Here’s a new acronym to grasp for 2012: ILCS, otherwise know as Industrial Low-Cost IT Services. At the Gartner Outsourcing & IT Services Summit 2011 in London last week, much discussion focused on the trend toward replacing costly customized IT services with more standardized services that come at a lower price. “While there are multiple ways to reduce the cost of IT delivery, as well as to increase the value of IT, the trend towards ILCS will become paramount for end users to trade nonessential customization for better and less expensive services,” said Claudio Da Rold, vice president at Gartner.
Gartner says that by 2015, ILCS services — outsourced e-mail is one example –will make up 30 percent of the IT services market, and that the value of cloud services will grow into a $177 billion market.
Interestingly, Gartner measures the price of such services using a per-user or per-unit per month measurement. For example, it contends that e-mail services delivered by ILCS should cost about $6 PUPM rather than the $8 to $10 PUMP that traditional e-mail costs. The ILCS price could go as low as $3 PUPM for basic services.
For IT, the advent of ILCS cuts both ways. On the one hand, it gives IT the chance to cut costs and become heroes in the business. On the other hand, it takes away IT’s chance to shine as a builder of custom apps. It’s just one more twist on the cloudy, so to speak, future of IT.