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"Security, storage give rise to managed services" by Linda Tucci (ComputerWeekly)
The twin hogs of IT spending -- security and storage -- are fueling growth in managed services, according to a new study from The Computing Technology Industry Association Inc. (CompTIA), the nonprofit trade association and developer of certification exams for IT skills.
In a survey of 322 organizations, CompTIA found that 30% of all users of managed services plan to invest in or increase spending on managed security services this year. Thirty-three percent said they plan to purchase or spend more on managed storage, backup and disaster recovery services. Web or email hosting is another spending priority, followed by network monitoring, Software as a Service and application subscriptions.
The surveyed organizations ranged from small businesses with 20 or fewer employees to large enterprises with 1,000 or more employees and $250 million or more in annual revenue,
The managed service model -- defined in the survey as the "ongoing management, monitoring and maintenance" of IT infrastructure and services -- is here to stay, said Richard Rysiewicz, vice president of services for Oakbrook Terrace, Ill.-based CompTIA.
"The strength of the managed service provider model from the CIO's perspective is that the provider becomes much more of an adviser rather than a resource you use on an ad hoc basis," Rysiewicz said. "When most people talk about managed services today, what they are really talking about is a business relationship between a customer and service provider, similar to a lawyer or an accountant."
Leave the esoteric to the MSP
In a rapidly evolving technology environment, leaving it to the experts can be the most prudent approach, he added. "A CIO may know a lot about databases or the applications used by the organization, but not about the newest wireless technologies; the managed service provider takes care of that," Rysiewicz said.
This is particularly true for security, argues Forrester Research Inc. analyst Paul Stamp, a former systems architect with the Global Security Practice at Unisys Corp. In a report published earlier this month on managed security services, Stamp says the days are gone when an organization can single-handedly manage all the security risks to its IT environment. In an interconnected world, sensitive information is shared among vendors, suppliers, customers and even competitors, each of whom shoulders some security responsibilities.
"An organization that doesn't consider outsourcing at least some security tasks on the grounds that it needs to maintain total control is missing the point," Stamp said. "A security provider can take on many of the more esoteric or difficult security tasks, often more efficiently and effectively than an internal team, leaving the security team to focus to concentrate on its main purpose: aligning security strategy with the core business."
Indeed, respondents in the CompTIA survey listed a lack of in-house expertise and the more euphemistic, "It allows us to focus on core competency," as main reasons for using managed services. About a third said using a managed services provider (MSP) is cheaper than doing the work themselves.
ROI: A compass
Whatever the reason, the rising demand for managed services is driving a fundamental shift in the provider business model, Rysiewicz said.
"The industry and the end users are all starting to see the same need, and that need is that you have to demonstrate a return on investment on the service you provide," Rysiewicz said. "CIOs are getting pressured by their organizations to show the ROI when they invest in a particular technology. Now the CIO is going out to the managed service provider and asking the same thing: 'If I invest in you, what is your ROI?'"
One obvious benefit is the cost savings realized by reducing or eliminating downtime, because the service provider managing the system is continuously and proactively monitoring it. "If you can reduce downtime, the cost savings can range from thousands to millions of dollars, depending on the size of the organization," Rysiewicz said.