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Is Cloud Sourcing the next big thing?

by Frank Ridder  |  June 24, 2010  |  2 Comments

There are not much topics that are discussed as heavily as cloud computing these days. Many organizations and service providers talk about clouds, but they often mean very different things.  In my discussions with sourcing executives around Europe I have learned that there is one key question that occupies their minds:

Where is the business value for me?

This is a question that has at the same time “many“ and “no” answers. Many answers come from marketing and sales people of cloud solution providers: According to them, cloud solutions are flexible, high quality and cost effective. It sounds like a great alternative for sourcing executives. But key questions remain unanswered, e.g. “Where are the real risks?” and “How to I integrate cloud services?”.    Help and answers do not come from the cloud service providers. Processes, workflows, behavior and expectations of buyers have to adapted. This is often huge and long lasting effort. Therefore it is very hard for the buyers to understand the net value coming from the cloud.

In fact, I am writing this blog in train back from an event where I met 18 CIO’s – none of them believes that they can find real business value in the cloud today. They rather leverage utility solutions (often called cloud as well) as they are apparently more transparent, less risky and easier to integrate.

Considering the investment into cloud services that we observe, it is likely that the picture changes over time. It has to – if cloud providers want to sell into larger enterprise organizations. Until then, utilities  seems to be a great alternative.


Frank Ridder
Managing VP
6 years at Gartner
21 years IT industry

Frank Ridder is a vice president in Gartner Research in the area of IT services and sourcing. He is mainly helping organizations through the sourcing life cycle for infrastructure services, including the data center and the end-user side. He is a leading… Read Full Bio

Thoughts on Is Cloud Sourcing the next big thing?

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  2. Ryan Nichols says:

    Hi Frank– not surprising to hear that the CIOs you talk to aren’t “finding business value in the cloud,” any more than they would simply “find” business value in any other technology architecture on its own.

    The business value comes from assembling these cloud services into solutions that enable your business to do new things– that’s the value of cloudsourcing… allowing IT to say “yes” to the business instead of “no.” And many IT organizations will need help with this assembly– that’s the value of the “cloud service brokerages” that your Gartner colleagues write about.

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