With the rise of commercial cloud services and increasing digitization, a major revolution is taking place in the IT industry. The traditional business model of IT companies is under considerable pressure. New entrants on this market are the so called “hyperscalers” with a business model that differs greatly from the traditional IT outsourcing model. Business software is increasingly offered as SaaS from the cloud and the market
for Infrastructure-as-a-Service (IaaS) is growing by more than 40% annually. Because of all this, the traditional outsourcing model – largely based on economies of scale – is no longer effective, resulting in decreasing revenues and loss-making contracts. This development is happening so fast that many traditional IT companies are forced to take drastic measures. For Europe the situation is even more dramatic since the public cloud market is dominated largely by US companies.
Jan Bouman – Senior partner at Burnt Oak Partners Benelux – has written an article about this development. In this article he describes the consequences for the traditional IT companies and outlines possible survival strategies.
Further details read the full article here