Shortly after car supermarket Motorpoint was founded in 1998, it made a strategic decision that few organisations would make these days, let alone back then: it would outsource all its data centre computing requirements to a third party, enabling the company’s management to focus on growing the business.
That third-party, Node4, has remained Motorpoint’s partner ever since.
Motorpoint managing director Mark Carpenter told Computing that the company took the decision because outsourcing enables a company to more easily keep up with the fast-moving pace of change of modern IT.
“It is too rapid a race for an internal department, which will be left behind very quickly. A big plus is not having to worry about your IT department leaving you in the lurch, and the flexibility of drawing on the resources of another organisation,” he says.
After nine years of working with Motorpoint, Node4 implemented a cloud-based infrastructure for the company, bringing all of its IT into its data centre. Much of the legacy infrastructure that Motorpoint had retained was replaced with functionality that had been brought into the cloud. This, Carpenter believes, is evidence that a third party can keep up with the latest IT trends better than an in-house team.
Motorpoint has grown into an organisation with 450 employees and, even though Carpenter believes that organisations with more than 1,000 staff probably warrant a dedicated in-house data centre, he can’t foresee Motorpoint opting to move its operations back in-house any time soon, even as the company continues to grow.
“The ease with which we operate now means that we’d be hard pushed to bring it back in-house,” he says.
To outsource, or not to outsource?
Roger Keenan, managing director of co-location data centre provider City Lifeline, says that many potential customers may not want to outsource their data centre – perhaps with good reason.
“Organisations may have something very valuable that they want to keep under their own control. A lot of companies say ‘I want servers under MY control and in MY building’.
“For small organisations it may make more economic sense to have the server in a cabinet under the stairs, and to connect their three PCs via Ethernet. The times when it is economic to do it yourself are either if you are very small or very big,” he says.
Hence, many organisations are opting to stick with their in-house data centre operations. Surrey County Council, for example, recently replaced its 31-year-old data centre by building a new one worth £3.1m.
The council’s information and technology manager, Paul Jennings, told Computing that it considered the size of its infrastructure, and the number of applications it ran, and weighed up several managed service providers and co-location services companies. However, it found that it would have been more expensive to outsource its data centre requirements than to build its own. In fact, some of the existing outsourcing contracts that the council held were brought in-house, one of which saved it £500,000 a year, claims Jennings.
But while Keenan and Jennings believe in-house IT can work for smaller organisations, Motorpoint’s Carpenter disagrees.
“Smaller businesses could do it, but they would not have a clue how to turn things around if everything went wrong. With a third party you don’t have to worry about disaster recovery testing or servers being out of date, for example,” he says.
Keenan claims that in time, the SME in-house data centre will “die a slow, lingering death”. But Computing’s own research* suggests that it won’t. Asked in a survey whether their in-house data centre will exist or not in 10 years’ time, the vast majority of senior IT professionals (61 per cent) either disagreed or strongly disagreed that their data centres would be closed down.
The same survey found that the biggest proportion (42 per cent) of respondents believe that their organisation will run a mix of on-premise data centres, and private and public cloud services within a decade.
Ovum analyst Roy Illsley thinks organisations are unlikely to close down their data centres outright because many have considerable cost and expertise invested in them, and can claim a competitive advantage from controlling the IT themselves.
“I think some organisations will have a strategic plan to move over time to a different mix of IT sources, but it will still include an in-house data centre,” he says.
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* February 2013 Cable & Wireless-sponsored cloud survey asked 200 IT decision makers for their views of cloud computing.