Companies clamour for ‘flexibility’ when outsourcing IT

While cost savings and security will continue to remain key factors in the selection of a managed IT services provider, in the past few years Canadian companies have been basing their choice on yet another factor: flexibility.

When outsourcing IT, flexibility has become vitally important for growing companies that may need to change direction on a dime. Experiences, in this regard, have been varied.

For some the flexibility of their service provider and service contract has been a source of great satisfaction; for others the perceived lack of flexibility has become a major a bone of contention.

Colliers International belongs to the former category. The company provides commercial real estate services and operates over a Wide Area Network that links its Toronto-based data centre to locations across North America, Europe, Latin America and the Asia-Pacific and Africa-Middle East regions.

Flexibility was the decisive factor in the company’s selection of Bell Security Solutions Inc. and Fusepoint Managed Services Inc. to co-host the Colliers data centre, according to Rennie Fisher, CIO of Colliers International.

“If we want to bring any of our applications [in-house], we have the freedom to do so,” said Fisher. “But these services are typically local office functions, such as print servers. By and far, everything at Fusepoint will stay there.”

He said having options is important, as his company’s expectations from service level agreements can change. “We need to know that if we do have to pull a server or two back in-house, then we can.”

Last year, Colliers signed up Bell Security and Fusepoint for Web hosting services, but in February moved its data centre to Fusepoint. Fusepoint offers managed hardware, managed operating systems, Web applications, database management, data back-up, firewall security, intrusion detection service and comprehensive monitoring and reporting services.

Fisher says the move to Fusepoint saved the company between $300,000 and $400,000. “When we relocated to the West End of the city, we either had to rebuild our entire data centre or look for outsourced services. Bell was already hosting our WAN and it made sense to go with Fusepoint for the flexibility, cost savings and security.”

Not every company that has outsourced IT to Bell and Fusepoint has the same happy tale to tell, however.

For IT Weapons Inc., in fact, the experience was definitely unpleasant. Mississauga, Ont.-based IT Weapons offers performance analysis, infrastructure assessment, portal integration and application development.

When business started booming for this company, its president and CEO, Ted Garner, needed to do something with the company’s ballooning data centre. He’s been advising his clients on data centres for the past five years, either helping them build the network infrastructure or pointing them to outsourcing companies who fit their needs.

Garner considered expanding on his own, but total cost of ownership made outsourcing his Wide Area Network to Bell Security Solutions Inc. and moving his data centre to Fusepoint Managed Services Inc. a better option – or so he thought at the time.

According to Garner, the agreement has proved nothing short of difficult and inflexible.

“We’re a growing company and, back in November last year, we fully disclosed our business objectives when we went in with Bell and Fusepoint,” said Garner. “When we did in fact begin to grow and our servers demanded more power, they turned around and told us we couldn’t have so much power.”

Fusepoint currently houses 100 servers for IT Weapons, providing space, cooling, physical security and Internet access. Garner expects IT Weapons will grow to 1,000 servers in the next 18 months as the company begins hosting an increasing number of servers for its customers.

“We’ve been having a terrible time with Bell and Fusepoint and there’s been a lot of anger spread over many months of disagreements,” said Garner, describing problems that ranged from increasing power demands, to cross-connection cabling issues, to a breakdown in communication with Bell and Fusepoint, right down to the costs of facility tours for his clients.

The bottom line, said Garner, is customers would need a lot of experience before signing a data centre contract. There’s a lot of fine print and there has to be a lot of flexibility written into it.

Stephen McWilliam, vice-president of Channels at Fusepoint, disputed the allegations made by Garner.

“It’s absolutely not true,” said McWilliam. “It’s not that they couldn’t have more power; they couldn’t have more power for free.”

McWilliam emphasized the importance of the SLA (service level agreement). “We have 400 customers and we cannot afford any ambiguity in any of these contracts. That’s why we have SLA agreements.

“When customers come to us they tell us what their power requirements are, how much bandwidth they’ll need, etc. Then, if they need incremental power, we work out what the costing will be and we make sure there’s no ambiguity.”

McWilliam said he remembered the discussion well and that it had been a heated forum, albeit an open one. He described IT Weapons as an interesting, demanding customer. “They were a small company when they came to us and they’re growing very fast.”

As well, McWilliam said IT Weapons was offered options in the set-up of its cross-connections, where and how the different cables from the various Internet service providers fed into IT Weapons’ cage.

McWilliam added that the trend, generally in managed IT services, was not so much towards “backsourcing” or bringing services back in-house, but more towards selective outsourcing.

“We’re noticing the classic Canadian procedure of a company dipping its toe in the water, seeing what we can do for them and then making the decisions as their needs change,” said McWilliam.

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Jim Love, Chief Content Officer, IT World Canada

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