Colocation versus cloud and managed services is a decision many CIOs face, as they seek the best approach to run an application. How do you know which strategy works best for your company?
Heather Noggle, CIO of Exits Inc., which develops international and compliance software, has had hands-on experience with both approaches. Exits went with colocation when it began offering its trade and compliance application on a software as a service (SaaS) basis in 2003.
Colocation allows an IT organization to lease space, and place storage, servers and the resident apps in a third-party data center, which provides cooling, network connectivity, power and security. It's is a no-frills approach that offers the advantage of greater control over equipment -- until it doesn't.
Eventually, reliability became an issue with Exits' colocation arrangement. The company's site would go down for no discernable reason, and the colocation provider was unresponsive, Noggle said.
Noggle recalled driving to the colocation facility to personally reset the servers hosting Exits' software. Exits' development team and its colocation vendor were both located in St. Louis at the time. The company's headquarters is in Connecticut.
"I only had to do that the once ... but that was the proverbial straw that broke the camel's back," she said. "When you are in our business, you can't be down. You've got to have someone invested in keeping your data available all the time."
Exits' customers rely on its Global Wizard software suite to handle export document generation, determine international trade requirements based on trade lanes and conduct Denied Persons screenings, the company noted. As for the last service, U.S. companies may not engage in export transactions with people or organizations on the Commerce Department's Denied Persons List.
Making the switch to cloud and managed services
Heather NoggleCIO, Exits Inc.
After that pivotal server incident, Exits decided to drop its colocation provider and tap Xiolink to provide what Noggle called a "fully integrated managed service model." Xiolink is now part of Cosentry Inc., a cloud and managed services provider based in Omaha, Neb.
The transition to a new provider took place in 2005. Today, Cosentry maintains Exits' IT infrastructure in a managed private cloud that encompasses a Microsoft Internet Information Services Web server and SQL Server database. The cloud and managed services provider also includes managed security and data backup within its service offerings.
Beyond greater reliability, the use of a cloud and managed services firm helps Exits reduce IT costs. The biggest source of savings: Exits has not needed to keep a network expert on staff. Noggle said Exits has general IT knowledge, but noted that networking and hardware aren't the SaaS company's specialties.
Starting salary for a network administrator is forecast to increase 6.4% this year, with compensation running from $76,250 to $112,000, according to Robert Half Technology, an IT staffing company.
In addition, Exits takes advantage of business and technology planning that its services provider offers. For example, Exits' growth has prompted discussions around hardware load balancing. Load balancing is a technique IT departments use to deal with increasing volumes of Web traffic.
"We're looking at the hardware load balancer now, but we haven't completed the request with Cosentry, who did recommend it," Noggle said. "We have some older code and some newer code, and some additional changes in infrastructure planned that we want to nail down before we move forward with that."
Exits, meanwhile, has another technology change in the offing: The company plans to update the user interface of its main product, and then its supporting database. The software rework is scheduled for completion in 2017. The new software could change the way Exits wants its infrastructure managed, but Noggle expressed confidence is Cosentry's flexibility.
"We know they will help us as we go forward," Noggle said.
And her advice to other CIOs considering a services provider partner?
"Get someone who will work with you as you grow and change."
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