Moving out: Getting to grips with infrastructure outsourcing

Are large enterprises ready to outsource their infrastructures en-masse?

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Moving out: Getting to grips with infrastructure outsourcing
By  Tom Paye Published  May 27, 2014

The idea of infrastructure outsourcing is simple: Offload the servers and network to a solutions provider to free up time for an organisation’s IT team to work on delivering more value to the business. But are large enterprises ready to do this en-masse, and should they be worried about claims that outsourcing infrastructure can actually stifle innovation?

More and more enterprises are adopting managed IT and cloud infrastructure services to accelerate operational efficiency and achieve better results. Think about it: who does not want to avoid up-front capital expenditure and increase operational efficiency?”

That’s the view of Yasser Zeineldin, CEO of eHostingDataFort, anyway. In explaining the growth in demand for infrastructure outsourcing, he cites a 2012 IDC study that indicated the overall managed and data centre services market in the UAE is growing by 16% each year. And from his personal experience, he says that he sees organisations in the Middle East — particularly the UAE and Saudi Arabia — increasingly working with specialised IT service providers to remotely manage their IT infrastructures.

But are Middle Eastern enterprises really convinced by the — admittedly growing — small number of success stories that have trickled through from managed service providers? Concerns over data privacy and security still prevent many from taking the jump to outsourcing major parts of their infrastructures. And, among some thinkers at least, there is a concern that outsourcing IT in general can stifle innovation, which by extension blunts any competitive edges that the business may have in the market.

Indeed, a combination of these factors still means that large enterprises in this region still prefer to build and manage their own data centres, according to Mahesh Vaidya, CEO of ISIT and chairman of SNIA’s Middle East Committee. He does, however, believe that smaller organisations are opening up to the idea of infrastructure outsourcing.

“Smaller to medium-sized enterprises are more open to the co-location of their infrastructure to local co-location service providers, but still prefer to manage their hardware and applications themselves. They will simply utilise the space, power and cooling from the outsourcing company but retain all control of the management of the hardware, applications and data themselves,” he says.

For many, the issue comes down to data security and privacy, Vaidya explains. When it comes to critical infrastructure, most organisations want to retain complete control, and in the event that they do outsource any element of the infrastructure, they want it to be hosted within the country. And that goes for non-critical elements of the infrastructure, too, he says.

“Most enterprise customers want to maintain personal control of their critical infrastructure. In terms of non-critical applications, they would be willing to look at outsourcing these but to locally-based companies only. Their non-critical services may be applications such as backup and archiving of certain non-critical corporate data, an example of which is backup data from remote branches,” he says.

Not everyone agrees, however. According to Biswajeet Mahapatra, research director at Gartner, Middle Eastern organisations are already prone to outsourcing parts of their infrastructure. He says that some of the well-known and traditional outsourcing players are reasonably active, and that outsourcing is now part of many organisations’ overall IT strategy. “It works well,” he asserts.

What’s more, the advantages of outsourcing don’t have to be confined to non-critical infrastructure, Mahapatra says. If security is a concern, it shouldn’t be, so long as the contractual and service-level agreement aspects of outsourcing are taken care of, he explains. Indeed, there are plenty of reasons why a company might turn to outsourcing, he says, particularly if organisations simply want a more efficient way of ‘keeping the lights on’.

“We tend to outsource the routine and mundane activities and these are mostly the regular ones which help run the basic services and keep the lights on,” he explains.

To cloud or not to cloud?
While many businesses may see the benefits of outsourcing elements of their infrastructures, some have been scared off by thinking that it denotes coming up with a cloud strategy, which they may not have been ready to scale out. Mahapatra, however, explains that the two do not have to go hand in hand.

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