Corporate IT is Dead

[n2ize]

Based on an article written in "Network World" I predict that within the next 10 years corporate IT will be history. As more and more companies outsource their IT services to centralized service providers more and more companies will see the light and shrink their IT departments to almost nothing. This is good news for business, bad news for those in IT. Programers ? Think your spared ? Sorry, you'll be going the way of the IT worker as well.

10 years from now the typical corporate IT department will consist of 1 or 2 people punching commands in via a laptop rather than 50 - 100 IT workers and redundant IT departments. The rest of the work will be done behind closed doors at the headquaters of the centralized service provider.

Google might be among one of the players in this game. However it spells bad news for Microsoft and other software companies unless they gear up for the new future.

College students ? Best to go back to majoring in the classics like science, math, history, english and business. Focus on a more rounded and broader education and aquisition of skills rather than a focus on a narrow range of computer and IT skills.

Well, that's my take and I think I'm right. The example given in NW is, much like the large power companies came on line and became more and more reliable companies found it cheaper to buy power from them rather than run their own power plants. Corporate IT will go the same way. Why provide expensive in house IT when you can buy the IT services you need cheaper.

Even better these providers can be anywhere in the world. You email services could be handled via a facility in Houston and your web apps via a facility in India or the UAE Dubai. This could significantly lower costs per service.

[KD8COO]

I agree that a lot of the services will shift to the centralized providers. Not really a bad thing for IT people though. You'll just be working at one of those providers, with other IT people, instead of spread out at all the individual companies.

Of course, there's also the possibility that we're both wrong. Another thing that IT is similar to is the maintenance department... Some of that gets outsourced to certain providers, but there's still a need to keep some in house for routine services that can't be outsourced (as well as emergencies).

[KG4RUL]

And, there are some IT functions which have security concerns that do not lend themselves to outsourcing, especially to off-shore providers.

[KA8NCR]

Yes and no. Like everything, it depends upon the particular business. While many businesses have an inordinately large IT department that tends not to be service oriented, the truth is that there is an element of the business that can't be outsourced.

Managing SOX compliance, proper backups and higher end IT management functions isn't going to be outsourced. Ever. While dealing with morons and their email problems is something that every IT department would gladly hand over to a central service, even then I can think of many companies that will simply not lose control of their own email servers. As the requirements for disclosure change, do you think a company is going to want to be footing a bill for tens of thousands of dollars so a third-party can comply with disclosure?

Furthermore, as computer literacy has increased through the years, small and mid-sized businesses that never had IT departments are used to flying solo, and they're not going to undertake the expense of outsourcing either.

There will always be a demand for competent IT workers. The days of getting ahead with a pocket full of IT certifications and Google though, have long passed.

[K7ADB]

I've been hearing stories like that for years now but it's not what I'm seeing. In fact, most companies I've worked with are actually trying to reduce their dependencies on outsourced IT services.

The IT department is CRITICAL to most corporations now days. If the network, email or websites go down, most businesses will come to a screeching halt. When that happens, the last thing you want to do is to wait for some 3rd party company located on the other side of the world to return your phone call. I think as businesses become more and more dependent on their IT infrastructures, they will become less and less likely to outsource those services.

[AC0H]

We're actually doing just the opposite.
My company has decided that it make sense at this time to bring our hardware support and acquisition function back in house after having it "contracted" for the last 10 years.

App developement may go outside but I don't ever see our Network/Systems/Security admin function ever being outsourced.

[KD8COO]

In small to mid-sized businesses, I've noticed the e-mail, web, and security tending to migrate to being outsourced. Simply due to the increasing degree of specialization required and the inability to fund/keep busy that many specialized people. The day of the generalist appears to be over. App development seems to go both ways. I see more web stuff outsourced due to the severe security requirements that most places just can't handle internally. Whereas less risky internal use software is easier to develop in house. In a larger company, I'd expect them to try and keep as much as possible inhouse in order to more tightly control their proprietary information...

[N2RJ]

John, you are wrong.

People have been saying that I.T. departments will shrink because of the internet and cheap labor in India, and our salaries will go through the floor.

In fact quite the opposite has happened. I.T. has expanded quite a lot, and salaries have risen ever heavenward.

[n2ize]

Quote[/b] (N2RJ @ Jan. 15 2008,15:24)]John, you are wrong.

People have been saying that I.T. departments will shrink because of the internet and cheap labor in India, and our salaries will go through the floor.

In fact quite the opposite has happened. #I.T. has expanded quite a lot, and salaries have risen ever heavenward.
Read the NW article, he explains it better. Or better yet, read the guys book. His name is Carr. He lays it out pretty well. See if you agree with him as explained by him rather than I. If I can dig up the article I'll post some particulars. I tend to feel he is correct. Perhaps the reallife scenario will be smaller in scope. However, I do feel that they way IT is performed is going to change dramatically over the next decade or so,

[KD8COO]

Quote[/b] (N2RJ @ Jan. 15 2008,15:24)]In fact quite the opposite has happened. #I.T. has expanded quite a lot, and salaries have risen ever heavenward.
That's not how it is around here. IT work seems to be decreasing overall, and salaries are plummeting here in the midwest (enough that I've been considering getting out of IT and getting into something else, probably already would have except I enjoy the work and I still make enough to pay the bills).

[kf6rdn]

Seems there's always at the least going to be a need for an infrastructure person to setup the networking, routing etc, at the minimum, and a low level guy to schlep hardware around.

If it's outsourced, it's usually been a local company that can send bodies to the site.

Aside from call center/helpdesk I cant see that going offshore.

[AE6IP]

offshoring also happens when companies use off shore colos and end up using offshore help to maintain them.

it's happening more than you might realize.