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Growing cyber threats challenging cost reduction as reason to use managed services

Mid-sized companies plan to use more managed services and many see it as improving security

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Over a third of IT operations at mid-sized companies will move to an outsourced managed service over the next five years, as IT directors seek security as well as cost reductions.

Outsourcing to save money is still the main motivation for taking up a managed service, but businesses that lack huge IT resources and struggle to keep up with the changing cyber crime landscape are increasingly outsourcing for security.

A survey carried out by Vanson Bourne for communications supplier Daisy found companies are planning to move 37% of their IT to a managed service over the next five years. A total of 67% said this is to reduce costs, and 55% said growing cyber threats are driving them to outsource security. 

The other main reasons to move to managed services include the desire to gain organisational agility (50%) and a drive to optimise existing IT resources (40%).

“The combined business objectives of cost reduction and the insatiable desire to accelerate innovation mean the adoption of an IT managed service is becoming an increasingly attractive proposition for many organisations,” said Andy Bevan, director of client solutions at Daisy Corporate Services. 

“At the same time, the risk of cyber attack – growing significantly and visibly over recent years – has prompted an increasingly stringent regulatory environment for all sectors, forcing organisations to jump through far more compliance hoops.  

“As a result, many businesses are now finding it is easier, and significantly more cost-effective, to outsource their security management to a service provider with the certifications and expertise necessary to tackle the rapidly changing threat landscape to protect their data, customers and reputation,” added Bevan.

While big companies with large IT teams and IT budgets might see the outsourcing of security as a step too far, small and mid-sized firms feel safer if supported by experts.

Mark Lewis, outsourcing lawyer at Berwin Leighton Paisner, said cost has always been a part of any outsourcing decision, but security is an increasingly influential factor.

“The complexity of managing and keeping up to date with cyber threats is leading smaller companies, and those not regulated to outsource,” he said, adding that it remains to be seen whether this is the right decision.

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