There is upheaval coming to IT services firms as business models are questioned

Just when the IT service providers thought it was safe to go back in the water, following the recession, they face massive upheaval to reposition themselves in the new world.

Forrester has released its latest report about the tech services sector.

The Coming Upheaval In Tech Services report covers the consulting, system integration, professional services and outsourcing segments. It says the transformation will “call into question traditional business models.”

Traditional delivery models will be undermined by cloud computing and software as a service says Forrester.

See this article about the report.

Forrester says: “As a result of these dynamics, the resulting changes will be much more severe and disruptive than we’ve seen over the past 10 years in terms of service lines offered, buying habits, key stakeholders, pricing, and delivery models. We believe that new offerings and models will eclipse traditional services. Specifically, technology services will be recast as follows:

1. More money and budget will go to services.
2. The operating model will shift from fixed to circulating capital.
3. The commoditisation of traditional services will accelerate.
4. Demand and growth will shift to new services with higher margins.”