I’ve been giving a lot of thought to what virtualization means to managed services.   Evolve, my company, recently moved our virtualized server infrastructure to a hosted cloud, which I detailed this in my own blog. We did the math and found we could save money on our hardware investment by not buying more and instead moving our systems to a hosted cloud. Besides the cost savings, this lets us “eat our own dog food,” as I’ve made the commitment to developing Evolve’s cloud services plan.

While this is all very interesting, it leads to an interesting focus. What are we really saving? Does it change our management costs? Are we really saving money?

Our focus with this move was hardware savings alone. Prior to the cloud move, our data center comprised a rented 42U rack with hardware that we owned. On that hardware was our virtualization layer, and all our servers were virtualized.  All of our servers. Our decision to move from our own rack to a hosted solution was simple, as we weren’t changing much. We were committing to the same bandwidth usage, and using the same provider. We selected a package that hosted the same number of virtual machines we already had running, and which included the same amount of data storage. The beauty is that adding resources is a check box on an order form rather than a shopping cart with a hardware vendor.

Once we had our comparable package, we believe that the difference became hardware – and the fact that backup management was moved to the provider. Let’s ignore that for the moment, though.

The price difference? Our monthly cost increased by $350. I’m notorious for being bad at math, but looking at a three-year timeframe, that comes to $12,600 in additional spending. The other option -- buying a replacement SAN and several physical servers to handle the load -- could not be done for less than $12,600. Thus, moving to a hoster was cheaper and more expandable over time.

What didn’t change were our maintenance obligations. Our servers still require maintenance by our team. We patch, we manage the applications, we perform software upgrades, we have to license the software, and if the servers lock up, we have to hit the reset option. Operational backups are still our responsibility, as we need a way to pull email out if someone deletes one. We don’t have to do disaster recovery backups, as we have a complete image of the machine each night.

Measured by timesheets, the two options are the same. Measured by cost, they are the same. We’re doing the same work, and using our systems the same way. This hasn’t surprised me, and it gives Evolve (and managed services providers) a clear direction.

Customers will continue to need management services. There is still hardware being sold that runs our systems. There are still backups to manage and systems to run.    Managed services, including the services around maintaining and monitoring systems, remain a viable solution in a virtualized world. And virtualization makes more of the customer’s spending like a managed service: an operating expense spent over time, rather than a capital expenditure every 3 years. I’m delighted not to buy hardware ourselves.  I expect our customers will feel the same way.

Dave Sobel is the founder and CEO of Evolve Technologies, a consulting firm that provides information technology (IT) and computer networking services to the small business, faith-based and nonprofit communities in Washington D.C., Maryland and Virginia. Evolve Technologies provides a wide array of services including server installation, virus protection, network security, backup services, and complete information technology outsourcing. The first Microsoft Small Business Specialist located in the Washington, D.C. area, Evolve Technologies is a Microsoft Gold Certified Partner.