The IT tide seems to be turning away from organisations taking on the challenge of owning and operating their own internal data centres - they are turning instead to outsourcing to expert service providers and taking up outside managed services.
New research by KPMG concludes that outsourcing has become a key part of a broader enterprise operations strategy and that shared services and outsourcing are on the increase.
KPMG has found that: "One in four enterprise buyers are reinvesting heavily in their global shared services operations, while 70% are continuing to make (largely moderate) investments in their outsourcing delivery," the KPMG report says. "This is driven by technology advancements and automation and the rampant globalization of enterprise supply chains and business ecosystems.
"There is a clear move towards integrated global services models that incorporate both shared services and outsourcing. The long and short of this is that 93% of enterprises today have shared services and 96% are outsourcing some element of their back office IT and business operations, while 27% are actually reducing their investments in their own internal business units. "
It seems the vast and varied challenges of catering for the 3rd platform are becoming just too daunting for organisations - seeking to focus on their core business and profits - to manage internally. Of course, the outsourcing - partnering trend is easy to understand in the context of the glacial issues currently confronting today's infrastructure and operations (I&O) managers. The 3rd platform has its foundation in the hugely disruptive forces of mobile computing, social networking, cloud services, and Big Data analytics technologies.
Research house IDC forecasts that today's unprecedented pace of technological change means that, within five years - by 2020 - most organisations will simply stop managing their own infrastructure. They will turn instead to on-premise and hosted managed services for their existing IT assets. For new services, they will increasingly turn to dedicated and shared cloud offerings in service provider data centres.
These are some of the key findings of new IDC research which has also forecast that by 2018, the construction of 'service provider mega-data centres' - the primary server location for large collocation and cloud service providers - will take up nearly three-quarters of global data centre construction, based on space.
The IDC Report highlights the evolution of the datacentre: "Data centre and server rooms - closets are no longer just the places where organisations house their IT assets. The datacenter must serve as the primary point of engagement and information exchange with employees, partners, and customers in today's interconnected world. The datacenter is also the foundation for new business models where leveraging large volumes of data and highly elastic compute resources are critical to delivering better insight and a superior product/user experience. This requires that data centres reliably deliver large and highly variable amounts of transaction, content serving, and analytic capacity on time, with no delays and no excuses."
And this line in the report outlines why the (near) future role of the CIO and the IT department will likely be very different from today: "In this environment, building and running data centres as well as managing IT assets at the edge can no longer be a part-time or occasional job".
Separate Gartner research hammers home the current challenging environment and why enterprise IT approaches must change: "Mobile and the proliferation of data are having dramatic impact and pressure on the supporting I&O infrastructure. The number of devices that need to be supported, and the amount of data being created everyday are growing exponentially. All this data is having a dramatic impact upstream on servers, storage, networking, facilities and IT operations, not to mention creating new security challenges. Just extending what I&O has done the last five to 10 years will no longer work, as many organizations cannot continue to scale doing business as usual."
The trend towards 'service provider mega-datacentres' is not the only one pointing to the importance of enterprises partnering with the best expert service provider. IDC points to the growing popularity of 'aaS' (As-A-Service) offerings. In a November 2014 report, IDC says: "software as a service (SaaS) will continue to dominate public IT cloud services spending, accounting for 70% of 2014 cloud services expenditures. This is largely because most customer demand is at the application level.
"The second largest public IT cloud services category will be infrastructure as a service (IaaS), boosted by cloud storage's 31% compound annual growth rate (CAGR) over the forecast period. Platform as a service (PaaS) and cloud storage services will be the fastest growing categories, driven by major upticks in developer cloud services adoption and big data-driven solutions, respectively."
So the overall message seems to be that the traditional 'do-it-yourself' and 'go-it-alone' approach to IT and infrastructure management is no longer a feasible success strategy. Only by drawing on the expertise, experience and professionalism of expert external service providers, can organisations hope to be able to thrive and prosper on the 3rd platform and beyond.
