How to Significantly Reduce IT Infrastructure and Operations Costs Jay Pultz

How to Significantly Reduce IT
Infrastructure and Operations
Costs
Jay Pultz
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other
authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2010 Gartner, Inc. and/or its affiliates. All rights reserved.
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Thank you for joining us on today’s Gartner webinar.
10,800
Client
Enterprises
60,000
Clients
100,000
IT End-User
Inquiries
5,500
Benchmarks
65% of
Fortune 1000
80% of
Global 500
2.7 Million
IT End-User
Searches
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Serving Clients
in 80
Countries
55
Conferences
10,000
Media
Inquiries
3,800
CIOs
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other
authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2010 Gartner, Inc. and/or its affiliates. All rights reserved.
1
How to Significantly Reduce IT
Infrastructure and Operations
Costs
Jay Pultz
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other
authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2010 Gartner, Inc. and/or its affiliates. All rights reserved.
I&O: 60% of the IT Budget!
Data
Center
(20%)
Non-I&O IT
Costs
(40%)
Other
(3%) Support
(7%)
Network
(18%)
Client
Computing
(12%)
I&O Costs
Poll question—Participate in live research
When do you expect that your I&O budget will
return to pre-recession levels?
1.
Already has (2010)
2. 2011 or 2012
3.
Beyond 2012
4.
Never
5.
We weren’t significantly affected by the recession
Please select the option that best fits your situation.
Responses are confidential.
4
Ten Key I&O Cost-Containment Actions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Defer Noncritical Key Initiatives
Re-examine Networking Costs
Consolidate I&O
Virtualize I&O
Reduce Power & Cooling Needs
Contain Storage Growth
Push Down IT Support
Streamline IT Operations
Enhance IT Asset Management
Optimize Multisourcing
No "magic bullet"!
Tools:
1. Defer Noncritical I&O Key Initiatives
Data Center
Modernization
and
Consolidation
Virtualization
ITIL and Process
Improvement
Windows 7
and Office
VoIP, Unified
Communications &
Collaboration
Mobile
Enterprise
Strategy
Defer Key Initiative if 1) isn't needed by business, 2) doesn't
lower costs, or 3) doesn't help to prevent I&O "meltdown"
2. Re-examine Networking Costs
Network Costs
Cost Reduction
Action
Telecom
Services
(45%)
Personnel
(35%)
Hardware/
Software (15%)
Other (5%)
Percent Potential
Net Savings
(Next 12 Months)
Percent Potential
Net Savings
(3Years)
(Re) renegotiate TSP
contracts
8%
20%
Pay for just what you have
(enhance TEM)
3%
5%
Buy just what you need
(optimize net design)
4%
25%
15%
50%
Total
Since networking is ~ 30% of I&O costs, these
actions may reduce I&O expenses more than
4% near-term and 15% longer-term
3. Consolidate I&O (1)
Drivers
• Lower TCO (typically ~ 20%)
• Control server sprawl
• Enhance manageability,
service quality, agility, security,
disaster recovery …
Inhibitors
• Politics
• High CAPEX
• Long Payback ~ 18 months +
• Implementation risk
• Networking
Have you consolidated ALL that you can?
3. Consolidate I&O (2)
Server Evolution
Stand-alone
Rack
Chip
Blade
Data Center Switching Evolution
?
Small Ethernet Switches
Terabit-class Switch
Data center switch consolidation is
often overlooked
4. Virtualize I&O
• 50%+
lower hardware and power
costs
• 4:1+ utilization improvement
• Control further sprawl
• Asynchronous deployment, rapid
installs
• Enhance manageability, service
quality, agility, disaster recovery …
Virtualization changes virtually everything!
6. Contain Storage Growth: Dealing With
the Data Deluge
101100
1110101010
011011100100100010110010111011011101010110110010010101
01
1101
01
011010
0010101100111100100111001101010111110101000101010100010011001110101010
010101
101100111010101001101110010010
0010110010111011011101010110110010010101
10
001010
0101011001111001001110011010101111101010001010101000100110011
011110101010110
Virtualization
101010011011100100100010110010111011011101Tiering
010110110
01011
SRM&&Backup
Backup
SRM
101011101011100101010100
Thin
Thin
1011001110101010011011100100100010110010111011011101010110110010010101
Deduplication
Provisioning
Provisioning
Compression
010
0010101100111100100111001101010111110101000101010100010011001110101010
010
1011001110101010011011100100100010110010111011011101010110110010010101
01
0101011001111001001110011010101111101010001010101000100110011
0111101010
1010100110111001001000100010111011011101010110110
1010111010111001010101
You need a portfolio
of tools to contain storage growth.
1011001110101010011011100100100010110010111011011101010110110010010101
1011
00101
0101011001111001001110011010101111101010001010101000100110011
01111010110100
5. Reduce Power and Cooling Needs (1)
Heat Load
per Rack
(kW)
'00
'02
'06
'09
'12
2
6
24
40
??
"I don't think she can hold out much longer, Captain!"
5. Reduce Power and Cooling Needs (2)
100%+
New Design Approaches
• Build only what you need
• Modularize data center
design
• Plan for increasing rack
density
• Utilize containment vs.
open environments
• Consider slab vs. raised
floor
• Implement energy
monitoring tools
Impact relative to
traditional
approaches
Cost
Space
Power
Facility
Life
30%
50%
Out with the old; in with the new!
60%
7. Push Down IT Support
Cost per
Transaction
Higher-Cost Scenario
Level 3
Outage
App. Support
Level 2
System Admin
How-to
Level 0
Password Resets
Level 1
Break/Fix
Lower-Cost Scenario
Strategic Staff
Resource
$100 to
$500
Technical Staff
Resource
$35 to
$250
Service Desk
Analyst Resource
$10 to
$37
Break/Fix
$1 to $10
How-to
Password Resets
Intranet/Internet
Self-Service
Self-service requires investment
Outage
App. Support
System Admin
8. Streamline IT Operations
ITIL
Se
De rvice
sig
n
IT Operations Process Management
e
Servicons
ti
Opera
ice on
v
r i
Se nsit
a
Tr
Service Delivery
•
•
•
•
•
Service-level
Financial
Capacity
Service continuity
Availability
Service Support
•
•
•
•
•
Incident
Problem
Change
Configuration
Release
Integrated Service Desk
ITIL
Source: ITIL
ITIL can optimize costs!
9. Enhance IT Asset Management
•
Review available ITAM data to ascertain cost optimization opportunities
such as:
-- Extend life of certain assets
-- Defer upgrades
-- Combine contracts to obtain higher volume discounts
-- Eliminate/combine software licenses
-- Replace maintenance contracts with time and materials approach
•
Assess ITAM processes to identify gaps in process, policy, tools and
staffing affected by virtualization.
Are you among the 50% that do NOT have
an effective ITAM program?
10. Optimize Multisourcing
Business
Consulting
Planning
& Design
Project
Management
Service
Management
.
Financial
Advanced
Management Technologies
Value-Added: Increasing Focus
Commodity: Decreasing Focus
Equipment
Minor
Maintenance Engineering
Moves,
Adds &
Changes
Troubleshooting
Let go, get help and FOCUS
Legacy
Systems
Ten Key I&O Cost-Containment Actions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Defer Noncritical Key Initiatives
Re-examine Networking Costs
Consolidate I&O
Virtualize I&O
Reduce Power & Cooling Needs
Contain Storage Growth
Push Down IT Support
Streamline IT Operations
Enhance IT Asset Management
Optimize Multisourcing
No "magic bullet"!
Tools:
Poll question—Participate in live research
Thinking about ALL the I&O cost containment actions presented today,
how far along do you estimate that you are to FULL
implementation?
1.
0 to 10 percent
2. 11 to 25 percent
3.
26 to 50 percent
4. 51 to 75 percent
5. 76 to 100 percent
Please select the option that best fits your situation.
Responses are confidential.
Determine Cost Optimization Actions That
Have the Greatest Remaining Potential
Cost Structure
Reduction Action
Percent Potential
I&O Savings
(Through 2012)
Percent
Complete
(As of 1/2010)
Remaining Percent
Potential I&O
Savings
(Through 2012)
0%*
55%
0.0%
Re-examine networking costs
15.0%
0%
15.0%
Consolidate I&O
10%
45%
5.5%
Virtualize I&O
10%
40%
6.0%
Reduce power & cooling
5%
45%
2.7%
Better control storage growth
5%
40%
3.0%
Push down IT support
2%
40%
1.2%
10%
45%
5.5%
Enhance IT asset management
3%
50%
1.5%
Optimize multisourcing
5%
35%
3.2%
Defer noncritical key initiatives
Streamline IT operations
Through 2012, most enterprises can likely
lower their I&O cost structure by 25%+
Assess the Impact of Potential Cost
Optimization Actions
Cost Structure
Reduction
Action
Cost
Savings
Benefit
Customer
Impact
Payback Organization Technical
Time
Impact
Risk
Defer noncritical
key initiatives
Re-examine
networking costs
Consolidate I&O
Virtualize I&O
Reduce power &
cooling
Better control
storage growth
Push down IT
support
Streamline IT
operations
Enhance IT asset
management
Optimize
multisourcing
Excellent (10%+) cost
reduction/little or no impact
Good cost reduction (5%10%)/moderate impacts
Fair cost reduction (<5%)
/major impacts
Investment
Level
Cost Optimization: What Comes Next?
• Process automation
• New client architectures
• Data center infrastructure convergence
• Unified communications
• Hybrid cloud computing
Poll question—Participate in live research
Of the following FUTURE I&O cost savings
opportunities, which ONE do you consider the
MOST promising:
1.
Process automation
2.
New client architectures
3. Data center infrastructure convergence
4. Unified communications
5. Hybrid cloud computing
Please select the option that best fits your situation.
Responses are confidential.
Recommendations
• If you haven't done so yet, compare your costs to
those of your peers.
• Depending on where you are now, fully
implementing these 10 cost-cutting suggestions
can save you 10%+ in the near term and 20%+ in
the long term.
• Examine the next wave of opportunities.
• Fully utilize Gartner's research, tools and advice
to drive down your I&O cost structure.
Related Gartner Research
Î "Essential Gartner Research to Address I&O Leaders'
Key Challenges From 2010 Through 2011" G00174372
Î "10 Key Actions to Reduce IT Infrastructure and
Operations Cost Structure" G00170304
Î "How to Significantly Reduce Networking Costs"
G00174653
Î "IT Infrastructure and Operations Key Initiatives, 2010
and 2011" G00174909
Î "IT Key Metrics Data 2010: Index of Published
Documents and Metrics" G00172684
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