How Cloud Computing Has Changed the Sourcing Market

Cloud Computing Has Changed the Sourcing Market. Transformation of IT services as a tradable exchange product begin a new era in sourcing. Beginning of 2014 started with neutral, secure and transparent trading center for outsourced storage and computing capacity in operation in the EU region. Software which requires Licenses No Longer Needs To Be Purchased.

We can pay the License Fee as hourly charge in a Pay as You Go model – be it Red Hat Linux or Windows Server Editions. Indirectly, Open Source has Forced the Closed Source Softwares to be compared in an hourly model. Thus, a developer unless forced is opting for 0.08 USD per hour GNU Linux Server  over 0.22 USD per hour Windows Server. Even if, Microsoft Operating System is required, paying just for few hours resolves the need.

The market for IT services is still enjoying steady growth rates and the outsourcing of such services has established itself as a management tool globally across all industries to the public sector. Thus –  Cloud Computing as a model itself has changed the sourcing market.

Impact of Cloud Computing Sourcing Market

The structures in this market are currently subject to major changes. In the classical outsourcing market a decline in sales can be observed particularly in large contracts, which is in itself contrary to the growth of the IT market.
One explanation for these differences is certainly due to the fact that the award of benefits to external service providers is more specific today. In addition, there are certain periods every now and then trending towards partial insourcing.
In addition, companies tend to become smaller order volumes at shorter maturities. Specific benefits of different, specialized suppliers as opposed to a single service provider is en vogue. This trend is reinforced by the emergence of another form of offers for IT services. New providers are focused on very specific, but standardized services.

In cloud computing, the focus is on these same standards. The product is obtained as defined by the supplier. So it is not the subject of a specification individually created by the user. The success of cloud computing, which is reflected in above-average growth rates, is a sign that customers are willing, for the benefit of flexibility and cost abandon individuality in the preparation or in the provision of IT services.

Influence of Cloud Computing in Emergence of New Pricing Models

With the availability of the trading platform and the short time in which a transaction can be completed, the new products pricing also get changed at a much higher frequency. These can also be supplemented by the product indexes. In addition, trends and volatilities can be derived. So, generally there is a change in the design of pricing models in sourcing contracts.

Even in contracts that have a very traditional, individualized sourcing the subject, the pricing model can take into account the development of the stock market. So far, these pricing models are based on a snapshot at the time of tendering and contract negotiation with corresponding clauses for price adjustments and changes in quantity. New pricing models may refer to the price trend on the stock exchange, on the other hand – this also includes the price adjustments for the changed quantities.