The Rise of Outsourced, Virtualized IT Infrastructure Services and Why More Companies are Opting In
About five years ago, "the cloud" seemed like some new, mysterious, IT flavor-of-the-month that inspired more curiosity than actual interest among organization decision-makers.
Yes, you could explain to them that it's now possible to take your entire IT infrastructure and convert it to an off-premises, virtualized environment, commonly called Infrastructure as a Service (or IaaS). You could outline how much you'd save on the Total Cost of Ownership (TCO) of tech—from hardware acquisitions to daily operational costs to staffing allocations—because you no longer have to run and manage all the servers and applications that you used to buy and store on-site.
When told this, executives could perceive the value, but they'd also express lots of misgivings: How can we possibly get the same quality of tech if it's something that we can't see or touch? Why should we trust outsiders to manage our IT when we pay good people to do this in-house? And what about security?
The old way meant that every time IT ran a new application—whether for email or financial services or a sales-automation tool—they'd have to go out and get another server. They'd put that server on a rack with all the other servers and—if they were growing at all—they'd have an expensive mess on their hands called server sprawl. They'd walk into some big, windowless office in their building and see nothing but endless racks of these things, so many that they'd forget what some of them were for. Some were bought for one-time projects and had now grown obsolete. Others weren't being utilized to nearly their capacity. Either way, they took up space and accounted for considerable power/cooling, management and maintenance costs.
Now, some five years later, such reservations are fading. Companies are realizing that a transition to a cloud-based, virtualized, outsourced IT infrastructure model simply makes good sense. According to an industry survey of 200 IT decision makers at companies ranging from SMB to Enterprise, one-third will increase IT outsourcing investments in the next 12 to 18 months, three-fourths plan to outsource applications services, and 22 percent intend to expand the outsourcing of datacenter operations within that time frame.
This is happening because organizations are recognizing clear advantages in four major areas:
Technology. There was a misimpression that virtualized, outsourced solutions couldn't possibly be as reliable as those you bought and ran in-house. Today, nothing could be farther from the truth. Cloud Hosting services are built using top-of-the-line servers, storage and switches that are more powerful than anything one would buy for a single application or even an entire small business. Any application you run on a dedicated Windows or Linux platform will run in the virtualized environment. There's also totally seamless redundancy—if one server, switch or storage disk dies, a backup is running in parallel to takeover without any service interruption.
People. By turning over the hosting of applications, data and storage, your IT people can now focus strictly on driving innovation to achieve strategic goals. If you're a courier company, for example, you want your tech staffers to come up with better solutions to track trucks and shipments, right? You don't want them getting constantly sidetracked because another server just went down. Infrastructure oversight is the IT equivalent of digging a ditch. It's generic, not specific to any particular line of business, so it's easy to farm it out and free up your people for revenue-producing projects.
And the people behind the managed IT infrastructure are absolute professionals. They welcome direct access, and even face-to-face meetings at their sites. And, there are lots of them, unlike at a company that might be in trouble if the only cloud expert gets sick, goes on vacation or quits. In the end, customer companies realize that the virtualized infrastructure provider is an extension of their IT department—a true partner who's available 24/7/365 to lend the same level of due diligence and enterprise support that you'd expect from your own employees.
Total Cost of Ownership. Buying your own servers, storage and datacenter facilities is much like buying a house. Once you think you've tallied up all the costs involved, you find all kinds of additional costs that you never anticipated. There's the capital and operating and power expense, of course. But there are also unexpected "gotchas," like a product breaking down or not performing as it should. (Just like needing to replace a roof, hot-water heater or expensive appliance in a home.)
All of this is eliminated by outsourcing. Like renting a place to live, you write a single monthly check to get all that's required to run your business and leave the headaches of ownership to the provider. When TCO is this predictable, it's easy for a CIO to project annual budget and (better yet) stay within that budget.
Security. Five years ago, the cloud immediately triggered sharp questions about security. Today, customers are justifiably concluding that their infrastructure is safer there than on-premise. Again, you can outsource it all to an enterprise-class operation with state-of-the-art buildings that are practically fortresses. They come equipped with video surveillance, biometric access and round-the-clock security guards. Many cloud providers also have deep security expertise and offer a wide range of managed security services using the latest technology. Is that something that you can afford to manage on your premises?
Ultimately, these four factors equate to this simple conclusion: The cloud isn't just trendy. It's simply a better way to do business. In Part 2 of this blog, we'll explore the kinds of qualities you should seek in a virtualized infrastructure provider. Meanwhile, if you're interested in learning more about behind-the-firewall, virtualized IaaS offerings, check out MegaPath's Cloud Hosting.