SAN ANTONIO, Texas – According to a recent customer survey conducted by Rackspace Hosting, a specialist in hosted IT services, nearly 70 per cent of respondents indicated that the number of IT functions they outsource to hosting, SaaS or cloud service providers should increase over the next five years.

“We are seeing a trend towards more use of hosted services,” said John Engates, CTO of Rackspace. “We feel that customers are not averse to doing this. Two thirds of the survey respondents said they used a services provider to host one or more of their SaaS applications today and the data indicates that demand is likely to increase.”

Over 112 of Rackspace’s US-based customers from SMBs to enterprises and in a variety of industries responded to the survey. Engates said that the company wanted to gauge the extent to which their customers were thinking about outsourcing and whether or not people were looking to do more or less with outsourcing and hosted services in general.

Findings also revealed that the amount customers will spend on hosting is expected to increase over the next five years. Today, 47 per cent of respondents said they spend between 0 and 20 per cent of their IT budget on hosted services, while 30 per cent of respondents said that they spend 30 – 50 per cent of their IT budget on hosted services. Nearly 50 per cent of customer respondents said that they expect the percentage of IT budgets spent on hosted services to increase over the next five years.

“82 per cent of IT budgets today are spent on maintenance on things like updating the hardware but nothing that innovates or changes the way the business is run. Hosting is an opportunity for [companies] to do more with less and do things they want to do to differentiate their business especially as competition heats up,” said Engates.

He added that people are willing to spend on IT hosting and will spend more over time, a trend that will increase due to the tough economic conditions being experienced today. “[People] don’t want to buy equipment and they don’t want to borrow money to buy equipment so hosting gets companies what they need in terms of infrastructure without long term commitment.”

The customer survey also acknowledged that outsourcing IT functions to a hosting provider can save IT managers a significant amount of time. More than 40 per cent of the customer respondents said that outsourcing their IT functions to a hosting provider saved them from 30-50 per cent of their time. As a result, almost three-fourths of them believe that they can spend at least 25 per cent more time on new projects because of the time they saved from outsourcing their hosting needs.

Engates recommended that companies shouldn’t attempt do all the IT themselves or outsource 100 per cent but make a relationship with a third party company like Rackspace, which complements their IT staff, to offload some of the day-to-day IT tasks to them.

This column was written by Vanessa Ho of ConnectIT, an IntegratedMarCompany

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