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Deputy General Manager, APAC
Date: November 2, 2017

A Billion Saved is a Billion Earned

Billion Saved

I recently spoke at Data Centre World Asia 2017 on doing more with less as today’s IT budgets keep shrinking. The velocity of digitalization requires that CIOs stay ahead of their internal stakeholders, manage customer experience, and tango with their legacy infrastructure – all while rolling out new initiatives and future-proofing with innovation.

So how do they do it? Not easily, of course.

I’m a firm believer that to solve your biggest challenges, you need to get back to your basics. IT infrastructure is that foundation that keeps our business humming along. Like your health, you don’t think about the fundamentals until a problem crops up or you’ve got a reason to improve it.

IT assets are laden with costs that you can never escape. It’s like a Halloween horror where you’re trapped in a cycle of upgrades and refreshes — with maintenance, replacements, and bolted-on fixes like some Frankenstein monster. And that process is executed and repeated. And, like Frankenstein, you’re all too happy when your IT infrastructure continues to stay alive!

We can’t always predict the future, but we can learn from history and break out of this Groundhog Day-style tech nightmare. Let’s do an experiment by going back 10 years. We’ll look at how things pan out when a company takes the traditional path, and what happens when that company takes an alternate route.

The Experiment: The Traditional Path

The year’s 2007.

The traditional path is where you spend (or, let’s face it — splurge) on a stack of different hardware solutions that span middleware, database, server, storage, and so on.

Here’s a scenario: let’s say you have 2,500 employees globally and you’re looking to strengthen your presence. For the typical organization, the average breakdown for a traditional IT infrastructure would have cost about US$2,315,074.

Mid to large corporations spent a combined US$64B on IT infrastructure support services in 2007. That’s a large chunk of change just on stuff that keeps your lights on.

The Experiment: The Alternative Path

So what about the alternative path? If you’d started on it back in 2007, you would have moved your stable assets from 20 percent to 80 percent.

That means that for 20 percent of your infrastructure, you would have spent budget on the latest and greatest to help the company innovate. But the other 80 percent of your assets is being leveraged for independent maintenance support to refresh every three years, so you can extend the life of your assets to 10 years.

This makes sense, because at least half of your assets no longer need support contracts for updates (manufacturers prefer that you buy new equipment instead), and security and vulnerability patches are made publicly available.

In fact, the bugs and features are typically worked out within three years of release. By year five, most manufacturers rarely put out updates. Curvature took a poll several years ago that asked companies how often they patched their infrastructure, and they said they did it whenever there were updates. But just five years after a product’s release, software updates usually aren’t pushed out.

Again, that’s because manufacturers want you to buy new stuff.

The Results: Alternative vs. Traditional Paths

chart

This is pretty self-explanatory. By following the alternate path and utilizing third-party maintenance, you avoid:

  • Downtime (cost + labor)
  • The need to rip and replace (where you’ll be facing hassles and a learning curve in dealing with new technology)
  • Having to design new architecture
  • New product bugs – that’s not a feature you want

It’s ultimately a conversation about stability vs. innovation and getting that balance. And it’s not just something my team and I are preaching. Research firms that have an overview of the tech landscape are recommending that enterprises create a consolidated plan on the likely timing of various upgrades based on current business demands and update it on a yearly basis.

This approach, they say, yields greater budget flexibility. It also helps you prioritize and time your investments into things that keep your company innovative. That’s the strategy I’m seeing customers employing in varied industries across Asia Pacific, from FSI to manufacturing.

This is something I’m passionate about—not spending where it’s not necessary. Let my team know you what you think.

Questions? Comments?

Talk to our team of expert engineers, product managers, and technicians by emailing us at experts@curvature.com