THE PROS AND CONS OF DATA CENTER OUTSOURCINGW
hy are more and more large and mid-sized organizations now considering data center outsourcing? Do the pros of IT outsourcing outweigh the cons? Or do organizations want to embrace the trend for the financial and operational advantage that outsourcing data center management offers? Unfortunately, a simple yes or no won’t suffice to answer the above questions.
As per a recent survey of Fortune 500 companies by Forbes, most IT companies now prefer IT outsourcing, over in-house data center operations, the reason being the advantages that data center outsourcing has to offer. This includes minimized operational costs, better use of infrastructure, access to servers and computing/storage on demand, etc.
Before you decide to outsource your data center, carefully examine your options, analyze your business perspectives and conduct a careful examination of your assets, budgets and requirements. A careful evaluation of the pros and cons of data center outsourcing and how it can impact your business is something that you must consider before you sign an outsourcing contract.
Advantages of Data Center Outsourcing
All outsourced data centers are governed by SLAs (Service Level Agreements). Service providers are bound by contract to comply to the SLAs and use state-of-the-art infrastructure and IT systems. They also need to ensure that they stick to predefined quality levels while minimizing downtimes to avoid financial penalties. As a result, outsourcing data center services will guarantee the lowest possible downtime during power outages or delays caused due to different distribution facilities
Business agility can get compromised either due to under or over utilization of the capacities in an in-house data center. However, by outsourcing to a third party, you can avail cost effectiveness, scalability and flexibility, without having to worry about allocating resources and appropriate infrastructure
Better Flexibility and Speed
Setting up a new data center or upgrading your current center can be both time consuming (over 2 years) and expensive. Outsourcing data center services on the other hand will free your business from worrying about power or space challenges. You can also avail better flexibility while considering an expansion
Huge Cost Savings
Investing in data center outsourcing is a great way to boost your bottom line by saving on the costs related to equipment maintenance, IT labor, upgrades, physical space, and overheads. Today, you even have the option of migrating data center operations to the cloud. This will not only reduce your cost of ownership, but also minimize expenditure on future equipment
Improved Latency and Connectivity
For enhanced data center functioning, you will need to ensure that the outsourcing provider can assure of better latency and connectivity when it comes to the Internet and other network related tasks. An accomplished service provider can offer you both through multiple-carrier offerings. Not only will your enterprise get the best offering, but you can also get to choose from a wide range of network carrier options
Increased Business Focus
In a data center outsourcing model, the burden of building new systems or upgrading the IT infrastructure is shifted to the service provider. This will enable your IT managers and CIOs to shift their focus on meeting the immediate business goals of your organization
Disadvantages of Data Center Outsourcing
Possibility of Unpleasant Surprises
Before you outsource, you must understand what your contract conveys and understand all the details inside out. Since the cost and coverage of running a data center can vary from service provider to service provider there can be quite a few unpleasant surprises in terms of cost, ownership of software, or the termination period if not communicated clearly within the contract
The assurance of data security is something that you must check with the service provider before signing a contract. Without the right amount of data security, you critical data might be at risk to malware infections, or worse still, corporate theft!
Loss of Control
With in-house data center operations, you will know that your trusted staff members can provide you with customized systems that match your specific needs. With outsourcing, you may feel that your business has lost control over the management of your data center, and often times, you might have to solve critical issues over only a phone. Choosing a vendor wisely can absolve you of facing such problems
When your business completely depends on a service provider to handle your data center, you may be unable to use any other vendor, without experiencing monetary loss. Therefore, it is always wise to ensure that your contract doesn’t bind you to using the same vendor for an extended amount of time and also that their proprietary services have suitable replacements elsewhere
Choose Wisely Before You Decide to Outsource
As a part of data center outsourcing, you can outsource anything and everything from managed hosting, database administration, and application performance monitoring to managed storage and systems management service providers. You can also choose to outsource your data center on a multi-year or annual basis. In fact, you could get the service provider to manage your infrastructure on your premises or even get the vendor to provide you with a leased data center in an area owned by the vendor.
In hindsight, outsourcing data center operations is a great way to align your IT requirements with your business objectives cost-effectively. Top benefits include better financial and operational efficiency, proactive monitoring, higher customer satisfaction, and professional management of IT infrastructure.
However, critics of data center outsourcing argue that no external vendor will be able to match the service levels offered by an in-house team. Therefore, you need to carefully weigh the pros and cons of outsourcing IT services before deciding on a suitable offshoring partner.