Right now Remote Infrastructure Management (RIM) service providers are enjoying explosive growth as they take share from asset-heavy players. The labor arbitrage market is disintermediating or successfully attacking the traditional asset-heavy infrastructure space. But in every boom are the seeds of undoing.
It reminds me of the story of Joseph in the Biblical book of Genesis. Egypt’s Pharaoh had a dream about seven fat cows and seven scrawny cows coming out of the Nile River and the scrawny cows ate the fat cows. He sent for Joseph to interpret the dreams, and Joseph revealed that Egypt would have seven years of great abundance followed by seven years of famine.
Everest Group anticipates that, with HCL and TCS and Wipro having achieved a break-through level of credibility doing large transactions, these three and other providers behind them are poised for a number of strong years of growth as their cost to operate is lower than the traditional players. We forecast three years of plenty where they will drive explosive growth.
But behind the RIM contracts is coming a world in which the integrated automated cloud platforms such as IBM’s SoftLayer and AWS will move into the enterprise and start taking share from the RIM players.
Unlike Egypt where they experienced seven years of plenty and then seven years of famine, we forecast three years of plenty for RIM players followed by increasingly lean years.
RIM players will need to adapt to integrated automated platforms such as SoftLayer and AWS as they move into the enterprise — just like the RIM model is currently disintermediating the asset-heavy players.
Photo credit: George Thomas