In times of economic uncertainty, managed hosting solutions become more popular among large organisations, it has been asserted.
According to IT industry analyst IDC, users' preference for predictable periodic expenses and potential cost savings from vendors' economics of scale in a downturn tends to drive take-up of outsourcing and managed services.
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Adam Lee, IDC associate market analyst for the New Zealand IT services market, commented: "With some skin left in the game, vendors can better convince customers of their commitment towards fulfilling service level agreements. Outcome-based contracts and price-per-mainframe capacity are some of the examples."
The company went on to say increasing pressures on vendors to help their customers ride through the economic storm is leading to a preference for discrete outsourcing over enterprise-wide information system outsourcing.
Earlier this week, IDC stated the popularity of open-source managed hosting solutions is on the rise.
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The group added that vendors of open source enterprise applications are attracting equity investments and experiencing growth rates are typically above 20 per cent each year.