65. Enterprises Shouldn’t Be Outsourcing Their IT Anymore – Tech Field Day Podcast

The world of enterprise, it is complicated enough. So why bother doing it at all when there are so many firms out there that are willing to let you outsource to them? But have you answered all the questions in this episode of the Tech Field Day Podcast?

Enterprises shouldn't be outsourcing their IT anymore. Welcome To the Tech Field Day podcast, where each episode we bring together a group of IT experts to talk about a single idea or a topic in the world of enterprise it. This podcast features a variety of perspectives from members of the Tech Field Day delegate community, and is often recorded in association with one of our events such as Networking Field Day.

Tech Field Day is a part of the FU Room group, and this podcast is also published on our sister site at Techstrong tv. In this episode, as we head into networking field day, we're gonna be discussing enterprise networks. But before we get into that discussion, I want every one of our guests to introduce themselves, so you know who's speaking, starting with ed.

Hi, ed Whedon, uh, network engineer, uh, recovery and enterprise network engineer at this point. Hi, I'm Chris Gunman. I'm an executive advisor on network infrastructure topics.

I'm Jody Lim. I am a data communications and networking consultant, uh, independent and very outsourceable. That's relevant.

All right, thank you very much for joining us today. Let's jump into the premise for this episode. Folks.

Let's face it, IT networking is hard. We've been doing it for years. We think we've got a handle on it, and we kind of do, but maybe we don't.

And that's just doing the basic stuff. If you're trying to do anything more advanced than just connecting switches together, possibly running a simple routing protocol, who has time for that? Who has the talent for that?

Don't worry. We can take care of it on this episode of the Tech Field Day podcast. Enterprises should outsource their enterprise networking.

Now, I, I know that we've invited some people onto this podcast who are recovering enterprise architects who are responsible for outsourcing things, but I wanna kind of open the floor up to you gentlemen about this. Why are enterprises still doing their own networking? Because I know that when I used to do this for a living, I was responsible for doing networking for a lot of companies that quite honestly didn't care to have the IT talent to run their networks.

Yeah, it's a good question. I think, um, you know, you compare the fact that networking is absolutely fundamental to anything digital, which is most of what most businesses are doing these days, right? Even if you're making physical goods, if you run manufacturing, whatever, you know, at, at, at the base layer, there's, there's a network underneath.

Um, whether it's running the PLC controlled machines or it's conducting the CAD computers together or whatever. I mean, any business you look at now, um, digital technology is at the forefront, and that means networking is fundamental. However, these companies are still looking at their network as a cost center as something to be run as cheap as possible.

Um, and I think you're right, Tom, that like, why, why, why do it that way? Um, and there's a lot of conversation around, well, they should look at it as a, as a strategic asset, which I think is true in some cases. Um, but if you're not going to, why do it at all?

I'll even jump in and say, looking at it at a cost center is optimistic a lot of the time they don't think of it as all at all. Uh, not to be okay, I'm gonna pull out a real geeky reference and pull RFC 1925. First rule, it has to work.

Most organizations, once it works, they don't care about it anymore. Everything else rides on top. They'll spend thousands of dollars to secure and automate their servers.

And anything in between the servers doesn't even get a thought. I feel all of this, I mean, just less left a sizable IT consulting company, uh, where I was focused on the internal, uh, enterprise network and, um, these, these comments kind of hit home. Uh, and, and it was always something that was a, that was an uphill battle, uh, for us for a lot of things.

Uh, because I, I think both of you are right. Um, you know, that view of the internal network as a call center or really a lot of IT functions, uh, not just networking, but I would say even some of the compute stuff. Um, you know, look, being viewed as a call center, wanting to get as much stuff off premises as possible, uh, and get it cloud managed or everything done in the cloud, you know, a lot of times your, your executive suite doesn't really fully understand the complexities that go into, you know, a modern network today.

Uh, and so that's, that's where that complexity challenge comes in. And how, how do you communicate that and say, yeah, we need to spend, you know, $5 million upgrading our, you know, enterprise infrastructure across like 50 sites. Right?

You know, and, and, and trying to explain that and, and say, yes, there, this is a cost, but you know, there's a benefit to this. And it can be, it can lead to some very interesting and uncomfortable discussions for sure. Um, I also think that complexity as well, um, I think networks are getting even more complex as we start layering in more stuff like AI and automation over top of it as well.

And, and it used to be that when you are looking at complexity on the network, that goes proportional to scale. So large networks are more complicated than small networks, but now that we're bringing in things like built-in security at the low level, even the smallest networks are much more complicated than they used to be. So if I've got, you know, 50 people in an organization and my network isn't very big, but I'm still baking in a secure network right from the beginning, that's more complex than it ever was before, before.

And the expertise isn't always there. So lemme ask this question. And the reason that I, I wanna ask this question is because I understand that the IT department has this reputation for being a complex thing that doesn't directly generate revenue for the company.

And I know that it's critical to the operations of what we do, but why is it that we outsource it so often when the exact same thing can be said about the accounting department and no one ever outsources their accounting, or if they do, it's very, very rarely, even though accounting is very complicated, you have to know very specific rules. It doesn't directly generate revenue for the company. It does get revenue by getting all of the paperwork in place, but yet the first thing that usually gets tossed out the door is, well, all that computer stuff, somebody else can handle that.

Well, why don't we let somebody else do the accounting? Oh, no, no, we have to do the accounting. Well, I say that's an interesting question.

I mean, and is that, is that totally true? I mean, KPMG makes a ton of money doing other people's accounting. Yep.

Do they do other people's accounting or do they audit other people's accounting? I Would say it's, it's the audit. Oh, okay.

That's fair. Yeah, That's fair. Yeah.

That's, that's what a lot of them are doing as well. I mean, that was from where, where we were, we were dealing with KPMG audits all the time, actually, it felt like year round. I, I think it's a, I think it's a really good point.

It's, it's a very good point. And like, you know, why not outsource other, other business functions? And I think for smaller scale, smaller scale companies, you know, more you're asking B markets more on the small side, um, you could see some of that happen.

Uh, but once you get, you know, again, it goes to that scaling question. Once you get to a certain scale, that stuff, you wanna keep some of that stuff in house, I think, I feel like you need to, There's also two pieces to, uh, why you get rid of it. First one, uh, if you compare accounting to it, we have a much bigger price tag, way bigger, um, because yeah, accounting, they, they need their resources to do what they need, but they generally are not buying a whole lot of five and six figure equipment to make it happen.

Um, the other piece is, as I said before, as long as it's working, it's invisible. And so you really have to think about it to say, okay, what is my day-to-day value that I'm seeing in my IT department? And if you're doing your job and everything's working, you're invisible.

There is no immediate value unless people really think about it and how many people really think about it. Well, and this may jump a little bit to the side, but to your point there, Tom, around the idea that, I mean, because I, because I think the answer may be that somehow it's thought that accounting is more business critical or, or, or less fungible, right? That we need to be in control of this because money and money, I mean, companies are essentially money pumps, right?

They're moving capital through and, and hopefully collecting a little bit of themselves that that seems to be fun, fundamental to every business. So is it that we don't realize how fundamental the IT aspects are? Is is that just flying under the radar somehow?

Because somehow over the last 20 years, this became a thing and maybe there's still people running around managing companies that don't quite realize that the fax machine has gone away and that the router is now a critical piece of infrastructure? No, it hasn't. And it pains me to say that, um, having worked for a government contractor, um, I, Chris I, that, that's also a really good point.

Um, I, I, I think the other aspect to the, the perception of it from a finance perspective, right? You know, you look at finance and accounting, well, what that information is considered critical to information, um, to the business. It's about how, you know, it, it, it goes to a lot of, Hey, this is how good or bad a company is doing.

So companies wanna keep that, you know, kind of close to the chest so you can kind of make that argument like, well, you don't wanna outsource a man's business critical, uh, or something that's perceived as business critical. Uh, you can also make that same argument for HR company or HR functions as well. Although we're starting to see that we're starting to see HR functions getting outsourced, um, in, in a lot of organizations for particularly, again, smaller scale companies.

Uh, so it's, it's it, yeah, it's interesting. Lemme lemme ask this question because I think one of the things that kind of puts us in a certain perspective on things is what in enterprise might look like. Because for example, we work primarily with people who are highly technical.

We work with people who rely on the internet to get things done. We work with companies that have a lot of headcount, but also a lot of companies that don't. And what made me think of this just now is, you know, I, the thought experiment was fire the accountant and fire the IT staff and see which one starts screaming first.

Generally with accounting, you're probably gonna start hearing the first complaints after they're week, maybe 30 days. Especially if you have AR that needs to come in it, you probably won't notice until something breaks. But boy, when it does, it does.

But that's only for certain industries. Like if, if there's an IT problem at Netflix, we'll know right away because their primary business model of delivering entertainment over the internet goes away. But what about your local sandwich shop, right?

As long as they have a way to take payment, even if they have to put the little sign out that says cash only, I mean, they can still operate. I remember last year during the whole CrowdStrike debacle, I was camping at a, uh, state park and we couldn't buy anything in the store because their register was down. They couldn't even take cash payments, but the park was still operating.

They were still able to figure out how to take money for tours and stuff like that. So, I mean, certain kinds of companies can operate without massive IT budgets, but I also think that those are companies that don't qualify in most people's eyes as enterprise. What do you think?

Oh, enterprise means a lot of different things to a lot of different people. Uh, it, yeah, it does. Yeah.

It's, Yeah. And I think that's, I, I, I, Tom, I think that's a really good point because, you know, there are large enterprise companies out there, you know, Well, lemme think about that. I I was about to say, you know, pull, pull the manufacturing card, right?

You know, take a manufacturing company, well, would they qualify as an enterprise? You know, would you make them enterprise? Like, you know, because they may, you know, they're large scale operations, they manufacture widgets for whatever, you know, component, um, to go into and they have to do, you know, manufacturing at scale globally, you know, and transportation logistics, right?

You know, so a lot of that stuff goes into the question of, well, does that qualify as an enterprise? You know, or does it just have to be a knowledge company? One of my favorite examples when I used to do this for a living is a school like a K through 12 education school.

They are enterprise grade networks on small business budgets because they have a ridiculous amount of technology designed to educate students, but they don't buy at enterprise pricing. They don't have the budget to do that. So while I may be dropping in, you know, at the time 10 gig internet circuits and entire wireless deployments and iPad carts, it's because they were subsidized somehow.

Like nobody would walk in there and be like, yeah, you guys need this expensive, uh, fiber channel SSDs san with blah, blah, blah. They would have a small heart attack looking at the budget on that. Whereas a company like Boeing is like, yeah, order us another couple of those $300,000 switches to light up this, uh, factory because we need to have it lit up to get plans to the people building the $20 million aircraft Subsidizing makes a huge difference.

So, for example, I've got customers who are government subsidized who would never be buying the equipment that they do, except for the fact that maybe they're not considered a large enterprise, but the government payment plan that they're buying through is so they can get all those discounts and it gets passed right down. But it's a question of whose definition are you looking at? Like here, if you've got a, you know, large company, or not a large company, but you've got a company that's got like, say 225 employees doing things officially, their SMB like 2 25 employees is not where we think of as A SMB that's on the low end of what we would think of as enterprise.

But if you don't have like thousands, a lot of organizations will say that's not enterprise at all. And that's, and and I, I, I've worked in both, you know, both sides. You know, I worked for a nonprofit that was about 350 people at the time.

Um, but we were one of the largest nonprofits for the particular sector that we were in. Um, you know, and, and we absolutely did run enterprise networking. We did run enterprise services 'cause we had to, 'cause we operated call centers, um, you know, and, and certification services.

So, you know, and then flip a couple years later, and I'm at a large enterprise, relatively speaking, um, you know, government, uh, government IT contracting company, and that's 10,000, 15,000 plus people. You know, that's also a large enterprise as well, you know, so it, it, yeah, that, that, I've always found that cutoff for SMB to be very, very nebulous and totally dependent on who you talk to. But I think where you see a lot of the outsourcing occur is in that SMB market space.

And on the lower enterprise side, I'll say on the lower scale enterprise side, you'll start to see some, some outsourcing happening, um, particularly for your tier one, tier two services, uh, where they can get away with it. Uh, some, some instances, some industries they can't get away with it. Um, because of reg regulatory compliance, um, we were actually one of those, you know, dealing with government, you know, government, uh, accreditation and government, uh, security compliance, you know, there was a lot of stuff we had to keep in-house and onshore.

Um, so we couldn't take advantage of some of those, some of those outsourcing options. Uh, even though if we were in a position where we could, we certainly would've, I think that for the question of outsourcing the network in particular, we can kind of sidestep the official or non-official definitions of like what enterprise is versus s and BI think, to me, anyway, it comes down to specialization, um, and, and criticality, right? So to me, the question isn't how big you are.

It's how critical is this thing, in this case, the network to your business, right? So if, if you're running a business and the network is truly a utility that just needs to work, and when it doesn't provide any differentiation whatsoever, then maybe you should outsource that. And, and, and maybe that's why people are outsourcing to infrastructure as service cloud operators, because running servers doesn't differentiate them in the market.

Now their software may, you know, they may need those, um, servers critically. Um, but, but the software that runs on 'em is what actually differentiates them and not the operation of the data center infrastructure, right? And so I think you can look at the network from the same purpose perspective, which is, if you've outsourced all of your compute and storage to a cloud provider, then why are you running your own campus network?

Um, now is that campus network actually differentiating you in some way? Is, is is there something you're doing that's special that makes that something that you should run yourself and do in creative and in interesting ways? If not, maybe you should not be running that.

You know? And there's, there's new companies that have sprung up that actually are providing hardware and management. Like it's kinda like a new, uh, MSP, but it's basically, you know, they're calling it network as a service, right?

And they come in and load up the gear and, and, and do this. Like that seems like a great option if your network is just a utility. Um, however, going back to what Tom was talking about around the finances and things like that, is this idea of like business criticality and, and, and then maybe my idea of differentiation, which is what happens to a large organization when they start having as many or more AI agents working than they have employees now, does the network now become a differentiator or more critical because those agents can't actually run the business without it?

I dunno. Well, whether you're talking AI agents or just traditional software as a service or infrastructure as a service, the smaller end of the enterprise is leaning far more on the cloud. It's just because it's easier to outsource services than it is to outsource people.

And those organizations aren't necessarily outsourcing things to save money. They're outsourcing things so that they don't have to be concerned about it and they can hire expertise that they don't have. So you get someone who is a networking person who knows all the ins and outs of networking security and all of that, who can build this network as a service for them, that's very, very attractive.

And what we're finding is that security really has to be built in at the bottom these days. If it's not part of the network design, you can't just bolt it on later. It doesn't work well that way.

And that expertise isn't there. Even in the smaller enterprises, you've got IT teams who are really good at managing their Windows servers, but do they really understand handling things down at the low level and as they move things up to the cloud? Yeah, the network simplifies in some ways, but it becomes much more complicated because now it's your critical line to absolutely everything.

You can't run word without having your internet connection working properly. Um, and it becomes absolutely critical that everything work the way it should. Do you need to have the big iron switches in there with all the enterprise stuff?

No, but you better have redundant paths. You better have secure access. You better have it so that not just anybody can get onto the network and get at your stuff.

And smaller enterprises don't have the expertise for that. Well, Chris brings up a really interesting point here when we talk about outsourcing things to the cloud, because in effect, you're doing a double outsource there. You're obviously sending most of your enterprise data center assets into the cloud where they can be managed.

They have infrastructure and you don't have to worry about buying new switches. And the software that everybody uses is freely available from anywhere, whether it's the office, your house, or a coffee shop, right? So then the network is no longer the transport between your edge and your data center and then becomes the way to access things in the cloud.

So in a way, you've not only outsourced your data center, but you've also outsourced your edge connectivity in effort in basically in a self-service thing, right? Because I'm not gonna manage my employees enterprise networks at home 'cause they don't have one. They have some SMB gear that they bought at Best Buy or, or whatever big box store.

And as long as they can get on the internet with their work laptop that has a sassy client on it, then I don't care and I don't wanna pay for that. And, and that's one of those things that as more and more companies have said they're wanting a distributed workforce, obviously those are places that don't rely on things like manufacturing or, or teaching or what have you. They can get away with that and say, I'm not gonna do any of it at all.

And that's why other companies like you mentioned, uh, network as a service companies like Nile Meter and Ramen have stepped in to those smaller organizations and saying, we're gonna outsource the parts you don't like in your office for the people that are still there if you're requiring them to be there. So could this kind of double back on the companies by saying, well, if you can just offload the data center part, you can actually offload all of it because if everybody's working from home, as long as the cloud's up, we don't care. Yes, yes.

But it's a, it's a psyche chain. Everybody's used to people working remotely with VPN clients and not having their enterprise network at home. But when they're in the office, they still expect to just log in at their desk and go, the idea of treating the office network as a Starbucks with fewer baristas is kind of a new thing.

Now I've got customers doing it and it's good because you can just basically say, I don't need to worry about the, well, you do have to worry about some security, but not the bulk of enterprise security on the network when everybody is offloading their security to their sass e clients. But it's a rethink And and it's not only a rethink, but it's also, it's a cultural shift too, um, you know, within those organizations. And it, it, it's a huge cultural shift.

Um, uh, that's, and and yeah, I've had some experience in, in sitting on both sides of that. Um, and it leads people to be very uncomfortable, you know, especially if you're, you're in that legacy position of like, well, I've run the network all the time, so what do I do now? And Chris, I think this goes to something that you, you brought up before, which is getting people out a out of the day-to-day minutia of running a network and maybe refocusing them and focusing them on my, on areas that matter and actually, you know, being able to ensure that the architecture is right for the business, that the AI agents that are getting developed have the right information base to work off of, right.

You know, that. So I think there's, there's, there's some retooling options there, uh, you know, for a lot of people. And I think there's definitely gonna be fallout where you'll see, you know, some people will just get worked out of, of, uh, you know, out of a role.

Um, but that's just kind of, it kind of goes to that, that philosophy of adapt or die. It goes up to bigger thinking. It's, uh, you know, too, too many people think that day-to-day management tickets and break fix are what we do.

No, there, there a thing we do, yes. But if we don't have those things, we have the option to think bigger. We have the option of looking at the design of our networks.

We have the option of saying, okay, how can we make this better for the company? And hey, maybe if we're not just fixing things all the time, we can demonstrate our value in the vision we're providing to our employers. It's, it's, it's being able to shift from a reactive mode to a proactive mode.

And, and that's, and that's challenging. It's incredibly challenging. And, and particularly the larger the organization is.

Yeah, there's some interesting, uh, sociological work behind this. I forget the guy's name, but kind of looking at cognitive load and this idea that there's three types of cognitive load, right? There's intrinsic cognitive load, which is, uh, for example, if you're gonna write a Python program, you need to know Python, uh, and there's some cognitive load involved in just in just knowing that, right?

And then there's extraneous cognitive load, which is all the other stuff that we attach to this, right? So like a lot of times it's, uh, I have to remember how to get on my VPN and then where the file is with the passwords or like what password manager I'm using and I need to know like, you know, what libraries we're using. There's a, there's a bunch of like stuff, right?

That that's, that's kind of extraneous. You need to know what to get the job done, but it's not actually inherent to the job. And then there's a third class of cognitive load, which is germane, which is kind of the bigger picture stuff, which is that like, okay, if I, if I make this change, what happens over here and like how does this impact the business?

How does this impact my customers? And you kinda look at that, right? And I mean, this is really, I've been looking at this a lot in, in regards to automation, because what we can do is we can automate the extraneous stuff, and I think that's what you guys are talking about as well, right?

Is a lot of time we can, we can get rid of some of this, right? Get rid of some of those trouble tickets, get rid of some of this break fix, you know, get rid of some of the, the friction that's involved in doing the job. And now all of a sudden you've freed people up into that germane realm where they're actually thinking about how this impacts the business and they can actually get outside of, you know, just the CLI hacking and really look at it.

And I think, you know, maybe on a separate point, but maybe kind of related ed, I mean, what you said about, you know, there's a cultural change. I think that's really, really important. And I think regardless of what you're gonna do next with your, you know, big company network, we call it enterprise or, or, or highend, SMV or whatever it is, you know, if you're gonna outsource, if you're gonna bring in a NS provider or an MSP or whatever to take over some of this stuff, that is a cultural change on your team.

Um, and you need to build, you need to rebuild the organization to be able to handle that because now you're managing outsource tools or outsource staff instead of, you know, internal staff. And that's, that's, that's, that's a big difference. Or if you do decide, hey, for whatever reason our network is a differentiator and we're gonna actually apply modern network management practices, we're gonna build some automation, we're gonna do some intelligence there, that's a cultural change as well.

And you've gotta rebuild the organization. So I think personally, I think no matter what, almost every enterprise on the planet needs to be thinking about how their organization needs to evolve to run their network in the future. And it's gonna be down one of these paths.

It's either modernize the operations or get rid of the operations, I think, And there, and there's always room to do that. One of the things that I've found in my business is that there's always room to outsource things, but it doesn't have to be a hundred percent. So one of the things that I find is that I've got lots of companies who are really good with the day-to-day operations of their, of their network, but they need an escalation point.

They need someone to come in and say, okay, what are the best practices here? What are we doing wrong? Help us get into this thinking.

And so it's kind of partially consulting, but it's also partially being the guy that they call when everything's gone to hell and they don't know what to do. Um, both services are equally valuable. One more in the moment, but outsourcing nothing isn't gonna be the way to go because you don't have people whose full-time job it is to keep track of this sort of thing and the best practices and the, the right things to do, and the layers of security that are becoming increasingly complex.

You need to outsource at least the thinking. To a degree, It's a matter of specialization, right? Is this the focus of your business or not?

And when it's not, you don't have those people. Yeah, I, I, I definitely would echo that as well. I think there's, and, and Jody, you brought up a point, uh, that you've mentioned several times now, which I, I very, very much agree with, which is the co the security complexity that is getting baked into everything these days.

Um, you know, and not only that, but the security landscape changes so dynamically, I would say arguably way more than anything else in, in it that security landscape is, is ever evolving on a daily basis. And what you're seeing now with a lot of organizations and, and I come from a federal contracting background, so this is where, you know, my view is slightly, slightly skewed, uh, but we have a ton in the federal wor in the federal space, a ton of security compliance, uh, hurdles that we have to jump through every single day. Um, and they are a very complex and very nebulous in a lot of ways.

Um, and one of the things that I have seen is that a lot of organizations, especially at scale, you, you get a, you get a, the additional problem from the security perspective where you have a lot of security policy people pushing certain things, not understanding the technology stack and how that, how the implementation of those security components tie into the technology stack. Um, because they just wanna say, well do it and get it done. Okay?

It doesn't work that way. Um, and, and, and as you get in with large organizations, and I think that's where you see some of the consulting companies particularly, you know, coming in and offering that capability of saying, Hey, you gotta go through, you know, CMMC for federal or PCI for, you know, commercial, you know, merchants. Um, those are two widely different, uh, animals.

But it, you know, the point being is that that's, that's an area that people do outsource today. Um, you know, outsource for that expertise. Um, and I, I think you could definitely see, you know, see that going on the networking stack as well.

Alright. As you can see from this conversation, there's a lot of elements that have to go into what your decision will ultimately be about whether or not you need to outsource your system or if you're just doing it 'cause it's what all the cool kids are doing. Uh, we didn't even get into like the huge amount of regulatory issues that might even come up.

But you have to do your homework, you have to investigate, you have to make sure that this makes the most sense for you. And remember that someone's definition of what enterprise actually is may be completely different than what your situation might currently be. But you have to take all those factors into account because if you make the wrong decision, you might not crater the business today, but you may run into some difficulties down the road.

Thank you all for joining us today on the Tech Field, a podcast. com. LinkedIn ghost in the net info and mastered on at ghost in the net at hacky derm io.

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