CIO decisions – Should I outsource my datacenter?

Article by Jayabalan Subramanian

How much is too much? It’s hard to say – especially with datacenters. It’s a subject that has troubled CIOs who have over-provisioned in the face of soaring business demands and need to cut costs at the same time.

More and more frequently, the balancing act brings CIOs to one question: should they build and maintain their own datacenters or let others run it to help manage costs and enable growth?

The current slowdown is pushing more CIOs towards evaluating an outsourcing strategy. Only half in jest, one CIO says that in a time of crisis, even God outsourced the building of the Ark to Noah. By turning to managed hosting services, CIOs hope to better control capital and operational costs while enabling their organizations to be more agile to address changing market scenarios.

While the datacenter is crucial to the operations of your business, you should be cautious of allowing it to take precedence over other business operations. Unless your company is a datacenter services provider, you should consider outsourcing your datacenter. Building a datacenter requires time, space, resources and competent staffing. A datacenter should run 24/7, which means staffing it around the clock. By paying someone else to host and manage your servers, networks and other computer equipment, you free yourself to focus on the core functions of your business.

There are many benefits of outsourcing datacenters. Some of the more important ones include:

Scaling on-demand:

Depending on how fast your business grows; you may need to scale-up your IT infrastructure to meet demand. If the business slows down, it means scaling down the same to avoid wastage. This can be expensive and time consuming for you if you are managing the datacenter on your own. When you outsource, you use as much or little resources as your business requires on the go. You get to enjoy this scaling flexibility without impacting your capital investment, what is referred to as capital expense in the industry.

Enjoy purpose-built infrastructure:

Because a datacenter provider operates as an Infrastructure-as-a-Service (IaaS) company, they are able to set up highly redundant facility infrastructure that meets all the requirements of an efficient and highly available datacenter. Other important components of an outsourced datacenter are:

  • Fire suppression technology to prevent data loss due to fires.
  • Guaranteed security. Both on-site surveillance and authentication systems ensure that only authorized persons can access your networks. These systems are constantly improved to counter new hacking techniques.
  • Constant system upgrades at little or no cost. IT Infrastructure components get outdated and obsolete quite fast. The IaaS Company you are using has the capacity to change hardware and systems in line with changes in technology without affecting your business.

Reduced cost of operation:

A good hosting service provider should help you save between 1/3 and ½ of your total datacenter operation costs or more. When you factor in the amount of money you would spend on upgrades every year, it becomes clear that the expense is unnecessary, especially if you can enjoy high quality and redundant outsourced services for less. Datacenter companies charge a fixed rate for the duration of the contract, billed as operational expenses or OpEx. This rate is inclusive of upgrades and all other services, unless otherwise stated in the contract.

Guaranteed Connectivity and Increased Bandwidth:

Outsourced datacenter connectivity provides greater redundancy, which ensures that your applications are always accessible. In addition, you enjoy burstable bandwidth, which ensures that your availability is stable even when there is a spike in demand.

So are you looking at outsourcing your datacenter? Considering the numerous business benefits that it has to offer, taking a decision to outsource should not be so difficult. If you are still concerned about trusting a datacenter provider with your mission critical business applications, please drop a note and I will get back to you.