Introduction

The IT Infrastructure Outsourcing Annual Report sketches the changing world of IO with focus on emerging asset ownership dynamics, delivery location selection in asset-light service, role of labor arbitrage and emerging infrastructure tool technologies, and evolution and growth model of the asset-light mode of IO. This 170+ pages report combines discussion on the key issues around infrastructure outsourcing with actionable commentary on maturing delivery models, supplier strategies and location selection. It also outlines implications for buyers, suppliers, investors and technology providers.

Scope

The scope and methodology of this report includes

• Analysis of industry trends with actionable insight on the current and projected state of the market
• Interview case-studies of IT infrastructure suppliers’ tools strategy
• Evaluation of tools with focus on identifying the leading products in each function of IT infrastructure
• Applying the Everest location selection framework to offshore geographies in order to recognize the locations most amenable to setting up of a delivery center

Content

The ITO infrastructure market has matured over time to give rise to multiple delivery models. Nonetheless, several changes impacted the market in the last decade, most significant being the asset-light model. New asset ownership dynamics have given rise to the growth of the asset-light model. Emergence of remote infrastructure management outsourcing as a concept led to the entry of Indian suppliers in IO with active utilization of labor arbitrage as main value lever.
In this research study, we investigate the development of the IO market and key changes in the service delivery models. We focus on:

• Background and historical perspective of IO
• Role of asset-ownership and emergence of asset-light outsourcing
• Key forces driving RIMO model and growth prediction for the model
• Tools as the drivers of change in the IT infrastructure outsourcing
• Global trends in RIM service delivery and location analysis

Background and historical perspective of IO

IO is a mature market that accounts for approximately 40% of the global ITO market. Growth has been slowing down and is likely to continue sliding to ~4% CAGR in the next five years, reflecting overall maturity of the market. In spite of overall maturity, new models are emerging on the IO market. Three main service delivery models are prevalent on the market today, Traditional Infrastructure Outsourcing (Traditional IO), Infrastructure Managed Services (IMS) and Remote Infrastructure Management Outsourcing (RIMO). These models differ based on deal characteristics (e.g., scope, size, length), and the way IT assets and resources are handled in the outsourcing deal. From the buyer’s point of view, these models offer different levels of commitment and control, while from the supplier’s point of view, these models are based on different points of leverage. While traditional IO is a prevalent model on the market today, the RIMO market shows much higher growth and is projected to exceed ~US$8 billion by 2010.