Oct. 11, 2007 With stricter environmental regulation on the horizon, businesses should consider outsourcing their IT operations to companies with a well-defined environmental strategy, according to a new report from hosting provider Rackspace.

The report, which focuses primarily on European business, says that outsourcing to a third party can help minimize regulatory risk while improving service and cutting costs.

For example, hosting providers can exploit economies of scale by sharing data center infrastructure across customers, thereby reducing overall power consumption and environmental impact. Green-minded IT providers can go further by prioritizing the use of renewable energy sources, power-efficient servers, efficient cooling systems, and green data center design, according to the report.

"Although today the EU would like the IT industry to regulate itself, this won't be the case forever," says James Eibisch, research director at IDC's European Telecoms & Networking Group, which authored the study for Rackspace. "Today, legislation is concentrated on areas such as materials (RoHS) and recycling (WEEE), but discussions are going on within the EU and NGOs to extend environmental regulation to IT and communications, and companies must consider the future implications of this for their business."

Eibisch notes that about 50% of companies currently host their websites and e-business infrastructure in-house.