What should your IT team outsource to IT Service Providers, what should they source internally, and how do you know?

First a couple of definitions for IT Service Provider types we’ll discuss here:

• Cloud Service Providers – Provide SaaS/IaaS/PaaS type IT Services remotely via the Internet (in the “Cloud”)
• Managed Hosting Providers – Host and maintain/manage specific IT Services for customers in local and remote data centers
• Managed Service Providers – Monitor and manage systems for customers – both within the customer’s data centers and at remote locations

IT departments deliver a variety of services to their organizations. While some of these services make sense to outsource to an MSP, others should stay in house. Some of the services IT delivers, like email, collaboration tools, and so on, are critical to the organization’s ongoing operations, but they’re not a competitive differentiator. Let’s call these types of services “chore” services. Every IT department also has a long list of services and initiatives that provide, or have the potential to provide, significant competitive advantage in the market. These “core” services are the critical drivers of business success.

For an IT department, engagement with an IT Service Provider offers a great opportunity: the Service Provider can often deliver higher levels of service for chore functions—while freeing up internal IT staff to concentrate on core business differentiation. Service providers can offer the deep level of expertise in configuration and operation of these chore services that allows delivery with low costs, and with very high availability. With resources freed from these chore service responsibilities, IT can focus on that long list of projects that will really help to differentiate the organization.

There are a range of different ways IT organizations can engage with IT Service Providers:

• An MSP may simply maintain and optimize the infrastructure you have in your environment.
• A Managed Hosting Provider (sometimes also an MSP) may also host and maintain your infrastructure at their data center, while still running this infrastructure separate from other clients.
• A Cloud Service Provider, Managed Hosting Provider or Managed Service Provider can deliver a monthly, fee-based service, for which they assume complete control over delivery and SLAs.

Each of these approaches has merit, and deciding which is right for you will depend upon a host of factors, including your business’ industry, relevant regulations, and the degree of infrastructure control required. The monthly fee-based approach frees organizations from having to upgrade software and maintain hardware, and puts the burden of supplying the service fully on the service provider. Many organizations, particularly small and medium sized businesses, are finding this to be a very attractive alternative.

This is why many MSPs are starting to offer cloud services, such as virtual private clouds and IaaS, to their existing customer base. Once their customers migrate to the cloud, MSPs can up-sell additional, higher level services. These services can include dedicated resources, higher levels of monitoring and management, security, and custom implementations. These offerings provide opportunities for customers to get additional value from their vendor, and for the MSP (Now also a Cloud Service Provider and/or Managed Hosting Provider), they can represent high-value, higher margin services that can boost profits. In these situations, Nimsoft Monitor is a key tool for many cloud providers, as it provides a single monitoring infrastructure that is easy to deploy, and that supports the additional systems and applications needed to provide new services.

For many IT organizations, working with MSPs and cloud providers presents an opportunity to boost user satisfaction, reduce costs, and improve services. IT effectively becomes a broker of services for the organization, and starts to focus better on delivering the core services the business needs to compete more effectively. For most organizations, services will be sourced through some combination of MSPs, Managed Hosting Providers, cloud providers, and internal staff. MSPs and Managed Hosting Providers offer the opportunity to keep IT operations working through familiar models, including local or dedicated resources, while reducing costs and improving service levels. Cloud providers offer IT teams an opportunity to replace chore services with another delivery model entirely, one that limits visibility and control, but that provides access to the latest technologies, which can pave the way for breakthroughs in agility and economics.