The IT Services Cloud : Emerging Trends

NetworkWorld recently carried Gartner's Prediction for 2012. The summary has predictions, many of which revolve around the buzz that we have been hearing around cloud services, social networking (here in the enterprise context), IT security, smart devices, energy crisis etc. 

One that caught my eye, and is against the current known trend at large, is around movement of Asia produced finished goods and assemblies (consumed in US) to Americas (not US per this prediction). While this is not widely discussed, movement of manufacturing and even services bases around the world is not unknown. What has worked well is not necessarily set to work well in future too. In fact if we extend this to IT services : it is not very unlikely that center of gravity of where these services will be delivered, will also move in the coming years. In fact it may move to not have a center of gravity at all and be more diffused than previously known. Several new contenders from Europe (more of East Europe) and those from Far East are already creating shifts in the currently emerged models which moved out of US in the previous decade. These are challenging the current sweet spots in India and other regions for IT services.

What will countries, currently making hay while the Sun shines, do in that scenario? There are naysayers galore which is evident with continued investment in building greater and bigger delivery infrastructure. Like any bubble, these will continue till the trend reversal seems imminent. That will unleash (if this theory which I personally feel is not too far fetched) a string of manifestations which would not be new. Looking at what happened when a disruptive model moved many of these outside US will provide some insights on those impacts.

For now, the view from the trenches does not show this trend at all, probably because the view from trenches is never good to know where things are heading overall. In India, companies continue to grow and many are rightly in a constant effort to find those differentiators and build exit barriers. 

In the longer run, companies should focus on building capabilities and resource models which are not geo-specific and should be easily adaptable across cultures and geographies. What then  will emerge are leaders in IT services who can front-end with enterprises and get the work done. Where the work happens may not be really relevant. It would then commoditize the services model and turn it into a "IT services cloud", invisible and transparent to the enterprise. The core focus would then be around understanding business imperatives, domain focus and orchestration of service delivery which the clients would value. Where work gets done would then be irrelevant, who gets it done and the process maturity would be key then.