Tag: system integrators

What You Need to Know about the Convergence of Systems Integration and Application Outsourcing Services | Sherpas in Blue Shirts

Are the systems integration (SI) and application outsourcing (AO) spaces converging? We’ve been asked this question numerous times.

It does appear that in the large-company buying group that there is a trend to combine SI and AO services. By combining them, customers seek to reduce or eliminate the premium pricing on their SI services, which typically are much higher than AO fees.

While this sounds like a smart purchasing move — and in some instances it may be — don’t overlook the facts that this strategy comes with risks. If your organization is considering plunging into this strategy, you need to realize that it can shift to become a disadvantage.

Here are two ways that can easily happen.

Apples and oranges are priced differently for a reason

AO and SI skills are not the same. Systems integration services come at a premium price because they require more onsite resources plus a more senior blend of skills and usually more industry knowledge in the blend. The classic offshore talent so often used for AO services is less beneficial in SI services.

By combining the services for a lower price, you run the risk of your service provider populating your SI project team with AO-skilled resources. This will significantly increase the risk of your SI project failing.

Look out for the bursts

If SI and AO services converge to the same pricing for both, you will lose your flexibility. Providers utilize personnel assigned to SI groups differently than those assigned to AO groups. It’s an important distinction for the customer’s benefit.

Fundamentally SI projects are unpredictable and require burst capacity to satisfy customer needs at such time. An AO team has a consistently known quantity that the provider maintains and optimizes; but AO resources lack burst capacity to handle variations in project needs.

Don’t dilute

Our advice is to remember the fundamental resource capacity and skill problems that drove you to outsource SI and AO services in the first place and don’t dilute the power of your outsourcing strategy.

Although signing a contract for SI and AO services priced the same eliminates the SI premium and looks like significant savings — on paper — you will essentially put your project at risk because of not having the right level of skills and the burst flexibility to address your changing needs.

System Integrators Join the Party in the Cloud | Gaining Altitude in the Cloud

Many folks, even those who follow the technology services industry closely, attribute the cloud computing ecosystem to the public/cloud hosting service providers and SaaS/platform providers. While these two categories of service providers indeed form the backbone of the cloud universe, others also play pivotal roles in enabling cloud services. The following image illustrates the service provider categories that constitute today’s cloud ecosystem:

it providers

With the expansion of cloud services, enterprise buyers are steadily realizing that they need help not only from pure technology providers, but also from firms that serve as system integrators (SIs).

Yet, in a universe in which hosting providers (Rackspace, AWS, etc.), SaaS/platform providers (Salesforce, Workday, etc.), and cloud enablers (CISCO, VMware, etc.) deliver the core resources to enable cloud-based services, is there enough room for SIs to establish their importance?

The answer is a resounding yes. SIs are, and will continue to be, an integral part of the cloud vendor ecosystem. Here’s why:

SIs provide a roadmap for transition to cloud

SIs have inherent design and consulting capabilities, and help buyers put in place a roadmap for transition. They make the cloud integration and deployment process more seamless and customized to each buyer’s requirements.

SIs bridge the gap between cloud solution owners and the enterprise buyer community

Enterprise buyers seeking to migrate to the cloud will need a facilitator to interact with and among multiple players in the vendor ecosystem. It is the SIs who act as this bridge between cloud technology providers and the buyer community.

SIs help manage multiple large complex buyer environments

Given their multiple complex environments with varying requirements, large global enterprises really need a party to serve in the role of moderator. SIs are well equipped to take on this responsibility due to their global delivery and management capabilities.

Additionally, after setting up a cloud environment within their organizations, buyers will most likely need support from SIs to maintain and manage the new system. With increasing moves toward cloud-enabling large IT stacks rather than just specific applications or infrastructure, it is only logical that the role of SIs will become more critical for enterprise buyers that are about to take the leap of faith by transitioning to cloud services.

For more details on how IT service providers and SIs fit in the cloud ecosystem, please see Everest Group’s recently released research, Enterprise Cloud Services – PEAK Matrix Assessment and Profiles Compendium, which profiles the players on the proprietary Everest Group PEAK Matrix.

And keep watching this space for a deep-dive into providers of cloud application and infrastructure services through a series of blogs.


Photo credit: cuatrok77

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