This article is part of the Cost Savings series (part 2 out of 4).
In the first part of this Cost Savings series we explained how can you reduce IT spend by reducing your software and hardware consumption. There is, however, a way to cut costs while maintaining the same level of service, by optimization of your hardware and software license resources.
IT optimization can become quite creative discipline, as there is no golden rule or clear guide how to optimize your IT landscape. New opportunities for hardware optimization are coming in waves as technology is advancing, while software license optimization is purely dependent on license terms and licensing models made available by software publishers.
Hardware optimization comes with advanced technology
Virtualization technology was first developed in the 1960s but became popular and massively used later in the early 2000s. Using virtualization today is a no-brainer, it simply brings many benefits (ranging from security to IT agility), as well as cost savings. Virtualization technology not only enables high-availability without need to keep all infrastructure parts redundant, but it also improves utilization of hardware resources like memory or compute power by running virtual machines across clusters of multiple physical servers.
New emerging technology today is containerization, basically an OS-level virtualization. Containerization does not fit everyone, but definitely can reduce IT costs in certain scenarios by improving efficiency of hardware resources (due to deduplication of operating systems) or reducing effort to maintain applications. Storage virtualization is enabled through CNS (Container-Native Storage), therefore expensive SAN can be avoided. And as a bonus VMware licenses are not needed anymore.
Virtualization and containerization are just one of many. Server hosting or housing, IaaS (infrastructure as a service), PaaS (platform as a service), VoIP (voice over IP) and many other technologies can be used to optimize your IT spend.
License optimization or alchemy?
While possibilities of hardware optimization are given by technologies and are generally known, methods of license optimization are more “secret” and basically limitless since software publishers keep introducing new license terms and models.
You are probably familiar with Microsoft CALs (Client Access Licenses) and comparing of users vs. devices or alternatively calculating costs of processor/core licenses, used frequently in the past. Similarly, Oracle introduced NUPs (Named User Plus) and processor metrics for their databases and let customers do the math, or do an expensive mistake paid later through software audit. Major software vendors have been always offering multiple licensing metrics to maximize their revenue. Over time, more metrics and product bundles (like Office 365 suites) have been introduced to make it more complicated.
Another aspect of complexity is given by license contracts enabling customers to get a software license through various channels. Microsoft is excelling in this area. You can easily pick from many licensing models, including Enterprise Agreement, Enterprise Subscription Agreement, Open Value company-wide or non-company-wide, Open Value Subscription, SCE, CSP, OEM, MPSA, SPLA, ISV, and more! How do you best license your Windows Server?
Are you combining both methods to achieve synergy?
Licensing software running virtualized across server clusters is whole new level. You have perhaps heard of clusters dedicated to Oracle Databases separated from the rest of infrastructure or licensing Microsoft SQL Server high-density VM deployments. Have you considered migration to public cloud and using BYOL model (bring your own license)? Have you calculated ROI for various options or do you need help with that?
New technologies, trends, solutions, licensing models - IT world is spinning faster and faster. For CTOs and CIOs it might be difficult to keep pace with all those changes and not to ruin their budgets. Every such change brings also opportunity for better #CostEfficiency.
If you want to learn more about cost savings or cost optimization, do not hesitate to get in touch with us using contacts below.
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