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Data Center Outsourcing: Current Trends In The Industry

Sep 12, 2013 6:00:00 AM

by Charles Bystock

data center outsourcing industry trendsKeeping up with trends in data center outsourcing is no easy task. It’s an environment in which change has become the very definition of normal. The technology industry research giant Gartner predicted the worldwide IT outsourcing market would total $288 billion by the end of this year, a modest increase over last year. Further, they said growth would continue at a somewhat slower pace compared to recent years, especially in traditional “first world” countries.

They blamed that sluggishness on factors such as the continuing evolution of data center outsourcing delivery models, variable economic, political and workforce conditions and financial performance of service providers. Oh, and then there are the internal budget constraints with which executives are all too familiar.

How might current data center outsourcing trends affect your thinking?

Hybrid IT strategies and small to midsize companies moving to IaaS are driving growth in outsourced data center services and cloud-based solutions. Companies are searching for solutions that can enable and support corporate BYOD opportunities while fully protecting internal and client data and addressing other security questions.

Gartner forecasts increased interest in outsourcing support for mobile devices over the next several years, not only due to BYOD but because enterprises themselves are investing in smartphones, tablets and other handheld devices for employee use.

In North America, companies taking advantage of data center outsourcing are looking for greater predictability of costs. That includes diminishing interest in hiring more IT personnel or making large new capital investments for IT infrastructure or applications – an emerging strategy known in the industry as “asset light.”

No surprise, really. Companies looking to squeeze more bang from limited bucks prefer alternatives that enable them to streamline operations -- increasing efficiency, productivity and service quality while reducing operations expenses.

Sound familiar? You’re not alone. Gartner says companies typically spend two-thirds of their IT budget on operations. Data center outsourcing can lessen that operations expense pressure and also shift capital expenditures to service lines within your budget. That can benefit both your bottom line and your balance sheet. The advent of a broader spectrum of pricing models enhances these opportunities.  

Increased enterprise cloud usage.

Large, global enterprises in particular have figured out they don’t have to rely on public cloud computing, they can use data center outsourcing to create their own internal clouds. Think more highly tailored solutions aimed strictly at your business goals and internal IT needs, both now and in the coming years. Internal cloud solutions can be a well-targeted tactical response, allowing you to focus on fixing your most pressing problems first.

In a recent international Gartner survey, 55% of companies not currently using cloud solutions said they expect to move in that direction within the next year. The shift is on, the survey indicates, as companies transform IT operations from traditional technology to functions delivered as cloud services.

There are three key reasons for interest in this data center outsourcing option:

  • Business solutions directed toward specific issues are taking precedence over broad-brush enterprise needs, as already noted. It’s a toe-in-the-water approach that enables companies to focus on near-term needs first, working up to organization-wide transformational solutions.
  • C-level execs now recognize that they can capture the greatest benefits from cloud solutions by moving up the “value chain,” from infrastructure services to multi-functional business process services that benefit their entire organization, both internally and in terms of customer service.
  • Cloud solutions can get the ball rolling, helping companies develop a more diversified program of solutions that supports flexibility – options beyond just dipping your toes into the water. New combinations of IaaS, PaaS, or SaaS applications support customization and enhance your ability to align data center outsourcing choices your corporate goals and timing requirements.

One final thought: Gartner says companies are using data center outsourcing to resolve their most complex IT issues first, to realize the broadest benefits soonest. 

Data Center Outsourcing

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