Baseline Data Boss Predicts Steady Stream Of Outsourced Production Environments

If there is a demand for managed services in the IBM midrange market, you can begin measuring it 20 years ago. It’s not a new thing, but some of the services are new. For many companies, those contracting for managed services as well as those that provide the services, the managed services relationship has been long established. Usually it’s based on a disaster recovery service. But what about the new demand?

We’ve written about this before in IT Jungle articles. When will the managed services business become more than the disaster recovery business? It already has. Nearly every managed service provider in the IBM i community can talk about shops that are outsourcing their production environments to MSPs.

“I think the trend in moving production IT environments to managed service providers will continue to be steady,” Lance Thompson, president and CEO at Baseline Data Services, predicted last week during a telephone interview with IT Jungle. Baseline has been in the DR and data storage business for more than 20 years. During that time, Thompson says it has successfully handled more than 100 customer-declared disasters. His company’s IBM i customer base is estimated to be 170. The majority are in a swath from Michigan to Florida, but the company reaches into 40 states.

It owns a data center west of downtown Indianapolis, which houses most of the equipment and personnel. It has a second location east of Indianapolis in a data center owned by Online Tech, a company with five data centers that facilitate its co-location and VM cloud business. Baseline also has equipment located in an Online Tech facility in Central Michigan. In addition to IBM i, Baseline has expertise and investment in AIX, Linux, Unisys Clearpath, Oracle, Microsoft Windows, and VMware environments.

Most of the IBM i users that come in contact with Baseline have systems intertwined with VM environments. The IBM i runs important core applications and with between 10 and 100 VMs doing other things, but communicating with the i. Thompson estimates 75 percent of Baseline’s customers have IBM i in their data centers. Its traditional customer base came from the banking industry, but in recent times Baseline has expanded its customer demographic to include manufacturers, transportation, distribution, and healthcare.

“When I look at the forecast for Baseline as a company and how we will grow, I have several buckets,” Thompson says. “Traditional disaster recovery is one bucket, targeting replication is another, and production is the third.”

“The majority of business is DR, using EVault or Commvault or another way to get information to the data center electronically. The targeting replication and hosting production business buckets are about equal,” Thompson noted while pointing out the DR business has been built up during 20 years while the production services have been offered for less than two years. He declined to be more specific about the revenue generating capabilities of each of his buckets, but is eager to talk about hosting production environments as a needed feature in the IBM i community.

As a side note, EVault was recently purchased by Carbonite and Commvault recently announced support for IBM i.

MSPs hosting IBM i production environments may be gaining momentum, but it’s still a trickle from my perspective.

Thompson says it’s more than that.

“You have me thinking about the comparison between a raging river that you can’t hear yourself shout above and a little trickle in the forest. It’s probably a river that you wouldn’t think twice about swimming across,” he says.

The scarcity of IBM i system engineers has companies looking to outsource system management, Thompson says. And companies are just flat out tired of managing the box. That combination pushed Thompson in the direction of filling that need.

“The only production hosting I want to do is IBM i. I don’t want to compete with Amazon or Microsoft and be another cloud hosting company in the VM world. There’s not that much competition in the IBM i hosting space,” he says.

“I believe there are a lot of midsize shops that have a mixed bag of technology that includes legacy applications. Those shops have been growing up with VM and would love to have a one-stop shop that can make their [IT systems] problems go away.”

The 2016 IBM i Marketplace Survey found nearly 15 percent of the participants claimed to be currently working on cloud computing, which included backup and recovery, managed services, and software as a service.

As expected, Baseline services are subscription based with the monthly charge determined by the amount of required CPW, memory, and disk. Depending on those requirements, the company doing the outsourcing may be purchasing a partial core, a whole core, or multiple cores. In situations where a company’s actual requirements fall short of what was purchased, Baseline scales it accordingly and refigures the charges.

The complexity of the system being managed–multiple servers and the number of LPARs and VMs, for instance–will affect the cost beyond the charges for CPW, memory, and disk.

Thompson sees consolidation in the future of the IBM i MSP business. The smaller MSPs with business primarily in disaster recovery services will have customers looking to outsource production environments to the MSPs’ data centers. Those companies will also ask the MSPs to manage more than IBM i systems. That will require bigger investments from the MSPs in equipment and skills. At some point, those smaller MSPs will sell their business to larger MSPs.

What’s been important for MSPs in the past was to know how to provide traditional disaster recovery for the IBM i shops. What’s important today and going forward is to know how to provide replication services, how to host production environments, and to be able to do this in multiple environments.

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