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 who are short of technical skills or don't have the means to provide long-term IT support.

Essentially, they can outsource your services at low short-term costs that are knowable and controllable, are quickly and easily scalable, and generate a 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. It would seem the way to go, particularly 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 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 which aren't so obvious. It can end up costing far more than the conventional solution once you take into account the extra costs, the fees for customization and upgrades. 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 annual 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 this company, with its own schedule of priorities, to implement every change, however simple, you have effectively lost control of your technical infrastructure. This will make senior management very nervous.

There is definitely a requirement for this sort of service. If you urgently need an exceptionally high class of service or more expertise than you currently possess, then outsourcing is probably for you. You and your IT colleagues will always have something to do, be it user assistance, smoothing out integrations with an external provider, or working on something entirely new. Heck, if you outsource to IBM, the SysAdmins can go along for the ride and polish their expertise. What you need to figure out is how much your time is worth, because time is ultimately all that outsourcing will buy you and your organization. Now you just need to convince your nervous CEO.

Cheers,

Michael