IDC Releases Comprehensive Market Framework Assessing and Defining the Relationship Between Traditional and Cloud Services Across 15 Services Markets

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International Data Corporation (IDC) has released an extensive market framework study examining the question facing many customers and suppliers: "Where do cloud services fit or not fit into the traditional set of services?" This framework study assesses and defines the relationship between traditional and cloud services across the full breadth of 15 services markets.

"Navigating across a world of services that has expanded from using a traditional means of delivery to newer options referred to as cloud services, has become increasingly complex and resulted in customer uncertainty," said David Tapper, vice president, Outsourcing and Offshore Services at IDC. "Success for both services and technology firms will require that they not only develop a framework that clearly states how these two worlds interact and align, but also use this framework to help customers migrate as seamlessly as possible and enable vendors themselves to build more integrated organizations, optimize investments, construct effective road maps, and create a financial plan that supports a smooth transition to the world of cloud services."

Questions for which this study provides answers include:

- Do cloud services represent a set of new services markets?
- Do they represent a new means (e.g., the how) in which services are provisioned for existing markets?
- Do cloud services represent a new business model of providing IT and/or business process services?
- What is the impact of cloud services on the current taxonomy of services markets?
- How will cloud services impact current services markets and future opportunities?

"Both buyers and suppliers of services firms are increasingly confronting the need to view services as an integrated set of options that cut across both traditional and cloud services," stated Marianne Kolding, vice president of European Services at IDC. "The goal for buyers is to optimize sourcing of services and knowing when to use which type of service, traditional versus cloud, as well as how this shift will impact their organizations and their sourcing strategies."

The results of this IDC analysis across the world of traditional and cloud services shows that the fundamental difference between these two service models is not the "engagement", nor fundamentally "what" customers buy, but in "how" services are consumed and delivered. The new "how" requires building a new factory model of service delivery to support new consumption capabilities (e.g., greater granularity of services offerings and payments) using greater technology standards and capabilities (e.g., user interface [UI], application programming interfaces [APIs], self-service).

This IDC study, From Traditional to Cloud Services: A Market Framework(IDC #235783), provides a framework highlighting the relationship between traditional and cloud services. It examines options available to customers through the lens of traditional services, services in which there is a considerable labor component, across the full array of customer options that extend from professional services (e.g., consulting integration) to support (e.g., software, hardware) to outsourcing (e.g., hosting infrastructure services, application management, BPO).
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