There was a great article posted on CIO.com in March 2008, titled, “Outsourcing: The Pros and Cons of Offshore Remote Infrastructure Management.”  The article discussed many of the recent trends related to remote infrastructure management, including the increase in competition caused by offshore vendors.

Infrastructure is generally managed remotely, even if the data center is located nearby.  According to Bill Piatt, CIO of the International Finance Corporation, “remote infrastructure management is something that virtually every organization does every single day.”  He goes on to say that people think there is a difference if that work is done offshore.   However, recent trends show that remote infrastructure management is being included as an additional service in global sourcing.  Numerous global outsourcing proposals now contain some form of offshore infrastructure delivery of services.

Many of the large global sourcing providers believe that infrastructure management will be the next main revenue source.  IT vendors are increasing their delivery capabilities to attract more business from outsourcing companies.  From 2003 to 2005, the number of vendors who have the ability to handle infrastructure tasks tripled to 15,000. 

The utilization of global sourcing providers for services involving infrastructure management has become more mainstream.  The market for remote infrastructure management is estimated to be somewhere between $80 billion to $120 billion.  Experts feel that global sourcing providers will gain additional market share and will continue to grow by 20 percent each year.

The article on CIO.com listed the percentages of infrastructure support functions that could be sent to a global sourcing provider.  These functions included:

• Network Services 80%
• Internal Help Desk 75%
• Servers 70%
• Maintenance 60%
• Administration 35%
• Mainframe 30%
• End-user Devices 15%

A report published last February by India’s National Association of Software and Services Companies (Nasscom) asserts that up to 75 percent of all infrastructure management roles could be outsourced globally, which would create a $26 billion to $28 billion revenue potential by 2013.   The report stated that Indian companies could capture approximately 50 percent of this revenue. 

There currently is a lot of competition among infrastructure providers.  Global sourcing vendors have been purchasing infrastructure service providers to grow that segment of their businesses.  The recent changes will give outsourcing companies additional options, but can also create more confusion on making the right decision for remote infrastructure management.

There are benefits to sending infrastructure management to a global sourcing provider, but it may not be a good fit for every organization.  A&E Consulting can help you weigh the benefits of working with a global sourcing partner and will oversee your first outsourced project.

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Tags: global sourcing, global sourcing provider, infrastructure provider, remote infrastructure management

This entry was posted on Wednesday, August 13th, 2008 at 8:13 am and is filed under Global Sourcing Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.