How a Pandemic is Driving Innovation

From grocery store clerks to physicians and nurses, COVID-19 made us keenly aware of the people on the front lines ensuring life would go on, and that we were kept safe. 

According to a series of new studies, businesses of all sizes are starting to look at the cloud as a new kind of essential service. With the shift to remote work and digital operations, innovation in the cloud has never been so critical.  

Cloud Adoption was Already Speeding Up Before COVID-19 

Numerous studies conducted just before the COVID-19 outbreak showed businesses were already expanding their journey to the cloud. A Softchoice survey of North American leaders found 66% of businesses intended to go cloud-first” on all new workloads. 

We also found that 37% of businesses were starting to look to cloud as an innovation engine, that is using cloud infrastructure to build new applications and services or unlock new insights from their data. At the same time, O’Reilly’s Cloud Adoption in 2020 study said almost half of all businesses planned to move 75% or more of their applications to the cloud by 2021. 

Along came the devastating global pandemic. Instead of seeing massive cuts to cloud budgets and initiatives, however, we saw IT leaders move to the cloud faster than before.  

 In one poll40% of respondents said COVID-19 was accelerating their move to the cloud. Meanwhile, 76% said the pandemic had led them to increase their spending on private and public cloud infrastructure services, including Amazon Web Services (AWS), Microsoft Azure and Google Cloud. 

 Why Cloud Innovation is Accelerating 

 All of this makes perfect sense when you consider what businesses are facing — and how the cloud can help them overcome it. Stay at home orders, social distancing and a radical shift in consumer behavior has forced businesses to rethink workplace experienceand go-to-market strategies almost overnight.  

“What you are going to see is an acceleration of more people going 100% to the cloud,” said Mary Treseler, O’Reilly’s vice president of content strategy in an interview with Tech Republic 

As businesses get back to (relative) normal, business and IT leaders are looking to the future with some uncertainty. They do not want to be caught off guard again, and they are looking to the cloud to shore up remote work and other business continuity capabilities.  

Don’t Take Our Word for It  

This pandemic-prompted innovation meshes with what we’ve learned through this year’s virtual Innovation Executive Forums. Two stories stand out from our recent event with senior IT leaders in Central Canada, showing just how fast innovation happening now. 

After COVID-19 shut down operations, an IEF member in the food retail industry worked with legal and finance teams to create a new curbside pickup and eCommerce application. The new app took just three weeks to launch. 

Another IEF member in the travel industry said his business lost almost 95% of its revenues in April and May. In response, the IT leader helped the business lay the groundwork to deliver more tailored, end-to-end travel experiences. He says IT has had to shift priorities and shorten delivery timelines to help the business survive 

In both of these stories, IT was forced to act quickly to keep the business alive and thriving. In each case, relying on cloud infrastructure, platforms and applications made a rapid response possible 

Speed Bumps Expected  

In our cloud adoption research, Softchoice found that security and compliance concerns were among the top hurdles keeping businesses from moving to the cloudBusiness leaders also struggled to recruit and retain the specialized talent needed to manage cloud infrastructure and control costs.  

Now that the pandemic has accelerated cloud adoption, don’t expect these challenges to disappear. In fact, because speed is now part of the equation, we expect these challenges to become even more important to navigate in the months ahead. To do that, finding the right partner – such as Softchoice – can make all the difference.  

 For more information on surviving and thriving in the COVID-19 era with cloud innovation, download our research brief, “Cloud: An Innovation Engine.” 

How to Add to Your IT Environment without Adding Costs

Part 2 of our 2-part series on Driving Efficiency through Infrastructure Optimization. Read Part 1 “Where to Find Cost Savings in Your Cloud or Data Center Environment

In the response to the current global crisis, short-term cost reductions have been prioritized by many  organizations looking to keep their businesses viable during the economic downturn.  Quite often they are looking to drive greater efficiency in their IT environments.

However, as organizations move from efficiency into recovery and beyond, the need to add new applications and workloads won’t disappear. It’s important for organizations to consider ways to optimize infrastructure to add new workloads while incurring minimal or no additional costs.

Why is this so important?  In the data center, 67% of organizations over-invest in data center storage while 33% have run out of capacity or experienced high utilization that impacted up-time (Source: Futurum Research). In the cloud, 60% of organizations have overspent their planned budgets at some point (Source: Rightscale).

Organizations that sustain efficiencies found in the short term will equip themselves to compete and thrive in recovery and beyond. This is where looking into the data center to find excess capacity and resources, tiering storage appropriately and choosing cloud over new servers all come into play.

Here are the steps you can take to optimize your infrastructure to add new workloads cost effectively by optimizing the on-premise data center and moving the right workloads into the cloud.

Optimizing Your On-Premise Data Center

As application workloads change, the optimal infrastructure setup to support them changes, too. When the time comes to add new applications to the IT environment, adding new hardware or spinning up new workloads in the cloud without a plan in place often results in unnecessary waste.

Instead, look for opportunities to optimize existing data center infrastructure to support new workloads without additional costs.

The following actions will help you understand your applications and ensure you have each running on the ideal compute and storage resources:

  • Take a comprehensive inventory: Use data collection tools to gather a holistic view of your existing on-premise environment, including devices and workloads. Capturing and analyzing current usage and performance data will uncover opportunities for greater efficiency. In turn, this data can inform your decisions about where to make changes based on accurate estimates of cost and business impact.
  • Consolidate the data center: Now is the time to assess the business value of owning multiple data center sites and whether there is an opportunity to consolidate these. Shutting down unnecessary sites and leveraging lower-cost cloud backup and disaster recovery could provide considerable infrastructure efficiency benefits.
  • Defer data center refresh costs: If you have hardware devices that have or are about to reach end-of-support (EOS) or end-of-life (EOL) and migrating to the cloud isn’t an option, a refresh may be unavoidable. Fortunately, many hardware providers have deferred some or all upfront costs until 2021 to help organizations through cash flow issues. It may also be worth considering other alternatives to an upfront capital expenditure, such as leasing or pay-per-usage options.

Migrating the Right Workloads to the Cloud

For many organizations, COVID-19 has put plans to migrate applications and workloads to the cloud on fast-forward. This has the potential to increase agility and cost efficiency by reducing technical debt and physical footprint associated with the traditional data center.

In fact, the Flexera State of the Cloud Report 2020 finds that more than half surveyed have seen increased cloud usage due to reliance on cloud-based applications since stay-at-home orders came into effect worldwide (Source: Flexera).

Reduced IT operations personnel, difficulties in accessing data center facilities and delays in hardware supply chains have all contributed to this shift.

Nonetheless, not every application or workload makes sense in the cloud. Furthermore, challenges in understanding application dependencies, assessing the feasibility of migration and predicting the costs to run a given workload on-premise versus in the cloud all get in the way.

The following steps will help you identify the best candidate workloads for cloud migration:

  • Assess suitability and identify migration risks: Analyze application, data and dependencies to determine the most suitable workloads for cloud migration and address potential performance and downtime risks.
  • Conduct total cost of ownership (TCO) and return on investment (ROI) analysis: Equipped with insights into applications, you’ll be able to define the infrastructure requirements to run applications in the cloud at optimal performance and cost.
  • Compare the cost-benefit of running each workload in the cloud vs. on-premise: The next step is to estimate the cost and business impact of running a given workload on-prem or in the cloud.
  • Plan and migrate: From here, you can determine the appropriate migration strategy to move workloads into the cloud with minimal risk. With complete and accurate documentation, you can establish the best migration sequence and apply dependency controls to avoid downtime.

Taking steps to optimize infrastructure and minimize the cost of adding new application workloads to your environment is a big milestone on the road to recovery.

We offer the following solutions to assist organizations like yours to move ahead with infrastructure optimization in the data center and migrate the right workloads to the cloud.

  • Workload Assessment: Evaluate the technical feasibility and cost of migrating and running application workloads in the public cloud based on usage, performance and technical characteristics of existing workloads to identify application dependencies, total cost of ownership and cost management considerations.
  • Public Cloud Accelerator: Leverage an operating expense (OPEX) model to meet new workload needs by reducing the risk of deploying workloads to the cloud and mitigating cost overruns based on proven experience earned through hundreds of cloud engagements.

Our team of licensing and technology vendor experts are ready to help you find efficiencies wherever you are in your journey from response to recovery.

Looking for further insights to help  drive efficiency and optimize the infrastructure in your IT environment? 

Watch our webinar, “Cloud Cost Optimization: How to Avoid Overspend and Control Costs,” on-demand or connect with an expert.

6 Steps to Reduce Your Software Spending

In the initial response to COVID-19 most organizations focused on enabling and stabilizing remote access, collaboration, security and network capabilities. As new financial pressures present themselves, leaders in every vertical are now looking for immediate steps they can take to reduce spending.

The Spiceworks State of IT Report 2020 finds that software and cloud-based services represent 51% of IT budgets, making these some of the most impactful areas to look for cost savings.[1]

But a confluence of competing IT priorities, growing complexity around vendor licensing vehicles and limited access to relevant data stalls progress. All this makes it much harder for technology leaders to move ahead with efforts to reduce cost.

To make a strong short-term budget impact, organizations need to seek out redundant and unnecessary software spend and convert those opportunities into savings through the following steps:

  • Discover: take an inventory of all the traditional and cloud software in your environment and measure its actual utilization against licensed consumption.
  • Categorize: sort your software by function, identify redundant spending and prioritize the areas for greatest potential cost savings.
  • Select: develop selection criteria based on your specific needs and select applications you can eliminate and keep based on an informed evaluation.
  • Restructure: find the most cost-effective licensing options for the applications and services that remain and restructure licensing agreements.
  • Maintain: take a proactive approach to reviewing and re-evaluating your overall software licensing strategy on an ongoing basis.
  • Monitor: as an additional step, always be aware of quick win opportunities to reduce costs and take full advantage licensing options and entitlements.

Below, we go deeper into the ways you can find short- and long-term savings on your software and cloud application spending.

Discover and evaluate current software and cloud usage

Determining whether cost matches utilization is a critical first step to optimizing your licensing spend. But having little or no visibility into software or cloud services usage and associated costs makes it difficult to move ahead on efficiency.

Where data does exist, it’s often diluted with false positives, duplicates or questionable installs. In many cases cleansing that raw data into actionable information takes specialized expertise in asset management engineering – a competency not all organizations will have on staff.

Under a cost management mandate, it may be important to isolate unnecessary seats or products, but without clear and accessible usage and cost data, these decisions are made on a best guess basis.

Enterprise-grade discovery tools can help you capture all the software installed in your environment and measure it against usage. Many of these can be accessed at no cost, allowing you to get started on license optimization without using internal resources or budgets.

Categorize the software in your environment by function

With accurate data available, the next step is to categorize your software by function and determine which products aren’t being used or that duplicate functionality.

For instance, organizations may have technologies installed for desktop anti-virus, cloud file sharing or collaboration tools. Many have several examples of each. In some cases, this is intentional, in others it’s not.

In recent years, more line-of-business (LOB) departments have gained some control over the software they purchase and use. Shadow IT has emerged when non-IT departments or individuals have sourced and purchased their own alternatives to approved applications.

By grouping installed software into specific functions, you can very quickly identify areas of redundant spending. Then, you are in a much better position to estimate the cost of unnecessary applications.

Select the applications that are essential to your business

The next step is to build out appropriate selection criteria for your specific needs and decide which software is core to your operations and which is not. Here, it is important to take a logical approach to paring down your software to those products absolutely necessary to the business.

Next, evaluate the cost/benefit of the available licensing options for core services you have identified and execute. In this case, a software vendor licensing specialist may be equipped to help.

It’s also important to ensure the people in your organization use the tools you already have by designing and implementing an appropriate adoption program.

Restructure licenses and contracts to reduce cost and risk

Determining whether you are over- or under-licensed today isn’t enough. Among the software you still need to run the business, there will be many licensing options and vehicles available to help drive further savings.

For example, even after the decision to standardize on one collaboration tool like Microsoft Teams or Cisco WebEx, there may be hundreds of ways to acquire it. To get the most savings, you will need to identify and adopt the ones right for your specific technology and budget needs.

Restructuring contracts to ensure your licensing across all relevant vendors and products can scale up or down as necessary is critical to driving efficiency while you work toward recovery.

There is no one-size-fits-all solution for enterprise software licensing. Where subscription models might work for some, others are better served by a perpetual agreement. For example, some organizations can offset costs by shifting to a subscription or operating expenditure (OPEX) for some software or cloud services. But for those organizations with cash flow or debt covenant issues or those required to assign technology spending to capital budgets, this isn’t an option.

Maintain cost efficiency long-term with a proactive approach

Streamlining your software licensing is not a “one and done” proposition – you may need an ongoing approach to manage licenses over their lifecycle from deployment to End of Support/End of Life.

Meanwhile, as vendors increase the pace of innovation, unexpected product and program changes could disrupt technology planning and introduce unanticipated costs. Without specialized knowledge of licensing programs and vehicles, you may be exposed to compliance risks or even audit failure. Building an effective strategy for negotiating license agreements and renewals is a complex but necessary step.

Keeping your right-sized licensing strategy current and optimized to take advantage of new opportunities to avoid costs takes a programmatic, data-driven approach. A structured program for enterprise lifecycle management that includes programmatic support and expert guidance in licensing across the major software vendors will help you translate short-term wins into long-term efficiency.

Monitor for short-term opportunities to reduce costs

In response to COVID-19, you may have introduced new software to enable remote work, such as modern collaboration, virtual desktop infrastructure (VDI) and security products. At the same time, you may have adopted or shifted some infrastructure or application workloads into the public cloud.

Without knowing the licensing options available, you may end up spending more than necessary. Many organizations fail to take full advantage of licensing benefits and free services vouchers they are already entitled to or didn’t know were available.

It’s important to stay ahead of new options or creative alternatives to adjust your licensing models or access financing options could net savings in the short term. A structured enterprise lifecycle management program will help you identify these opportunities as your business needs evolve.

Next Steps to Reducing Your Software Spending

Reducing your software and cloud services costs for the long term may require the help of an experienced and specialized solutions provider like Softchoice.

Making changes or adjustments to contracts and licensing without the right knowledge or insight into vendor-specific licensing programs and vehicles could create compliance issues and audit risks.

Our team of licensing and technology vendor experts are ready to help you find efficiencies wherever you are in your journey from response to recovery.

Looking for more insight on reducing your software spending?

Watch our virtual workshop, “Creating Efficiency through Software Rationalization and Contract Restructuring” on-demand.

 

[1] State of IT Report 2020, Spiceworks, 2020.