Reaching Out For Management - Page 2

 By Lynn Haber
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"We always operated in reactive mode and had to field complaints from users," says Shipilov. Another Silverback customer, the MSP monitors the well-being of the City of Santa Clara's network infrastructure, including 40 switches and 40 servers. About 1,000 employees support a host of traditional city services. Three full-time IT staff oversee the IT infrastructure including network and applications. All other IT functions are outsourced, i.e. help desk, network support, application development and operations.

"If there's a problem on the network, Silverback sends an alarm to the help desk and we can fix it before it impacts the users," says Shipilov. This type of proactive management not only improves the end-users IT experience but it eases the burden on the help desk, as well.

Looking at the cost proposition of using an MSP was a no-brainer. If the city government IT department were to assume responsibility for network monitoring it would have to invest in network and systems monitoring tools and hire at least one additional person with network management expertise. That one additional staff person alone would cost at least $60,000 to $70,000 per year. By contrast, the service that the city contracts for with Silverback costs about $2,500/month, or $30,000 annually. "We also get 24x7 coverage," says Shipilov.

What many selective outsourcers like about service offerings is that they're flexible. "We signed a two year contract but we're not locked in. We have an optional out after one year," says Marlite's Zell.

Mark Nicolett, vice president of research and director at the Gartner Group says that selective outsourcing makes sense for companies deploying a new application type or system in a new infrastructure. "To me, turning to an MSP is very much an application by application decision," he says.

An affiliate of Fidelity Investments, Insurance.com is an online insurance marketplace offering advice, quotes or rates, shopping, as well as, a portfolio of insurance policies. Launched in March 2000, the company uses a highly outsourced model, turning to service providers for web hosting, web site development, web site monitoring, and marketing.

"We knew that the network infrastructure needed monitoring and that we didn't want to buy the tools and expertise to have a 24x7 shop," says Paul DiNicola, vice president of operations at Insurance.com, noting that building versus buying wasn't cost-effective for the company.

After shopping around for an MSP, the company turned to InterOPS Management Solutions. InterOPS provides Insurance.com with monitoring of its hardware, application availability and server availability. "We get notification if there's a problem and InterOPS knows how to escalate it to us or a partner if the need arises," says DiNicola. The online insurance company colocates its, more than one dozen web and database servers, at an Exodus facility. The MSP also provides its customer with weekly reports.

This article was originally published on Aug 29, 2001
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