Executive Summary

Ownership of IT assets is one of the most important factors in determining the dynamics of an outsourcing engagement. Historically, suppliers leveraged assets ownership transfer in Infrastructure Outsourcing (IO) engagements to deliver financial and operational benefits to the buyer. However, key changes in the market reversed this dependence, resulting in increased exploration of the “asset-light” outsourcing model.

Several factors drove the increase in adoption of the asset-light model. The model provides better alignment of supplier incentives with buyer interests. Buyers find it beneficial to own IT assets due to the inherent flexibility, control, and benefits of scale. Suppliers avoid the capital expenditure requirements that reduce the Return on Investment (ROI) of asset-heavy deals. New technologies also serve as a catalyst for the asset-light approach, due to the constant turnover of the asset base and the difficulty of predicting the technology road map. Finally, the emergence of Remote Infrastructure Management Outsourcing (RIMO) played a key role in instituting asset light as a sustainable model.