Here comes cloudsourcing

For many industry observers, cloud computing is one of the most important technology developments in recent decades - if not the most important.

In terms of cloud computing, IT services are delivered via the Internet. There is no need to worry about the ownership of costly and often complex IT infrastructure, whether it's servers, applications, networks or storage.

Instead, the entire IT stack can be delivered as a seamless service, with no requirement for a client to own any component of the stack.

Obvious questions arise, especially in the South African context: bandwidth, associated latency, security, availability and reliability, data ownership and integrity, performance management, and alignment with business objectives, to name just a few.

There is also the little issue of whether IT is strategic or tactical, a debate that needs to be answered by each organisation. There was certainly a time when IT was highly strategic, but today many industry observers view aspects of IT as tactical, and therefore eminently suited to outsourcing.

But increasingly it seems that these issues are becoming moot. Cloudsourcing - the delivery of outsource services via the cloud - is rapidly coming to the fore as one of the industry's pre-eminent trends.

Companies as large as Google and Amazon are offering cloudsourcing services; Zoho, Yahoo and Rackspace are another three worth mentioning.

Nothing delivers economy of scale the way cloud computing does.

Andrew Holden is MD of Bytes Outsource Services.

Most of these companies have built their initial cloud foundations by offering relatively simple services, such as e-mail, word processing, presentations and spreadsheets via the cloud. Through these companies, it is now entirely possible to fulfil all office application processing requirements without incurring the licensing costs typically associated with them.

And it goes further, by the day. Users can have cloud-based business intelligence, project management, CRM, recruitment, contract management, invoicing and integration with Microsoft SharePoint... and all at no direct licensing cost, and with no concern for the infrastructure needed to deliver and maintain these applications, and with built-in collaboration.

Cloudsourcing is set to have a fundamental impact on the traditional outsource market. For instance, IBM and HP, two companies that lead this market, are gearing themselves for 70% downward pressure on their margins. After all, outsourcing is all about economy of scale, and nothing delivers economy of scale the way cloud computing (and by extension cloudsourcing) does.

Cloudsourcing is in every sense an idea whose time has come. It combines the best of many worlds:

* Software as a service, or SaaS, which is the most current incarnation of a legacy of outsource models that began with time-sharing, evolved to hosted applications, stuttered at application solution provision (ASP), and stands today at Web services and SaaS.

* Internet-based hosting, which permits offshore business process outsourcing, also known as offshoring. This really means that services can be provided anywhere in the world, opening the door for South African companies to provide BPO services globally, or contract them in from other countries.

* Services-oriented architecture, or SOA, which permits a high level of re-use of existing applications, with relatively little modification, enhanced return on investment, reduced cost of ownership, and the ability to offer more or less the same application to many customers.

A prime example of the convergence of these phenomena is the hosted contact centre, which is revolutionising this space, locally and elsewhere, especially in East Africa. It enables a greater degree of competitiveness, with a lower barrier to entry, and with more flexibility than any competitive technology.

Cloudsourcing is set to change the world of outsourcing, and the only question to be asked is: “Are South African outsourcers and customers ready for it?”