IT Cost Optimization and
Cost Control
Budgets are rebounding after the pandemic and more money is flowing into new strategic IT initiatives. Now, businesses need to optimize and reevaluate cost models to ensure IT spending doesn’t get out of control.
When you start to look at IT cost optimization initiatives, it can be easy to miss certain dependencies or misunderstand the intricacies involved. We’ve provided a few benefits and considerations to keep in mind when working on IT cost optimization strategies
Evaluate a Shift to “as-a-service” Models
One major way to control your IT costs is to take a closer look at cost models, capital expenditures (CapEx), and the alternatives.
CapEx spending is great for big purchases that you know your company will use frequently or for a long time. However, many businesses are rethinking their traditional models and moving towards “as a services” models, or an operating expenditure (OpEx) model.
For example, if you don’t anticipate your system demands to fluctuate much, you may be safe making big investments in infrastructure. However, if you have seasonal surges, you’re looking to scale, or you’re looking for a way to get up and running without a lot of upfront expenses, you can benefit from an OpEx model, paying for what you need when you need it.
With these alternatives, businesses are finding more flexibility, agility, and scalability options. When you pay as you go, you free up valuable resources that would otherwise be spent on managing onsite infrastructure. Other benefits would include predictable spending, lowering capital costs, and reducing spend on hardware and software.
New trends are also impacting why businesses are rethinking CapEx models.
According to the 2022 State of IT report, around 40% of IT departments expect to deal with the following: limited product availability, shipping delays or logistical problems, supply chain issues, increases in product costs, and chip shortages. Upgrading on-premises hardware is difficult due to those component shortages and the wait times for those components can reach up to years.
9 Reasons Businesses Choose Cloud Computing
Control Cloud Costs
As businesses adopt the cloud, the costs to run and maintain them can start to add up. Add more cloud platforms to your infrastructure and you can start to experience cloud sprawl. Cloud sprawl is the uncontrolled growth of cloud instances and can contribute to escalating cloud costs.
These costs can compound when businesses use expensive compute instances, fail to turn off unused resources, overprovision storage performance and capacity, and forget to account for data egress fees.
Cloud migration processes can also drive up costs. By understanding potential infrastructure issues and having the right team and skill sets in place early, you can better assess and control your cloud spend. You may even be able to cut costs.
For example, if one application is dependent on another, or a member of your team will be tied up in migration enough to pull them out of other projects, these factors need to be considered in your overall plan. We can help you figure out how to reduce costs while setting migration priorities.
Six Tips for Controlling Cloud Spend in a Migration
Staffing In-house IT Talent is Expensive
As of 2021, there are 2.7 million unfilled cybersecurity jobs, a reduction from 3.1 million in 2020, but the pipeline has a long way to go to close the gap. It can be hard to secure top talent with every organization vying for qualified individuals.
Instead of wrestling with the talent shortage, working with a service provider can give you access to several different specialists when you need them. You could have a deeper bench without paying for multiple full-time staff members. Think about what skill gaps exist on your current team, and think about how you could supplement with a managed services provider.
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Reduce Your Footprint with the Cloud or Off-premises Data Centers
Cloud data centers are becoming more prevalent, processing 94% of workloads in 2021. Businesses building their own data centers need to think about initial investment, ongoing costs, and the staffing and skill needed for operation.
A move to cloud resources takes you out of the data center business and frees up your team to be involved in more revenue-building activities relevant to your organization. Cloud services can help you be more nimble with your business processes while enjoying cost savings on upfront expenses.
Data center relocation, whether it’s from another provider or from your corporate data center to a third party facility, involves a lot of moving parts and can be expensive. If you just bought new equipment, it can feel especially daunting to think about investing in all-new everything. Colocation can help you save money where you’ve already made an investment.
Journey to the Cloud
How We Can Help
Leverage the power of hybrid cloud capabilities with TierPoint Cloud Services and Solutions to achieve the best results for business agility.
Managed IT Services offer best-in-class technology, proactive management, and specialized skill sets to free up your IT staff for strategic projects.
Maximize availability, minimize risk, and reduce costs with IT colocation services in any of TierPoint data centers.
TierPoint IT advisory services can help your team address evolving needs with expert advice, strategically designed IT solutions, and comprehensive migration services.
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Let’s discuss how we can help you identify opportunities for IT cost optimization and cost control.