Recent industry analysis suggests that demand for remote infrastructure management outsourcing, RIMO, is increasing. Driven by aggressive budgets and growing technology demands, leaders are finding newer, more efficient ways to operate. RIMO is a multi-billion dollar market; and, the growth is expected to continue. However, optimism about the RIMO market is not universal.
Complexity will only increase
Technology evolutions like enterprise 2.0 and user driven analytics are increasing the complexity of managing environments. RIMO offers a chance to meet these demands at a fraction of the cost of internal implementation with high quality. Despite these benefits, some argue that RIMO and other related platform-driven global services will disappear in the wake of epic adoption of cloud computing.
We spoke to Rodrigo dos Santos, in ITS – Managed Services at CPM Braxis CapGemini, about the RIMO market and why such services is still quite relevant.
Attractive outsourcing target
RIMO involves engaging an external firm to manage network assets. This may seem trivial, but infrastructure operations consume significant portions of IT resources. In many organizations, infrastructure management is a necessity, not a source of organization innovation. This makes it an attractive target for outsourcing. According to dos Santos, RIMO is beneficial for many reasons:
- Allows technology to focus on strategic business concerns
- Improved responsiveness
- Improving auditing, compliance and process maturity
- Cost advantage – remote infrastructure management services can reduce labor costs by 10% to 50%, depending on the delivery location
- Reduction in operational risk
Traditionally network, server and desktop management were the key components of RIMO. But, as is the norm with technology, things are changing. Virtualization is replacing physical devices. Utilization of cloud computing has become mainstream; now, infrastructure components, like storage networks, are ascending into the cloud.
Analysts predict by 2012, cloud-based services will account for at least half of all new demand for managed IT infrastructure services, putting cloud computing on a intersection course with infrastructure services like RIMO.
RIMO’s long term future
Does this mean RIMO services are destined to become obsolete due to the cloud? dos Santos confidentially says no. Over half of large companies outsource some portion of infrastructure management; the practice is becoming more popular in mid and small sized organizations. That is a significant market. dos Santos admits that CPM Braxis CapGemini has had competition from cloud solutions, especially in the midmarket. However, according to dos Santos, the cloud does not negate the need for RIMO.
Initially, says dos Santos, cost was the only rationale mentioned when engaging his firm. Lately, organizations are shifting from pure cost-driven decisions to a more holistic view. Companies have begun critically examining alternative delivery models, including cloud-based services, for how they can help achieve cost objectives while supporting business needs.
dos Santos says that with examination, many companies find RIMO is a better option. Compliance is commonly cited. In sectors like finance, moving data off-premise may not be allowed due to internal and legal policies. The need for data to remain on-site make public clouds and complete infrastructure externalization non-viable.
Heterogeneous environments also play a role. Cloud-based solutions only serve a portion of needs for most companies. Internal resources must manage an increasingly diverse mix of physical devices, virtual machines and externally hosted services. RIMO vendors can manage the entire portfolio and provide detailed, comprehensive metrics on utilization and performance. They can also ensure that policies like access control and auditing are consistently applied across all channels; this is not something possible with the majority of cloud vendors.
Despite additional considerations, cost remains important. dos Santos indicated vendor location has a significant impact on potential savings. Allowing the company across the street manage infrastructure is outsourcing, but it is unlikely to achieve the cost optimization companies desire. Offshoring offers savings, but also risks:
- Geopolitical and economic disruption
- Increased vendor management complexity
- Low effectiveness due to communication challenges
- Questionable practices for data privacy and confidentiality
Interestingly, dos Santos said that the cloud isn’t just a competitor. Cloud computing is resulting in new opportunities for RIMO. Companies that want the flexibility of cloud services, without public cloud risks are opting for private clouds. Private clouds promise cost transparency, elastic scaling, availability and speed of adoption without relinquishing control, security and recurring costs to a public cloud service provider. Private clouds provide tangible benefits, but many technology departments become overwhelmed by their management demands. Many companies do not have the skills internally to manage and monitor private clouds long term and turn to RIMO as a solution. dos Santos indicated that his firm has seen significant growth in this area.
It is easy to take a cursory assessment and assume that RIMO will soon be no more. However, the reality is more nuanced. The cloud isn’t going away, but neither is remote infrastructure management.
Josette Rigsby is a 15+ year technology professional with a passion for software and process improvement. Josette has held a number of roles in IT ranging from consultant, developer, IT Director and Enterprise Architect. Josette also works as a freelance journalist with a focus on technology.