Whether it is IT outsourcing, business process outsourcing, managed services or utility computing services, any IT service that helps enterprises increase productivity and reduce costs is in demand.
The IT industry has been turned upside down, or inverted, as former technology leaders transform themselves into services leaders, and other companies seek to follow their lead. For instance, IBM and Hewlett-Packard have won the greatest recognition and most significant customer contracts in the utility computing market to date on the strength of their outsourcing and integration capabilities, more than the technical features of their utility computing products.
Technology-centric companies such as EMC and Sun Microsystems are struggling to keep pace in the utility computing market, and have recently begun to shift their business models to emphasize their services as much as their products.
Many organizations are frustrated with the inefficiencies of their current IT operations and concerned about buying more technology and adding more staff to satisfy their business requirements. For many hardware and software technology companies this shift in demand represents a significant challenge.
Even harder than changing the operational processes for many long-standing technology companies is changing the corporate cultures of these places. Many IT companies attempting to restructure their organizations so they can deliver more of their technical capabilities via services are learning how hard it is to invert their business models.
Part of Big Blue’s success has come from internal organizational and cultural changes, and part by acquiring consulting firm PricewaterhouseCoopers. Putting services out in front is a dramatic change for the IT industry. Gone are the days when IT installation and maintenance services were slaves to the product side of vendor shops.
As the demand for new technology continues to languish and product differentiation continues to fade, IT services has become a key strategic competitive weapon as well as an essential vehicle for delivering meaningful business solutions.
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