As advances in enterprise technology have accelerated, the shelf-life of legacy applications and infrastructures has been significantly reduced. At the same time, the demands on IT departments to ‘do more with less’ continue to grow. As such, more and more organisations are looking to embrace hosted services as a way to utilise the latest technology whilst reducing their upfront CAPEX costs.
With lower barriers to entry and easier long-term budgetary planning, it becomes much easier for smaller enterprises to deploy new IT services. The latest market data underlines this emerging preference for hosted services. IDC recently forecast global spending on hosted private cloud services to exceed $24 billion by 2016; with a compound annual growth rate of 50% over the next three years. But aside from the cost benefits, what else is making hosted services increasingly attractive as a replacement for traditional on-premise IT?
Global mobile workforces
A key driver behind the adoption of hosted services has been the growing mobilisation and globalisation of modern workforces. As communications technology has become more sophisticated, enterprises are now able to support mobile workers on a previously unprecedented scale.
The perception of ‘work’ as being a place that people go to from nine to five is fast becoming outdated. Instead, we are moving towards regarding work as an activity that can be carried out at any time and from any place. Rather than solely being based in fixed office premises, with a single workstation at which they work, employees can now operate from any office around the world, at home, or even during the commute; accessing applications from their desktops, laptops and mobile devices.
As a result, on-premise installations are becoming less effective as a means of deploying new services. The cost and effort involved in rolling-out technology in every location where it is needed have escalated significantly as the workforce has geographically diversified. Hosted services are becoming the preferred and simplest solution to this dilemma, granting instant access to the latest enterprise services, regardless of the users’ location. For example, research has found that nearly three-quarters of UK IT directors are more likely to embrace unified communications technology if they are able to deploy it via a managed cloud.
Easing the burden
Whilst the globalisation and mobilisation of the workforce has improved productivity, it has also increased the management burden associated with on-premise IT services. Routine administration tasks such as setting up access privileges and installing updates could take up hundreds of man hours for enterprises with multiple premises around the world. With a hosted service, management of these tasks can be handed over to a service provider; reducing the time needed to manage enterprise IT internally, whilst simultaneously reducing the risks of missing important upgrades and patches.
Furthermore, businesses gain access to specialists with expertise that may not be available in-house. However, as they come to rely more on third-party service providers to ensure their IT is running smoothly, businesses need peace of mind that their suppliers are reliable. Research has found that the majority of UK IT directors feel more accountable when things go wrong where services are managed by a third-party. As a consequence, hosted services must be delivered by trusted providers who have clearly defined SLAs.
Ultimately, it’s easy to see why hosted services are becoming more favourable than traditional on-premise solutions. The rapid evolution of technology means that the demand for IT services is far higher and more diversified than ever before. This creates the risk that by the time an on-premise solution has been rolled out, there will be a newer version available; leaving businesses stuck in a perpetual Groundhog Day of IT updates.
Being able to tap into the latest IT innovations without the hassle involved in rolling out on-premise deployments, offers enormous advantages. As a result, businesses are turning to managed service providers, which have the ability to offer easy and instant access to these services, whilst easing the management burden that they would otherwise entail. Meanwhile, enterprise IT staff are freed-up to focus on their central aim of creating value for the business.
