Today, third-party service providers play a major role in managing the data centers of Indian organizations. While this trend is not new to India as such, it is evolving with the constantly increasing number of service providers involved in data center management. Thus, when it comes to data center outsourcing, there are several key factors to keep in mind.
First, recognize that the issue involves more than just outsourcing a data center's management. When you outsource data center's management to a third party, it brings various associated services into the picture. Such services include management of bandwidth, network infrastructure, server space and storage space.
For example, at LG Electronics, we have arrangements with various vendors to manage different technology aspects. Bharti Enterprises and HCL Technologies Ltd. manage our connectivity infrastructure. We work on IBM servers, while Hitachi Data Systems handles our storage needs. Apart from these tasks, data center and facility management have been outsourced to another company.
The evaluation parameters are critical, since your entire organization's IT infrastructure depends on them. Hence, have the right parameters in place to help identify the right data center outsourcing partner.
First, your chosen outsourcing service provider should be financially stable. A vendor should have requisite technical and domain expertise, since data center management is sophisticated and requires high-end back-office operations. The vendor should also have industry exposure, since it helps the company to understand how your particular business works.
Second is the deal's price point -- perhaps the most central selection criteria from an Indian perspective. Pricing of the agreement should be well-thought-out and negotiated. And while it is obvious that a CIO expects to receive best-in-class technology services from the provider at the lowest price point, I believe that the pricing terms should be a win-win situation for both the parties. At the same time, you should not squeeze the service provider so much that it results in quality-of-service degradation. A win-win situation can strengthen long-term commitments.
I believe that service-level agreements (SLAs) should be specific, clear in nature and, most important, measurable. Ensure that you define specifications according to the applications that the service provider has to manage. When it comes to stipulating measurable factors in SLAs, always clearly define the evaluation parameters.
At LG, we ensure that reward and penalty clauses are in place. But more important than the penalty are the rewards for achieving a target. This helps both parties and keeps motivation high. In fact, we have seen that a service provider will go out of the way to give best-of-class services.
Also, the clauses concerning a breach of contract should be clearly communicated. If there is a breach of contract, a CIO should measure the impact on his organization. It's best to try to resolve the issue, as opposed to getting into legal hassles.
Selecting a location
Irrespective of whom you outsource your data center management to, you will face two situations when it comes to hosting: Your data center can be hosted on-site at your data center or at a third-party data center (this vendor may or may not manage your data center).
When your data center is hosted externally, there are several important factors to be taken into consideration. The most important factor is the cost of the location in terms of real estate value. In addition, the data center should have state-of-the-art facilities.
Before you finalize a location, you must assess aspects such as availability of power, proper connectivity and approachability and the site's propensity for natural disasters. The location should not be in an earthquake-prone zone, for example. Security concerns such as terrorist attacks should also be kept in mind. The data center site should also fulfill basic requirements, such as availability of technical staff and coverage by offices of your IT vendors.
When you choose a data center location, it is necessary to look at the physical security aspect. Consider security features such as biometrics (for people with access to the area) and vigilance cameras (to track visitors).
In general, evaluation of a data center management contract should be done every year. Such contracts are typically renewed on an annual basis.
About this author: Daya Prakash, Head-IT, LG Electronics has an industry experience of 15 years. He is working with LG since 2001.
(As told to Yuga Chaudhari.)