Thoughts on Reducing IT Capital Expenditures

In the current economic downturn where IT budgets are declining and the demand for IT resources is increasing, the expectations for many companies are you must accomplish more with less. As a result, many businesses and enterprises are working to find ways to cut costs without compromising productivity while remaining competitive.  With all of these pressures and responsibilities how do you ensure ongoing growth while meeting compliance requirements and your service level agreements?

The answer to this dilemma is the incorporation of new technologies into your IT infrastructure.  Although this may sound like you are increasing IT capital expenditures you are actually cutting costs while increasing productivity in response to the ever changing market.  Here are some thoughts on how to reduce costs while still maintaining the competitive advantage.

IT Lifecycle

 It is a well known fact that IT infrastructures which are older are much more expensive to maintain and present many challenges in terms of working with hardware and software that is no longer compatible with new applications.  In many cases the older IT infrastructures tend to remain in operation because they serve as a comfort zone, so to speak, for the IT department and management despite the fact that the system is very costly to maintain.  If one were to analyze the exact cost of retaining the older infrastructure chances are the results would show exorbitant maintenance and operating costs in addition to high energy consumption.  So what is the answer?

Let’s consider the virtualization model.  Virtualization is a methodology that provides a solution for companies to consolidate older infrastructures.  This is accomplished by combining servers which can then be controlled through single point access.  This type of system increases the utilization of hardware by as much as 85 percent where the older infrastructures may use as little as 20 percent.

Transitioning to virtualization means cutting operating costs significantly while improving reliability and reducing downtime.  Server consolidation is also scalable so you can deliver IT services on-demand. Plus fewer servers mean lower energy consumption and reduced cooling requirements.

Information Lifecycle Management and Data Storage

 Without a doubt, the growth of data and information is a major contributor to the increase in IT costs. The older infrastructures are unable to meet the demand for more affordable solutions that help to reduce the data storage footprint.  Older methods such as tape storage can increase downtime in the event of a disaster plus offsite storage is typically more expensive compared to the newer methods for data storage and backup.

When you consider a cloud hosted model, virtualization is the channel to a solid data storage and backup system in the cloud.  This means that your IT resources are consolidated into logical steps for storage, network, and servers which create a virtual datacenter.  This is known as a holistic approach to information lifecycle management and data storage requirements. The result is the reduction of IT capital expenditures in terms of maintenance and administration while improving the level of service.

Virtualization and cloud hosted services are being considered by more companies for the reasons we have discussed in the article.  Hopefully these thoughts will help to spur some ideas and options as to how your company can save on IT capital expenditures.  When it comes to remaining competitive in today’s marketplace most companies should not be asking, “Why should we consider virtualization and cloud hosting?”  Instead, the question should be, “Why are we not already using virtualization and cloud services?”

If you are trying to find ways to reduce the cost of IT capital expenditures, contact Thrive Networks today for assistance with designing a strategy for reducing IT costs over the next one to three years.