Study: IT Infrastructure Outsourcing About to Catch Fire Globally

STAFF REPORT

Over the next five years, nearly 40 percent of organizations around the globe are likely to outsource their IT infrastructure as part of their efforts to cut down cost and increase efficiency, predicts a survey conducted by research firm Vanson Bourne.

Interestingly, three in five IT and business decision makers contacted by the research firm agreed that owning and operating in-house IT infrastructure drives costs higher and wastes resources.

In a similar survey conducted by Vanson in 2010, nearly 38 percent of IT decision makers had disliked the idea of owning in-house IT infrastructure. Now, 60 percent of them are saying so.

The report shows growing interest in outsourced infrastructure and cloud computing as means for freeing up budgets, fostering collaboration and operational efficiencies, and building competitive advantage.

“IT departments are now looking to strengthen collaboration, efficiency and competitive agility – and they’re turning to secure, outsourced environments and cloud computing to help meet their objectives,” said Bill Fathers, president of Savvis, the hosted IT solutions provider which commissioned the survey.

As part of the survey, the research firm has claimed to have contacted 550 IT and business decision makers in the United States, the United Kingdom, Germany, Japan, Hong Kong and Singapore.

Globally, as of today, only 25 percent of organizations have outsourced their IT infrastructure. But the research firm expects that number to increase to 40 percent over the next five years.

In the survey, interestingly, more than half of all organizations regretted their decision to invest in IT equipments. The attitude is highest among U.S. respondents (66 percent), compared to 34 percent of respondents in Hong Kong and Singapore.

Fifty-six percent of surveyed IT executives keep most of their infrastructure in-house, with the practice more prevalent in Japan where 78 percent of respondents indicated reliance on in-house services.

Forty-two percent of organizations that do not currently outsource all of their IT are most likely to name contractual obligations as the main reason for not outsourcing, indicating a major shift in thinking, according to the research firm.

Momentum for cloud computing continues, as 85 percent of organizations today use private and public cloud for storage, big-data analytics and other applications. In 2010, just 39 percent of respondents said that their organizations were using cloud computing.

Given the study report, the need for increased agility is driving a majority of decision makers in the United States, Japan and the United Kingdom to boost the amount of infrastructure they outsource.

“As the business focus moves from IT budgets to enriching core competencies, we expect strategic ITO solutions to move to the forefront of decision-maker priorities,” Fathers added.