Business Week published an article recently that talked about changes in outsourcing. They got the cloud part right - massive disruptions and changes in the IT infrastructure stack both in technology and company power positions. But they got the outsourcing part wrong.

There will be big changes for large and middle-tier outsourcing companies. But the large won't necessarily get larger. In fact, the combination of cloud and modern programming frameworks makes it perfect for small developers and medium IT shops to get a leg up on the big consulting firms, putting their models - and margins - at risk.

Ken Fromm is a serial entrepreneur who has been a part of many innovation cycles. He co-founded two companies, Vivid Studios, one of the first interactive agencies in the Internet 1.0 days, and Loomia, a Web 2.0 recommendation and personalization company. He is currently working in business development for Appoxy, developing scalable cloud applications for others in the realtime and Internet of Things arenas. He can be found on Twitter at @frommww.

This post explains why cloud makes for better outsourcing. More specifically, why cloud lets you keep a better eye on outsourced development, lets you more quickly correct issues that might arise, and gives you more security when taking ownership of the work.

Most large firms don't go to large IT consulting shops to get their websites designed and developed. (At least, we hope they don't.) Design shops in combination with industrial strength content management systems (WordPress, Alfresco, and Drupal/Joomla/Zend combinations) let modest-size firms create robust sites for some of the largest companies. - and under modest budgets. The same is happening within Web app development. The combination of cloud infrastructure and programming frameworks lets a small team of developers compete on the same or even better terms than a large team of enterprise consultants and developers.

A Web application is not just a SaaS or Web 2.0 service built for multi-tenant use. The increasing ease of building them means that every application becomes a Web app and that almost every company can build or commission one. They can be utilities to extend your brand. They can be critical interfaces doing business with your customers and business partners. Or they can be for internal use built on top of open source business apps or as replacement for large complex business software.

Reason 1: Agility

The most pronounced advantage to developing in the cloud is agility - the ability to work faster and get more things done. In the case of outsourced development, agility translates into the ability to ramp up development of a project as well as identify if something is going off course.

The issue isn't so much the development of the look and feel because that's not tied to whether something is in the cloud or not (although the programming frameworks used for cloud development create common interface patterns that accelerate development). But when you start handling data and running algorithms to process the data - and when you modify the features to find out what works and what doesn't - that's where doing things in the cloud changes the game.

This is because build-test-deploy cycles are faster using cloud infrastructure and programming frameworks. The structure and flows for a Web app can be built in a few days or weeks. Data storage components can be brought on line quickly and multiple copies or versions of test data can be cycled in and out. Configuration and data management time is reduced, and so less time is spent messing with operating environments and copying and managing data stores - which means more time developing, testing code segments and algorithms, and making sure an application will work as intended.

And once you launch the application, this speed improvement extends to iterating on the design. No application is launched with the right features and flows - in fact, with minimal viable product approaches, the goal is not to get everything right, it's to get something to users to get data. Being able to rapidly iterate based on real-world data and to rapidly add or delete features (yes, deleting features is a part of popular design approaches) makes sure you get a viable product to users sooner rather than later.

Reason 2: Standard Architectures

Standard architectures and loosely coupled components are another benefit to using cloud infrastructure. Most IT consultants developing on managed servers will have likely have restrictions or gating factors with their infrastructure which will make development more serialized and the components more tightly configured.

The cloud enforces much looser coupling between application code, operating systems, Web and application tiers, and data storing and processing. Cloud developers are forced to compartmentalize and think in distributed terms.

This is in part due to the abstraction inherent in virtualization - more parts of systems are commoditized and therefore shielded from application code. Also, the components that are visible are accessed through increasingly standard distributed programming approaches.

This approach pays off because one or more pieces can be modified and then combined and relaunched in hours and minutes instead of half-days and more days. And because the elements launched are copies and created on the fly, instances can be started and stopped at will with little setup or clean up.

Developers can also build and test more asynchronously. Instead of running one version one day and another version another day, developers can run trials at the same time and share results the same day.

Reason 3: Transparency

A third reason for reduced risk with outsourcing development is the greater transparency provided by cloud development, meaning that a more logically separated architecture in combination with rapid launch-teardown-restart mentality makes it easier to know where things are, localize and identify problem areas, and take over ownership.

When you outsource development, you typically accept the language and the development environment that the IT shop specializes in. The big pieces - the operating system, Web server, database, and language - will be common and industrial strength. (Hopefully it's a form of LAMP stack.)

But with internally managed environments, the scripts that configure the system, the wiring of connections between components, and the side processes to maintain the system will all be largely custom and unique.

With a system in the cloud, a number of components are shielded by the virtualization layer. Any exposed connections typically work via standard interfaces. Configuration scripts and issues are either handled by third party software or services or at least widely documented and discussed. Configuration problems, scaling issues, and growing pains will still exist. But the enforced compartmentalization and the widely exposed connections reduces the complexity and administration of the system.

Cloud development and programming frameworks have led to the rapid acceptance of core design patterns. This means the application code and the system architecture will be recognizable to thousands of developers.

It also means that approaches and answers are available from a number of sources - which means you can more easily take over oversight and operation of the application with less of a learning curve and less risk.

Summary

Risks associated with developing applications - internally or using outside developers - will always remain. Things will go wrong regardless of the platform or method you're using. Teams can fall flat or deliver something other than what was intended. Algorithms might not quite work right. Data can get corrupted or overwritten. Bad programming and poor project management can touch any project.

But the combination of the cloud and common programming frameworks increases your chances of success - or at least, developing what you intend to develop.

Photo by Kevin