This paper examines the likely impact of utility computing on information technology (IT) outsourcing. Drawing on a set of eleven outsourcing cases and on IT outsourcing literature, the paper identifies four risks that lessen the potential benefits of IT outsourcing. The paper considers two approaches to outsourcing: selectively managing a network of outsourcing partners and managing large-scale exclusive partnerships. The paper discusses the implications of both vendor relationship management and architecture design capabilities as firms seek the benefits of utility computing, and concludes that both continue to play key roles.
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