How will IT sourcing fare in 2017? The team here at NPI had fun with this brainstorm back in January. While we had no intention of publicizing the conversation at the time, I just came across my notes and found some of the insights to be interesting. Some of our predictions seemed a little far-fetched (“RIP, hardware” and “The extinction of EA/ULAs”), but others seem probable and noteworthy. In fact, I would say that some are more relevant today than they were just three months ago. Here are a few:
1. IT sourcing enters an age of enlightenment. IT sourcing finally gets the respect it deserves from other business stakeholders and enters a period where the art of negotiating and the science of market data combine to usher in a new era for the function. The “enlightened” IT sourcing function has tools and processes that drive savings and increased value for every transaction. It’s a cultural and knowledge shift that has measurable business impact, and equips IT sourcing professionals to interact more effectively with the vendor sales machine.
2. Microsoft announces it will no longer sell perpetual licenses, instead requiring customers to move to its cloud offerings. That’s a pretty dramatic statement, and while it may not come true in 2017, it will likely come true over the next few years. That means IT sourcing teams need to prepare now.
3. Those vendors struggling to transition their business to a cloud-first model get downright nasty. Some legacy IT vendors are struggling to transition from an on-premise revenue model to a cloud-first business – and their customers are paying the price. With Wall Street pressure adding up, these vendors will resort to dark tactics to extract additional revenues from clients – while simultaneously forcing them to adopt the cloud. If you think licensing audit activity was up in 2016, just wait. Customers will be dealing with more frequent, more aggressive audit activity in 2017. And those discounts to move to the cloud? Seize them while you can.
What predictions do you have for IT sourcing in 2017?