More and more companies are becoming attracted to the idea of Infrastructure as a Service (or IaaS). It would seem that you can outsource the provisioning and management of your services, encompassing everything from Email, through to your servers, workstations and software, all the way down to your LAN and internet services. This type of outsourcing can be a very attractive option for companies who have tight budgets and are short of technical skills, or don’t have the means to provide long-term IT support.

Essentially, you can outsource your services at low short-term costs that are knowable and controllable. The services are provided in such as way as to be quickly and easily scalable, and with the minimum of hassle for your internal staff. If you want to get a sophisticated IT infrastructure set up in a hurry without the usual high buy-in costs, or the task of finding and hiring the right specialists, then it would seem the way to go; especially when their salesmen are hypnotizing you with oleaginous phrases such as “we are closely aligned with our client organization’s core business requirements, providing agile services”.

It sounds too good to be true, and so it often is. Whereas the costs will have initially been calculated on the annual renewal fees and service fees for ongoing support, there are other charges too, such as fees for customization and upgrades, which aren’t so obvious. The Total Cost of Ownership (TCO) only becomes apparent when it is too late to extract the company easily from the arrangement. After a few years, these fees can add up to more than the initial cost of implementing a traditional in-house system. Worse than that is that you can then lose your power to determine your priorities. When you become reliant on another company, with its own schedule of priorities, to implement even simple changes, then you have effectively lost control of your technical infrastructure. This will make senior management very nervous. Likewise the IT staff will likely be nervous of a change in roles and responsibilities, possibly even redundancy.

There is definitely a requirement for outsourcing services. If the organization’s overriding priority is to provide an exceptionally high class of service, which requires more expertise than it currently possesses, then outsourcing is worth considering. The IT team will almost certainly be involved with user assistance and smoothing out integrations with an external provider. Heck, if you outsource to IBM, the SysAdmins can go along for the ride and polish their expertise. Crucially, though, it will free up time to work on something entirely new. What you need to do is figure out much this time is worth, because ultimately it is this, rather than any substantial cost savings, that will be the main benefit to you and your organization.

Cheers,

Michael