With the rise of commercial cloud services and increasing digitization, a major revolution is taking place in the IT industry. The traditional business model of IT companies is under considerable pressure. New competitors are the so called “hyperscalers” with a business model that differs greatly from the traditional IT outsourcing model.
Business software is increasingly offered as SaaS from the cloud and the market for Infrastructure-as-a-Service (IaaS) is growing by more than 40% annually. Because of this, the traditional outsourcing model – largely based on economies of scale – is no longer effective, resulting in decreasing revenues and loss-making contracts. This development is happening so fast that many traditional IT companies are forced to take drastic measures.