Here comes cloudsourcing

For many industry observers, cloud computing is one of the most important research developments in recent decades - otherwise the most important.

In terms of cloud computing, IT services are delivered via the Internet. There is no need to worry about the ownership of costly and often complex IT infrastructure, whether it's servers, applications, networks or storage.

Obvious questions arise, especially in the South African context: bandwidth, associated latency, security, availability and reliability, data ownership and integrity, performance management, and alignment with business objectives, to name just a few.

And it goes furthermore, by the day. Users can have cloud-based business intelligence, project management, CRM, recruitment, contract management, invoicing and integration with Microsoft SharePoint... and all at no direct licensing cost, and with no concern for the infrastructure needed to deliver and maintain these applications, and with built-in collaboration.

Fundamental impact on the traditional outsource market

Cloudsourcing is set to have a fundamental impact on the traditional outsource market. To illustrate, IBM and HP, two companies that lead this market, are gearing themselves for 70% downward pressure on their margins. Taking everything into account, outsourcing is all about economy of scale, and nothing delivers economy of scale the way cloud computing does.

* Internet-based hosting, which permits offshore business process outsourcing, as well known as offshoring. This in effect means that services can be provided anywhere in the world, opening the door for South African companies to provide BPO services globally, or contract them in from other countries.

A prime example of the convergence of these phenomena is the hosted contact centre, which is revolutionising this space, locally and elsewhere, especially in East Africa. It enables a greater degree of competitiveness, with a lower barrier to entry, and with more flexibility than any competitive innovation.