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While the percentage of organizations outsourcing data center operations is only moderate, those that do outsource some or all of their data center generally find a very successful cost experience.
That was the key finding from our study, Data Center Outsourcing Trends and Customer Experience. The study, which compares the customer experience of data center outsourcing with the outsourcing of nine other functions, finds that cost and service success are both fairly strong, with cost success coming in as very high and service success as moderate, Figure 1 shows. However, despite the positive experience, the net growth trend in data center outsourcing is only moderate.
We interpret the ratings as follows:
The decision to outsource data center operations is an important one for today’s IT executive. As data centers become more automated, virtualized, complex, and larger, service providers can leverage expertise and economies of scale to provide attractive alternatives to hosting and managing systems on-premises. On the other hand, the data center is the heart of the IT organization, and turning over data center operations to a service provider or moving applications to a service provider’s site can entail sizable risk.
Data center outsourcing remained relatively stable over the course of the recession, but after a rise last year, it remained flat. As business growth resumes, IT organizations face decisions regarding how best to support that increased growth, including whether to upgrade infrastructure, turn to off-premises hosting service providers, or move computing resources into the cloud. Thus, we anticipate data center outsourcing will increase going forward.
In the full study, we examine data center outsourcing trends to provide IT executives with insight into how broadly and eagerly their peers are undertaking data center outsourcing as a strategy. We also examine the success rates organizations are having reducing cost and improving service through outsourcing this critical function. Finally, we report on the extent to which IT organization size and sector affect data center outsourcing adoption.
This Research Byte is a brief overview of our report on this subject, Data Center Operations Outsourcing Trends and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).