Running IT-as-a-Service Part 26: The evolution of the managed services providers’ landscape in Australia
Conclusion: There are distinct differences between traditional outsourcing, managed services and as-a-service contracts. Traditional outsourcing and managed services are input-based contracts with a fixed price based on the number of the supplier team members delivering the service, service levels that do not reflect business operations and significant financial penalties when exiting for convenience.
As-a-service contracts are outcome-based contracts, priced on a consumption basis, measured by service levels that reflect end-user experience and no exit fees.
IT organisations should analyse the advantages and disadvantages of each alternative whilst formulating their sourcing and Cloud migration strategies.