Data Center Outsourcing Continues Rise

October, 2017

In a world of public cloud infrastructure providers, it is becoming increasingly easy and cost effective to outsource some or all of an organization’s data center operations. Therefore, it is not a surprise that outsourcing data center operations has been in a growth phase recently.

According to Figure 2 from our full study, Data Center Outsourcing Trends and Customer Experience, 41% of companies in our study outsource at least some of their data center operations, compared to 37% in 2016. This is also up from a recent low in 2014 of 34%. 

DatacenterOutsourcing fig 2 - Data Center Outsourcing Continues Rise

In this study, we define data center outsourcing as any service that enables an organization to significantly reduce the amount of internal resources devoted to owning or managing servers, storage, and other data center equipment and facilities. However, we exclude software as a service and also network operations outsourcing from this definition.

“Right now, the largest driver of data center outsourcing growth comes from infrastructure as a service, ” said David Wagner, vice president for research, Computer Economics.  Public cloud services, when managed properly, save money and free up valuable support staff for more mission-critical work.”

The decision to outsource data center operations is an important one for today’s IT executive. As data centers become more automated, virtualized, complex, and larger, service providers can leverage expertise and economies of scale to provide attractive alternatives to hosting and managing systems on-premises. On the other hand, the data center is the heart of the IT organization, and turning over data center operations to a service provider or moving applications to a provider’s site can entail sizable risk.

In the full study, we provide IT executives with insight into how broadly and eagerly their peers are undertaking data center outsourcing as a strategy. We also examine the success rates for organizations in reducing cost and improving service through outsourcing this critical function. Finally, we report on the extent to which IT organization size and sector affect data center outsourcing adoption.

This Research Byte is a brief overview of our report on this subject, Data Center Operations Outsourcing Trends and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).