July 27, 2016 5:35 pm | Updated 5 years ago.
Traditional IT outsourcing is falling as companies related to cloud computing are gaining momentum in today’s environment. According to a recent report published in Channel web, traditional IT outsourcing market has declined rapidly due to the drying up of large deals. This year’s performance has been sighted as the worst in the last seven years. The average contract value recorded a fall by 20%.
On the contrary outsourcing as a service has increased by 38%. In the present market scenario, organizations are increasingly adopting cloud computing as a result of which the cloud providers are generating huge profits. The traditional providers are finding it hard to survive in this fast-changing environment. The offshore suppliers are also generating more revenue as they readily offer similar services at cheaper rates. Various offshore outsourcing firms have continued to grow because of their cheap labor cost but the situation seems to eventually undergo a change as mid-tier IT firms are assertively competing with each other on price. The traditional players need to focus on the technology created or invested by them.
Date of Publication: July 25, 2016