IT outsourcing is worth nearly £50bn to the UK economy. This may be something of a surprise, since many predicted that the growth of cloud computing would lead to IT outsourcing’s demise. But IT outsourcing lives on, albeit in a different form.

So exactly how has IT outsourcing changed? And what choices do companies seeking IT outsourcing solutions have?

Previously, large-scale mega-deals were the dominant drivers of the IT outsourcing industry. Now, however, as the importance of IT continues to increase for all businesses, and security has to be taken more seriously than ever before, smaller, more focused arrangements are becoming the norm. These deals increasingly relate to functions such as security, web/ecommerce systems, and application hosting which, previously, were often kept in-house.

Smaller deals and more specific requirements mean that customers will buy from an expanding list of technology providers. According to Dan Masur, partner in Mayer Brown’s Washington D.C office, emerging ITO, BPO, and cloud service providers will provide more product-orientated services than were previously available.

In 2016, we can expect to see larger corporations opting for such services as they grow their managed services capabilities. 

With so many vendors operating, companies interested in IT outsourcing need to find the right mix of outsourced, offshored, and in-house IT provision. Just what this looks like will vary depending on a company’s specific circumstance. This means plenty of opportunities for everyone involved, and plenty of competition, too, which should ensure that the industry remains lively for the foreseeable future. 

Are you involved in IT outsourcing? If so, what changes have you seen?

Email me your thoughts.