Managed services beat “baby datacentres”

Ulrika Hedquist talks to analysts and users about the advantages of abandoning on-premise servers for off-site managed services

Uptake of the managed services model is growing locally, according to Peter Macaulay, principal, executive programme at IDC New Zealand.

But the shift from in-house operations to a managed services or outsourced solution is a huge change, he says. Traditionally CIOs have had a strong operational focus. Under the new models, they are ceasing to run any equipment and are instead focusing on setting up service level agreements and managing relationships with vendors that deliver those services for them.

“It’s a different model of doing business and it’s quite a hard transition to make. The actual transition is not easy and requires significant management,” he says. “It’s not a matter of snapping your fingers and saying: ‘we’re putting everything in the cloud’.”

The key to a successful transition is having people onboard that understand the current operational model and yet have the ability to adopt the innovation and shift in processes that are needed to move into a cloud-type mode, says Macaulay.

This model is “quite a big shift” and it requires a different mindset.

“To be fair, many CIOs struggle with the change in mindset.”

Macaulay sees three steps of moving to a managed services model – the first piece is the old model with the kit kept and managed in-house; the third part is where all the kit is outsourced and you are managing relationships and SLAs; the middle bit of transitioning is enormously difficult and complex.

“Not every CIO can handle that, and not every CIO can do all three of those roles.”

Organisations need to consider if they really need to look after their applications themselves, he says. And even if they do, is it better to have them running on servers that are managed by someone else? In many cases, that model is often hugely beneficial to the organisation, says Macaulay.

“If you are doing a major development, you can go to your service provider and say: ‘I’m going to need X number of CPUs for the next three months – provide them, please’. At the end of three months you can bring them down.”

No longer do you have to have a stack of servers sitting on stand-by, or worry about maintaining and updating them, he says.


Better use of time at Abano

Abano Healthcare Group in Auckland is enjoying just those benefits, according to its CIO, Peter Radich.

The organisation is an operator of healthcare and medical services businesses in New Zealand, Australia and Asia, with services in audiology, dental, diagnostics and rehabilitation. The organisation, which has more than 200 users locally, uses a “mini-cloud” solution from Appserv, also based in Auckland.

“Appserv runs essentially all our applications in its datacentre and deliver them over a thin client, using Citrix desktop,” says Radich.

Abano Healthcare has been an Appserv customer for more than five years and has no plans of changing things, says Radich.

From an IT point of view, the managed services model is more secure, more cost-effective and more controlled, Radich says. Abano Healthcare gets access to the scale and technology of a much larger organisation.

The company wouldn’t be able to have the same resilience if it had its own “little baby datacentre”, he says.

“It also means we get access to tools and people that we couldn’t afford otherwise.”

It’s expensive to have network engineers, systems engineers and security experts on staff. “Essentially, it’s the ability to rent highly skilled IT staff and not having to pay their full costs,” he says.

Appserv also takes care of backup and disaster recovery for Abano, which otherwise had been costly for the company to set up itself.

The day-to-day IT operation is now one less thing to worry about, he says.

“I can now focus my time on business projects, on how to use IT to make the business better, faster and more resilient and lower the cost overall, rather than spending time on Exchange upgrades or worrying about licensing,” Radich says.

He now spends about 80 percent of his time of new projects. “It’s a better use of my capability,” he says. “I don’t have to have a big team. In fact, I don’t really have a team. Our partners help us deliver projects.”

“For just keeping the lights on – it’s better to get somebody who is really good at that to look after that area. [Appserv] focuses on it 100 percent, all day, every day.”

But you have got to be careful when choosing your managed services provider, says Radich.

Abano had the same outsourcing philosophy for its businesses in Australia and Asia, and “that whole process has shown that it’s critical to get the right size outsourced partner – somebody who is a similar size to you so that you are not forgotten in the mix”, he says.

“As a small-to-medium enterprise I wouldn’t tend to use a large [outsourcing partner] because you get lost in the noise. I like to be able to phone the person who owns the business and tell him what I think, or what I need done.”

And you have got to have “a bloody good relationship” with your partner, because you are tied in and it has got to work. As important is having solid SLAs, so both parties understand who looks after what and what level of service you require.

Also, don’t skimp, says Radich. Make sure you pay the right amount of money for the right service. “There is no such thing as cheap, good IT,” he says.