Adapt to Business Trends While Reducing IT Infrastructure TCO

by | Dec 3, 2020 | Technology Strategy

At the beginning of 2020 the world looked drastically different than it does today. Business is no exception. In fact, business environments represent some of the best examples of how quickly life changed. Take remote work for example. Many businesses needed access to cloud services, remote employees introduced new security concerns, and it raised important budgeting questions for the C-suite.

Every business’s journey this year was unique; some moved slower in areas, some were very well prepared in others. However, many CEOs, CFOs, and other leaders are asking themselves the same questions: How can we keep up? And how can we adapt cost-effectively?

While there’s no one-size-fits-all approach, here are five strategic ways businesses are adapting to the changing competitive landscape while reducing their total cost of IT ownership (TCO).

1. Embrace remote work

When COVID-19 hit, American businesses were forced to go remote. Some were more ready than others. Many companies scrambled to get their remote environment setup and deployed in a matter of weeks, thinking it would only last about that long.

Now, the business world is settling into the idea of hybrid remote work as a long-term, and perhaps permanent, solution. Part of the reason so many companies are embracing the idea of long-term remote work is that it presents them with the opportunity to remove (some) fixed costs without reducing output or work quality.

Remote work environments are inherently intertwined with cloud-based technology and a migration towards subscription-based IT ownership. These shifts allow businesses to be more nimble, remote, and scalable while actually saving on IT TCO.

Tips for a successful long-term remote plan

A common way we’re seeing businesses adapt to a longer-term remote model is with hybrid remote work. Businesses are learning how to customize their in-office and remote schedules to meet their needs and maintain employee safety. This also gives businesses the opportunity to make these industry shifts at their own speed. For example, allowing them to keep certain equipment on-premises while virtualizing the hardware that’s ready to move to the cloud.

  1. Identify the right tools you and your team need to do their jobs effectively.
  2. Invest in the time and resources to train and support users with these tools, and don’t cut corners. If employees understand how their tools work, they can troubleshoot on their own and think on their feet should an issue or new type of task come up.

Businesses that don’t take their time with this step end up with a purely reactionary IT help desk that’s bogged down with issue after issue. By being proactive (with the two steps above) businesses can avoid getting bombarded with these technical difficulties that eat away at productivity.

2. Replace hardware with cloud services

Migrating to the cloud is one of the biggest modernizations businesses are undertaking, and cloud accessibility is becoming more and more critical for businesses to keep up with competition. This is especially with remote work becoming the business norm. What’s more, hosting equipment in-house creates a single point of failure, whereas global cloud providers offer redundant and resilient environments.

Migrating to the cloud can be daunting, especially if you’re starting at ground zero. Our recommendation? Start with a small pilot project. Take one non-critical asset (e.g., an old server) and virtualize it. Then, you can test the process while still making a small move towards the cloud – but if something goes wrong, business won’t come to a crashing halt.

Migrating to the cloud by nature reduces IT TCO because it takes equipment ownership off your plate. That includes the costs of renting the data center space, purchasing and updating equipment, maintaining the equipment and environment, and keeping up with security patches. Instead, you only pay for the amount of data center service you need, with the ability to change that amount quickly and easily as you grow. This makes scaling much easier and cost-effective.

As an added bonus, even a small pilot project moves you one step towards transitioning your expense model from ownership-based to subscription-based.

Tip for maximizing ROI when moving to the cloud

It depends where you are in your journey.

  • If your business just invested in new server equipment, a common route is to host that server in a co-location environment while it depreciates. Then, the company doesn’t have to get rid of new equipment, and it can still reduce what it was spending on hosting that server in-house. Once the server is old enough to replace, the company should then move that server fully to the cloud rather than purchase a new one.
  • If your company’s server equipment is older, it’s a great time to move to the cloud. This way, you don’t have to spend any more money on upgrades. Instead, you can allocate those funds towards cloud migration.

3. Build resiliency in the face of increased security threats

The change to remote work resulted in a spike of cyber-attacks, and they’re not slowing down. What used to only affect 1 out of every 10 companies years ago, now affects 1 out of every 3 or 4 companies today. This increase is largely since companies went remote quickly, without implementing and maintaining all the security necessary to support those environments. For one, disparate employees using various networks and devices while working under less supervision created vulnerabilities hackers quickly learned to exploit. Additionally, while businesses may have secured their environments when they went remote initially, many haven’t kept up with those security protocols.

The first step to adapting to this new threat environment is to stop thinking of remote work as a temporary band-aid to an immediate problem. Instead, businesses need to invest in the full security solutions necessary for securing their remote environments for the long-term.

Part of this initiative involves ensuring network security equipment is up to date. Similar to our advice on taking advantage of older server equipment by virtualizing it, we recommend businesses consider virtualizing some of their old security hardware. It both transitions them to a subscription-based model and guarantees them more consistently up-to-date security solutions.

Firewalls, for example, can be a great place to start. Network security equipment is frequently purchased with 5-year lifecycles for CAPEX budgeting. But what if circumstances require replacing equipment sooner, to meet higher level needs? You either have to throw away your investment or cross your fingers that it will hold up for another couple of years before you can budget for replacement. Instead, if your servers are in the cloud and protected by virtual firewalls, you can upgrade the firewalls instantly and even change brands on the fly, while keeping all costs within the realm of monthly OPEX.

4. Move from a CAPEX to an OPEX model

Business IT is moving from a CAPEX (ownership-based) expense model to an OPEX (subscription-based) model. More and more often, providers are selling subscriptions to everything from servers (i.e., the public cloud) to software licensing (like Adobe, Microsoft, or Meraki), rather than selling outright ownership to the equipment and tools. That means that, instead of purchasing an entire server, program or tool (remember buying a CD-ROM to get Microsoft Word?), you pay for the membership and duration you need. Since the provider retains ownership, they also retain the responsibility to push updates, patches, and other maintenance to your instance of the tool.

OPEX models by nature reduce IT TCO by replacing ownership with subscription. This is more scalable, cost-effective, and competitive because the investment can be as robust as you need for as long as you need. Plus, the technology is always up to date.

5. Don’t add risk by cutting financial corners

Some businesses attempt to save money by cutting back in important areas. While cost-cutting looks great on paper, it can actually incur more expenses when it creates vulnerabilities that could result in expensive consequences.

Don’t opt for software subscriptions intended for personal use. Some businesses cut corners by using the personal subscription versions of tools instead of investing in a full corporate account. Similarly, some will just use the free version of a tool, or only sign up for one account and have employees share the credentials and take turns using it. While this may help with savings in the short term, it creates significant security vulnerabilities in the long run.

Personal-use subscriptions often do not have the levels of protection enterprise subscriptions contain. Personal subscriptions aren’t designed to protect customer data, store financial information, or comply with business regulations. Business-level accounts, on the other hand, will be specifically designed with these needs in mind – not to mention a support team that’s available to help you as a business.

Additionally, sharing credentials is always a bad practice. The credentials inevitably end up written down somewhere, like in an email when an employee asks a coworker to remind them what the password is. Other risks include people accidentally logging on with a personal device or via an insecure network, employees leaving the company but remembering credentials, the list goes on. A shared account is a compromised account.

About ZAG Technical Services

ZAG is a top-ranked global managed security services provider that takes ownership and responsibility for client IT needs, instead of hiding behind pages of fine print contract exclusions. Over the years, we have helped companies maintain and gain competitive advantage by strategically adapting to industry shifts in ways that serve their business. Our portfolio includes helping companies adopt remote work, migrate to the cloud, assess and remediate their security, and more.

Don’t let IT weigh your business down. Check out our managed security services overview to learn how we help companies stay on top of the trends and ahead of their competition, or contact us directly to start a conversation about your specific needs and goals.

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