In the early 1990s, I was an IT manager in a medium-sized company of about 1,500 employees. Running this business required a substantial IT investment. Everyone needed computers and Microsoft Office licenses ($300 each, as I recall) for every desktop, regardless of how frequently it would be used. Expensive servers, storage appliances, and network components supported our IT infrastructure. We had to perform regular backups, and create disaster recovery procedures. Our developers had to design and build custom software, such as customer relationship management applications. And while we didn't need an Internet connection, we did have to pay a high price for network connections to international offices.

And, of course, there was a sizable IT staff -- numbering about 30 people -- on hand to perform the voodoo necessary to keep everything running.

Imagine you are an IT manager in 2008. Internet connections to the office are a given. So are PCs and some networking equipment. Once these purchases have been made, you're ready to do business.

Wait a second. Aren't a few things missing from this list? What about Microsoft Office, the storage gear, and the huge support staff?

No, nothing is missing. Your company just outsourced most of its IT. Google Docs or Zoho lets employees create documents online. The tools are free, and online sharing and collaboration are easy. IDrive serves as a low-cost alternative for online business backups, and even individual desktop backups. Salesforce.com takes care of CRM-related needs. Thousands of other productivity and communication tools can be downloaded for free, or for a negligible cost, on an as-needed basis. Amazon's EC2 and S3 services provide raw computing power and mass storage resources as the company grows. Multinational office support is inherent in tools that are accessed via the Internet.

And while it wasn't uncommon 15 years ago to have a majority of IT staff time dedicated to maintaining servers, backups, and disaster recovery, nowadays SMBs can get by with a smaller IT staff who, largely freed from such concerns, can now provide better customer service.

I estimate that per-employee IT costs today would be about 75% lower than what I experienced in the early 1990s. If you could stand up in a management meeting and say that you had cut costs by 75%, a celebration would be in order, not to mention a large bonus.

But there's more at stake than costs. Consider the other issues that must be taken into account when vetting outsourced services. Which services should be outsourced, and what should remain in-house? How will all of the pieces work together? It may be great handing off primary backups to an online storage service, but plans still need to be made for 'Net or power outages, or when individual services go offline.

There are also some undeniable downsides to taking the outsourced route. Information is the lifeblood of most businesses today, and security is paramount -- no company wants customer lists, email, or other mission-critical data open to the Internet. Protecting data is critical, and companies need to understand where to draw the line. Someone needs to have a handle on all of the company's applications and data, figure out what data is stored and maintained in-house, and determine how encryption might be applied to particularly sensitive data -- in other words, he or she has to create and implement best practices that enhance the flows of information without compromising it.

So, even though the technology has evolved and the tools are new, the basic IT management role hasn't really changed. The company still needs someone to accept responsibility for technology decisions in support of the company's business goals. Still, technology has altered the character of that role. Without the costly burdens associated with servicing the technology, today's IT manager now has more freedom to do what they've always tried to do -- service the customers with a better array of tools to improve their productivity and work lives.