In-house data centres - asset or liability

The global economic downturn has forced companies to refocus on their core business. As a result, many are now reconsidering the merits of outsourcing on-core business areas, such as management of the organisation’s IT infrastructure, to specialist third party providers. SunGard availability Services believes the role of the in-house IT department will increasingly become one of governance and architectural design and that this will become the ‘new normal’ due to the numerous business benefits created by an Infrastructure as a Service (IaaS) model:

Cost-savings

Research conducted by SunGard into the relative costs of ownership of IaaS, Managed Services and in-house solutions revealed that on average organisations can reduce total IT expenditure by as much as 55% when moving into SunGard’s secure, virtualised, cloud environment. These savings come from many sources: the soaring cost of data centre development and operational costs is one obvious area, while the savings to be gained from using a shared infrastructure rather than creating new platforms on an application by application basis is another example.

Removes management burden

While a decision to outsource IT infrastructure may originate as a cost saving exercise, the real benefits of outsourcing actually come from saved management time, which can then be used to focus on more strategic activities.

CapEx to OpEx

This is particularly relevant in the current economic climate where banks are reluctant to lend and funding is scarce. The cost of building or upgrading a data centre today is huge, requiring a multi million pound investment to be diverted into a non-core business area where it will be tied up for years to come.

The OpEx model of outsourcing gives back balance, control and predictability of costs, enabling organisations to continue to invest in the revenue-generating areas of the business.

Business demand driven agility

Whether businesses are conserving resources to weather a feared ‘double dip’ recession or want to be in a position to take advantage of the hoped-for upturn, the ability to scale services and the workforce support up or down according to business demands is a prized feature. With outsourcing, IT assets are not left unused in ageing data centres and companies pay only for what they need now, rather than tie up valuable capital in anticipation of future growth.

Greater resilience

The levels of redundancy built into SunGard’s highly resilient data centres require capital and operational investments that often cannot be commercially justified by one company alone. With utility costs alone for a 100,000 sq ft data centre averaging £3.7m a year*, the gold standard of data centre management practised by specialist hosting and managed service providers such as SunGard is beyond the pockets of all but the largest firms.

For instance, even the incidental expense of an annual deep clean of a single data centre, incorporating zinc whisker and air particulate tests, runs to tens of thousands of pounds.

Environmental benefits

The shared services model is inherently a more environmentally responsible form of computing. In the light of issues associated with real estate, power draw, cooling and other resources, a shared data centre that can service multiple organisations is intrinsically a more sustainable model than companies trying to buy, resource and power their own standby facilities.

Despite the clear benefits of outsourcing management of a data centre to a third party and harnessing cloud computing technology, some still doubt the security and reliability of public clouds. There is no question that choosing a trustworthy cloud partner with a demonstrable track record of security, resilience and financial stability is vital. For this reason SunGard’s own private cloud is proving popular with organisations that want to reap the benefits of an enterprise-class, cloud computing infrastructure without any of the perceived risks.

*Datacenter Journal 1/9/9

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