Managed service providers (MSPs) have solidified themselves as a viable outsourcing option for Canadian organizations, but there are still laggards, and many enterprises are experiencing IT-related outages that put a dent in their productivity for more than a day. That’s the view of the MSP landscape in a recent Branham Group study commissioned by CenturyLink, Inc.
The Managed Service Provider Market in Canada found that 53 per cent of companies surveyed experienced a significant loss of productivity due to an application, network or data systems failure.
More significantly, said Ash Mathur, CenturyLink’s country manager for Canadian operations, 18 per cent of respondents endured a multi-day work stoppage due to these failures, while 29 per cent lost a whole day.
“That’s pretty significant,” he said. “That could be viewed as a surprise for senior executives.”
The study did not drill down into the causes of the outages, but if an enterprise is managing their own infrastructure from end to end, interruptions are to be expected given the complexity of the modern IT environment, said Mathur. “Running the IT operations of even just a mid-size company is complex nowadays.”
The upside is that none of these business felt the outage threatened the company’s future; more than half perceived these outages as a short-term annoyance. Mathur said the bulk of the results were not surprising to CenturyLink, and said the managed hosting and services of MSPs are really about improving productivity. However, he said, many organizations are still devoted most of their resources to managing day-to-day IT operations rather than focusing on more strategic, innovation-driven projects, and one third of respondents are still not using an MSP.
Those companies that are turning to MSPs to take aspects of their IT infrastructure are seeing cloud infrastructure and security as key areas where they can most benefit, said Mathur, and about 70 per cent of organizations have some sort of relationship with an MSP, even if it’s only for only part of their IT operations.
While there is always reluctance on the part of some organizations to up control of their IT operations, Mathur believes the trend toward outsourcing some or all functions to an MSP is a “mega-trend” that is here to stay, just like virtualization and cloud computing. “It’s a question of pace.” Many customers outsource part of their business, but have “crown jewels” they still want to maintain internally, in some cases because they feel there’s isn’t expertise available from outside that is equipped to handle that particular workload or application. The nature of the business might keep an organization from outsourcing, he said, such as the public sector.
One misconception in the MSP market, said Mathur, is that it’s just large organizations like the big banks that outsource IT functions to a third. “Many of our customers in Canada are small or midsized,” he said. “They have different challenges.” He said many of them have to scale up quickly around the world to compete in a global marketplace, but don’t have the resources or staff to it fast enough without help.
Mathur said mergers and acquisitions can be a good reason to turn to an MSP as the combined entity sorts through disparate systems and often outdated legacy systems to integrate. “It often makes sense to have someone come in,” he said. “We can bring them up to date.”