Analyst Gartner has identified 14 alternative delivery models that will transform the IT market in the next five years, including software-as-a-service (SaaS), grid computing, capacity on demand and business process utilities.

The report, Alternative Delivery Models: A Sea of New Opportunities and Threats, says that IT leaders must explore these models or risk having business units implement the solutions without their knowledge and support.

Alternative delivery models require IT functions to acquire, package and deliver IT in new ways, the report said. “These alternative delivery models start from externals. Software-as-a-service is not something you buy and install in-house, it’s something you get from outside as available functionality, and you adapt to it,” said Claudio Da Rold, vice president and distinguished analyst at Gartner.

The new models provide several advantages over traditional models, said Da Rold, including “faster and cheaper utilisation of a solution, reduced infrastructure investment, lower switching costs, and the idea that you pay based on what you consume, rather than pay for what you install.”

To avoid being bypassed by the business, IT functions need to respond by offering themselves as service integrators, Da Rold added: “What we are talking about is an evolution from a view of technology that is mostly about how you manage the technical aspects of IT into a view that is far more concentrated on the business value and the support to enable business growth.”

IT will still have an important role to play, he said: “IT should be leading the shift towards this new mix of alternative delivery models and external services because, if not, we don’t see who will take care of all the technical issues.”

A survey by service provider Colt suggests that IT directors are already ahead of the game, finding that 88 per cent of UK IT directors expect to increase their use of on-demand software by 2009, while 68 per cent of UK businesses have already embraced server virtualisation.

“Adoption of server virtualisation is very strong. The critical thing is that, in the future, you will need application virtualisation to deliver the agile IT infrastructure that customers are looking for,” said Geoff Gilton, managed service products director of Colt.