Sean Power, director of strategic technology at Berlitz International Inc. in Princeton, N.J., saw his data center grow to the point where the majority of his IT workers were supporting storage and servers instead of supporting employees in about 500 field offices. "We were having to build internal resources while not providing services to our customers," he says. "We were becoming [storage] specialists."

So in February, Berlitz shuttered the doors of its primary data center after engaging a service provider to run its infrastructure from a hosted site in Boston.

While the move may have been seen as pass' by some in the IT industry, harkening back to the dot-com era, analysts say there is a new and growing demand for hosted services, especially when it comes to storage. That's because while storage systems are being recognized as strategic, they're also growing out of control.

The change at Berlitz has boosted service while cutting costs. "We were barely covering U.S. operations and couldn't cover global operations," Power says of his IT staff of about 100 workers. "Now we have a much higher level of service than we were ever willing to pay for, at a slightly lower cost."

Berlitz, which franchises more than 500 language learning centers in 60 countries, has completed most of a change from an in-house storage-area network to a service hosted by VeriCenter Inc. in Houston. The move to a service provider saved Berlitz about 10 percent in total operating costs, but more important, it kept Power from having to open as many as three new data centers to serve growing offices in Europe and Asia. Power was also able to redeploy his IT staff.