Enterprise IT has been for the most part working with a centrally managed, ‘vertically-integrated’ model.

This model has tended towards building and managing custom infrastructure, services and applications to support the business. It is often based on the most restrictive requirements (scale, availability, compliance etc.), which also often implies more complexity and more costs.

It is no accident that enterprise IT has been constantly struggling with the rapid and flexible creation of new capabilities for the business in a cost-constrained environment while supporting, maintaining, and integrating with an ever-increasing number and complexity of applications and services.

They have investigated standardization, governance, outsourcing, and off-shoring among others as possible solutions for the delivery of business support in this complex environment. In general, however, they have not yet been able to deliver the level of agility that the business is looking for at the cost it wants to pay.

The viability of the Internet as an extended platform, catalyzed by Software as a Service offerings  and Managed offerings is now driving interest in sourcing services from the ‘market’ as opposed to buying/building and managing them internal to the organization i.e. externalizing IT.

Enterprise IT expects this shift towards the externalization of IT to

·         drive the cost of building and managing services down

·         enable the business to be agile by exploiting innovation in the marketplace

·         reallocate IT budgets and priorities to focus on growth and innovation

Obviously, these are my opinions - all speculation here is mine and mine only - not those of my employer.