The growth of IT outsourcing
With the South African IT services market expected to reach R53.3 billion by 2015, according to BMI TechKnowledge’s (BMI-T) South African IT Services Market Sizing and Forecast it is safe to say there is still considerable opportunity for IT players in their respective specialist fields, be it vendor, service provider or integrator.
However, it is the outsourcing market in particular that has enjoyed significant support over the past three years and will continue to provide a lucrative playing field in the coming two years.
This statement is also echoed by a report released by KPMG: South African Sourcing Pulse Survey: Shared Services & Outsourcing Advisory Practice, Management Consulting in September 2012 which indicates that the outlook for domestic outsourcing is looking favourable in terms of adoption.
Considering the above figures, why is the South Africa outsourcing market such a strong force, particularly in light of global economic pressure? For one, the outsourcing market continues to grow through its dynamic evolutionary nature which in turn allows it to meet the varying demands of organisations.
It is specifically the managed services and hosting segment that are enjoying some strong adoption. Managed services enable clients to choose what outsource services they require such as end user device management or security instead of necessarily outsourcing the entire IT stack.
This also gives the market the flexibility of outsourcing different services that are tailored to meet company requirements.
However, the mantra remains the same: with an outsource partner, organisations benefit from the use of specialist systems and insight that offers the latest in technology advancements and can ultimately impact the way they run their daily operations.
Full outsourcing services take this one step further, whereby outsourcers take ownership of, and responsibility for, managing all or very large parts of the customer's information infrastructure and operations according to a service level agreement (SLA).
Driving the evolution
But, it is not only the outsourcing market that is evolving on its own – external technology influences are also dictating the way it is developed and implemented.
Take Unified Communications and Collaboration (UCC), for example. The convergence of IT and telecoms, mobile workforce support and the constant need for broad network connectivity are playing a significant role in the adoption of wireless and mobile technologies.
This is resulting in continuing developments in the UCC space, hence the changes in traditional IT infrastructure and network design.
Here, it makes complete sense to partner with a UCC outsource provider who can take the guesswork out of unifying the myriad connectivity and communication options such as videoconferencing, messaging, telephony and VoIP.
However, where outsourcing will really come into play in the next few years is to address the complexity of IT environments which show no signs of abating or simplifying for that matter. While a lot of organisations do have IT departments to support businesses processes they don’t always have the skilled resources to handle the increasingly complex IT infrastructure.
Outsource service providers have a major role to play here; businesses can outsource their environments in order to optimally focus on their core businesses while gaining access to best-of-breed technology expertise.
It also then becomes the service provider’s responsibility to ensure that training occurs, certification levels are maintained and that technical expertise and optimisation is available for the outsource client’s benefit.
Overall, the research group IDC states that general IT spending in South Africa will steadily increase at a compound annual growth rate (CAGR) of 6.2 percent over the coming years to reach $17.42 billion (around R150 billion) by 2016. As indicated, the IT services market represents a significant part of this growth.
Outsourcing will no doubt play a critical role in the above growth and, importantly, in the manner in which IT services are provided in SA today.
Outsourcing allows local organisations to truly embrace the advancements that come with technology, be it cloud computing, mobility or UCC, but with the confidence and benefit of using a partner organisation which is completely focused on these technology business enablers.
There is no doubt that outsourcing will remain a major force in the coming years.
GfK and VMware: Innovating together on hybrid cloud
GfK has been the global leader in data and analytics for more than 85 years, supplying its clients with optimised decision inputs.
In its capacity as a strategic and technical partner, VMware has been walking GfK along its digital transformation path for over a decade.
“We are a demanding and singularly dynamic customer, which is why a close partnership with VMware is integral to the success of everyone involved,” said Joerg Hesselink, Global Head of Infrastructure, GfK IT Services.
Four years ago, the Nuremberg-based researcher expanded its on-premises infrastructure by introducing VMware vRealize Automation. In doing so, it laid a solid foundation, resulting in a self-service hybrid-cloud environment.
By expanding on the basis of VMware Cloud on AWS and VMware Cloud Foundation with vRealize Cloud Management, GfK has given itself a secure infrastructure and reliable operations by efficiently operating processes, policies, people and tools in both private and public cloud environments.
One important step for GfK involved migrating from multiple cloud providers to just a single one. The team chose VMware.
“VMware is the market leader for on-premises virtualisation and hybrid-cloud solutions, so it was only logical to tackle the next project for the future together,” says Hesselink.
Migration to the VMware-based environment was integrated into existing hardware simply and smoothly in April 2020. Going forward, GfK’s new hybrid cloud model will establish a harmonised core system complete with VMware Cloud on AWS, VMware Cloud Foundation with vRealize Cloud Management and a volume rising from an initial 500 VMs to a total of 4,000 VMs.
“We are modernising, protecting and scaling our applications with the world’s leading hybrid cloud solution: VMware Cloud on AWS, following VMware on Google Cloud Platform,” adds Hesselink.
The hybrid cloud-based infrastructure also empowers GfK to respond to new and future projects with astonishing agility: Resources can now be shifted quickly and easily from the private to the public cloud – without modifying the nature of interaction with the environment.
The gfknewron project is a good example – the company’s latest AI-powered product is based exclusively on public cloud technology. The consistency guaranteed by VMware Cloud on AWS eases the burden on both regular staff and the IT team. Better still, since the teams are already familiar with the VMware environment, the learning curve for upskilling is short.
One very important factor for the GfK was that VMware Cloud on AWS constituted an investment in future-proof technology that will stay relevant.
“The new cloud-based infrastructure comprising VMware Cloud on AWS and VMware Cloud Foundation forges a successful link between on-premises and cloud-based solutions,” says Hesselink. “That in turn enables GfK to efficiently develop its own modern applications and solutions.
“In market research, everything is data-driven. So, we need the best technological basis to efficiently process large volumes of data and consistently distill them into logical insights that genuinely benefit the client.
“We transform data and information into actionable knowledge that serves as a sustainable driver of business growth. VMware Cloud on AWS is an investment in a platform that helps us be well prepared for whatever the future may hold.”