Data Centre Outsourcing Continues to Grow

By Subashini Selvaratnam

The local data centre outsourcing segment is projected to grow bigger this year, generating a revenue growth of RM562 million.

Last year, the revenue growth recorded was RM450 million, exceeding projections of RM395 million, according to National ICT Association Of  Malaysia (Pikom). This means the segment grew 38% from 2011. The revenue growth in 2011 stood at RM326 million.

According to Malaysia Data Centre Alliance chairman Billy Lee Kok Chi the local market recorded a high growth because data centre outsourcing is catching-up among the organisations, due to its cost benefits.

“Setting up your own data centre is expensive, in terms of money, time and deployment of people i.e. human resources. One needs to consider not only the high capital costs involved but also the day-to-day managing costs such as upgrading to new service or technology,” he said.

“Moreover, to recover the cost of building a data centre is a long wait. Therefore, it is better for the organisation to consider outsourcing as an option,” Lee explained.

Lee said organisations should also understand the processes involved on how to outsource i.e. engaging services providers, addressing security concerns, and respecting service-level agreement (SLA).

For example, in terms of addressing security concerns, organisations should know what are the steps taken by the service providers to ensure the data and applications are secured from any possible Web threats. Organisations should also ensure their businesses would run smoothly without any possible downtime.

On the type of data to outsource, Lee believes it depends on the individual organisations requirements and its policies.

Echoing a similar view, VADS Berhad’s general manager for business innovation Edwin Ng believes an organisation would typically go for non-core data that are relatively risk free for outsourcing.

“This kind of data is found in the test and development environment. Here, the test data is somewhat risk-free compared to production data,” he added.

 Organisations would still need to ensure that proper standards, policies and compliance with the industry standards are in place. This is to ensure data is protected and secured all time.

It’s getting cloudy
Ng added that building your own data centre is expensive. By subscribing to cloud services, organisations need only pay for the resources they consume i.e. pay as your needs grow. The benefits of cloud computing are obvious includes improving business and IT agility as well as lowering IT costs.

For example, Amazon Web Services provides infrastructure and application services that lets you run virtually everything in the cloud i.e. from enterprise applications to social games and mobile apps.

Ng explained that if organisations are worried about security issues surrounding cloud computing, they should evaluate any one of the three cloud computing deployment models. They are public, private and hybrid.

The National Institute of Standards defines public cloud as a cloud infrastructure that is provisioned for open use by the general public. It may be owned, managed, and operated by a business, academic, or government organisation, or some combination of them. It exists on the premises of the cloud provider. Examples of cloud service provider s are Google and Amazon.

The private cloud, as the name implies, is a cloud infrastructure that is dedicated to a single organisation comprising multiple customers (such as business units).  With this deployment model, organisations can host their applications in the cloud. Here, they can address their security concerns, for example.

In hybrid cloud, the cloud infrastructure is a composition of two or more different cloud infrastructures (private, community, or public) that remain unique entities, but are bound together by standardised or proprietary technology that enables data and application portability (e.g. cloud bursting for load balancing between clouds).

The other type of cloud is known as community cloud. This cloud infrastructure is for exclusive use by a specific community of consumers from organisations that have shared concerns (e.g. mission, security requirements, policy, and compliance considerations).