Avoid the high cost of doing nothing

All costs matter. But hidden costs can matter even more. Why? Because they can undermine an otherwise seemingly healthy P&L and balance sheet — if not now, then in the future.

Hidden costs can take many forms. They can be ones that are overlooked or ignored. But one thing’s for sure: eventually they must be addressed. Such is the case with outdated IT infrastructure. And, in today’s world of fast-paced technological advances, doing nothing is not an option if an organization expects to keep pace with its competitors.

Hidden costs of outdated IT infrastructure — a closer look

Looking at the issue of outdated IT infrastructure from a strictly financial standpoint, the cost of any hardware that’s more than five years old may be fully depreciated, so its only expense is operating it, or OPEX.

But often that OPEX can outweigh the capital expense that new IT infrastructure entails. According to a leading IT market researcher, the many advancements of hardware architectures and components in recent years have led to dramatic improvements in performance, consolidation, space savings, management efficiency and reliability.

Given these improvements, it’s estimated that, compared to organizations with up-to-date hardware, those with older hardware could be:

  • Losing up to 39 percent of their peak operational performance
  • Incurring up to 40 percent more in application management costs
  • Suffering up to 148 percent more in server administration costs

Now, contrast these hidden hard costs with hidden opportunity costs. Take, for example, organizations that could have their IT staffs working on innovative services to generate new revenue and improve competitiveness instead of babysitting infrastructure. Or, consider those businesses that can respond faster to market trends by developing and deploying new applications much more quickly. Either way can help make them winners.

Six ways upgraded IT infrastructure can benefit organizations

Today’s hardware can be architected in many different ways, using a variety of hardware designs and combinations of software, flash drives and memory to maximize application performance. Based on benchmark performance research conducted for Dell EMC, the following are the kinds of improvements that can be expected by upgrading hardware that’s five years or older:

  • Performance: 18x the performance in same amount of rack space
  • Optimization: 10x the IOPS with SSD flash storage
  • Consolidation: 16x reduction in space, power and cooling costs, due to greater hardware densities, with further reduction in IT staff time requirements
  • Management: 92 percent less IT staff time spent doing manual software updates, thanks to simplified and automated server lifecycle management tools
  • Reliability: More uptime via better design, engineering and manufacturing — plus proactive alerts with remote diagnostics and remediation capabilities not previously available
  • Service: Reduced maintenance and spare parts costs due to aging and expiring warranties

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Source: IDC white paper sponsored by Dell: “Why Upgrade Your Server Infrastructure Now?” July 2016

About the Author: Sam Miller

Sam Z Miller serves as Vice President, Inside Sales for Dell’s North America Commercial business consisting of small and medium business commercial, public education and government customers. In this role, Sam is responsible for leading sales teams, driving a winning internal and customer culture, and operationalizing Dell’s strategy to enable growth. With 15 years of experience at Dell, Sam has a deep expertise of working closely and strategically with customers, partners and team members. His passion for his people and customers success is the foundation of the culture of his organization. With a focus on talent and experience of building world-class teams, Sam is well equipped to lead Inside Sales. In his previous role, he was Executive Director, Inside Sales for Dell’s Preferred Accounts Division and Emerging Business Division for four years. Other roles within Dell include Regional Sales Director, NAC SMB Acquisition and US Medium Business Sales for 6 years, various sales leadership roles, Account Executive within GCC and almost every inside sales role. Inspirational Leadership and talent development is a key priority for Sam and he is committed to building an inclusive and diverse multi-channel organization that puts the customer first.