Cost Optimisation and cloud offerings

Without attempting to remind people about the ongoing banking crisis, organisations are required to undergo a tough review.  I’m not going to say this has to be a cost cutting exercise, but more a cost review exercise.

There’s a big difference in my opinion, and also some consideration required when throwing various cost cutting terminology around.  Please remember, your staffs is just as fragile as the current economy, so any little sniff of cost cutting exercises, and they will get worried.  Worried staff will not work to the best of their abilities, as they fear for their future.  Also, staff might start looking elsewhere, and you might end up losing your key staff.

That said, you do need to review all your options, but reviewing and tweaking the IT outgoing is by far my preferred option.  It’s also an option that HiberniaEvros can assist with.

These reviews often force the IT management to look at all possible outgoing costs, with an aim to of course remove the unnecessary items.  The “easy” ones are always the so-called low hanging fruits.  I actually don’t like these kinds of metaphors, but somehow this one does make sense.  You pick the items that are not required to run a smooth and lean organisation – items that are low hanging.

What many organisations fail to do is look at items such as software licenses, insurances, warranty on old (no longer in use) hardware, too many phone, data and DSL lines.  Reviewing and tweaking these will often save you money … and quickly.  As an example, many organisations have for the past decade purchased an excessive amount of servers to run the information for the company.  Most of these servers are underutilized, but highly spec’d.

The reason for these investments was because software providers and hardware resellers convinced the IT management that more servers were better and that their software couldn’t run on servers with other software installed.  Why does this matter?

Well, firstly, that theory is rubbish.  Software will, 9 out of 10 times, run alongside other applications, without causing any kind of performance bottlenecks.  Yes, you do need to consider this when setting up new applications, but it’s more important that your hardware is geared up to take the loads/requests from the applications.

Another valuable example is software licenses.  This is always a huge expense, especially when reviewing the amount of money spent on support & maintenance.   Ask yourself a few questions:

  • How many of the licenses are still in use?
  • Do you know where these are installed?
  • Do you still use the software
  • Do you have software that overlaps
  • Are there any cheaper solutions out there, e.g. SaaS

By answering these, you might be able to adjust your software requirements and reduce money spent with multiple vendors.

Secondly, you buy more servers to make sure your users don’t have any application bottlenecks.  This often results in extra racks, more air conditioning required and more servers for your IT team to maintain.  Each of these items is an increased cost to the organisation, not just IT, but also facilities that might be covering the charges for electricity – not to mention the expensive floor space required to host the server room.

You are probably wondering, when is the sale pitch coming and how can HiberniaEvros possible assisting my organisation with reducing some of these unnecessary costs?

The answer to that is actually fairly straight forward.  HiberniaEvros will spend time with you and your team, to assess what you have and what can be done.  We use various tools to assist with this review, and some of these might cost a bit upfront such as Platespin licenses, but the aim is to produce a report that will help you develop your strategy.  The outcome and intention of our assistance is to assist you moving towards a more virtualised and cloud based infrastructure, which will NOT aim to reduce your IT headcount.  Keep in mind, you still have the same amount of servers, albeit virtual or cloud based, that all require the same amount of monitoring and maintenance.  We manage the hardware / cloud, but you look after the software.

What are the incentives for moving across and how can you possible consider such a move during a recession?

To be honest, you are no longer buying hardware to run your application, but you are renting hardware in a large server farm.  This means you can pay for what you need and use.  The capital investment required to buy and install new server hardware is removed, so now you pay in maintenance mode, or more correctly, you pay the operational charges.  It is still charges that need to be paid, but removing the upfront investment should make it easier.  When buying hardware, you often need to buy the warranty.  So, the annual cost is depreciation and annual maintenance.  We aim to replace the depreciation, so you only pay for the maintenance.  Most finance departments would support this approach, as your annual Capex budget is reduced and you do not need to develop complex business cases for improving the infrastructure.

Furthermore, consider the cloud option in HiberniaEvros as a pay-as-you-go option.  You only pay for the services you required. If you only need 12/5 support, then that’s what you get.  There’s no need to pay for 24/7 if you don’t need it.  But, you can always increase the offering you are buying and add extended support.  Please note, the hardware is being maintained 24/7, so if something does happen, then we will bring the hardware back up and make sure it’s functioning – you do need to check its back.

Another way of thinking about cloud is as a disaster recovery solution for your company’s irreplaceable data.  If the data was hosted in a cloud / hosting environment, then it would be part of our back-up strategy, meaning that in case of an outage at your end, the data is secure and safe.

One of the most common questions raised, when talking about cloud / hosting solutions, is the security protecting your data.  To be honest, we don’t want to see or touch your data, mainly because it jeopardises the relationship between HiberniaEvros and our client, but the data belongs to you – not us.  We do what we are experts at, which is ensuring that the hardware is running, and you just use the data.

Our motto has always been “We are here to help you get even better at what you do and allow you to focus on your main priorities”.  We look after the hardware, giving you time to focus on your clients and your business development / growth.

Here at HiberniaEvros, we have two solutions that we think will be perfect for your needs:

  1. VMware Lite – virtualization is affordable, easy to deploy and delivers business continuity.  We believe that around 50% of small and midsized businesses will move to virtualization this year.  Check out our solution and contact us to discuss further.
  2. Is it a cloud day? –  Our enterprise cloud solutions give you the flexibility of choosing the solution that fits your needs.

We are only a phone call or email away, and would love to sit down with you to discuss your strategy with you, and hopefully we can develop the optimised solution for you and your organisation.


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Filed under 2011, Digital Planet, Services, The Organisation

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