Hosted infrastructure or managed services 2

[PaulSA42]

We are looking into moving to a hosted solution for the whole or part of our internal network (moving the majority of our servers off site to a virtual environment in a data centre). I know little about these solutions and would like some thoughts on whether they are more cost effective and what compromises must be made (i.e. latency, turn around time to add new servers, higher data communication costs, etc).

Is any one doing this now and would not go back? Is any one doing this now and regrets it?

I appreciate any comments.

 

[BNPMike]

Definitely look at the Cloud - start with Amazon. It's a complicated calculation but I would guess it is a cost effective option considering all the flexibility and resilience you get automatically.

 

[jimbojimbo]

Let's say you outsource some or all of your network systems. Who will have access to them? Are they US Citizens or does the outsourcing company use labor from Russia, India, Iran or Iraq? What security procedures are in place. Does the outsourcing company perform background checks on all their employees? What is their policy for hiring convicted felons? How many employees have come to work drunk? Can they provide individuals with government security access such as secret or top secret? What prevents another customer from accessing your data? What level of redundancy do you really have in your circuits to the outsource location. Two often does not mean diverse paths as many who were dependent on the Sprint POP in New Orleans will tell you. How much internal bandwidth will become external bandwidth and how much additional cost? Are all of the technical people who will be working on your portion of the system actually certified or at least professionally trained for their job?

Outsourcing is not necessarily a bad thing. It can provide enhanced backups and hardened facilities but it almost always means a compromise in security and may be difficult to comply with Sarbanes-Oxley or HIPAA requirements. What if the government changes the rules? Can you renegotiate or get our of your contract without stiff penalties.

Most of all remember if it isn't in writing it never happened so be overly precise in every detail of any negotiated contract. Leave a back door for you to get out if things are not working out or if they can't comply with negotiated service level agreements.

The network is the arteries that make your business thrive so be sure you have complete confidence in whoever you may chose. And of course cheaper doesn't necessarily mean better. Management must clearly define business objectives and acceptable levels of risk. You don't want to lose your job the first time a circuit goes down and the CEO can't read his e-mail. Is 1% outage per year acceptable (about 3 1/2 days without service) or are you looking for .1% or .01%. What is acceptable for application delays due to network latency? 1 second or 10. Can you be provided with Quality of Service (QoS) for various functions or is everything going to be best-effort?

How easy will it be to add additional services? Is there a possibility the company could go bankrupt leaving you without any network resources?

Jimbo

 

[mrdenny]

Moving to an MSP can save you a lot, or it can cost you a lot. The company I'm at now used to be at as MSP. When they got started it was a great cost savings. Basically no cost to get in, and they have people to handle the server support (they didn't at the time).

However over time as the hosted environment grew it got to the point of costing more than the finance costs would be to buy it out selves. We ended moving into a CoLo facility near the office, designed everything to be fully redundant so that if something failed we wouldn't be down while waiting for the new parts to arrive. We ended up saving ourselves about $10k per month by going this route. And in 4 years we won't be paying the finance charges, just the CoLo charges so we'll be in even better shape (and we've got a lot of room to grow).

Would it have made sense to do this at the beginning? No way. We would have been spending way more money than we were making so the MSP made sense. As long as it makes sense it's worth it. Once it doesn't, it doesn't and it's time to look at other options.

Denny
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[PaulSA42]

Thenks for the feedback.

We are looking at both options, fully maintained and CoLo. One of the drivers for this project is the cost of equipment, particularly the ongoing cost of upgrading or buying new equipment to replace older boxes. Some vendors allow both options, so this gives us a little more flexibility, although for us to go down the CoLo path, it would only really provide us with greater security, redundancy (power & comms), and monitoring. The cost of the equipment still lies with us, so this may not be the right starting point. As you pointed out mrdenny, to start with one solution doesn't mean you cannot change when it makes more sense.

jimbojimbo, the points you raise are all relevant and have given me additional questions to ask when meeting with vendors. I am particularly concerned about the security of our data, not that we are a high target for industrial espionage, but you can never be too sure. We are in Australia so I'm not sure of the impact on statutory requirements, but I don't think this will be an issue.

I think we have a small to medium sized network (14 servers, some virtualization, mixed 2000/2003 domain, hoping to upgrade to complete 2003 domain, 100+ users). My main concern is that we use a design package that is not only resourse intensive on the workstation, but the files produced are 5-4Mb in size, and we produce 5000 per year.

I feel we are heading towards a part solution which will give me greater redundancy and a better DR solution for our business/financial applications and data, but will still need to maintain some servers locally for the design software.

It's all very complex, but if we put the right effort in, we should be better off.

 

[mrdenny]

Check the Australia tax code. I know that here in the US when you buy the capitol equipment the lost value of the equipment is a tax write over over the years that you are still paying for it. So you get some tax benefits for buying over renting.

Denny
MVP
MCSA (2003) / MCDBA (SQL 2000)
MCTS (SQL 2005 / SQL 2005 BI / SQL 2008 DBA / SQL 2008 DBD / SQL 2008 BI / MWSS 3.0: Configuration / MOSS 2007: Configuration)
MCITP (SQL 2005 DBA / SQL 2008 DBA / SQL 2005 DBD / SQL 2008 DBD / SQL 2005 BI / SQL 2008 BI)

My Blog

 

[PaulSA42]

mrdenny, as I understand it, it works roughly the same here. This is just another element I need to include in my calculations. Time to pull out the old high school maths books!

Paul.