Before you even look at providers, make sure you know EXACTLY what you want from one. You should start by looking at a detailed list of the things your inhouse staff actually do. Prioritize them. Identify the critical ones, then make sure the RFP asks each provider how they would handle each one. If you have a dynamic and/or growing environment, ensure they address how they would be responsive to your new and growing requirements. Many providers will low ball the initial bid, then make their money on the extras, especially the ones you don’t anticipate in the contract. Outsourcing is excellent for a stable (“cookie cutter”) environment. For mid- to large sized companies, I strongly recommend getting an outsourcing consultant who has been through a contract reward/negotiation with a similar size and industry client. If not, go to the Outsourcing Institute and look for their sample documentation and whitepapers on selection, negotiation, contract language, etc. Most importantly, take the time to understand the cultural fit between your company and the outsourcer. If you are fast and dynamic, don’t go with a slow and methodical vendor. Good luck.
You may want to look for a provider who doesn’t have “cookie cutter” packages and/or will come up with a customized SLA/Quote including EVERYTHING that you want out of the hosting agreement. This will show that they are committed and customer oriented. But keep in mind, you WILL get what you pay for, so if you are on a tight budget I would consider doing some extensive homework.
It really depends on the services you are looking for full managed service solution, co-lo managed by you, combination of the two.
It all comes down to how the contract is structured. Keep in mind that in order to provide a cost effective service, most outsourcers/managed service vendors provide standard offerings, with standard SLA’s and optional services at an additional cost. In order to keep the cost down, clients will contract for the standard services and select a pay as you go scenario for additional services in order to get a favorable price within budget on the initial contract.
Best approach is to understand your needs compared to the standard offerings, and negotiate the additional services, SLA’s, future needs, into the initial contract. This may cost you a little more than expected on the initial contract, but keep in mind you are now customizing a standard offering. The other option is to contract for the standard services and negotiate a separate contract for additional services required.
Without naming names, I’ll say that the company that I’m with is currently hosting our servers with an outsource company. They manage everything for us, and we aren’t very happy with them. We aren’t getting the level out services from them that we expect.
Before going with a managed services provider make sure that they are going to offer you the level of service which you expect. If you aren’t expecting them to do much besides turn the machines on then you will probably be happy. If you are expecting a lot from them you may end up with a less than good experience.
Also keep in mind that managed services providers are there to nickel and dime you to death. If you need a little more storage on your server, it’ll cost you. If your backup data is larger than expected, it’ll cost you. If your network bandwidth goes over your comitment, it’ll cost you. Depending on your contract if you need there staff to spend a lot of time working on your servers, it’ll cost you.
Software licensing is where they really get you. For example a SQL License with a hosting company may cost you $600 per month for SQL 2005 Standard Edition (2 CPU licenses). That license retails for $9,998, so if you are with them for over 17 months you are now paying extra money for the SQL License for no reason.