Study: Cloud plans are a critical component of business outsourcing agreements

Cloud outsourcing is the virtualization of information technology resources to a third-party site responsible for the data. This process is not all that different from the practice of businesses outsourcing customer service inquiries and additional services to other countries, so the partnering of the two ideologies may have been inevitable.

According to a report conducted by TPI, which is called The TPI Momentum Market Trends & Insights 2010 Annual Report, many of the service and contract agreements relating to outsourcing hinged on whether or not managed cloud hosting would be utilized.

The study also made note of the fact that the outsourcing market was becoming increasingly competitive, and that many of the new contracts inked are now much shorter as a result. Furthermore, large corporations are favoring the use of multiple outsourcing providers.

The cloud may fit into this role well, as it offers the ability to continually upgrade software without replacing infrastructure, which could be introduced to a newly-contracted outsourcing provider.

The cloud is also a key component of several corporations infrastructures, which according to Gartner may become a popular alternative for businesses looking to to upgrade their IT systems cheaply.