Offshoring Datacenters? You Might Want to Think About That

Infrastructure Maturity

One could argue the last several years of rolling blackouts in the U.S. are not far from conditions in developing nations, but when you sign off on moving infrastructure to another part of the world, can you safely assume the infrastructure supporting datacenter operations (power, environment, roads, etc.) is reliable?

While the “backhoe” still presents the world’s greatest risk to high-bandwidth communications and data transmission, general infrastructure maturity, telecommunications and power reliability are significant risk issues to consider when moving IT infrastructure offshore, especially if the user base is geographically distributed.

Depending on location, routine power outages and service disruptions are an environmental reality. Offshore hotbeds like Mumbai are plagued by frequent brown-outs and power disruptions, while Shanghai is developing one of the worlds most sophisticated power infrastructures.

But don’t plan on infrastructure issues to persist in offshore hot spots. As discussed above, China is investing heavily in infrastructure development and India is showing increased commitment to telecommunications and power infrastructure development.

Don Van Boren, president of Vanguard, specializes in call center consulting services and comments: “Many are keeping their datacenter infrastructure local for security issues, however a lot of companies are now looking at relocating infrastructure to offshore locations. Higher bandwidth network connection costs are dropping and remote management is no longer an issue”.

The bottom line is infrastructure maturity is inevitably going to expand in the various offshore industrial IT centers, while other environmental risks like natural hazards and political stability fall into the unmitigated risk bucket. With billions of dollars pumping into these economies, governments have no choice but to keep pace with post-industrial growth needs.


Is the typical medium to large organization ready to move IT infrastructure offshore? At the moment, no. While these companies are using or have considered infrastructure outsourcing, the hardware and connecting infrastructure remains in house with the necessary provisions made for the outsourcer to manage resources remotely and securely.

For larger organizations the investment in datacenters and the supporting environment is already in place. As such, any arguments for physically relocating infrastructure are less tangible. Larger organizations will really need to look at outsourcing enough hardware to significantly decrease their overall hardware footprint; a situation that is unlikely at this time.

For example, if a large investment bank decides to outsource their messaging environment they may remove 30-to-50 servers from their global hardware footprint. This barely makes a dent in their overall hardware investment meaning they still have all the overheads of maintaining their other systems and the environments to house them while loosing control (perception or not) of that most precious of corporate resources, their business data.

Many financial services companies built large data processing facilities in rural America, specifically to take advantage of lower labor rates and a lower cost of doing business. Now the same companies are moving labor offshore which many believe establishes a natural precursor to offshoring infrastructure.

While this maybe a reasonable assumption certain factors would need to be mitigated before this started happening on a large scale, namely:

  • Outsourcing companies need to specialize in holistic services allowing organizations to outsource significant numbers of systems and services. ·
  • The infrastructure within the outsourcing environment becomes mature and regulated enough to guarantee the level of service required for business to operate competitively. ·
  • The laws and regulations that govern data protection in the countries where business data exists become formalized and globally regulated.

    While the evidence suggests that the IT infrastructure will ultimately follow the people who are responsible for performing the technical work, it will only be viable if the risks and limitations associated with this strategy are addressed and mitigated.

    John Merryman is a senior consultant with GlassHouse Technologies, an independent storage services firm. He can be contacted at [email protected].

    Stephen Craike is the technical director for Nitor Global Solutions, a specialized consulting firm focusing on global systems integration and operational services. He can be contacted at [email protected].