The Outsourcing Continuum, Part IV: Fully Managed - Page 2

Mar 23, 2009

Mike Scheuerman

24x7 Monitoring - Monitoring will include a long list of things that need to be watched. This will typically be done from a 24x7x365 network operations center (NOC). Items that will be monitored will include:
  • Hardware, e. g. memory usage, disk space, CPU utilization, etc.

  • Communication Ports

  • System Logs

  • Horizontal software, e. g. is it running?

Reports - You should get at least an annual hardware and software performance report to let you know what has been done to maintain the agreed to service levels. You’ll want to get a security and vulnerability report at least twice a year to make sure that the systems you’re using are safe and secure. On a quarterly basis you’ll want to see reports on operating system and horizontal application performance tuning, hardware maintenance including firmware and BIOS updates and physical support tasks that were done.

Power and Comms - As in the co-location model, the power in the data center should be backed up by an uninterruptible power supply (UPS) to ensure that in the event of a power outage. The service provider should have at least two communications services providers to ensure that the loss of any one communication channel doesn’t significantly impact you.

SLA - The scope of services covered by under the SLA should include the following:

  • Response commitment. This includes:
      • A commitment to respond to any failure of the operating system, server Infrastructure, or service provider network within a negotiated time frame (2-4 hours).

      • A service charge credit if that level of response is not met.

  • Bandwidth availability commitment

      • At least 99. 99% of the time the contracted bandwidth should be available.

      • A service charge credit if that level of availability is not met.

  • Network availability commitment including:

      • At least 99. 99% availability of the service provider network

      • A service charge credit if that level of availability is not met.

  • A commitment to maintaining a hardware infrastructure capable of complying with the negotiated scope of services.

What You Won't Get

With this model, you get a lot, but you will have to buy and maintain any applications you want to use. This could be your own staff or you could have the software vendor support those systems if they provide that kind of service. You’ll have to make sure that you have someone on staff that has responsibility for managing the relationship with your service provider and making sure that you get what you’re paying for. You will have to develop, maintain and test a business continuity plan or disaster recovery plan.


The costs for this kind of outsourcing vary widely depending on what services you are buying. The pricing is based on service providers cost of system acquisition and maintenance as well as the cost of hiring the experts needed to maintain those systems. For example, if you have six physical servers running general applications and moderate bandwidth needs, your costs might look like those in the following table.

To determine if this is cost effective you’ll need to sit down with the guys in finance and figure out the cost of acquisition and depreciation. Don’t forget to figure in the cost of power for the systems and the air conditioner and communications costs from a local carrier. You also have to include in your calculations the costs of the staff to monitor systems 24x7x365 as well as the staff costs for engineers to maintain and monitor the systems.

You get more value for your dollars because you don’t have to worry about buying and maintaining servers. You also get the security of knowing that someone is watch your systems around the clock to make sure that they’re up and running, doing what you need to get done. In the next article, we’ll take a look at what you should look for in a service provider and the service level agreement.

Mike Scheuerman is an independent consultant with more than 26 years experience in strategic business planning and implementation. His experience from the computer room to the boardroom provides a broad spectrum view of how technology can be integrated with and contributes significantly to business strategy. Mike can be reached at

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