“Industrialized,” low-cost IT services (ILCS) are the future of the IT industry, according to a presentation this week at the Gartner Outsourcing & IT Services Summit 2011 in London.
“While there are multiple ways to reduce the cost of IT delivery, as well as to increase the value of IT, the trend towards ILCS will become paramount for end users to trade nonessential customization for better and less expensive services,” Claudio Da Rold, vice president and distinguished analyst at Gartner, said in a statement.
ILCS is the replacement of more costly, less standardized IT services with industrialized outsourced or virtualized services with little customization and lower prices per user in order to deliver IT to businesses at more reasonable rates.
By 2015, Gartner predicts that ILCS, including services such as outsourced email, will account for as much as 30 percent of the IT services market, and that the value of cloud services will grow into a $177 billion market in that same time. Some $77 billion of that will be advertising supported.
“Thanks to new delivery models, industrialized services and cloud computing, Gartner analysts see increasing numbers of low-cost offerings in which the price of specific unit of function (such as email or software as a service) is instead measured in PUPM (per user or per unit, per month),” the statement said.
For instance, Gartner found that email configured as ILCS should cost IT about $6 PUPM but today costs from $8 to $10, while some entry-level offerings are as low as $3 to $4.
“With the email market in flux and the price of traditional in-house/hosted/outsourced mail under pressure by the lower price of cloud email available in the market, the email service is an area in which clear signals of industrialization and low price points are emerging,” according to Gartner.
The same is true of other IT services as well.
Gartner cited EasyJet as an example of an IT organization that adopted infrastructure as a service by subscribing to Microsoft’s Windows Azure cloud computing service to provide connectivity to a broad array of mobile devices for its reservation and departure control systems.
“Azure managed the connectivity to the myriad endpoint devices in a manner that was less expensive and less complex than what would be required if EasyJet created it in its existing internal systems,” according to Gartner.
The Gartner Outsourcing & IT Services Summit 2011 was held Monday and Tuesday.