Trends in Higer Ed Services or "To Host or not To Host"

That is the question. Many companies are providing hosting services for higher ed institutions for everything from course management systems and e-portfolios to content specific software. What are the implications for small schools? With very few dollars available for staff - does it make more sense to outsource these systems? My institution has opted to outsource our course managment system and are now looking at e-portfolio systems. When we first moved our course managment system from on campus to the hosted environment, I was finally able to sleep for the first time in months (only a slight exaggeration). At that time we were a two year college, with a VERY slim IT staff and simply did not have the expertise to keep it running and updated and protected, etc.

As we look at more systems, the question becomes more complicated. Systems that are hosted externally are much more difficult to integrate into our campus portal (not for us, but some companies 'seem' to refuse to allow basic things like batch creation of accounts, and passing passwords after authentication. So, IMHO, here are a few ups and downs with hosting vs self-run.

Pros to having services hosted off campus:

1. The people who sell the product are most likely to know how to keep it running and available. (May not apply to third parties that host other services.)
2. Frees staff on campus to address other issues that cannot be outsourced (pc trouble shooting, phone lines, portal, create users, etc.)

Cons to having services hosted off campus:

1. Data is not 'completely' available. Some reports can only be run from the server - hosted clients either pay for reports or don't have access to particular information.
2. Retention of records and student confidentiality - if student work is hosted off site do we have an obligation to inform them that their information is being handled by an external party?

What do you think? I'll keep adding to the list, but would love to see your ideas.

Teresa