As the trend to cloud computing has gained strong momentum, there are some traditional IT outsourcing (ITO) service providers who are at a crossroads with their business models. They are seeing their customer value propositions disrupted. This is because, until now, they have profited by taking on complex IT assets their customers have and managing them more efficiently. However, the essence of cloud computing is that on-demand, commodity-based servers combined with a value-added software environment create a new model – with a stronger approach to using resources in a highly efficient manner. IT outsourcing companies therefore have to re-model their businesses to take advantage of the cloud and be truly equipped for giving customers what they need to take their businesses to the next level.

A report from Nucleus Research has calculated that cloud computing delivers much more than fast deployment and low one-time costs. The reports goes on to claim that on an average, companies end up with 1.7 times greater ROI with cloud deployments than with on premise deployments. The research firm evaluated 70 case studies with budgets between $30,000 and $10 million.

When companies have successfully migrated to the cloud, it has been identified that companies using cloud implementations spent 40% less on consulting and 25% less on application support staff costs. The biggest benefit of cloud over traditional client/server architecture is that ROI improves and grows over time for the IT organization.

Companies are likely to expand their workflows with cloud applications without additional consulting costs, because business users can expand and adapt their cloud usage on demand and often without any further investment in consulting.

The Nucleus Research report concludes by finding that 80% of companies have gained a substantial increase in benefits from cloud computing without an increase in costs.

Adds David Stuckey, PwC’s US leader of its data center infrastructure practice, about the cloud, “We have seen major technology shifts in the data center in the past. These shifts have just added to the mix in the data center – increasing complexity and cost. Cloud computing, when done right, has the potential to actually replace, and not just augment, legacy environments while adding value by reducing costs and increasing agility.”

In fact, cloud computing can not only be applied to a company’s IT organization, but it can also be extended to the public use domain. For example, baseball fans would like to know the very moment their icon scores a home run and a link to a video showing this can be found on their mobile phones. Another example would be that your refrigerator could warn you when the door is not fully closed by sending an alert to your mobile phone. This means that the cloud is not only accommodating applications for the IT organization, but it is also connecting to smart devices and they are then being used to communicate information that is important to the end-user.

A recent report on cloud computing by Gartner (Top 10 Technology Trends, 2013: Cloud Computing and Hybrid IT Drive Future IT Models by analysts David W. Cearley, Donna Scott, Joe Skorupa and Thomas J. Bittman) says that cloud computing and offshore services are successfully moving to the mainstream in the menu of offerings from IT service providers. This is rapidly changing the IT market.

During the next few years, the Gartner report says, market forces and customer preferences will point out whether cloud-enabled outsourcing will prove to be the death of traditional outsourcing. This may either lead to services and products related to outsourcing being converged in offerings or it may lead to a quantum leap in outsourcing rules shaping up next generation outsourcing.

Compunnel Software Group, Inc. is already progressing in this direction and we’re seeing our customers achieve successful cloud outcomes with strong ROI, cost reductions and increased agility for their businesses. We created 0-Downtime by Compunnel to help businesses of all sizes navigate the cloud successfully. Our approach is to provide a custom, individualized cloud solution tailored to a customer’s unique cloud needs – not a ‘one size fits all’ approach. We help organizations who are moving to cloud adoption, migrating applications to the cloud and expanding and maturing cloud implementations to adapt to evolving business changes.

Compunnel’s highly experienced cloud services team can help you achieve compelling short-term and long-term results for your business with cloud computing. We’ll work with you to determine the best strategies, provide strong cloud insights and create your roadmap to success. Then, we’ll implement your cloud solutions, help you navigate through every step and give you the expert support and maintenance you need to get cloud done right. Compunnel will even keep your costs down with a combined onsite and offshore cloud services team. For more information on how we can help you achieve your cloud computing goals, contact us today.

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