Proact Undergoing Massive Growth in Selective Outsourcing

Storage and archiving specialist Proact is undergoing rapid growth in the field of niche outsourcing services such as backup, recovery and storage. Selective outsourcing has increased by 200 per cent over the past 12 months, and this strong growth is set to continue.

Lately, Proact has taken over the operation of critical IT functions for a number of companies such as NYX (which supplies online gaming systems), Aftonbladet and Cap Gemini. The clear trend towards selective outsourcing – whereby companies prefer to select a number of specialist suppliers – has opened up a whole new market for Proact.

“Outsourcing still represents a relatively small part of our turnover, but in percentage terms it is undergoing the fastest growth. We have seen an increase in excess of 200 per cent in this area since the start of 2007, and we are of the opinion that this growth will continue in 2008,” says Olof Sand, CEO of Proact.

Analysis company Radar Group agrees that selective outsourcing is on the increase. More stringent demands for measurability and action to enhance cost-effectiveness are reputed to be the main reasons for this.

“Niche organisations offering supreme specialist skills and which are also able to offer their services as an outsourcing partner have every chance of huge success in this market,” says Hans Werner, CEO of Radar Group. He is of the opinion that Swedish companies are fairly open to the concept of having a number of supplier relationships, unlike companies in other countries, on the condition that this measure enhances quality.

Proact is going against the tide in the IT industry, and its market price has continued to rise over the year. The outlook for share prices for other companies in the same industry, on the other hand, has been bleak – the SX45 IT index, which includes Proact, has shown a decline of around 40 per cent since the start of the year.

In the field of selective outsourcing, Proact is undergoing growth in respect of backup and recovery management and storage management operation. These are functions which are simple to limit and gauge.

Customers want to avoid paying for employees of their own, and they want to avoid having to manager purchasing and administration: these are the main reasons for outsourcing backup and recovery services. By passing on these operations to a third party, companies can both reduce their costs and focus on other parts of their organisation.

When it comes to outsourcing storage management, it is most often the case that companies want to avoid having to make the relatively onerous investments required for hardware. Moreover, it is often difficult to locate resources that can manage operations. Proact’s clients include companies that purchase the whole storage package as a single service, including hardware, while others opt to own the infrastructure themselves and buy operation as a service instead.

“A lot of clients who have previously had complete suppliers for their outsourcing reckon that costs often spiral, that the supply of services is unclear and that the results often cannot be measured satisfactorily. But selective outsourcing gives them back their control, creates flexibility and improves cost-effectiveness,” says Olof Sand.

There are other outsourcing services, too, which in the opinion of Olof Sand will undergo massive expansion over the year to come: these include information replication – that is, companies will be buying off-site storage in order to improve their disaster protection. More and more companies are opting to place archiving with third parties now, too.

Source: Proact

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