With the rise of cloud services and the decline of on-premise data centers, some companies are reducing or removing hardware costs from their IT budget; however, servers, storage, security appliances, network infrastructure, equipment for employees, and more should still be factored in when formulating your 2020 IT budget. In order to get the most bang for your buck, find out how to decide which hardware to include in your tech budget, calculate costs, and choose the top and most affordable hardware.
How to decide which hardware to include in your IT budget
Deciding how to allocate funds for hardware can be a challenge -- understanding exactly what you need and prioritizing accordingly can help.
Phil Mogavero, VP of advanced technology at PCM, a leading IT provider of technology solutions, says, "Organizations should start with a top-down approach, understanding key business objectives that can positively impact revenue or increase efficiency. While this will typically result in looking at key applications, one must also understand that server, storage, networking, and security which is not current, will create a house of cards for the success of the business."
Mogavero recommends keeping hardware and software current in order to avoid security issues. "Hardware which is end-of-life is subject to security threats, as it can no longer be upgraded to mitigate new threats, and of course will suffer from downtime as a service contract can no longer be procured."
SEE: Tech budgets 2020: A CXO's guide (ZDNet/TechRepublic special feature) | Download the free PDF version (TechRepublic)
Rob Coenen, vice president at data interconnect company InterOptic, offers this advice: "First, you need to plan for how much compute resources and total data storage you'll need. That'll tell you how many switches and layers of switches you'll need in your data center, which every data center needs to operate."
Coenen suggests companies invest in at least one router, though two would be better. "It's expensive for systems to go down, even for just a couple of hours, so an extra router can help curb this risk." Coenen recommends two points of data egress and states, "You'll want to keep these points separate just in case one gets damaged. Then the other one can keep functioning normally."
Security appliances should also be on the list, according to Coenen, to make sure intruders don't have access to your data.
Top hardware to include in your IT budget
More storage should be a definite consideration for 2020 IT budgets. Hu Yoshida, chief technology officer of Hitachi Vantara, explains, "Big data, analytics, 5G, and data governance will all drive the creation of massive amounts of data next year and therefore storage will be in much higher demand, reversing the declines of the past few years."
Yoshida suggests budgeting for large-scale, high-performance storage. Yoshida states these "will be in demand for real-time applications that cannot tolerate the latency of cloud nor the cost of frequent cloud access. While NVMe will be hyped, ensure that the NVMe system has been architected to take full advantage of the higher speeds; otherwise, the promises of NVMe will not be realized. Storage systems must be able to scale non-disruptively."
Yoshida continues, "Object storage, in particular, with its ability to manage large amounts of data from edge to core to cloud, across globally distributed sites, with custom metadata tagging and built in query capability will be in demand. Object storage can provide low-cost erasure-coded storage nodes for private clouds and leverage S3 storage in the public cloud."
Larry O'Connor, founder and CEO of Other World Computing (OWC), echoes Yoshida regarding the inclusion of NVMe-based storage in 2020 IT budgets. He says, "Having SSD/NVMe-based storage is one of the best investments today, with respect to improving system-wide performance."
O'Connor continues, "Employing or contracting the right expertise for systems management (especially for network QoS, efficient routing, and virtualization management) is huge. Although it's not all about the hardware, you definitely need to have the right hardware to get the right results, but without the right configurations and deployments, the best hardware can't offset soft bottlenecks."
Coenen notes that companies should consider a load balancer. "Its job is to keep network traffic moving around as smoothly as possible to avoid choke-points when there's too much network traffic for one server to handle. If it sees one server is sucking in or blasting out a lot of traffic, it'll move traffic around to other circuits to accommodate that," explains Coenen.
How to calculate hardware costs for your IT budget
Calculating hardware costs can range from simple to difficult, depending on the company and its hardware needs. Mogavero explains, "The simplistic formula should be equipment cost amortized over the lifetime (five years is a good basic rule of thumb) + maintenance cost + annual operating cost (people to manage + power and cooling + telecommunication cost). There are subjective values which are the cost of downtime, the cost of breach, etcetera."
Ryan Carter, senior information technology consultant at Maner Costerisan Business Solutions, suggests companies break expenditures into two categories: One for in-house, on-premise needs, and the second for cloud or host-related resources. As Carter explains, "Separating these two main areas will help to reduce the sticker shock and sheer number of assets needed."
Carter points out that "for traditional on-prem, the best way to determine what you need is to determine where you are most vulnerable. The only way to pinpoint that answer is by having a Network Vulnerability Assessment (NVA) completed. These studies generally zero in on deficient systems, outdated unsupported software, and equipment that may be misconfigured or end-of-life."
According to Carter, the NVA will help you identify which systems need immediate attention, which will help you assign dollars for hardware and estimate implementation costs of replacement. "Additionally, it will help you calculate environmental risks beyond the simple server replacement. Understanding your business risk tolerance is a good method for budgetary projections for technology projects and updates. Every business has a level of acceptable risk and finding yours will go a long way to flushing out the 2020 IT budget," says Carter.
Michael Colonno, manager of Data Center Solutions at Computer Design & Integration (CDI) LLC, says, "First, a company must decide how they would like to spend. [For example] more and more customers who look at cloud are interested in switching to an OPEX model." Because of this, "vendors are forced to release pricing models based on usage and will typically send more of that product than needed, allowing companies to grow into it and then charging for that additional usage," says Colonno. Once a company has decided how to spend its budget, Colonno explains "it is very important to look into true chargeback/showback so you can understand who is using the hardware and how."
Yoshida suggests that there are "four key principles of IT economics that apply to IT budgets." He outlines these four principles as:
- The price of IT infrastructure is not the same as cost. Purchase price is under pressure to be sure, but this may only represent a small fraction (<20%) of the total costs related to owning infrastructure.
- There are at least 34 different (hard and soft) costs that make up the total cost of ownership, and these categories do differ for storage, servers, data protection, networks, etc.
- Economically superior architectures and solutions do exist. We have to first identify and isolate cost sensitivities, so that solutions can be designed to meet the criteria.
- Finally, we cannot improve what we cannot measure. After costs have been isolated and prioritized, we need to measure the costs (baseline) every year to determine if the changes are providing the expected results and improvements.
Affordable hardware for your IT budget
After deciding what hardware your company needs to include and how to calculate your 2020 IT budget, spending it on affordable hardware can help stretch that budget a little further. Mogavero suggests investing in hyperconverged infrastructure and software-defined wide-area networks. Yoshida says storage is the most affordable hardware for IT budgets.
Carter says, "Some of the most affordable and simple upgrades are business-grade desktops with Windows 10 Pro installed. Not only will the desktop speed boost staff productivity, but knowing the hardware is covered under warranty will make your desktop techs happy." Carter suggests core network and IDF switches because "[they] are typically easy to upgrade and replace, and boost data throughput speeds while ensuring the hardware is supported by the manufacturer for security firmware updates."
O'Connor believes that employee computers should be part of the IT budget: "In general, we deploy Macs to our employees, and they benefit from a lower cost of deployment, require very little upkeep/IT engagement during their deployment, are easy to administer, and they last forever -- usually well beyond 5 years without negative user impact. The most costly IT impacts are those that impact a team member's ability to get work done."
O'Connor also recommends upgrading employee monitor/display size for the sake of productivity, "We have long invested in larger displays, and dual-display setups are very standard in our operation today. Even when it was $1,000 to buy a 19-inch display, this was money well spent for the amount of productivity return benefit from a team member versus a 13-inch or 15-inch display. Investments in hardware that benefit an employee has one of the greatest returns possible."
Dell's OptiPlex 7070 Ultra, an all-in-one PC that separates the computer from the monitor, may be a viable option for your 2020 budget, as it was engineered to allow displays and PCs to be upgraded separately for better ROI. Dave Lincoln, vice president of commercial fixed computing at Dell, explains, "With the Dell OptiPlex 7070 Ultra, an IT team can customize and upgrade individual components of the solution at a reduced cost, getting more value from the machine over its lifetime. When it comes to IT budgets, a machine may look cost-effective on paper, but it could produce hidden costs if it's underutilized, not the right fit for the space it occupies, or does not provide the performance required."
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