A Growing New Model: ‘Asset Light’ RIMO
As CIOs increasingly work
with remote infrastructure management tools for configuration, testing
and distri¬bution of software, more and more engineers are being
empowered to remotely manage data centers, storage, networks, desktop support, help desk
and security (i.e., security and control: certified ISO 27000). As CIOs
become comfortable with remote management of in¬frastructure planning,
administration, monitoring and problem-solving, a new model—remote
infrastructure management outsourcing, or RIMO—is emerging to help
buyers gain many of the hoped-for benefits of asset ownership transfer
without the sometimes nightmarish costs and risks associated with that
older model.
RIMO, also known as the ‘asset light’ model, is an
increasingly popular form of selective outsourcing in which a solution
provider assumes responsibility for managing specific (or all)
IT/network functions. Unlike traditional outsourcing arrangements,
however, RIMO does not entail the transfer of an enterprise’s assets or
personnel to the solution provider or data center.
Instead, the organization contracts for a solution pro¬vider to
continuously monitor its systems identify po¬tential problems and
remediate and resolve real events from a remote location.
The
foremost practitioners of RIMO today are managed service providers, or
MSPs, who manage IT services for other companies via the Internet. The
MSP business model evolved as the traditional computer value-added reseller
(VAR) model continually provided lower profit margins. This changing
reality, combined with competi¬tion from direct PC vendors such as Dell
and Alienware (the latter now owned by Dell) and unpredictable rev¬enues
from reactive, break-fix technical support, led to the new model.
In an RIMO scenario, an MSP commonly provides re¬mote network, desktop and security monitoring, patch management, remote data backup
and other technical services, monitoring a client’s IT infrastructure
and re¬solving any issues that arise within it. Most MSPs charge either a
per-month fee, on a time-and-materials basis, or per deployed device
(e.g., per server or network device). RIMO is particularly important for
the small-to-me¬dium-sized business (SMB) market, giving businesses a
relatively cost-effective way to manage their IT without having to hire
on-site staff.
RIMS Benefits and Market Growth
According
to Everest Research, the RIMO market grew from $720 million in 2005 to
$1.5 billion in 2006, and Everest expects the RIMO market to exceed $8
billion somewhere around 2011. RIMO is on the rise because it tends to result in both predictable recurring
revenues for the provider and peace of mind for the client, foster¬ing
labor arbitrage and delivering greater flexibility and improved process
efficiency.
RIMO is inherently more flexible than previous out¬sourcing alternatives. Assets rarely move from home data centers,
and the RIMO model is flexible enough that buyers can move assets to
nearshore centers in re¬sponse to M&A activity, business growth,
increased IT volume or changing technology roadmaps.
RIMO shifts control away from the owners of desktops, servers, mainframes and data centers,
and toward the buyers themselves. That helps spur competition that is
based on price, capability and cultural fit rather than proprietary
vendor requirements.
RIMS Models
‘Asset light’ does not
mean ‘asset-free.’ Instead, it means buyers will have more power to
retain ownership of their assets so they can not only relieve themselves
of vendor control but also break out functions according to core
competencies and overall value to the organiza¬tion, and outsource or
‘in-source’ pieces of the IT infra¬structure accordingly. To do this,
CIOs will commonly break their overall IT infrastructure into
independent ‘towers’ such as network management, server adminis¬tration,
maintenance and desktop support. Towers give IT executives the
flexibility to pick and choose functions they are willing to farm out to
suppliers to get started with RIMO. For example, outsourcing server
monitor¬ing within a data center, or quality assurance
after code is written, can be a safe way to start. By beginning with
one tower at a time, CIOs can familiarize themselves with RIMO providers
across different regions with various technology installed bases, as
well as varying IT expen¬ditures, resources, governance, and methods of
process engineering.
Three RIMO multi-sourcing/’collaborative sourcing’ models are emerging:
Selective/discreet
RIMO, where a set of functions and processes is set aside for remote
management. That means, for example, that functions such as help desk or data center
may be retained by the customer while their monitoring and management
is outsourced. This is the best way for most IT executives to get
started with RIMO regardless of company size because it involves the
least risk: if the first RIMO arrangement does not work, it does not
jeopardize the company’s entire IT infrastructure. It also embodies the
real promise of RIMO in that the company can outsource pieces of the IT
infrastructure to different providers based on their relative
capabilities and offers. Full-service RIMO, where a company outsources
services but retains the assets and the physical data center. Decisions around full-service outsourcing depend on business case and strategic drivers such as asset refresh and data center
consolidation. This scenario is ideal for those companies with the
largest embedded base of both IT investment and in-house experience with
regard to the equipment itself, but little capability and expertise in application management. This is a good model for nearly all Tier 1 organizations.
Vendor-managed
inventory (a.k.a. business-ready infrastructure or BRI), where assets
are largely owned by the RIMO provider. BRI combines certified,
on-demand application infrastructures and offshore-based services to
create a predictable, pay-per-use, multi-year service model and a
platform for SaaS that is ideal for the SMB market.
