IT services providers need to shift strategies to prepare for cloud computing

Melbourne, 19th October 2009. According to Ovum, the global analyst and consulting company, IT services providers, particularly those offering systems integration (SI) services, need to adopt new strategies and approaches to ensure that the trend toward cloud computing services does not negatively impact their business.

Although widespread adoption of cloud computing is slow to materialize, services vendors should take steps now to ensure that they can take advantage of any revenue-generating opportunities that the cloud computing services market will provide in the future. John Madden, Ovum Research Director says, “These steps include becoming an innovator in the development of cloud computing services, and creating and supporting cloud services ecosystems among various IT vendors”.

“In truth, services providers have no choice but to take such steps to keep up with customer interest and, more importantly, to blunt the technology’s potential negative impact,” says Madden, based in Boston. “Global systems integration firms in particular are worried that cloud services could irrevocably alter the SI business as we know it.”

Madden says the traditional SI model of tying together disparate IT systems is not going away any time soon due to cloud services, as the market for such services is still too young. “However, some customers that leverage cloud services in theory will no longer need an SI for complex, time-consuming and costly integration of their internal IT systems”, Madden adds. “Cloud services also could open up new opportunities for services providers to package SI services with consulting and outsourcing, as customers look for guidance and third-party expertise in the delivery of cloud services.”

Madden and his colleague Jens Butler, Principal Analyst in Ovum’s IT services team in Asia-Pacific, recently completed several well-attended and successful Ovum Executive Seminars in Hong Kong and Singapore, presenting research on cloud computing services and cloud’s impact on end-user IT sourcing decisions.