1. Pre commercial internet days Cos used proprietary technology to build networks It was expensive Led to duplication in infrastructure investment Multiple technologies led to confusion, poor performance and reliability Interoperability was a problem To overcome incompatibility issues cos built s/w that worked as a bridge Cos got locked in to specific vendors and lost bargaining power

2. Adv. Of public internet Cos share a communication infrastructure Can use common interfaces like a browser Common std tcp/ip so components interoperate very well Components are cheaper because of standardization Cos don’t get locked into a vendor so can bargain for better price and service As communication technologies become more standardized and modular, outsourcing becomes available at a smaller level (why?) –But this will make IT managers job more challenging as integration will become important –Although with smaller steps risks are reduced –Advantage would be better price and service as each marginal service provider will be good at what he does –Managing relationships with these providers will become important

3. Outsource if service offered is cheap, reliable, and provides no competitive advantage In the earlier days outsourcing meant all or nothing Many cos that had legacy systems and wanted to move to newer systems outsourced their legacy systems for cash which was used to slowly build client-server systems These days can go for incremental outsourcing –Lower risk associated –Lower financial stakes –Lower impact of mismanagement –Integration can be a challenge and problematic

4. Outsourcing hosting of a cos systems: hosting could mean physical location, power, h/w, sw, mgmt Where to locate physically Which management functions to outsource Benefits of outsourcing hosting are: 1.Reduced downtime by 87% for web server hosting 2.Lower cost 3.Can focus on more important things 4.Higher ROI

5. Hosting models 1.Colocation hosting: no frills access to facility & infrastruc Rent space, connectivity, and power. Have floor to ceiling cages, customer owns and is responsible for servers and equipment. 2.Shared hosting: servers owned and operated by provider Customers purchase space on servers Multiple customers may share a physical resource Suited for non-mission-critical hosting. 3.Dedicated hosting: servers owned and operated by provi. Dedicated servers---no sharing Other infrastructure components like routers may be shared Providers offer complete managed services package a.Simple dedicated hosting: deliver a narrow menu of highly standardized functions such as web hosting b.Complex dedicated hosting: wider range of functions c.Custom dedicated hosting: support custom functionality. Providers have to use system integrators and other service providers.

6. Managing relationships with service providers Its important because it effects your performance. So choose reliable providers and manage strong relationships. How to select service providers? 1.Write a RFP and send it to seemingly qualified vendors. This asks for info relevant to their service capabilities including financial, technical, and operational information. Ask for service guarantees, check what their averages are like 2.Get info from industry analysts 3.Other companies 4.Visits to the provider’s site