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Sunday, April 10, 2011

Do you need computer equipment, networks, and people to support them?

IMHO, we have reached a point in time where today's business enterprises need to carefully evaluate the money they are spending on computer systems or "IT" and the ROI that they are getting from traditional business as usual IT.

In today's world you must ask yourself if you are really getting your money's worth from your IT organization at all and begin to look at the alternatives.

I suggest you create a clean slate as if you had never had any internal computer systems. Then carefully evaluate what you need, what kind of people you need, and how to proceed to develop a Computer systems support structure that makes sense for your organization.

One of the first questions I ask you to consider is whether you need those expensive mainframe, mid-range, or server farms of Windows or Linux based computers that you have at various locations throughout your  organization. 

To analyze hardware costs and effectiveness, what is the total annual cost of your hardware including your amortization or depreciation if you purchase the equipment?  What is the annual hardware support costs for theses systems? 

What is the software cost of the Operating Systems and/or utility software for backup, software management, and many other internal tasks that have no direct business return?

How many people do you have on staff dedicated to maintaining, operating, or supporting the machines and their operating software that provide no direct benefit to the business?

For a large organization this number can exceed $50 Million per year.  In mid-size organization it can easily reach $1 million.

Add to this mix the cost of your internal computer networks, leased telephone lines, connections by an Internet Service Provider to the Internet, and the people required to support your networks? 

Thus far, we haven't talked about a single penny that has a direct ROI to the business.  This often huge expense is related to providing a computing environment upon which to run 3rd party software or your own internally developed software.

So you say, what is the alternative? 

Simple, cloud based hosting with  reputable cloud based hosting company. 

You can get all the benefits of in-house computer systems and actually much more by outsourcing your computer hardware to a third party cloud based hosting company.  Please note that I do not recommend any particular vendor, but here is what I would look for:

  • Ability to run PHP & LAMP stack based applications
  • Ability to run Java applications and support common XML based communication protocols such as SOAP.
  • Ability to support and host Microsoft Windows applications in a virtual hosting environment, [eliminate the need for Windows servers and support staff], enable support for mobile devices like the iPAD, Blackberry, iPhone, Android devices, etc.
  • All User interfaces should be via the Internet.  Note: internally all you need to do is establish wireless networks to enable your business users and their computers or devices to connect to.
Your Vendor should provide:
  • Daily backups of various types.  
    • Server backup optimized for rapid restore.
    • Your data back up with the ability to down load to your location daily.
  • Replication to a physically separate data center (in a geologically safe location -- two centers in Los Angeles would be vulnerable to earthquake, two in close proximity in Florida may be subject to hurricane, two in St. Louis, Missouri would be subject to flood, etc. 
  • Highspeed maximum capacity bandwidth on their internet connections.  
  • Dynamic configuration so you can increase computing capacity, memory, bandwidth, etc. both on an as needed basis as well as a fixed allocation basis.
  • 24 x 7 x 365 help desk and support 
    • Hardware, software, and operational issue support
    • Internet support such as spam protection, assistance with avoiding spam blacklists.
    • Domain names and services
You will find that a good reputable hosting company (there are several very large and reliable companies) can provide all of the services that your own people and systems provided, usually at a fraction of the cost.  Additionally, there are no huge budgetary battles when you need additional capacity as these vendors sell you what you need and enable you to easily add more capacity on demand.

I'm going to stop here in this post, but in my next post we will talk about your systems development organization, programmers, and all of the technology that vendors want to sell you to support your business applications.

1 comment:

  1. I am agree with your article. But due to some extent it became very massive usage of computer systems.
    dean graziosi