Insight and analysis on the data center space from industry thought leaders.

Facing Crushing Demands, CIOs Seek Flexible Outsourcing Options

With CIOs under pressure to transform their IT departments, many are pursuing the gradual migration of the data center and platforms out of the enterprise through colocation, managed hosting and cloud services. writes Pete Stevenson of Latisys.

Industry Perspectives

August 17, 2012

6 Min Read
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Pete Stevenson is CEO of hosting and colocation provider, Latisys.




Today’s CIOs are under staggering pressure to accomplish more with less, while at the same time intensifying their focus on connecting IT investment with business value. In spite of increasing complexity, reduced budgets and staffing constraints, they are expected to:

  • Transform legacy applications and outmoded processes

  • Build or acquire high-performance, secure physical and virtual infrastructures clearly tied to business objectives and requirements

  • Secure and manage critical applications, workloads and data across multiple platforms

  • Develop a long-term cloud strategy

These pressures and expectations have created a job that’s more complex and costly, leading to a trend that has received little attention in the general media, but may well be more important in the long run than other highly-hyped trends like Big Data or "consumerization." This trend is the gradual migration of the data center and platforms out of the enterprise through colocation, managed hosting and cloud services. This trend has three drivers.

Power Density. Data centers have three major operational and fiscal constraints: space, cooling and power—and they’re all interrelated. Many CIOs have been through server consolidation in an attempt to maximize efficiency, but with each generation of hardware requiring increased power and generating greater heat loads, power and cooling have taken center stage. Many facilities built in the early 2000’s were designed to handle 50 watts per square foot, yet server power densities have grown significantly and deployments continue to become more power dense.

Data centers that can’t support high densities will be severely limited in their ability to meet tomorrow’s compute demands. Colocation or managed hosting with an Infrastructure-as-a-Service (IaaS) provider whose data centers are purpose-built to support densities in excess of 250 watts per square foot ensures that you have room to “grow up and not out” over the long term. You’ll get greater value for your IT investment and have the flexibility to adapt your configuration to match changing business needs and the availability of new technologies, which are often inter-related.

Resource constraints. Given the combination of increasing demands and decreasing resources, CIOs want to focus on the tasks that deliver the most business value – and those tasks don’t always include presiding over the design, implementation, ongoing maintenance and capital associated with platform elements such as operating system management, patches, upgrades and other routine maintenance that could be better handled by a qualified third party. Nor does it include hardware procurement and server administration. Managed hosting services can take these time-consuming tasks off the IT organization’s plate and provide more time and CapEx for other initiatives that are also central to the mission of the business.

The Cloud. There is no question that the management of information technology resources will be influenced by cloud computing and services. Many CIOs and other managers are feeling pressure to determine how best to use cloud resources. And while some analysts would have you believe that the cloud is a panacea for all the problems IT departments face, the fact is that implementation of the cloud is an evolution and not a revolution. Cloud orchestration and automation means you can spin up and spin down resources for applications and tasks quickly and easily. It also means you can pay for only what you consume on a duration-oriented basis.

But unless you’re a high flying gaming company, for example, the cloud is not going to replace your existing infrastructure nor is it going to be useful in all cases—at least not in the short-to-mid-term. Most likely you’ll augment your current environment in a targeted way—starting with the most elastic workloads and evolving into a hybrid infrastructure comprised of physical and virtual resources where security vulnerability is less of an issue. This requires discipline. This requires strategy. This requires a plan. And it requires expert resources that can help you with right-sizing, migration and support. There are currently a limited number of solution providers who can (or will) do that for you.

Flexibility for Growth

The IaaS vendors best able to serve the complex needs of today’s CIOs are those that are flexible, collaborative, and can offer solutions tailored to specific customer needs—all with an eye towards high availability and high security. This starts with delivering agile, robust, extensible solutions over a highly scalable technology platform—one that spans colocation to managed hosting to enterprise cloud solutions. But it’s also critical for solution providers to offer dependable growth and migration paths as customer needs evolve. That’s where the vendor relationship becomes a trusted partnership, because customers must be able to rely on their solution provider as if they were an extension of their own team. Contracts can’t drive this—only culture, customer service, flexibility and expertise can.

Solution providers whose IaaS offerings span from colocation to managed hosting to cloud services have a competitive advantage that extends beyond technology. When their customers evolve to a point where they are ready to deploy applications or work tasks in a cloud environment, they don’t have to spend time and energy on a lengthy evaluation process nor do they need to manage multiple vendors. With business relationships already established, customers can focus on technology and business challenges without having to worry about operational details like how their solution provider will handle trouble tickets or how they will react to changes in requirements that happen faster than the time frame of the contract.

Flexibility takes on multiple forms. For example, businesses that have deployed an on-premise private cloud may want to augment their capacity during periods of peak load via cloudbursting – temporarily launching VMs in a hosted private cloud and then quickly spinning these resources down when they’re no longer needed (this is what HP and CloudAgile partners are doing with the CloudSystem Matrix). To provide business value, IaaS vendors must not only have the technical capacity to support cloud bursting, they must also offer a pricing model that doesn’t force customers to make a long-term commitment for capacity they may or may not actually need.

Innovation in Service Delivery

There was a time when outsourcing vendors could compete solely on the basis of location, economies of scale, and virtualization technology. Today, that is simply not enough. The market has become saturated with virtualized offerings. “Innovation” in IT service delivery is no longer about technology. Everyone is virtualized. Everyone has cloud platforms. Everyone claims to have fanatical customer service.

What is new, however, is the rise of innovation in new areas to meet growing demand for solutions that are perfectly tailored to a customer’s current and future business requirements. Innovation is particularly apparent in solution design and service delivery—the intersection of people, process, technology and even culture—which has become much more collaborative as CTOs and IT leaders are increasingly called upon to become builders and brokers of complex services across large, heterogeneous environments.

With an even greater emphasis on scalability and flexibility, the best solutions deliver new levels of performance and improved time-to-value-recognition while also reducing costs through maximizing efficiencies across service creation, provisioning, customer care and ongoing support.

The best IaaS providers will deliver tailored solutions designed and deployed to meet each customer’s specific needs. But they will also make a firm commitment to a collaborative, long-term partnership, placing customer care at the top of the priority list and ensuring that customers are never locked in to what made sense 18 months ago with no path forward for growth.

Industry Perspectives is a content channel at Data Center Knowledge highlighting thought leadership in the data center arena. See our guidelines and submission process for information on participating. View previously published Industry Perspectives in our Knowledge Library.

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