Higher education proves resistant to outsourcing technology

Just six percent of colleges store their school data on off-campus servers.

Campus technology leaders who propose outsourcing their website hosting, network storage, and data warehousing should prepare for raucous laughter.

In 2005—before eMail outsourcing was commonplace—Kyle James, then a marketing consultant at a small liberal arts college in South Carolina, suggested during a staff meeting that the school move all student eMail accounts to Google’s Gmail.

“They laughed me right out of the room,” said James, now CEO and co-founder of interactive map company NuCloud. “I just threw it out there as an option, and they made it perfectly clear that it would, in fact, not be an option.”

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Higher education has embraced some forms of technology outsourcing as officials watch operating budgets shrink, but national statistics show that colleges still consider some technology services off limits when it comes to seeking off-campus help.

eMail hosting is the most commonly outsourced service, with 43 percent of respondents saying their college or university has made the transition to a third-party eMail provider. And nearly half of schools outsource their video platform, according to James’s research, published in “The State of Outsourcing in Higher Ed 2012.”

But there are some services that are hardly ever trusted to an outside party.

Eighteen percent outsource web content management, 9 percent of colleges outsource network storage, and 6 percent store their school data on off-campus servers, according to the research.

Refusing to outsource some or all data storage, James said, could end in catastrophe when campuses are ravaged by natural disasters that destroy data warehouses storing the school’s most critical student, faculty, and alumni information.

“In that case, everything is gone,” James said. “I think that’s something colleges should be thinking about.”

Very few colleges and universities trust their website hosting to third parties. About one in 10 respondents said their school outsourced web hosting to an outside company, while 84 percent said no. Six percent said they didn’t know.

“There’s a comfort with what they know, and a mindset of, ‘This is the way we’ve always done it, so we’ll continue to do it this way,’” James said. “Colleges have a tendency to want to keep things in house. … They want to save money by [not outsourcing services], but they don’t think about the hidden costs, like maintenance.”

Respondents who commented on the perception of outsourcing in higher education said the subject is a sensitive one, and that campus decision makers are coming around to the benefits of farming out services.

Federal laws that require campuses to secure student and faculty data has made many higher-education officials gun shy when it comes to contracting with companies to store massive amounts of sensitive information, such as credit card numbers, Social Security numbers, and student grades.

“If outsourcing frees us up to focus on the core business of educating without risking the quality of service (and peoples livelihoods), then it is a good thing,” one respondent said in James’s report.

Another campus respondent cited bad outsourcing experiences, insisting that the school’s IT staff would do a superior job.

“Generally speaking, our team can do a better job in-house than we can if we outsource. Often times we can do it more quickly as well,” the respondent said. “Of the four projects that we have outsourced in the last six months, none of the vendors that we have worked with have delivered a product that didn’t require significant additional work by our team.”

Immediacy could be the most appealing part of outsourcing key technology services, said several survey respondents.

“I wish we had support to do this more, because I don’t see the sense of spending two years building something that is perfect (maybe) when something can be bought off the shelf and you just compromise a bit,” the respondent said. “Further, I have been frustrated several times by an IT department that would not support basic services like proper blog hosting, yet told my group we were wrong to go outside to get what we wanted.”