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Outsource Your Data Center (continued)

The potential advantages of outsourcing the infrastructure include:

• Reduction in overhead costs, including avoiding capital expenditures Having someone else host your hardware frees up resources and helps to offload non-core functions. Zakharov says that it also helps companies avoid the cost of "chasing technology" when they need to upgrade their infrastructure. "Now the third-party vendor is responsible for ensuring that your server is running the most recent technology and has the right patches,'' he says.
• Reduced staffing issues When companies outsource, the vendor is responsible for finding the right people and ensuring they are properly trained; turnover and retention become their problem.

Challenges Remain
For all the potential advantages, the decision to switch to a hosted data center is not a slam-dunk. The stumbling blocks include:

• Higher costs than anticipated  While the cost of outsourcing a hardware infrastructure varies widely, Zakharov estimates that it could consume over 50 percent of an IT department's annual budget. DiDio sees companies spending between 20 percent and 40 percent of their budgets on maintenance and equipment management, with more for applications and people costs.   
• Vendor performance issues  Glitches often arise over security, not meeting promised cost savings or failing to reduce downtime. "Not all contracts go well," warns Zakharov. "Companies end up taking the assets -- whether people or equipment -- back in-house.''
• Losing direct control  "When you're in a hosted environment, you're at least one step removed and that's enough to make managers hesitate," says Tere' Bracco, a senior research director at Current Analysis, located in Seaside, Calif. "They want to make sure they can actually produce reports, spot problems and take action to keep them in compliance." (article continues)

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