IT Outsourcing Profiles And Why They Matter
September 16th, 2010 By: Industry Perspectives
Don Goodwin is Chief Revenue Officer at Latisys, a leading national provider of colocation, managed hosting, managed services and disaster recovery solutions.DON GOODWIN
Operating in an environment of shrinking data center space and power availability, data center professionals and corporate executives find themselves challenged to satisfy the growing demand for data storage, networking and high-bandwidth applications. At the same time, tight budgets for capital expenditures and an unforgiving credit market are leading many enterprises to outsource IT infrastructure.
To meet these challenges, organizations can benefit greatly from determining what their current IT Infrastructure Outsourcing (ITO) profile is, which IT services to outsource, and which functions should remain in-house to realize savings on capital expenses and reduced total cost of ownership.
For purposes of this article, we are defining IT infrastructure as not only the servers that power an organization’s data needs, but also the management of the storage, security and nework systems that permit an enterprise to run properly in a data center environment.
Enterprises typically align with four ITO profiles:
- ‘Off-site’ refers to a company ready to move their IT infrastructure to a secure, redundant powered ‘off-site’ data center facility.
- ‘Off-load,’ describes a company that seeks to ‘off-load’ some or all non-core management of select resources, such as security, storage or backup.
- ‘Optimize,’ is used for companies with increased requirements for additional infrastructure management resources that seek tightened financial performance and more control.
- ‘Outsourced’ refers to a company that seeks support for their above-platform applications and turnkey services, in turn shifting segments of their IT systems, processes and/or functions to service providers specializing in managing IT functions on a captive or shared tenant basis.
A Closer Look at The 4 ITO Profiles
The typical off-site client seeks for more security, reliability and scalability than what its in-house data center capabilities can provide. It requires a colocation provider that can offer data center space with redundant power and cooling to ensure 100% uptime and 24×7 physical security for their designated IT professionals, where the client owns and maintains their own equipment and software. Often this may include a Business Continuity and Disaster Recovery solution requiring use of multiple data centers across different locations, more often different regions of the country.
Companies seeking to off-load IT infrastructure management often leverage managed services (Firewall, Managed VPN, Intrusion Detection, Intrusion Prevention, etc.) provided by a service provider to augment their own solution. The company may want to leverage the round-the-clock availability of certified IT professionals for the ongoing Monitoring and Load Balancing services on production servers, as well as Managed Storage and Managed Backup for complete data protection.
As an enterprise’s IT requirements for increased efficiency and consolidation become a strong fit for Virtualization and Managed Servers, companies seek the ability to turn up and run their applications quickly with minimal involvement from their own technical resources. To gain the benefits of this approach without incurring significant capital investment, clients can leverage tailored solutions provided by a data center services provider and thus turn the associated monthly charges into more manageable operational expenses that permit greater financial flexibility and return on invested capital.
This profile is suitable for companies desiring the value, functionality, and benefits of their business applications without the headache of managing and running complex applications such as change control, application management and helpdesk services. Firms with this profile want to maximize outsourced investment as well as the performance of their IT spend, and seek a provider who can go beyond the infrastructure and provide above platform-level support and services.
The Benefits Of ITO
While there are several economic and business advantages to outsourcing IT infrastructure, three stand out. First, strategic outsourcing can deliver savings on capital expenses and a reduced total cost of ownership (TCO) for the organization. Instead of making heavy investments in a physical security infrastructure, like that of a fully-redundant data center, a firm can leverage an outsourcing provider’s technology, capabilities and infrastructure for a best-of-breed solution that does not require burdensome capital investment.
Additionally, a firm can leverage service level agreements (SLAs) to ensure IT infrastructure availability and performance sync with the firm’s business objectives. SLAs are not often provided internally if IT infrastructure is managed in-house.
Another benefit is the ability to take advantage of technical expertise of the outsourcing provider when it comes to managing capabilities such as load balancing, security, storage systems, etc. The ability to benefit from this expertise is of tremendous value, particularly for firms with smaller data center facilities unable to accommodate the latest advancements in areas such as increased density and power utilization.
Determining an organization’s ITO profile is an important step in addressing the challenges presented by rising costs and tighter IT management budgets, and can set the organization’s IT department on a path towards better optimization of IT infrastructure.
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The most important benefit for most clients of outsourcing is the transfer of responsibility to the provider. In cases of data loss, or if the system crashes, it’s usually the provider that’s accountable and will clean up.