Outsourcing Survey Reveals Data Center Trends

The shorter the contract length, the greater the satisfaction in data center outsourcing efforts. That is one of the conclusions reached by Enterprise Systems and Sourcingmag.com in the 2006 Data Center Outsourcing survey, which solicited data from 463 companies.

When reporting how satisfied clients feel toward their data center service providers, 62.5% of those organizations with one-year contracts were satisfied or highly satisfied. Satisfaction dropped to 43.8% for those with contracts longer than five years.

“Although ‘mega-deal’ outsourcing contracts that extend for a decade in the future make for exciting headlines, that’s actually less common than it might appear,” said survey editor James E. Powell, editor of Enterprise Systems. The average contract length reported by respondents tends to be between four and six years.


Satisfaction was higher among organizations working with fewer service providers. For those working with just one provider, 76% reported being satisfied or highly satisfied; satisfaction fell to 53% for those with three providers.


Data center outsourcing encompasses many services. Trouble ticket and help desk are the most commonly outsourced function, as reported by 40% of respondents. Hardware and network operations, operations and end-user support, and disaster recovery and backup are outsourced by just over one third of respondents.


Security and privacy issues are slowing the adoption of outsourcing in the data center. Data confidentiality, security risk, and exposure are their primary worries.


The comprehensive survey, co-produced by Enterprise Systems and Sourcingmag.com, examines what data center functions are being outsourced, what typical contract lengths and values are, actual costs vs. contracted costs, the reasons for outsourcing, the location where the outsourced work is being performed, the factors considered most important in identifying client-service provider fit, what the major factors are in successful outsourcing initiatives and major areas of concern in outsourcing.


Readers can read more results from the 2006 Data Center Outsourcing survey at /content/c060424a.asp.