The Politics of Cloud Strategy

By Nicole Hemsoth

September 16, 2010

Ten years ago, haggling over the political correctness of IT services and infrastructure might have been an argument reserved for only the most globally-conscious CIO, but given the, shall we say, “shift” in economic conditions, especially as it relates to IT budgets, the issue has been resurfacing consistently. Analysts firms, as well as government and academia-led research groups have been turning a critical eye to the nature of IT outsourcing in this dawning age of “everything-as-a-service” and have been looking at ways to get a handle on the changing tide of an increasingly knowledge-based world economy.

The Council on Competiveness is not the only group ringing the warning bell for the United States as it attempts to retain its lead in the technology race. More voices are entering the conversation about what will happen when (and if) the vast majority of IT infrastructure is housed and serviced elsewhere. It is possible that as other countries beef up their leadership in cloud-based technologies and services, this “elsewhere” will often mean it’s offshore.

During a Nasscom summit on remote infrastructure management this week, John C. McCarthy, a leading analyst from Forrester Research, stated that “offering a cloud strategy to customers in the United States is a politically correct alternative to offshoring given the current climate,” which is more “politically palatable.”

Although McCarthy predicts, as do many other analyst firms, that the IT services market as a whole will steadily grow over the coming five years, any reductions that occur will come on the hardware versus software ends of the budgetary spectrum. He notes that the shift will be to services, either traditional outsourcing or outsourcing the cloud way—by attaining business-critical IT needs as a service.

Outsourcing America has always been on the political radar, but this has historically been in terms of manufacturing but now more than other time in history we’re on the cusp of watching this in the context of technology explode as  a hot-button topic.
 

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