| INFRASTRUCTURE OUTSOURCING: A RAPIDLY | | | | - Focus on end-to-end infrastructure deals that avoid |
| EVOLVING SERVICE | | | | direct competition or develop variations of a |
| Traditional Infrastructure Outsourcing - versus -Remote | | | | converged RIMO/Traditional IO offering with an active |
| Infrastructure Management Outsourcing – versus - | | | | role of labor arbitrage. |
| IAAS | | | | Evidence of convergence can be seen as offshore |
| Outsourcing suppliers face the strategic dilemma in | | | | suppliers of remote management services are not |
| Infrastructure Outsourcing (IO) services, caused by the | | | | limiting themselves anymore to targeting smaller |
| convergence of 'traditional' (multinational) and offshore | | | | companies with a basic labor arbitrage value |
| suppliers' value propositions, a maturing remote | | | | proposition. |
| infrastructure management delivery model, and | | | | Large buyers (above US$10 billion in revenue) now |
| adoption of labor arbitrage by traditional suppliers. | | | | account for 55 percent of the deals signed by |
| During the last decade, the emergence and rapid | | | | offshore suppliers. Although the majority of offshore |
| growth of new models of infrastructure services | | | | deals are still based on delivering remote services |
| delivery, such as Remote Infrastructure Management | | | | offshore, RIMO suppliers held 26 percent of more |
| (RIMO) and Information Management Services are | | | | traditional deals in 2008 compared to only five percent |
| showing signs of convergence with more traditional | | | | in 2004. |
| ways of delivering infrastructure service. | | | | KEY CLIENT EXPERIENCE FINDINGS |
| Offshore RIMO suppliers still hold a minor share of the | | | | MOST IMPORTANT CUSTOMER SATISFACTION |
| IO market; nonetheless, there are increasing signs of | | | | KPIs |
| the sophistication of RIMO leading to a growing | | | | Innovation, Trust, Reliability and Deployment are the |
| convergence of the models of infrastructure delivery. | | | | most important attributes influencing Client Companies' |
| The trend poses a challenge for buyers who need to | | | | satisfaction with their infrastructure outsourcing |
| understand the complexities of the offerings and | | | | providers. |
| suppliers who must refine their strategies. The | | | | ITO INFRASTRUCUTRE VENDOR SATISFACTION |
| convergence of IO models is driving offshore suppliers | | | | IS HIGHEST AMONG MIDMARKET VENDORS |
| to one of three choices: | | | | Clients with annual revenues from $500M to $1B are |
| - Continue to adopt key elements of the traditional | | | | significantly more satisfied with their Infrastructure |
| infrastructure management outsourcing model, | | | | Outsourcer than are Large Market Cap clients. |
| - Build added value to their remote offering or | | | | US VENDORS ARE SIGNIFICANTLY PREFERRED |
| - Simply continue to focus on classical RIMO services | | | | BY US CLIENTS |
| that rely on labor savings as a key driver. | | | | Latin American alternatives are challenging Indian |
| On the other hand, traditional IO suppliers are | | | | infrastructure vendors as they evolve, although two |
| confronted with a simpler, but not less challenging | | | | vendors, HCL and TCS are commanding market |
| option: | | | | growth share and commanding global user respect. |