In Software development companies will prevail I stated that I think that in house development is doomed. Building from this argument, I believe that we will see a time where technology is a vertical such as banking or insurance.
Technology is something that every company needs, just like financial services, benefits packages, etc. However, unlike banking or insurance, many companies today still strive to handle all thier technology needs in house.
I believe a much better approach for large corporations would be to purchase technology as a service. Technology companies could handle hosting, custom application development, environment set up, etc. CTO (or CIO) internal positions would still be required, much like a CFO currently is. Additionally, there would be supporting internal positions for the CTO. But, application development, integration, security, etc would be handled by the professionals employed by the technology company.
Some CIOs are already requesting software as a service. The message last week in Santa Clara was Some of you are doomed. No one is surprised by this message. The Standish group is reporting that only 29% of projects were successful in their last study. In the past we've tried contractors and in house development. Then, offshore became the trend. However, based on the current state of things clearly need a new approach.
Technology companies comprised of quality individuals will drive technology success in the future.