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Cloud Computing Squeezes the Outsourcing Industry, Business and Industry Trends Analysis

AstraZeneca PLC recently cut 50% from its annual $750 million in expenditure on outsourced IT assistance due to a shift towards cloud computing. The cloud enables businesses to abandon in-house computer networks and custom software development, which companies such as Tech Mahindra ltd., Infosys Ltd., Tata Consultancy Services and Wipro Ltd. in India have been handling on an outsourced basis for western customers since the late 1990s. Personnel needs also shrink with the cloud. ISG, Inc. reported that traditional service providers need one technician to oversee 200 physical servers, while one person can monitor thousands of centralized cloud servers accessed via the internet.

The impact is already evident in slowing new job growth in India. India’s National Association of Software and Services Companies reported that growth was expected to fall to a five-year low in 2015.

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