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This paper describes the logical evolution of IT service provisioning through various delivery models over time concentrating on the “rent” era as well as the “market” era – an emerging external IT services marketplace that offers rich opportunities for IT organizations to become more cost-effective in the future. With the market era, IT organizations speculate that strategic business applications for mission-critical applications will remain in-house but delivery for standard and meta-industry applications, processes, and technology will be off-site. Thus, for most companies, it is likely that external IT providers will form part of their future service delivery package and that some IT departments will become both consumers and sellers of components. The implications of these developments for IT management are articulated and the elements of an IT sourcing strategy presented.

Developments in Practice V: IT Sourcing: Build, Buy, or Market