Where Would You Outsource Your Datacenter?

An anonymous reader asks: "I want to outsource everything in our rackspace to reputable online providers. After wasting valuable time every day on mundane problems and upgrades, I'm convinced it's cheaper to pay monthly than maintain our hardware and staff time. So I ask you, Slashdot: who would you turn to for reliable and secure outsourcing of a VPN server, Exchange server, online backup, and webserver hosting?"

Comments

You are asking the wrong question

[Jailbrekr]

You should be asking "Which company can we outsource our I/T needs to?". Parking your servers in a remote location will not reduce your overall costs, it will only increase your potential downtime. Why? Because you are introducing another point of failure. That point of failure is between your business and the datacentre you have outsourced to.

If you value your data, keep it internal and outsource the support to a solution provider like EDS, IBM, or any of those big firms. They will provide the expertese necessary to supply and maintain the hardware and software for you so you can concentrate on your core business.

It won't be cheaper, but you will be able to easily quantify the yearly I/T costs which will make the accountants happy, and you will be able to pull the necessary funds from a different piggy bank, keeping your payroll low.

Putting the cart before the horse?

[mrolig]

How can you already have the conclusion that it is cheaper to outsource? If you don't know who could offer you the services you need, how do you know what they charge? You should investigate your requirements, prepare a bid if you keep in in-house, ask for bids to do it outsourced and compare.

Here's the situation I think you want avoid:

Company: keeping vending machines stocked and maintained is a pain in the butt and it costs us $5000 a month.

I know there are companies that provide this service for $2500.

Concusion : Let's oursource!

Gather requirements, ask for bids to do soda and candy machines.

Best bid $6000 a month. Ooops - the $2500 we knew about was only for Soda.

You have to have your requirements together to get bids to make the initial decision to outsource.

...and you are givign the wrong answer

[imsmith]

Paying for insourcing isn't as simple as it sounds - I worked once helping get rid of an insourcing contractor. They will provide exactly those services that you ask them to, and any changes will be charged a contract modification fee. They will try to take profits in the 35% range on your fee, primarily by under staffing your IT shop. They will assure their permenance by not not documenting anything, or making the system documentation the proprietary property of the insourcing corporation. Not only will it not be cheaper, but it will most likely cost more.

The lesson I learned was that those tricks you use to make your accountants happy and keep your payroll low are short-sighted and ill-concieved. You should be managing the IT budget to make itemized accounting anyhow, and keeping your payroll low just off-sets the true cost of IT, which, until the software stops having bugs, the malicious code stops beign written by human beings, and active intrusion stops originating in people, will remain a something that ranges from just above menial thinking to substantial serious talent. You just can't have enough brains when running enterprise IT.

If your company can turn off the LAN and still turn profits, then they shouldn't even have an IT shop, but if that isn't the case, your company needs to look at IT as an essential horizontal business unit that sits at the table for every strategic discussion, not a cost center where savings can be made by cutting labor.

Beware the False Economy

[YankeeInExile]

At a POPE, one of my Major Projects was bringing inhouse all of our datacenter operations that we had been paying (dearly) for outsourcing.

The reason is simple: Nobody cares as much about your business as you do. Any outsourcing or insourcing vendor you choose is going to maximize their profits by providing cookie-cutter solutions, and hiring worst-in-breed talent to maintain them.

Unless your needs are truly mundane, you are better of swallowing the bitter pill, and using all of the experience you have already paid for to keep the systems going yourselves.

Re:Beware the False Economy

[newsblaze]

And beware false statements too.

"Worst in Breed"?

That may be true of a backyard operation, but any business that wants to keep its customers doesn't hire dorks.

Some businesses will do this, of course, but you shouldn't outsorce to them without checking that they know what they are talking about.

Remember also, that you only sign a contract that you agree to. You can get lots of interesting things into a contract, such as performance guarantees.

If they won't agree to a reasonable performance guarantee, then you haven't found the right one and you should keep looking.

We lost a customer several years ago because they got a new VP who thought it would save them money to take it inhouse. They were paying us something like $3000 per month. They bought several machines, added the OS and all the software, and 2 staff and were then flooded with spam because they had no experience and software that couldn't handle the load.

How many staff and machines and how much bandwidth can you get for $36k ? And how do you maintain your system 24x7x365 in that price too?

Solution

[salesgeek]

1) Eliminate Exchange Server.
2) Analyze value of vpn. Is there really a need to connect just like you are in the building? If no, eliminate.
3) Engage managed services firm to handle your application servers. Put them in another NOC only if you have bandwidth to have decent quality of service.
4) Web hosting depends on the size of the site. Most sites can easily be handled by shared hosting like this example. If you need a server, you can get decent linux boxes for $129/mo or less and windows boxes for about $20 more per month. I'm always amazed when I see someone host a website in house when you can host somewhere else for exponentially less money.

Let me be serious for a moment

[metamatic]

I've already given the fatuous response, so let me go back and try a serious one.

After wasting valuable time every day on mundane problems and upgrades, I'm convinced it's cheaper to pay monthly than maintain our hardware and staff time.

Think about this statement for a minute. The costs you are identifying are hardware and software maintenance. Well, those aren't the costs you save by outsourcing your data center.

Outsourcing is about saving head count, and not needing expertise. Unless your hardware is way over capacity, there's probably no money to be saved there; so all you're hoping to do is save on hardware and software support costs. Well, there might be some savings there, but there's not a huge economy of scale, and remember that hosting companies are in business to make a profit. So, will the economy of scale of shared support offset the profit margin? I'd be doubtful.

Maybe what you ought to do is ask yourself WHY your support costs are so high. Start reducing some of those costs, don't just hide them in some third party contract. I've already pointed out one big cost in my other posting--Exchange servers. Depending on the size of your organization, it might be possible to keep the Exchange client, drop the Exchange server, drop in a replacement server, and consolidate half a dozen crashy Windows boxes into one reliable Linux server.