Managed Hosting as Outsourcing Alternative? Maybe…

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    TechRepublic and Rackspace provided a 39-minute Webinar discussion about “managed hosting,” which they consider a smart alternative to full-out IT outsourcing.

    John Engates, CTO for Rackspace (a — surprise! — managed hosting service) believes those functions that don’t really differentiate you in the marketplace are fair game for outsourcing. These include services at the application infrastructure layer, the operating system layer, the device layer, the networking layer and the data center layer. The fact is that for most companies, dealing with administration, monitoring and reporting don’t’ provide a competitive edge. (However, we do call into question his claim that services such as security, data management and delivery management fall into the same generic bucket. These truly vary based on your internal IT capabilities and the business that you’re in.)

    He offers a couple of useful tips for your evaluation process. These stand out:

    1) Make sure the provider is financially viable. The worst thing that can happen is that you’re put in the position of scrambling to find a replacement for your mail service provider.

    2) Find a provider with a clearly articulated and comprehensive SLAs. How clearly articulated can an SLA be? I went to the Rackspace Web site to find out. Here’s the SLA it publishes for its managed services:

    Zero-Downtime Network™
    Rackspace guarantees that its network will be available 100% of the time in a given month, excluding scheduled maintenance. Upon experiencing downtime, Rackspace will refund the customer 5% of the monthly fee for each 30 minutes of downtime (up to 100% of customer's monthly fee for the affected server). Network uptime includes functioning of all network infrastructure including routers, switches and cabling, but does not include services or software running on your server. Network downtime exists when a particular customer is unable to transmit and receive data and is measured from the time the trouble ticket is opened.

    Infrastructure
    Rackspace guarantees that the critical infrastructure systems, including power and HVAC, will be available 100% of the time in a given month, excluding scheduled maintenance. Upon experiencing downtime, Rackspace will refund the customer 5% of the monthly fee for each 30 minutes of downtime (up to 100% of customer's monthly fee for the affected server). Critical infrastructure includes functioning of all power and HVAC infrastructure including UPSs, PDUs and cabling, but does not include the power supplies on customers' servers. Infrastructure downtime exists when a particular server is shut down due to power or heat problems and is measured from the time the customer opens a trouble ticket regarding server downtime to the time the problem is resolved and the server is powered back on.

    Hardware
    Rackspace guarantees the functioning of all hardware components and will replace any failed component at no cost to the customer. Hardware replacement will begin once Rackspace identifies the cause of the problem. Hardware replacement is guaranteed to be complete within one hour of problem identification. In the event that it takes us more than one hour to replace faulty hardware, Rackspace will refund the customer 5% of the monthly fee per additional hour of downtime (up to 100% of customer's monthly fee for the affected server). Hardware is defined as the Processor(s), RAM, hard disk(s), motherboard, NIC card and other related hardware included with the server. This guarantee excludes the time required to rebuild a RAID array and the reload of certain operating systems and applications.

    To see how it stood up, I went to the reports covering the outages Sourcingmag.com has experienced over the last month under a different company. There were about 18 different outages that ran over the course of about 72 minutes. Under the Rackspace SLA, I think I’d be entitled to get a 10% credit on my monthly fee, presuming those minutes can be consolidated (vs. awaiting an outage that actually lasted half an hour). Getting excited about that is akin to getting excited over a coupon that’ll save me 50 cents on a brand of cereal I never buy. Hardly a dent in the ol’ IT budget. I’d have rather have seen the site up during those down minutes.

    Plus, since the SLA only covers the hardware and infrastructure, I’m not sure I’d even get the 10% credit, since the outages allude to connection problems, not “server not found” problems.

    My suspicion is that companies like Rackspace probably do best when serving clients that have an IT staff on hand to sort through these matters. You couldn’t expect to hand over your Web site and hope to get the service you want without paying a real premium — or without having a techie on hand to talk to the techies at the provider firm. So is managed hosting a true alternative to all-out outsourcing? Not really. It’s a subset to pay attention to when you don’t want to hassle with the commodity hardware.

    But, for the price of a free registration, you can decide for yourself by listening to Mr. Engates here:

    http://whitepapers.techrepublic.com/abstract.aspx?docid=141763&view=141763

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