Economic pressure on IT departments driving demand for technology as a service

PR Log (Press Release) – Jul 13, 2009 – According to an internal poll of customers, leading technology group SCC has identified two main drivers behind the changing IT market.  Businesses are increasingly turning to hosted applications in an attempt to fast access affordable and best of breed technologies; simultaneously, they need to maintain or reduce current capital expenditure levels.

“While the economic downturn is putting tremendous pressure on IT departments to reduce operating costs, company boards still want the latest technologies delivering improved performance and efficiencies throughout the business – leaving the CTO’s struggling between a rock and a hard place,” said Nick Martin, General Manager of Solution Architecture at SCC.

“As a consequence, we have seen a sharp rise in demand for hosted applications, cloud computing solutions (http://www.scc.com/cloud-computing) and technology as a service (TaaS) (http://www.scc.com/taas). These are widely considered an opportunity to remove the barriers to affordable access.  

“With up-front capital expenditure no longer necessary and the hassle and risk of management taken away - particularly where ageing legacy systems present complex environments – companies are increasingly seeking such risk free alternatives to expensive in-house systems.”

By packaging technologies and delivering them back to the customer as a service, a highly resilient and secure solution is provisioned at speed for a predictable and fixed price.  With the scope for operating cost reductions of more than 20%, it is a compelling proposition. It is also easy to add or remove technologies in line with business needs - providing flexible access to the latest solutions, at low risk.  Moreover, the best available SLAs will be achieved.

Utility services are available across the entire infrastructure. This is relevant because the size of many organisations server estates has increased massively, with new machines demanded for every additional business application. The burden of managing large volumes of data has also put storage under the spotlight.  It may be true that consolidation strategies (http://www.scc.com/consolidation) can resolve related issues, but not every IT director can allocate the required capital expenditure.

Moreover, advocates of hosted applications, such as Microsoft Exchange and Sharepoint, point out that they are significantly cheaper to buy as managed services, when compared to the costs involved in setting up a dedicated in-house system. They also provide users with the flexibility to add or remove services at any point and will underpin an effective and fast Disaster Recovery (DR) strategy.