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Cloud computing shakes up traditional IT outsourcing

By Stephanie Overby

April 8, 2010 02:44 PM ET

CIO - For all the vagaries of IT services, traditional IT outsourcing has always been quite tangible--servers, data centers, networks, specifications, man-hours, lines of code. The rise of cloud computing, however, is changing all of that with flexible, asset-free IT services available on an as-needed basis for more aspects of enterprise technology.

Cloud services are a boon for many IT departments willing to forego customization: They help IT organizations chip away at hefty capital expenditures from back-end infrastructure to customer-facing software and everything in between. Consequently, the cloud is turning the traditional IT services industry on its head.

"Cloud computing represents a fundamental shift in how companies pay for and access IT services," says Susan Tan, IT services and sourcing research director for Gartner.

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