Outsourcing grows as institutions find silver lining in cloud computing

Hannah Fearn on the bottom-line benefits of transferring IT functions to Google and Microsoft

April 8, 2010

Universities are increasingly farming out their computing services to the likes of Google and Microsoft as a way of reducing costs.

Rob Bristow, programme manager at the Joint Information Systems Committee, said that universities traditionally have been reluctant to outsource their complex and unique IT services to external companies.

"Outsourcing is a bit of a dirty word in some quarters," he said. "There have been mixed experiences of it and given universities' peculiar IT needs ... it has not been something they have looked at."

But the development of so-called cloud computing, together with the need to cut costs, seems to have changed some minds in the sector.

Cloud computing - which is based on remote servers delivering applications and services to any internet-enabled device - removes the need for expensive and power-hungry servers on campus.

But perhaps more importantly, many such services are being offered to universities free of charge.

Mr Bristow said the growing trend of outsourcing was primarily financially motivated.

"It's clear that the key driver forcing the use of cloud services is cost. Anything that can reduce the back-office cost is going to be looked at," he said.

The area most frequently outsourced by universities is student email systems.

Both Google and Microsoft now host student email systems for free, saving institutions tens of thousands of pounds on their IT budgets.

Mark Stubbs, head of learning and research technologies at Manchester Metropolitan University, said his institution had saved a "six-figure sum" by opting not to replace its ageing in-house email in favour of outsourcing to the Microsoft-hosted Live@edu service.

He said: "There is a need in this economic climate to take advantage of these offerings. We wouldn't be able to afford a system as good as the one we're now getting."

The free service that Microsoft provides allocates 25 gigabytes of memory per student, and it offers other benefits, too.

Professor Stubbs said: "It's a shared service. It can be done much more economically and environmentally (efficiently). If we were to have that kind of technology running at our place, we wouldn't be as green."

Laura Gibbs, director of IT at Royal Holloway, University of London, said her institution had also "cut future costs quite significantly" by outsourcing email.

"We no longer have to invest resources in increasing infrastructure capacity to keep pace with demand, and the reduction in the hardware estate will lead to other cost savings."

However, cloud computing cannot yet keep up with all of universities' IT demands.

It does not offer the bespoke computing services that researchers often require, and issues of data security and privacy are also problematic, Mr Bristow said.

"Institutions have huge investments in their current set-ups ... There are still some questions that are holding people back," he added.

hannah.fearn@tsleducation.com.

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