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Cloud Computing: Offshore Services Pressured by the Cloud

By Dick Weisinger

Public Cloud services are expected to increase 18 percent in 2013 to $131 billion and to then grow to $180+ billion by 2015 predicts Gartner.

Cloud services are expected to pressure traditional offshore service providers.  Gartner suggests that service providers that can’t evolve their way of doing business are at risk of being displaced.  Offshore providers have seen their growth rates shrink over the past few years, and the trend is expected to increase.

Ian Marriott, research vice president at Gartner, said that “the initial resistance to public cloud has begun to subside and customers are beginning to realize its efficiencies as the solutions mature.  Cloud-based services will not replace offshore services, but will complement them.  In addition, cloud services will not ‘make or break’ all offshore providers. There will always be a need for “pure-play” providers that operate a labor-intensive delivery approach. But, for broad-based offshore providers that operate in multiple geographies, industries and service lines, and who seek to compete for significant ‘wallet share’ in major accounts, strategic investments in cloud-based services are mandatory.”

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