Gartner to CIOs: Get ready to outsource infrastructure operations

Summary:Gartner is recommending that CIOs develop plans by mid-2006 for offloading IT infrastructure operations to external providers. "It’s becoming increasingly more difficult to prove how retaining in-house infrastructure has an advantage over the outside," said Gartner Fellow Ken McGee.

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Gartner is recommending that CIOs develop plans by mid-2006 for offloading IT infrastructure operations to external providers. "It’s becoming increasingly more difficult to prove how retaining in-house infrastructure has an advantage over the outside," said Gartner Fellow Ken McGee. "It’s becoming such a mainstream phenomenon that you will be behind competitors if you are still trying to manage IT operations by end of the decade, so you need to make that decision soon to complete the migration by 2010," McGee added. The usual suspects—IBM, HP, EDS, Sun etc.--as well as new players focused on smaller business will provide the standardized infrastructure to serve those growing needs, with price dependent on service levels and other metrics. Clearly, it has to be much cheaper than do-it-yourself infrastructure operations and just as reliable (if not more so).

The role of CIOs is changing from leading cost containment efforts in the past year to delivering projects that enable business growth, according to McGee and Sector General Manager Daryl Plummer. "We are at a crossroad where CIOs are beginning to ask once again what is the role of CIO and IT in business," said McGee. "It's a movement from being an enabling organization to a contributing organization, signing up to measurable deliverables, such as increasing customer satisfaction by 12 percent. IT performance is being aligned with sought-after business outcomes so everybody can be on the same page." In other words, the CIO is at the big table helping make business, not just technology, decisions, and being held accountable for delivering measurable business value, not just server uptime or a portal. 


However, McGee said that only about 10 percent of CIOs could be categorized as contributing IT organizations. At the same CIOs can expect their staff and budget for internal systems will decline as fewer traditional programmers are needed and as corporate infrastructure is delivered by external service providers. McGee said that by 2009 there will be 30 percent few programmers than today, moving from code to assembly and composition. "There is a need to move away from programmers to business specialists, who understand how the pieces go together," McGee said.

Other key issues that CIOs have to face in the near term include:

When to allow non-enterprise owned devices to access corporate systems. McGee said that the next generation of chips will permit PC virtualization that makes access to corporate system from personal devices more secure.

CIOs also need to figure out when to stop investing in their current set of enterprise applications.  "Stop investing in old application infrastructure," said Plummer. "We have been spending on implementation, maintenance and upgrades for same resources, year after year, rather than investing in something that might be more beneficial." He cited SAP's NetWeaver as an example of a vendor moving from static, monolithic infrastructure to components and services--what Plummer called an agile platform that unites application logic, data and business processes.

Start investing in IP telephony and VoIP. "An absolute revolution is taking place in networking worldwide," McGee said. "We are moving away from technology-based soloutions created at the end of the 1800s into the world of IP, systems based on a common architecture. You may have bought your last proprietary PBX, voice mail or video conferencing system." IP telephony and VoIP are now safe and good enough for communications in branch offices, and can deliver 30 percent or more in TCO savings, McGee added.

Topics: CXO

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