Terry Storrar, Managing Director, Leaseweb UK, discusses why optimising IT infrastructure costs should be a top priority for the whole C-suite this year and how it can unlock new levels of operational effectiveness and help businesses thrive through challenging economic times.
Organisations everywhere are currently under significant cost pressure, presenting a major challenge to business leaders as they look to deliver savings while also maximising digitally led competitiveness.
Despite the concerns presented by high inflation and energy costs, however, IT spending this year remains on a growth trajectory. According to a recent forecast from Gartner, for example, worldwide IT spending will grow by 5.5% this year to over US$4.5 trillion, with the software niche among the best-performing sectors of the industry with double-digit growth.
While the global reliance on technology infrastructure is key to driving this impressive growth, at the same time major developments such as generative AI are seeing organisations scramble to deliver on their potential. Somewhat ironically, many business leaders clearly feel they simply can’t afford to restrict investment in tech-led innovation, even when key economic indicators suggest they should keep spending under tight control.
A question of mindset
With these challenges in mind, where do the opportunities for tech-led efficiencies lie? For many organisations, the specifics about how and where to find IT-related efficiencies are matters for IT leaders and their teams. To ensure effective and joined-up decision-making, however, it’s important that C-level executives take time to engage with and understand the investment opportunities and challenges their specialist colleagues face.
More specifically, infrastructure spending can play a significant role in the overall financial health and overall competitiveness of a company. By playing an active role in the drive for infrastructure cost optimisation, executives can make informed decisions that align with the organisation’s strategic goals. This isn’t about taking control away from the experts, it’s more about adopting a mindset where leaders are more engaged in the process.
Ideally, infrastructure cost optimisation should align with the overall business objectives of the organisation. In this context, C-level executives are ideally positioned to ensure that cost-saving initiatives do not compromise the quality, reliability and security of that infrastructure. For instance, senior leaders who provide additional oversight around potential cost savings and resource allocation can help optimise spending around key areas such as data centres, cloud services and network infrastructure. In doing so, they can balance the need for cost reduction with the strategic priorities and long-term goals of the company.
It’s important to note that, for many organisations, this doesn’t require any radical changes in approach – roles and responsibilities are already evolving. Recent research, for instance, revealed that while IT manages the majority of cloud services and costs in 76% of UK organisations, responsibilities are less centralised with the IT department than they used to be. Other departments, including finance (24%) and operations (20%) now have some degree of responsibility for cloud workloads. Getting all senior executives to collaborate from the start helps to eliminate many of the most common barriers to success and ensures the best possible outcome.
Performance and efficiency priorities
When looking for IT-led cost efficiencies, there are also some major potential benefits to be gained by prioritising several key areas of infrastructure strategy and implementation.
Consider the huge role now played by infrastructure hyperscalers, for example. Industry research suggests that the global hyperscale computing market – valued at over US$55 billion last year – will grow by 23.9% between 2023 and 2030. While this is certainly impressive, it doesn’t mean, of course, that this is the only game in town as far as infrastructure strategy is concerned.
In reality, hyperscale services don’t necessarily always offer the best performance/cost solution. For instance, hyperscale solutions can come with significantly higher monthly costs, especially around bandwidth consumption pricing. In contrast, it’s possible for organisations to achieve the same level of performance at a lower cost with other proven cloud and/or traditional on-premises options that are able to deliver better results and more personalised services that hyperscalers may lack.
The concerns around hyperscale services are very real. Research has shown that over half of IT pros have found it challenging to migrate workloads out of a public cloud environment. It’s therefore vital that decision-makers consider all the options open to them, with much thought given to the benefits of creating a hybrid infrastructure that’s tailored to business needs.
Indeed, the advantages of hybrid IT infrastructure are encouraging more organisations to divide their infrastructure to meet specific use cases. The ability to migrate workloads according to need and without incurring additional costs can give businesses maximum flexibility when responding to changing demands.
Many e-commerce companies, for example, need to be able to scale infrastructure rapidly and sometimes at short notice to meet the additional traffic demand when peak shopping times occur or if a particular product line or campaign goes viral. Using a flexible, hybrid infrastructure approach, e-commerce companies can make major savings by moving their stable workloads to a more cost-effective provider. Finding a provider that offers high performance alongside the ability to integrate their platform with a hyperscaler to offload that peak traffic can help deliver the cost savings many organisations are looking for.
And herein lies an important point – today’s business and IT leaders have more choices than ever about how to implement their infrastructure strategy. Organisations that build partnerships with providers based on maximum flexibility are ideally placed to deliver a win-win where cost control can be achieved at the same time as improved performance.
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