Outsourcing: Soon to Be the New Normal?

Arthur Cole
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IT outsourcing has been a facet of the modern enterprise for some time, but it seems that we’ve only seen the tip of the iceberg so far.

According to a recent study by Vanson Bourne on behalf of Savvis, competitive pressures and tight budgets will push nearly 70 percent of IT infrastructure onto an outsourced model by 2017, more than double what it is today. The movement is happening through a number of channels, the researchers say, including greater adoption of hybrid cloud architectures, as well as increased reliance on colocation and managed services. And while nearly half of survey respondents cited cost as a prime driver, significant pluralities also mentioned improved service and reliability, as well as better scalability and flexibility, from outside resources.

Normally, I would look askance at a study on the increasing popularity of outsourcing from on outsourcing firm like Savvis, but in this case I think they may be on to something. We can quibble over the 70 percent figure, but it seems clear that with third-party infrastructure already a common facet in medium and large organizations, reliance will only increase as internal cloud architectures make it easier to burst loads onto public resources. This is undoubtedly a prime driver in the recent spate of server provider acquisitions by large multinationals, capped off this week by NTT’s purchase of both Virtela and Raging Wire.

Indeed, it seems that the approach to outsourcing has shifted from “Should I or shouldn’t I?” to finding the best way to maximize external infrastructure. According to EOH Cloud Services Director Richard Vester, issues with implementation, integration and overall service provisioning are not nearly as complicated as they were a few years ago. They key is in finding a solid cloud management platform that can accommodate both legacy infrastructure and the needs of the newly distributed architecture. Few organizations are going all-in on the public cloud, so it is important not to draw artificial distinctions between O&O and third-party resources. A full-time, full-infrastructure management and monitoring solution is the best way to assess which sets of resources are appropriate for all enterprise data requirements.

It’s also important to understand that simply pushing legacy infrastructure onto outside infrastructure doesn’t solve your problems; it just extends them to a wider footprint. As Dynamic Strategies Joe Infante told Forbes recently, the move to ITaaS or any other outsourcing model needs to be accompanied by a broader vision that incorporates strategy, management, new competitive opportunities and a range of other factors. It’s the difference between utilizing outsourced infrastructure reactively to confront issues of the past and present, or proactively to drive data activity into the future.

IT has always been subject to the herd mentality when it comes to new technologies or new ways of viewing data infrastructure and architectures. Virtualization, the cloud, SDN and outsourcing are all playing an active role in this grand tradition.

But that does not mean outsourcing is the answer to everything. And in that light, it is refreshing to see the conversation shift from the merits of outside vs. inside infrastructure to ways in which external resources can be most properly utilized for the betterment of the enterprise.

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Oct 29, 2013 7:48 AM Johnnythegeek Johnnythegeek  says:
I suspect the outsourcing fever will kick in. For so many reason and not just cost of labor. Using off site servers and other cloud services means less overhead, less support needed. Not to harp on Obama care AKA Afordable Health care act. But it has allowed for many companies to budget in their expenses by not offering health care and instead paying the penalty. What company would not do this?? This is why Obama and Washington fail, because they do not understand how business runs. Outsourcing is most certainly a answer to save money. Does it create jobs or just move those jobs into lower paying ones? Reply
Oct 30, 2013 8:50 AM Art Art  says: in response to Johnnythegeek
Too often, though, outsourcing is seen as the culprit in the loss of IT jobs. In reality, it is a symptom of the large consolidation trend going on in the industry. More loads are being shifted to the cloud, which means the regional cloud centers are getting larger and the on-premise infrastructure is getting smaller. And since both are becoming more automated, they need less IT staff to maintain. Today's IT worker, then, would be wise to bone up on service provisioning and infrastructure design and architecture rather than day-to-day resource management so that even if consolidation draws down the IT workforce, they will still be able to provide value to regional facilities or large enterprise operations. Reply
Oct 30, 2013 3:47 PM Craig Craig  says:
I'm not surprised that people look at external options. Usually the initial transaction costs and implementation time kill any internal option. Over time I suspect that the complexity of multi-vendor solutions (networking, sprawl, data mgt, lock-in), drives the need for a substantive internal workforce to make sense of it all... even if the machines are located elsewhere. Cheers, Craig Reply
Nov 7, 2013 6:18 PM Alleli Alleli  says:
Seeing this in the future, by 2017 to be exact, is very realistic. I just wonder if this could go any faster. I mean, we can see how swift-paced the growth of technology is. IT outsourcing can grow, or become normal, in parallel with it as well. What do you think? Reply
Dec 13, 2013 3:38 AM Michael611 Michael611  says:
Outsourcing helps businesses cut down on cost.. Reply
Mar 12, 2014 3:12 AM Tom Hanks Tom Hanks  says:
Indeed. When there is a better, cheap and productive option, then it would be a mistake to carry on the data entry works on your own. Better to outsource it. Reply

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