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Users Weigh In on Sourcing IT Out

NEW YORK -- More and more firms are opting to outsource their servers and storage, although users at the Data Center Dynamics conference here today warned that this process is becoming increasingly difficult. Smaller firms, in particular, face an uphill struggle.

Outsourcing is clearly growing in popularity, with Nissan and the U.S. Army's Office of the Judge Advocate General (JAG) recently signing major deals with IBM and Ciber Inc. (See IBM Wins Army JAG Contract and Nissan Signs IBM Agreement.) This followed General Motors' decision to award a massive $15 billion, five-year outsourcing contract to HP, IBM, Capgemini, Compuware Covisint, Wipro, and EDS in February of this year. (See GM Goes for New Outsourcing Model, IBM Picks Up $500M GM Deal, and HP Grabs $700M of GM Biz.)

But, further down the corporate food chain, where firms lack the resources and influence of GM or Nissan, there is plenty for users to gripe about. Lance Smith, assistant system administrator at New York City's Church Pension Group, told Byte and Switch that each time he deploys a new application, he adds another level of complexity to his outsourcing contracts. "It becomes an octopus," he said. "There are more and more applications, there are and more components to the network infrastructure."

Smith used the example of email, which is shared across a whole menu of different devices. A typical organization could end up deploying three different types of software to run email across desktops, Blackberries, and Palm Treo devices, he said, not to mention anti-virus software for protection. "It's crazy," he added.

The exec would not reveal which outsourcers he uses but warned small firms not to bank on gilt-edged service from some big-name providers with extensive customer lists. "If I have a problem and Merrill Lynch has a problem, where are they going to go first? So the little guy loses out in the end," he said.

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