Managing IT Costs Before They Manage You
According to the 2013 CIO Survey by Gartner, cutting IT costs is among the top three priorities of enterprises as IT asset expenses are becoming a serious concern for IT management and procurement professionals.
Executives are facing issues with big data, cloud computing, BYOD initiatives, and maintenance fees, among others, which, if not managed properly, could result in rising costs, Gartner reports.
Since businesses gather and analyze even more information in order to improve competitiveness, a further increase in demand for larger databases and storage is expected, claims Alexa Bona, vice president and analyst at Gartner. IT professionals will be required to optimize costs due to the core-based licensing metrics by which software is licensed. They may also be asked to start sourcing data and information, while negotiating and defining new metrics for information services regarding quality and integrity.
The cloud computing market, on the other hand, is on its way to hit $131 billion by the end of the year and is even expected to surpass $180 billion by 2015. Yet IT professionals should be able to offer cost models comparing traditional services with cloud services – and be prepared to explain the risks and benefits of each of them. They also have to be skilled to manage risk, develop demand and risk management tactics, communicate the hidden costs and growing risks of cloud models, and negotiate advantageous terms in their cloud contracts.
Mobile devices, which are both personal and owned by the enterprise, but used for work-related purposes, are bringing new risks in terms of security and additional costs for management and protection.
Software vendors are now more dependent on maintenance fees, which typically book profits of around 85% and make up approximately half of their revenue. In addition, these fees are firmly growing, which makes it difficult for IT asset management and procurement executives to lower, even in cases where the software is not used. To be able to deal with these challenges, IT professionals have to focus on improving their demand management skills and negotiate price protection for maintenance. They also need to avoid buying licenses that are not necessary. Finally, they should understand how emerging third-party maintenance alternatives impact them and become aware of recent European Union regulation on license resale.
When it comes to virtualization, IT professionals are struggling to cut software costs in virtualized environments, and IT managers have difficulties complying with the ever-changing and complex virtualization contracts. This is mostly valid for desktop virtualization, one of the main methods used to support BYOD adoption.
Learn More, Download: Avoiding a Storm in Your Cloud Installation