Minnesota opts for cloud outsourcing

The state of Minnesota has embraced Microsoft's Internet cloud services by agreeing to an application outsourcing deal, says RCPMag.

Minnesota's Office of Enterprise Technology (OET) has agreed to use Microsoft's Business Productivity Online Suite (BPOS) hosted services. BPOS will provide support for some of the state's collaboration and communications needs, including "e-mail, instant messaging, web-based collaboration and conferencing," according to a press release issued by the OET.

The deal, which was established last week, will apply to "all executive branch agencies" in the state. However, other government agencies, educational institutions, cities and counties can participate if they wish, the OET's announcement explained.

The Indian IT sector is likely to witness heavy consolidation in the coming months as medium-size companies struggle to sustain growth amid a rising anti-outsourcing tirade in the US, states The Times of India.

"We expect many mergers and takeovers in the IT sector. It will be among Indian companies and also overseas deals. This is very important for mid-size companies," PN Sudarshan, senior director at global consulting firm Deloitte Touche, told media in an interview.

He said the focus of Indian outsourcing companies in the coming months will be on Europe and the Asia-Pacific region.

China's outsourcing market is giving India "substantial competition" in terms of "footprint, awareness and capability", said Jens Butler, principal analyst at Ovum, in a statement, writes ZDNet.

India's possible eclipse by China's ascension in the outsourcing business has been reported by analysts in recent years. They point to India's high attrition rates, poor infrastructure, and rising wages as factors contributing to the country's decline in shared services and outsourcing activities.

In a study conducted by Tholons and Global Services, India was the top global outsourcing nation in 2009. China was among the top five. Butler called the competition between China and India a "two-horse race to the finish".