How Cloud Computing Transforms IT Services

Michael Vizard

The advent of cloud computing is having a profound impact on how IT services companies operate and, more importantly, the relationship between them, their customers and the vendor community at large.

In recent years, IT services companies have been transforming themselves from being advocates of vendors to becoming the strategic advisors of customers. It's true that a fair amount of their revenue still comes from vendors they represent on their line cards, but the lion's share of their profits come from the services they provide to customers independent of any particular vendor.

But just as IT services companies begin to strike their independence, along comes cloud computing. Many of them have rightfully concluded that cloud computing creates the opportunity for an IT services company to not only consult with customers about what should be done from an IT perspective; it creates the opportunity for the IT services company to deliver those services via the cloud.

In many ways cloud computing is just the natural extension of hosted computing and managed services that many IT services organizations already provide. But from the vendors' perspective, the evolution of cloud computing also means that the IT services company is becoming the actual customer. After all, the end customer no longer really cares how the IT service is being delivered. The people making the decision about what products and technologies that will be used to power any given IT services usually work for CTOs that are employed by the IT services provider. And many people that currently work with IT organizations are going to find that in the not too distant future they will wind up working for an IT services provider rather than their current employer.

None of this has been lost on the vendor community; many of which, including Hewlett-Packard and Dell, have gone out to acquire IT services companies to strengthen their ability to compete against cloud computing providers such as IBM. Arrayed against these behemoths are thousands of smaller IT services companies such as The Planet and Champion Solutions Group, both of which are expanding their cloud computing capabilities.

Over time what this all means is that CIOs will increasingly concentrate on buying services to drive a business process, leaving the product and technology choices up to others. The issue then will become how many suppliers of those services do CIOs want to have, including their own internal IT organization, and will they trust providers of those services that might be too vertically integrated around their own products and technologies. Accenture, along with the most of the IT services community, is betting that customers will ultimately place their trust in more neutral technology providers.

However things ultimately turn out, it's pretty clear that not only is there a massive transformation of the IT services under way; there is also a fundamental change taking place in how products and technologies are acquired, deployed, sold and ultimately paid for.

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