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Three quarters of Singapore enterprises to outsource the majority of IT infrastructure by 2021: Savvis study

Zafar Anjum | Sept. 16, 2011
Singapore IT leaders revealed that their top three cost savings initiatives will come from reducing IT infrastructure cost, implementing a cloud computing and virtualisation strategy and standardising IT infrastructure solutions.

Within a decade, 75 percent of Singapore enterprises will have so lean IT departments that they will outsource the majority of their IT infrastructure, according to an independent research study commissioned by Savvis released on Friday (16 Sep) in Singapore.

Savvis, which was acquired in July this year by US giant CenturyLink, provides cloud infrastructure and hosted IT solutions for enterprises globally.  

The study also noted that over half of the enterprises will opt to move their infrastructure to the cloud.

The study was conducted by Vanson Bourne, an international research firm, which surveyed 480 IT decision makers from enterprise organisations across the United States, United Kingdom, Singapore, France and Germany.

Top three cost savings initiatives

The study, in its third year, indicates that Singapore is leading the trend towards IT infrastructure outsourcing. Organisations that currently have the majority of their IT infrastructure in-house are in the minority (43 percent), compared to 59 percent globally.

"The adoption of outsourced IT infrastructure, in particular managed hosting and cloud computing, is a trend that Savvis has witnessed among our client base," said Bill Fathers, president of Savvis. "Singapore IT leaders are at the forefront of outsourcing adoption and we expect to see the propensity to outsource increase further over the next five years as more enterprises experience the benefits it brings."

According to the survey findings, Singapore IT leaders revealed that their top three cost savings initiatives will come from reducing IT infrastructure costs (39 percent), implementing a cloud computing and virtualisation strategy (34 percent) and standardising IT infrastructure solutions (31 percent).

"Enterprises are more ready to outsource than service providers are ready to service at the required speed," said Fathers. "In the volatile economic environment, enterprises want to drive costs down by using technology, cut headcounts and save money."

As Singapore IT leaders leverage managed hosting and cloud computing capabilities to gain efficiencies throughout their enterprise, their top strategic priority will be dedicating their resources to the development and/or management of business-critical applications (44 percent).

The survey also revealed that more than half (51 percent) of Singapore IT heads acknowledge that they are paying for excess capacity because of the need to peak to meet occasional business demands, compared to 42 percent of global IT leaders. The under-utilisation of IT infrastructure capacity is predominant in Singapore, with half of decision makers surveyed admitting to reaching just 55 percent or less of their total capacity. For example, seven out of 10 (69 percent) organisations in Singapore have IT equipment that they now regret purchasing, compared to 47 percent of global enterprises surveyed. Contractual obligations (53 percent) and company culture (47 percent) are the two main reasons that prevent Singapore enterprises from outsourcing, the survey pointed out. "Company cultures is one of the biggest barriers," said Fathers.

"Seventy-six percent of IT leaders in Singapore admit that their organisation would benefit from IT infrastructure capacity on demand. This willingness to improve and transform the way that IT is managed helps explain why Singapore enterprises are in lead position for global cloud adoption in our findings," added Fathers.


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