Managing IT infrastructure costs : statu quo or take action

Everyone knows the Energy Star label that appears on many electrical appliances. They are recommended to reduce household electricity consumption and to have better efficiency, yet many households retain their older equipment with a higher energy consumption. In the decision making process, on one side there is a device that works fine but contributes to increasing the monthly electricity bill and is a less efficient machine, and on the other hand, an investment in a new energy efficient appliance that has a better performance.

The need to control IT infrastructure costs is real and businesses have a dilemma: why change something that works when a replacement will require an investment in time and money?

For a business postponing such a decision will have a much more dramatic impact then in your home. To avoid critical situations, we must understand the implications of maintaining the status quo.

The cost of maintaining the status quo is higher than the cost to modernize

The logic that we often hear is: why change, I have no additional costs then what I currently spend to keep my equipment functional?

• The technology gap is widening

Maintaining aging machines is very expensive. For example, a company with an IBM Power server model 9407-515 will in 2015 be confronted with the limitations of these machines because of their obsolescence. In fact, the last version of operating systems supported by these servers is V7R1.  The V7R2 version was announced on 28 April 2014 and when the next version is announced, V7R1 will no longer supported by IBM. Companies will have 2 options: keep the old equipment and the unsupported V7R1 version, which entails significant risks and costs in case of failure, or otherwise migrate to a new server.

Also, if you wait too long to replace production equipment, there may be an impact on backups. Based on rapidly changing technologies, some companies will be forced to migrate or update in several steps: transferring the backup data to a temporary server that supports the old technology, but that will also support the new technology in order to make the transition to the new server. There are therefore two stages of backup and recovery operations to be performed in this case, which involves paying double for professional services in addition to the possible cost of renting an intermediate server for a successful migration.

By making updates more regularly, migration can be completed  in one step. You can follow our 4 tips to update a dinosaur-like IT infrastructure.

It is important for companies to not only consider the cost and maintenance of equipment in their IT infrastructure management strategy. In fact, maintaining the status quo can lead to costs related to lost opportunities. We see companies deprived of solutions that would improve their productivity because they are limited by their infrastructure and capacity of their servers.  In the current economic conditions, it is crucial for companies to take this factor into account.

Anticipate to spread out the costs

It is important to distinguish between two scenarios in order to evaluate the cost allocation of a server migration:

• Platform Change (i.e. Power to Intel)

The investment will depend on the time remaining before changing the platform. Some companies believe that the transition will be done in 3 to 6 months, when in reality the transition is rather 2-4 years, especially for SMBs with fewer IT resources.

During this period, some companies will choose to stretch the life of the equipment, without guarantee, which increases their risk and can lead to additional costs.

The approach which provides the most peace of mind to manage the transition is to replace the server and to fund it over 24 months for example. At the end of this period if the customer has completed the migration and he no longer needs the server, it can be returned without having to make a significant long-term investment.

 • Continuity on the same platform

The option of financing with renewal of servers at a fixed frequency of every 3, 4 or 5 years, prevents migration in several stages and the negative impacts on production as well as helps maintain sufficient capacity for business growth. This option will typically be preferred by businesses that operate with an OPEX (operational expenses) approach for their IT infrastructure.

IMPORTANT

Keeping your production servers up-to-date must be considered a priority for every business, even if there are fires to put out every day. Any server failure will have a greater impact on the company than any priorities that continually delay a decision and action concerning the IT infrastructure. Given the need to allow several months for a study of a solution, TCO (total cost of ownership) and internal approvals, in addition to the time for migration, companies that operate with equipment over 5 years old must act and consider the options available to them.