Will Outsourcing Your IT Save Time and Money?

At the intersection of business and technology, the rationale known as "we've always done it that way" seems downright antiquated. Still, it's a surprisingly resilient dogma — particularly in the area of IT. A lot of small business owners struggle with the idea of letting a third-party manage and maintain the infrastructure on which the business depends.

Hosted IT infrastructure? A brief definition: instead of buying, installing, managing and supporting the various servers, data backup systems, virus protection and e-mail platforms (for example) on your premises, you pay a monthly fee for these services from a company that maintains and protects all of the infrastructure in its secure data centers – and thus avoid an up-front cash investment.

The Planet, a company that provides on-demand IT infrastructure solutions and thus very interested in promoting the benefits of hosted IT infrastructure, did a little outsourcing of its own. It commissioned BizTechReports.Com to survey small business owners to see what, if any, benefits hosted IT provides over the traditional do-it-yourself approach. The report, The Small Business Transition to Hosted Technology: Costs vs. Benefits, was published last month. Let's take a look at the results.

BizTechReports surveyed 326 small business decision-makers from 19 different industries. These respondents fell into two groups: The first consisted of 164 people in companies (all randomly selected customers of The Planet) that outsource at least one major component of their IT infrastructure. The remaining 162 people (also randomly selected) came from companies that manage all major IT infrastructure components on their own.
The respondents were members of senior management, with 96 percent listing their titles as manager, director or higher. The majority of them — 97 percent — work at companies with fewer than 100 employees.

The study found that small businesses that use a hosted IT infrastructure are more likely to spend a smaller percentage of their annual revenue on technology than are their counterparts who manage IT internally. SMBs that outsource are also two times more open to and likely to use new technologies such as software as a service (SaaS) applications like Salesforce.com

The study also revealed that businesses that rely on hosted IT don't have as many security issues or technical failures, which reduces downtime and its associated cost. Another factor: The rate at which hardware becomes faster and more powerful. The study noted the rapidly shrinking shelf life of hardware makes investing in the technology a lot less appealing for SMBs

Steve Kahan, The Planet's vice president of marketing and product management noted the study's finding that a hosted infrastructure makes it easy for a company to expand or contact their IT operations as needed. "Customers pay a monthly fee, which makes predicting costs a snap," he said. "Plus, being able to buy what they need and scale up or down quickly is a real advantage, particularly when dealing with seasonal business."

Another notable finding relates to e-commerce. Specifically, outsourcing SMBs add e-commence applications to their business "to generate top-line revenue" twice as often as do companies that manage their own infrastructure. The study also noted that e-commerce apps "require a much higher degree of infrastructure reliability and availability to be successful."

Kahan said that a hosted infrastructure provides small businesses with the technological backbone necessary to be competitive in the e-commerce arena. "SMBs face behemoth competition when it comes to e-commerce. A hosted infrastructure gives them world-class resources at an affordable price."

Earlier in the year, The Planet commissioned Stratecast, a division of Frost and Sullivan, to compare the costs involved in a both hosted and a nonhosted IT infrastructure scenario. In its total cost analysis, Stratecast found that a small business owning and maintaining its own IT infrastructure would spend $104,600 over a three-year period where as a company with a hosted IT infrastructure would pay $24,100 for the same infrastructure over the same period of time.

Best Computing Products of the Year

Small Business Computing has released their best picks of the year for small businesses.

You can see the entire article here

Hardware:
Desktop PC
Dell OptiPlex 745 Runner-up: iMac (MA590LL)

Notebook PC
Dell Latitude D820 Runner-up: MacBook (2.0GHz)

Color Printer
HP Color LaserJet 2605dn Runner-up: Xerox Phaser 6120

Black & White Printer
HP LaserJet 5200 Runner-up: Samsung ML-2571N

Multifunction Device
HP Officejet 4315 All-in-One Runner-up: Xerox WorkCentre 4118 Multifunction Printer

Mobile Device
BlackBerry Pearl 8100 Runner-up: Palm Treo 700wx

Storage
NetApp StoreVault S500 Runner-up: EMC CLARiiON AX150i

Server
HP Proliant ML570 G4 Runner-up: IBM System x3105

Security:
PC Security
Norton Internet Security 2007 (Symantec) Runner-up: McAfee Internet Security Suite 2007

Network Security
McAfee Total Protection for Small Business Runner-up: Trend Micro Client Server Security 3 for SMB

PC Data Backup And Recovery
Symantec Backup Exec System Recovery Desktop Edition 6.5 Runner-up: Maxtor OneTouch III, Turbo Edition (Seagate Corp.)

Network Data Backup And Recovery
EVault Small Business Edition Runner-up: Seagate Mirra Sync and Share Personal Server 320 GB

Software and Services:
Productivity
Microsoft Windows Small Business Server 2003 R2 Runner-up: FileMaker Pro 8.5

Accounting and Finance
QuickBooks Premier 2007 (Intuit) Runner-up: Peachtree by Sage Premium Accounting 2007

Graphics and Multimedia
Adobe Photoshop Elements 5.0 Runner-up: Corel Paint Shop Pro Photo XI

Sales and Customer Management
Salesforce.com Runner-up: ACT by Sage 2007

Collaboration
Citrix GoToWebinar Runner-up: Central Desktop

VoIP
Skype for Business Runner-up: SmartVoice Plus (Accessline Communications)

E-Commerce:
Storefront
Volusion Runner-up: Yahoo Merchant Solutions

Web Hosting Provider
Yahoo Web Hosting Runners-up: GoDaddy and Verio

Customer Service
Volusion Live Chat Premium Edition Runner-up: Live Person Pro

SEO/SEM/Web Analytics
WebTrends Runner-up: Omniture

Online Marketing and Advertising
Google AdWords Runner-up: Constant Contact

Affiliate Program
Google AdSense Runner-up: Amazon Associates