Outsourcing any IT function (whether down the block or overseas) can make good business sense. However, most analyses ignore a major risk issue -- what do you do if the outsourcing deal doesn't work out. If the scope is one project, you can cancel the deal and regroup (though that may be quite damaging). If the scope is a major chunk of IT infrastructure, you may not be able to just cancel. You "sold off" the hardware and support staff and at best it may take many months to replace those critical resources. More importantly, you no longer have the accumulated experience with the technology and the organization that your original staff had accumulated.