How to Significantly Reduce IT Infrastructure and Operations Costs Jay Pultz This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2010 Gartner, Inc. and/or its affiliates. All rights reserved. Welcome! Thank you for joining us on today’s Gartner webinar. 10,800 Client Enterprises 60,000 Clients 100,000 IT End-User Inquiries 5,500 Benchmarks 65% of Fortune 1000 80% of Global 500 2.7 Million IT End-User Searches 730 Analysts Serving Clients in 80 Countries 55 Conferences 10,000 Media Inquiries 3,800 CIOs This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2010 Gartner, Inc. and/or its affiliates. All rights reserved. 1 How to Significantly Reduce IT Infrastructure and Operations Costs Jay Pultz This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2010 Gartner, Inc. and/or its affiliates. All rights reserved. I&O: 60% of the IT Budget! Data Center (20%) Non-I&O IT Costs (40%) Other (3%) Support (7%) Network (18%) Client Computing (12%) I&O Costs Poll question—Participate in live research When do you expect that your I&O budget will return to pre-recession levels? 1. Already has (2010) 2. 2011 or 2012 3. Beyond 2012 4. Never 5. We weren’t significantly affected by the recession Please select the option that best fits your situation. Responses are confidential. 4 Ten Key I&O Cost-Containment Actions 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Defer Noncritical Key Initiatives Re-examine Networking Costs Consolidate I&O Virtualize I&O Reduce Power & Cooling Needs Contain Storage Growth Push Down IT Support Streamline IT Operations Enhance IT Asset Management Optimize Multisourcing No "magic bullet"! Tools: 1. Defer Noncritical I&O Key Initiatives Data Center Modernization and Consolidation Virtualization ITIL and Process Improvement Windows 7 and Office VoIP, Unified Communications & Collaboration Mobile Enterprise Strategy Defer Key Initiative if 1) isn't needed by business, 2) doesn't lower costs, or 3) doesn't help to prevent I&O "meltdown" 2. Re-examine Networking Costs Network Costs Cost Reduction Action Telecom Services (45%) Personnel (35%) Hardware/ Software (15%) Other (5%) Percent Potential Net Savings (Next 12 Months) Percent Potential Net Savings (3Years) (Re) renegotiate TSP contracts 8% 20% Pay for just what you have (enhance TEM) 3% 5% Buy just what you need (optimize net design) 4% 25% 15% 50% Total Since networking is ~ 30% of I&O costs, these actions may reduce I&O expenses more than 4% near-term and 15% longer-term 3. Consolidate I&O (1) Drivers • Lower TCO (typically ~ 20%) • Control server sprawl • Enhance manageability, service quality, agility, security, disaster recovery … Inhibitors • Politics • High CAPEX • Long Payback ~ 18 months + • Implementation risk • Networking Have you consolidated ALL that you can? 3. Consolidate I&O (2) Server Evolution Stand-alone Rack Chip Blade Data Center Switching Evolution ? Small Ethernet Switches Terabit-class Switch Data center switch consolidation is often overlooked 4. Virtualize I&O • 50%+ lower hardware and power costs • 4:1+ utilization improvement • Control further sprawl • Asynchronous deployment, rapid installs • Enhance manageability, service quality, agility, disaster recovery … Virtualization changes virtually everything! 6. Contain Storage Growth: Dealing With the Data Deluge 101100 1110101010 011011100100100010110010111011011101010110110010010101 01 1101 01 011010 0010101100111100100111001101010111110101000101010100010011001110101010 010101 101100111010101001101110010010 0010110010111011011101010110110010010101 10 001010 0101011001111001001110011010101111101010001010101000100110011 011110101010110 Virtualization 101010011011100100100010110010111011011101Tiering 010110110 01011 SRM&&Backup Backup SRM 101011101011100101010100 Thin Thin 1011001110101010011011100100100010110010111011011101010110110010010101 Deduplication Provisioning Provisioning Compression 010 0010101100111100100111001101010111110101000101010100010011001110101010 010 1011001110101010011011100100100010110010111011011101010110110010010101 01 0101011001111001001110011010101111101010001010101000100110011 0111101010 1010100110111001001000100010111011011101010110110 1010111010111001010101 You need a portfolio of tools to contain storage growth. 1011001110101010011011100100100010110010111011011101010110110010010101 1011 00101 0101011001111001001110011010101111101010001010101000100110011 01111010110100 5. Reduce Power and Cooling Needs (1) Heat Load per Rack (kW) '00 '02 '06 '09 '12 2 6 24 40 ?? "I don't think she can hold out much longer, Captain!" 5. Reduce Power and Cooling Needs (2) 100%+ New Design Approaches • Build only what you need • Modularize data center design • Plan for increasing rack density • Utilize containment vs. open environments • Consider slab vs. raised floor • Implement energy monitoring tools Impact relative to traditional approaches Cost Space Power Facility Life 30% 50% Out with the old; in with the new! 60% 7. Push Down IT Support Cost per Transaction Higher-Cost Scenario Level 3 Outage App. Support Level 2 System Admin How-to Level 0 Password Resets Level 1 Break/Fix Lower-Cost Scenario Strategic Staff Resource $100 to $500 Technical Staff Resource $35 to $250 Service Desk Analyst Resource $10 to $37 Break/Fix $1 to $10 How-to Password Resets Intranet/Internet Self-Service Self-service requires investment Outage App. Support System Admin 8. Streamline IT Operations ITIL Se De rvice sig n IT Operations Process Management e Servicons ti Opera ice on v r i Se nsit a Tr Service Delivery • • • • • Service-level Financial Capacity Service continuity Availability Service Support • • • • • Incident Problem Change Configuration Release Integrated Service Desk ITIL Source: ITIL ITIL can optimize costs! 9. Enhance IT Asset Management • Review available ITAM data to ascertain cost optimization opportunities such as: -- Extend life of certain assets -- Defer upgrades -- Combine contracts to obtain higher volume discounts -- Eliminate/combine software licenses -- Replace maintenance contracts with time and materials approach • Assess ITAM processes to identify gaps in process, policy, tools and staffing affected by virtualization. Are you among the 50% that do NOT have an effective ITAM program? 10. Optimize Multisourcing Business Consulting Planning & Design Project Management Service Management . Financial Advanced Management Technologies Value-Added: Increasing Focus Commodity: Decreasing Focus Equipment Minor Maintenance Engineering Moves, Adds & Changes Troubleshooting Let go, get help and FOCUS Legacy Systems Ten Key I&O Cost-Containment Actions 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Defer Noncritical Key Initiatives Re-examine Networking Costs Consolidate I&O Virtualize I&O Reduce Power & Cooling Needs Contain Storage Growth Push Down IT Support Streamline IT Operations Enhance IT Asset Management Optimize Multisourcing No "magic bullet"! Tools: Poll question—Participate in live research Thinking about ALL the I&O cost containment actions presented today, how far along do you estimate that you are to FULL implementation? 1. 0 to 10 percent 2. 11 to 25 percent 3. 26 to 50 percent 4. 51 to 75 percent 5. 76 to 100 percent Please select the option that best fits your situation. Responses are confidential. Determine Cost Optimization Actions That Have the Greatest Remaining Potential Cost Structure Reduction Action Percent Potential I&O Savings (Through 2012) Percent Complete (As of 1/2010) Remaining Percent Potential I&O Savings (Through 2012) 0%* 55% 0.0% Re-examine networking costs 15.0% 0% 15.0% Consolidate I&O 10% 45% 5.5% Virtualize I&O 10% 40% 6.0% Reduce power & cooling 5% 45% 2.7% Better control storage growth 5% 40% 3.0% Push down IT support 2% 40% 1.2% 10% 45% 5.5% Enhance IT asset management 3% 50% 1.5% Optimize multisourcing 5% 35% 3.2% Defer noncritical key initiatives Streamline IT operations Through 2012, most enterprises can likely lower their I&O cost structure by 25%+ Assess the Impact of Potential Cost Optimization Actions Cost Structure Reduction Action Cost Savings Benefit Customer Impact Payback Organization Technical Time Impact Risk Defer noncritical key initiatives Re-examine networking costs Consolidate I&O Virtualize I&O Reduce power & cooling Better control storage growth Push down IT support Streamline IT operations Enhance IT asset management Optimize multisourcing Excellent (10%+) cost reduction/little or no impact Good cost reduction (5%10%)/moderate impacts Fair cost reduction (<5%) /major impacts Investment Level Cost Optimization: What Comes Next? • Process automation • New client architectures • Data center infrastructure convergence • Unified communications • Hybrid cloud computing Poll question—Participate in live research Of the following FUTURE I&O cost savings opportunities, which ONE do you consider the MOST promising: 1. Process automation 2. New client architectures 3. Data center infrastructure convergence 4. Unified communications 5. Hybrid cloud computing Please select the option that best fits your situation. Responses are confidential. Recommendations • If you haven't done so yet, compare your costs to those of your peers. • Depending on where you are now, fully implementing these 10 cost-cutting suggestions can save you 10%+ in the near term and 20%+ in the long term. • Examine the next wave of opportunities. • Fully utilize Gartner's research, tools and advice to drive down your I&O cost structure. Related Gartner Research Î "Essential Gartner Research to Address I&O Leaders' Key Challenges From 2010 Through 2011" G00174372 Î "10 Key Actions to Reduce IT Infrastructure and Operations Cost Structure" G00170304 Î "How to Significantly Reduce Networking Costs" G00174653 Î "IT Infrastructure and Operations Key Initiatives, 2010 and 2011" G00174909 Î "IT Key Metrics Data 2010: Index of Published Documents and Metrics" G00172684 For more information, stop by Gartner Solution Central or e-mail us at solutioncentral@gartner.com. Two simple steps for increasing the value of today’s webinar experience • Visit gartner.com/webinars • Today’s presentation will be available in 24 hours • See a Schedule of upcoming Gartner webinars (plus replays of previous webinars) and share these resources with your colleagues • Contact your Gartner account executive with any additional questions, comments or to order a complimentary copy of today’s presentation