The decision to move IT infrastructure to a service-based model is one of the most costly and risky strategic decisions a management board can make. Done poorly, it can paralyze the company’s operations for months. Done well, it can free up resources, accelerate growth, and reduce costs.

Management boards often hear technical arguments: “the cloud is better,” “colocation is cheaper,” “we need to modernize.” But these don’t help with making a business decision. What’s needed is a simple thinking framework—one that helps assess whether the service model makes sense for a specific organization.

Here are three key questions the management board should ask.

Question 1: Does our current infrastructure block the achievement of our business goals?

This is the first and most important question. It’s not about whether the infrastructure is “modern,” “in the cloud,” or “green.” It’s about whether it enables the company to achieve its business goals—or whether it blocks them.

Signals that infrastructure is blocking business goals:

  • New product or service features reach the market months later than planned because IT can’t keep up with preparing environments.
  • The company loses tenders or customers because it cannot guarantee the required availability levels (SLA).
  • Business teams complain that systems are slow, crash, or don’t work properly—and IT lacks the time or resources to fix them.
  • The company cannot enter new markets or serve new customers because the infrastructure doesn’t scale fast enough.
  • Most of the IT budget is spent on maintaining existing systems, leaving no money or people for growth initiatives.

If any of these signals are present, the infrastructure is blocking business goals. That is a tangible reason to consider changing the model.

Counterexample: If the company operates stably, customers are satisfied, teams don’t encounter infrastructure-related limitations, and the IT budget is predictable—then the current model works. Changing it “because others are doing it” has no business justification.

The decision should not stem from a trend toward “the cloud” or “digital transformation,” but from a clear diagnosis: does the infrastructure help the company achieve its goals, or does it hold it back?

Question 2: Do we have the internal skills and resources to manage the infrastructure effectively?

Owning infrastructure (on-premises or colocation) only makes sense if the company has an IT team capable of managing it. This is not about having “some IT people,” but about specialists with specific competencies.

What’s required for effective infrastructure management:

  • System administrators skilled in managing servers, networks, and databases.
  • Security specialists monitoring threats, implementing protections, and responding to incidents.
  • Automation experts creating scripts, tools, and processes that eliminate manual work.
  • IT architects planning infrastructure development and optimizing performance and costs.
  • 24/7 availability—if a server fails at night, someone must be able to respond.

How much does such a team cost? In Poland, several hundred thousand złoty per year in salaries alone—assuming you can hire such people at all, which is increasingly difficult. Add training, certifications, tools, and supporting infrastructure.

The board-level question: Does it make sense to build and maintain such a team when this is not our core business? Wouldn’t it be better to spend that money on product development, marketing, and customer service—things that directly generate revenue?

If the company lacks such a team, cannot hire one, or doesn’t want to invest in its development, the service model allows you to “rent” an entire team of experts as part of a data center service.

Question 3: What is the real Total Cost of Ownership (TCO) of the current model versus the service model?

This is the hardest question—because it requires honestly calculating all costs, not just the obvious ones.

A common mistake: comparing the cost of colocation (e.g., PLN 5,000/month) with the cost of IaaS (e.g., PLN 15,000/month) and concluding, “Colocation is three times cheaper.” The problem? That’s comparing apples to oranges.

The full TCO of owned infrastructure includes:

  • Purchase and refresh costs for hardware (servers, storage, networking)—amortized over 3–5 years.
  • Energy costs (servers, cooling, UPS).
  • Space costs (rack rental in colocation or maintaining an in-house server room).
  • Costs of the IT team managing the infrastructure (salaries, training, benefits).
  • Costs of downtime and failures (lost revenue, contractual penalties, reputational damage).
  • Costs of delayed development (if we had resources sooner, we’d launch earlier—what is that worth?).
  • Risk costs (what if a key administrator leaves? hardware ages? capacity runs out?).

The full TCO of the service model includes:

  • Subscription fees for resources and services (usually monthly and predictable).
  • Migration costs (one-time—moving systems to the data center).
  • Training costs for the team (how to use new tools and processes).

When you calculate the full TCO, the difference is usually far less dramatic than it first appears. Often, the service model turns out to be cheaper—especially when you include risk, downtime, and lost time.

Important: TCO is not just about numbers. It’s also about predictability. Owned infrastructure has variable and unpredictable costs (failures, hardware replacement, rising energy prices). The service model offers stable, predictable costs—making budgeting and planning easier.

Decision Framework: The Answer Matrix

These three questions form a simple decision-making framework:

  • If the answer to Question 1 is YES (infrastructure blocks goals), that’s a strong signal that change is needed.
  • If the answer to Question 2 is NO (we lack skills/resources), that’s a strong argument for the service model.
  • If Question 3 shows that the service model’s TCO is lower or comparable, that confirms the rationale for change.

Counterexample: If infrastructure doesn’t block goals (1 = NO), you have a strong IT team (2 = YES), and the TCO of owned infrastructure is significantly lower (3 = ownership cheaper), then keeping the current model makes sense.

The decision doesn’t have to be binary. Many companies adopt a hybrid approach: some systems (critical, well-understood) remain in owned infrastructure, while new projects and systems requiring flexibility move to the service model.

A Strategic Decision, Not a Technical One

Most importantly: this is not a decision for the IT department. It’s a strategic decision for the management board.

IT can present technical arguments, challenges, and migration scenarios. But the final decision depends on how infrastructure affects the company’s ability to achieve business goals, grow, and compete.

These three questions help the board view the issue through a business lens—not a technical one—and make decisions based on measurable data, not trends or intuition.