Outsourcing and Cloud Computing: Understanding the Cloud

On May 30, 2013, in Outsourcing, by Business Development Group

organizations that outsource IT services or even those that are planning to do so should consider and understand the effect that cloud computing is having on for IT outsourcing businesses

As outsourcing in business and Information Technology booms, it also explains how effective outsourcing is for organizations in terms of service delivery. Outsourcing solutions that organizations are receiving from outsourcing providers greatly affects their growth. A good testament to that is the continuous increase of numbers of companies willing to invest to outsourcing.

According to a recent post at Deloitte Insights’s website, organizations that outsource IT services or even those that are planning to do so should consider and understand the effect that cloud computing is having on for IT outsourcing businesses. The same post shows the hyped advantages of cloud computing over traditional solutions such us cost, capacity, scalability, and accessibility.

What is Cloud Computing?

According to webopedia.com (a free online dictionary for words, phrases and abbreviations that are related to computer and Internet technology), the word “cloud” (also phrased as “the cloud”) is used as a metaphor for “the Internet,” so the phrase cloud computing means a type of Internet-based computing, where different services (such as servers, storage and applications) are delivered to an organization’s computers and devices through the Internet.

Cloud computing is becoming a popular service that has gained good impressions to corporate data centers. The cloud basically provides data centers the ability to operate like the internet and compute resources which are accessible and shared in a secure and measurable manner.

Difference of Cloud Computing and Traditional Outsourcing

Here is an example of one key difference of traditional outsourcing and cloud service from a recent post of The Society for Computers and Law (SCL) website authored by Kuan Hon and Christopher Millard:

Active Agents VS Passive self-service usage of resources

Traditional outsourcing of data processing, e.g. payroll processing, involves commissioning agents, who are provided with data and tasked with processing the data actively for the user according to the user’s mandate. The agent may itself engage sub-processors to assist with this processing.

However, with public cloud services, users ‘rent’ pre-packaged IT resources from providers and then process data themselves in self-service fashion, using infrastructure/resources supplied by the provider. Infrastructure providers do not actively act as agent processing data for users but, at most, passively store data which users choose to store on the provider’s infrastructure ready for retrieval by the user when needed.[12] Such providers may be active in maintaining and supporting the infrastructure and environment within which users process their data (discussed below), but the data processing is generally performed by users operating the provider’s resources on a self-service basis, not by the provider.

(SCL is the leading UK organization for legal professionals advising and practicing within the IT sector or advising in a commercial context with a brief that includes such issues as IT, data protection and e-commerce)

Related Article:

The Cloud and Outsourcing: A New World Awaits

Cloud Computing vs Traditional Outsourcing – Key Differences

Cloud Computing Explained

 Photo Attribution:

By Giovanni Dall’Orto (Self-photographed) [Attribution], via Wikimedia Commons

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