Clearly the current and historical IT services delivery model of pumping low cost human onshore or offshore delivery resources at customer contract delivery is unsustainable. It just cannot continue to work on many levels from speed to deployment, skill availability, vendor morbidity and of course the CFO reluctance to sign the checks. The only option, and one accelerated by SaaS, PaaS and IaaS models is the shift towards the democratisation of repeatable template based models. I call this the Assetisation of IT Services delivery. Some call it productisation, Asset based delivery or another range of names.
It does not matter what you call it the shift is one directional, transformational and long overdue. I believe that the shift to asset based IT services delivery will fundamentally shift the balance of IT services providers’ ability to deliver to customers and compete with its peers.
To just highlight how fundamental I believe the shift to be, in the next 3-4 years, one of the big 4 Indian IT providers will cease to exist in its current form due to a lack of ability to shift their business model. (Which one of Infosys, TCS, HCL or Wipro, well you have to ask me that offline. J ) Traditional IT providers such as CSC, Fujitsu, Capgemini, HP et al are also going to be fundamentally challenged by this and some of them will not exist as we know them today. A hint to identifying those who will become part of history, a lack of commitment to IP development.
I have been looking at, and talking about the Asset based services market for several years now. Whilst the vendors, regardless of business model, understand in basic form the need to shift, to be perfectly honest I have been underwhelmed by the slow development of suitable Asset based solutions. It has been too slow, and most are still stuck with an approach of simply throwing more human resources rather than automating the process.
It struck me that I was looking in the wrong areas for the right solutions. Where I believe now that the initial stages of development of Asset Based IT Services delivery will come from is the input side of the equation. That is the application and software providers. Most specifically, I am seeing significant success in this approach from the following
- SAP – Rapid Deployment Solutions
- Cisco – Smart Services
Both capabilities are repeatable, democratic, promise a quicker implementation time, and are based on applications. Note that none of these solutions would have also happened without the growth of the SaaS model.
It does not matter that Cisco is a hardware company. It is creating assets as a software provider. The hardware is a mere medium for the management of a network or server environment.
The classification of the offering as democratic is important. It is open to all eligible partners. This creates in part the scale required to create the depth of a menu to ensure that a range of client scenarios are met by the Asset.
The clear and rapid outcome of this is that with perhaps one debatable exception, pure business consulting, there are no IT Services that can be delivered without Software. That realisation is profound for the way the IT services industry needs to position itself. IT services itself does not exist anymore. Everything has to be considered a solution with the full integration of the services and software components. This is why IP development becomes central, and why I have been pushing for more understanding of this by services vendors since I started capioIT.
The software providers have largely led the way to this point. It is now up to the IT services providers to become real solution providers and be the ones to drive, survive and thrive in the fundamental shift.
If you require further information, please contact Phil Hassey, Founder capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology in emerging markets. Phil may be contacted by email below,