For every dollar a business spends on purchasing a server, $8 is spent on managing it, according to converged infrastructure systems provider VCE.
This crack between what businesses are gaining versus what they are actually losing from running their existing infrastructure solutions is starting to show.
An IDC study in May 2013 revealed that the priorities of Australian and New Zealand CIOs have been changing.
VCE Asia-Pacific and Japan CTO Matt Oostveen said that prior to the days of the GFC, CIOs were more concerned about strategies on how they could lower overall cost structure, but by the time the "fog of the economic storm blew away", they started to look at opportunities to improve and simplify their IT infrastructure.
"We've hit a point where we're spending too much money to run these systems than actually acquiring them and this problem has got to change," he said.
"This is why we believe there's been a growing appetite for the conversion infrastructure market."
Fox Sports, a local client of VCE, is one company that realised the inefficiency of its datacentre, as it was "very organic, systems were bespoke, everything was tailored, and it was impossible to maintain".
Fox Sports' CIO Michael Tomkins saw the opportunity to start from scratch when the company announced that it was moving to a newly built office in Artarmon, and to create a software-defined networking infrastructure that would be able to handle the daily movement of 30 to 40 terabytes of files.
As a result, Tomkins said he decided to adopt an internal private cloud built on VCE's Vblock, a converged infrastructure that integrates technologies from Cisco, EMC, and VMware into a single mainframe. It was the most appropriate solution, as it was able to turnaround the new infrastructure rollout that would have previously taken the company 3 to 6 months to implement in just 45 days. It also reduced IT calls within the company by 75 percent.
"Our growth is 3 petabytes a year, so there's a lot of growth, files, and movement, and to have people spend their time maintain the systems that were down 50 percent of the time just because of volumes — I didn't want to repeat that," he said.
"We were looking for simplicity and automation, which comes back to the principle of software-defined networking and the way that works is what has led us to this."
But the main change the company saw, according to Tomkins, was the cultural attitude within the IT team when Vblock was introduced. Team members were eventually redeployed to work on new projects, which lowered total operation costs.
"We had engineers that just wanted to build because they thought that's our job, but we had a cultural change where I wasn't interested in building. I was running a technology and engineering department where I didn't want to build and would try to never build," he said.
"I have more software developers now than actual engineers. I have no system specialists, no IT specialists, no storage specialists, and no networking specialists.
"Basically, I've taken the department and reformed it into logical segments where I have a brain trust where they drive the direction in which we go. I have a development section that is writing software across all platforms and I still have a level one-type IT, but they've merged with broadcast. So the philosophy and culture has changed, otherwise we'd be building silos again, which is where we never want to be."
Oostveen said customers like Fox Sports, along with its other clients, such as Costco, F1 Grand Prix, and Vodafone, have been able to reduce their running costs by 50 percent as a result of installing Vblock.
"Private cloud is bloody hard to build. It's very hard to get the right amount of resources because you're competing with a resource pool, not just in the end-user community, but also the service-provider community," he said.
VCE Asia-Pacific and Japan vice president Paul Harapin said there is a general consensus in the Australian market that running a datacentre is extremely hard work and is "overwhelming" businesses — big and small — which explains why a lot of them are now looking to the cloud as an alternative.
"The cost to run a datacentre is really giving customers a hard time," he said.
"If I talk to any customer about cloud, I ask them: 'Why are you looking at taking things out of your control versus doing it yourself?' They simply tell me it's because of time to market, the cost of complexity every time they do it themselves, and try to support that running, is just overwhelming."
As a result, Harapin said that enterprises are looking at opportunities on how they can bring perceived cloud economics into their own datacentre to optimise what they are doing through an on-premises managed cloud.
VCE president Frank Hauck said the aim of Vblock is to provide an "iPad experience" to help simplify and automate a business' server storage network.
"The idea of Vblock was about having the ability to build out a platform, which could be a general purpose machine that can handle a wide number of applications, but it's also around everything we did, which is about agility and speed," he said.
Hauck also said it's about helping companies redistribute their IT budget spend so there's more focus on new applications and less on infrastructure.
"The 70 percent people usually spend to keep the lights on is just thoughtless, and our idea was to shrink that down so people spend less on infrastructure, and more on applications and business value to drive more revenue on their business."