So what is the current flavour in the IT channel. We have gone through the ISPs, ASPs, Web hosting, outsourcing and so on. We are now tasting the very real flavour of storage delivery and hosting.
There are only a few serious offerings that will allow true integrated systems to share the same environment. For the end user the cost of storage is still high (we need to preserve some margins in the hardware business), especially at the high-end enterprise systems level. The cost of putting unlimited storage onto the mid-range systems is still out of reach for many players.
In the US they have rapidly adopted the model of shared storage, especially in the outsourcing market. This model has made inroads into both the enterprise environment as well as the mid-range and server market. It is particularly effective in imaging and forms storage that often require multiple terabytes.
For service providers the challenge they face is how to provide end users with access to vastly scalable storage and a wide variety of services when they are only focused on one part of the overall solution required.
In this type of environment the ideal outsourcing suppliers are those that deliver the IT services, including storage (IT infrastructure support), business process outsourcing (back-office functions) and the "glue" (integration between both) that holds the complete delivery of these processes together.
In this way the end user can take full advantage of the storage options as the usage is not just restricted to one function. What's more, they get to take advantage of economies of scale. As a result of this type of integrated services offering, many paper-based processes are eliminated, thus reducing all sorts of associated costs and providing even more value to either the end user or the margin-starved channel.
There is also still a lot of talk in the market about outsourcing, ASPs, ISPs, storage providers, Web hosting and so on. Channel players need to be careful to identify exactly what sorts of services they can deliver so end users have a chance to properly evaluate their options. At the moment, many different service providers are often lumped together when in fact they are quite different in terms of what they can deliver.
As a rule of thumb end users should be encouraged to take price as a good indication of the services provided, with the cheapest quotes only covering the supply of space for hosting and the higher prices including fully structured outsourcing with hardware included. Intelligent channel companies will use their marketing to support this view. End users shouldn't be drawn down a path of just looking at the costs, as they may end up buying a mini for the supply of a Rolls Royce service, which of course will result in disaster. You only get what you pay for.
David Knox is the director of business development at KAZ Computer Services. Contact him at David_Knox@kaz.com.au