Infrastructure outsourcing - Actions not words will make the CIO happy

I have seen some recent output looking at the competitive environment for Infrastructure Outsourcing in Australia and the broader Asia Pacific region. What was rather surprising to me was the level of acceptance that some industry watchers are placing on ideas and commitments to undertake infrastructure outsourcing in the region rather than actual 'real world' experience. An organisation typically lives and breathes on the infrastructure core. Therefore, when looking at the providers in the market I tend to be more comfortable with those providers who actually have had depth of experience and capability in the local market, not those who have talked about it loudly. That is why the Indian based providers (as much as I hate the generalization implied by the term), as well as Accenture need local proof points locally before they can be considered actual or potential leaders in the infrastructure outsourcing market in Asia Pacific. Infrastructure is no applications, nor by the same token is infrastructure capabilities transferable to the applications space (just ask a Telco). Talk is not enough. Running a data center in Europe or the US is different to running one in Asia Pacific. Just as the large outsourcers made the mistake of assuming a heterogeneous market in US, was transferable to the UK, then Australia and then Asia in the 90's and early 00's it will be disappointing to see the same mistakes again. Any entry needs to be measured, incremental and structured, the challenge for this is the high cost of infrastructure, and the need to spread costs through scale. Providers such as Infosys, Accenture and Wipro will likely provide this over time, but they need to get the customers who have the profile to run with their offerings before it becomes more mainstream, particularly for the enterprise audience.
11. December 2007 14:13 by Phil | Comments (0) | Permalink

Australian Government Outsourcing Renewals - More of the Same?

There has been recent media speculation about the large number of Australian federal government contracts that are up for renewal in the next 2 years. This is of course part of the ongoing cycle of renewals that occurs in the Australian outsourcing space. 2006 saw some very significant renewal activity with South Australian Government, Telstra and Commonwealth Bank amongst others. What is going to be very interesting to gauge is; will anything actually change. The three deals all highlighted above, had some tinkering around the edges, but incumbents still got the overwhelming majority of the renewals.
What was equally significant was that the mass herd of enterprises moving to selected outsourcing did not occur. I have been on the record as a relative cynic about the move to selective outsourcing due to the cost of vendor management and risk of a blame game, and whilst there are always examples one can use to highlight it's existence, it is has by no means produced results that match the hype by some involved parties. Nor has widespread in sourcing occurred, again examples can be found, but it is not endemic as some may believe.
Perhaps the largest 800 pound gorilla in the corner is the impact of a changing government federally in . All polls seem to point in this direction (for now at least) with PM Howard now both literally and figuratively stumbling. There is now a highly politicized public sector federally in Australia (and in most state governments to be fair), any change in government will likely result in a lot of new department heads and an expectation of changing strategies in terms of IT. Perhaps it might be good for consultants and less positive for outsourcers time will tell.

26. July 2007 07:00 by Phil | Comments (0) | Permalink


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