Outsourcing IT: Cloud Computing and Virtualisation explained

Businesses are drowning in a sea of information over how to best manage their IT infrastructure. Outsourcing can be a great option, and cloud computing has been touted as an attractive investment. But what is it all about?

This is never more evident than when it comes to off shoring; case in point, the recent Satyam scandal. This has certainly raised a few eyebrows. So… what do businesses need to consider today when they look to best manage their IT infrastructure efficiently? Certainly cloud computing looks an attractive option, but what does this mean in reality? And what shift in thinking is needed for organisations in order to truly embrace this new phenomenon?

In January this year, one of India’s largest software companies, Satyam Computer Services, admitted to corporate fraud on a massive scale. This threw the country’s already floundering stock market into further turmoil and cast a corruption shadow over the IT and outsourcing sector. It is no wonder that businesses, particularly small and medium sized companies, are wary of outsourcing IT infrastructure.

What does it all mean?
The function and approach of outsourced IT management can vary but the best accepted description is that outsourcing provides services that deliver operational support to businesses, from day-to-day administration to management of an entire environment. With this, business can ensure service-level requirements and optimise their IT environment, while at the same time reducing risk, lowering costs, and improving speed of time-to-business value.

The classic outsourcing argument is generally tied to the opportunity for cost savings as IT Managers continue to look for smarter ways to manage their IT infrastructure efficiently. This allows businesses, particularly in the SMB space, to concentrate on serving customers, without having to invest in becoming experts in the IT arena.

Today, a phenomenon known as cloud computing is providing an excellent platform to meet exactly this need. Cloud computing is a technology paradigm whereby software and IT infrastructure are delivered as services via the Internet. This network of services is collectively known as “the cloud”. It makes it possible to use a thin client, smartphone or laptop to reach into the cloud for resources as and when they need them, which in turn can lead to a reduced cost per user and greater leverage of resources.

In the past, most small to medium business viewed outsourcing as the exclusive domain of the corporate sector and therefore outside their financial and management capabilities. However, as a consequence of the current economic climate, organisations are under increasing pressure to support growing demand on their IT infrastructure with shrinking resources. Businesses must do everything possible to operate more efficiently and companies must look at alternatives to ensure resources are used effectively without sacrificing service. This is causing a re-think about the appropriateness of outsourcing at all levels of the economy. And with the explosion of virtualisation, which enable clouds to function effectively there is now a viable option for businesses of all sizes to consider.

As the affects of the global economic crisis take hold, those businesses which have taken measures to streamline business processes will be most likely to survive the downturn. We are already seeing signs of this emerging in the retail, consumer goods and the banking and finance sectors where those companies which have taken the time to strategically restructure at all levels, including IT, are showing market resilience.

More and more, businesses will look to innovative IT environments that provide a more cost-efficient, flexible and agile solution to IT infrastructure. They also need to act fast. Fundamental changes must take place if an organisation wants to thrive tomorrow. Many companies of all sizes are considering the advantages provided by outsourcing IT, from virtualisation through to cloud computing.

Virtually outsourcing
Virtualising IT infrastructure is an advantageous way to outsource IT management and achieve several business benefits. This technology makes sense for business as most modern computers are vastly underutilised. Virtualisation allows you to run multiple virtual machines on a single physical machine, sharing the resources of that single computer across multiple environments. Different virtual machines can run different operating systems and multiple applications on the same physical computer.
Virtualising IT infrastructure means reducing IT costs while increasing the efficiency and flexibility of existing assets. For example, thousands of organisations worldwide, including all of the Fortune 100, employ VMware virtualisation solutions. However, virtualisation is not only for large enterprise; companies of every size can reap the benefits of virtualisation.
John Brand, Research Director at Hydrasight, believes that virtualisation will experience continued growth in Australia driven largely by the need to satisfy greater variability in demand. Brand says, “We expect Australian businesses to adopt this technology more and more in the future because of its ability to be able to scale both up and down and to enhance the stability of the IT environment.”

Step up into the Cloud
While virtualisation began in the datacentre consolidating servers, the next evolution is surely in the cloud with application delivery and storage. In order to successfully make the transition from physical storage to cloud storage, for example, a significant change in perception within businesses must take place. This mind shift is made more difficult for a number of reasons.

Firstly, companies are being asked to invest heavily in new technology, such as VMware and associated infrastructure, as well as new process, including provisioning and management. The idea of relinquishing such responsibility and management to another entity can be daunting, particularly considering the sensitivity of company data.

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