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IT complexity drives movement to managed service providers

IT continues to move in new directions, such as managed services and cloud computing -- but some businesses don't want to join the movement. Why are some companies afraid to give up control?

As IT complexity increases, businesses cling to their control on servers and refuse to loosen their grip. However, complete control requires a lot of time, effort and money that could be spent in other areas. Moving to cloud or managed service providers could alleviate a lot of responsibility for businesses.

"As we're building out our infrastructure and building out our architecture within the enterprise, it's OK to put some things in the hands of managed service providers because you don't want to be in that business," David Linthicum said. "It's just too costly and puts a drag on revenue."

In his latest podcast, Linthicum discussed the movement to managed service providers (MSPs) with Mike Kavis, VP and cloud architect at Cloud Technology Partners. Other points of discussion include:

1. Why are some businesses refusing to hand off control to MSPs? Kavis believes the problem starts with the mindset of IT.

"[IT] is focusing on the wrong things," Kavis said.  "They're focusing on what's good for IT instead of what's good for business."  Why is there a fear of outsourcing to MSPs? Kavis believes businesses not taking advantage of outsourcing could be risky.

 "The do-it-yourself model doesn't make a lot of sense anymore," Kavis said. "If you're stuck taking 12 to 18 months to deliver a new functionality, you're putting your business at risk." (1:50-10:00)

2. Linthicum and Kavis discuss the impact of the release of Amazon's file-sharing service, Zocalo. Will Zocalo help Amazon Web Services capture an even bigger chunk of the market?

"If anybody can do it, [Amazon] can," Linthicum said. "Specifically because they're not new to data storage … they cut their teeth on that stuff years ago." Should Google and other providers be concerned? (10:00-16:30) 

3. SAP enjoyed increased cloud revenue, but software sales decreased. With the cloud market continuing to grow, is this bad news for SAP? Kavis believes it's good for customers, but not the company.

"Now, [SAP] is shifting to what the market wants, which is software as a service and easy-to-use applications. …  They're going to have to sell way more to live in that gravy train world that they lived in the past," Kavis said.

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This was first published in August 2014

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