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| Wednesday, January 04, 2012 | |
| Outsourcing Will Get a New Face | |
| Sourabh Chandra Pushp , , | |
| The shift to cloud, the emergence of enterprise mobility and other trends have spawned a wide range of innovative technology, platforms and services. But the primary issue here is that many customers lack the expertise to deploy the new solutions, and many of the companies building the solutions dont have professional services arms. The answer to this would be partnerships between services companies and a range of companies that results in best in class solutions for customers. | |
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GS.) In what areas would you expect budgetary cuts with your customers in 2012? How would these cuts impact IT outsourcing? Or is there a scope for increased spends? Where and why? Sanjay-We expect pressure on R&D budgets as companies remain cautious on the overall business climate in 2012. Having said that, the pressure to innovate and introduce new products has never been higher. So we expect customers to look for help from their outsourcing partners in 3 ways: 1) Taking over mature products to drive down costs and add enhancements to extend the lifespan, and using those savings to fund new products and initiatives; With slowdown in economic growth in the US and Europe, business and governments will be more cautious about investing in technology, spending on IT goods and services. According to Forrester Research Inc, IT spends are expected to decrease to 5.5 percent in 2012 for a total of $2.15 trillion, from estimated growth of 11 percent this year. Some areas that will see growth and increased spend are enterprise mobility, cloud computing and managed services. Also areas like machine-to-machine communications, mobile apps development will drive investments and partnerships in product engineering service providers like Symphony Services. GS.) If you are an enterprise services buyer, how have your expectations from service providers changed? If you are a service provider, how have your customer’s expectations of you changed? Sanjay- From a product engineering services perspective, some customer trends we see are - Increasing SLA and Risk-reward based engagements – Our prospects and customers (Independent Software Vendors) are looking to leveraging from our value proposition of Outcome Certainty TM for their business success. Traditional outsourcing revolved around contracting for inputs (resources, rates). Outcome Certainty TM is about achieving goals, driving innovation and bringing predictability to costs, schedules and quality of the outsourced software product engineering process. Collaboration and co-innovation with customers – We see more and more of our customers expecting us to take on strategic partner’s role which includes collaborating with their internal R&D teams to build next generation innovative products and solutions. Customers seek greater value creation – Our customer expect us to provide significant value with modern solution in fast-growing areas such as enterprise mobility, SaaS/Cloud enablement and Product Quality Management in order to stay ahead in the game.
Sanjay- Symphony Services is a key player in the product engineering space. Some of the trends we see in this segment are - ISVs continue to swap Services Partners for better results – According to Zinnov, 70 percent of ISVs look at industry benchmarks each year to rate/ re-negotiate with their services partner. Over the last couple of years, 80 percent of new contracts have some sort of SLA component with rewards / penalties. Changing out a captive, with today’s experience and tools is not nearly as hard as it used to be. So smart ISVs will do some shopping around – and get rewarded for it. Enterprise Mobility as a Managed Service will grow rapidly – We are reaching the tipping point of complexity with a huge variety of connected devices, significant security concerns, app development challenges, and expense management concerns. All these are driving forces for most enterprises to buy Enterprise Mobility as a managed service. The enterprise mobility market is expected to reach USD 165 billion by 2015, comprised of applications, enabling software, hardware, mobile voice and data, systems integration, and professional / managed services. The Enterprise Mobility game is on and there will be some big winners. Lots of Connected Health Innovation – From personal health management systems to medical adherence solutions, analyst predict as many as 500 million of the 1.4 billion smartphones could have a health related app installed by 2015. It’s a huge market in its infancy, with lots of room for innovative solutions that marry health care solutions with the wireless and communications ecosystem. Cloudsourcers to beat Outsourcers – As per Ben Trowbridge, CEO of outsourcing consultancy Alsbridge, the emerging cloud sourcing market will cause the destruction of the outsourcing market as we know it today, with the two markets merging and cloud sourcing driving the rebirth of outsourcing. The key takeaway from here is that service providers with close ties to leading cloud players like Amazon, Microsoft and more will have a disruptive cost advantage over those that don’t. Customers will get all the benefits of the cloud with nice, tailored services “wrap around” if they pick the right outsourcing partner. Services Partners become a key conduit for new tools and technology - The shift to cloud, the emergence of enterprise mobility and other trends have spawned a wide range of innovative technology, platforms and services. But the primary issue here is that many customers lack the expertise to deploy the new solutions, and many of the companies building the solutions don’t have professional services arms. The answer to this would be partnerships between services companies and a range of companies that results in best in class solutions for customers. Growing adoption of Open Source - Enterprises are adopting open source at an accelerating pace, as companies take advantage of the significant cost savings open source can bring. According to Gartner, 80 percent of all commercial software applications will include open-source components by 2012. The value and robustness of open-source software will offer opportunities to major software companies and services partners that build development tools that are available under open licenses. GS.) Which are some of the most promising verticals in Product Engineering for 2012? Sanjay- From a product engineering standpoint, some of the key verticals that will drive growth –
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