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How to make a hybrid IT infrastructure more cost effective and agile

With the help of virtualized cloud, your hybrid IT infrastructure will be more cost effective, less fragile, and more agile.

When it comes to moving from legacy solutions to hybrid IT, many enterprise IT organizations—large and small alike—take the "if it ain't broke, don't fix it" attitude. And with their budget woes, they can hardly be blamed for that philosophy.

An oft-cited Gartner study, now more than a decade old, estimated that 80 percent of all IT money is spent merely "keeping the lights on." These funds are what is called "dead money" because they cannot be spent on innovations or emerging technologies.

Despite all the hype surrounding digital transformation, things have not changed much overall in the past decade-plus. Gartner has more recently found that infrastructure and operations (I&O) spend comprises approximately 60 percent of IT budgets. Meanwhile, a recent McKinsey Global Survey reportedly found that 54 percent of the "top" IT organizations were dedicating between 11 and 40 percent of their budgets to innovation.

These statistics may well represent improvements, but it is worth noting that none of the so-called top organizations in the McKinsey study had devoted more than 40 percent of their budgets to anything other than dead-money work. Industry analysts and pundits argue that percentage should be higher.

Hybrid and Goliath 

Smaller, "non-top" companies seem to be able to do this more easily. The same McKinsey study found that at least some (between 6 and 9 percent) of the lower tier companies surveyed have indeed been devoting more than 40 percent of their budget to innovation and digital transformation. Here, enterprises in developing nations and small, nimble startups share something in common: Both are running circles around more established (and for that matter, entrenched) IT organizations in first-world North American countries because they have far less legacy hardware to rip and replace to begin with; they can go directly to a virtualized cloud environment for pennies on the dollar.

While it thereby would be unfair to expect major first-world enterprises to completely transform all of their IT operations from top to bottom, abandoning everything legacy in the process, it is nonetheless incumbent upon the IT leaders of these technologically entrenched big boys to move to a hybrid IT environment—one that is at once cloud-friendly and appropriately virtualized—for the good of their budgets. Consider the following:

  • Gartner reports that acting on hybrid IT technologies (especially virtualization) today will play a key role in IT cost savings, reducing IT departments' I&O costs by 25 percent come 2020.

  • Hewlett Packard Enterprise and VMware report that virtualization, including IT integration with virtualization platform management tools, can help enterprises enjoy a 30 percent reduction in long-term hardware costs.

  • VMware further reports that its virtualization platform for server consolidation, VMware vSphere with Operations Management, offers a savings in excess of $3,000 annually per virtualized server workload— along with a potential cost deferment on data center construction up to $1,000 per square foot.

On top of these factors, hybrid IT technologies have been shown to play a crucial role in enhancing the efficacy and efficiency of enterprise revenue streams, particularly where cost savings are concerned. As such, hybrid IT also means reduced fragility.

And, in turn, more money.

The Strategic CIO's Playbook: How to create an IT environment that drives business growth.

Fighting fragility: Simplify, simplify, simplify (with new tech)

Sometimes called "complexity," fragility is simple to describe: The more moving parts your IT environment has, the more it costs you, regardless of how it is constructed. The superfluous elements require more maintenance, and more things can go wrong with them—hence, they are fragile. Building simplicity and resiliency into your IT infrastructure is thereby essential to maximizing IT cost savings. Counterintuitive as the proposition may be, the older, more entrenched, and more "legacy" your IT infrastructure is, the more expensive it is.

By corollary, incorporating a virtualized cloud environment into an otherwise legacy (and fragile) IT infrastructure can reduce costs because of how well virtualized cloud lends itself to simplicity and resiliency. Each layer of the technology stack can be virtualized and ported to the cloud, meaning fewer moving parts in a one-stop cloud shop. As more enterprise IT components become cloud-enabled or virtualized, it is this extension of enterprise connectivity inherent to hybrid IT environments that make those environments more resilient overall. They are less fragile.

And yet, this all represents but one of two components essential to the transition to and maintenance of a hybrid IT environment: Just as the hybridization of IT reduces fragility, it necessarily enhances agility.

This is yet another way of saying that hybrid IT means more money—albeit on the other side of the balance sheet.

Amplifying agility: Fast money

"Agility" has become something of an enterprise IT buzzword. Many IT experts have difficulty defining it and even disagree on it (particularly where the balance of CapEx and OpEx is concerned).

Agility is not so much about a reduction of expenditures (whether they be capital or operational), however, as it is about adding value. Whereas reducing fragility is about cost reduction, fostering agility in a hybrid IT infrastructure is about making it easier—and creating new ways—to make money faster, in greater amounts, and more efficiently. This can include deploying new services or applications, reducing time to market, expanding business models, and even developing new revenue streams altogether.

Agility in the hybrid IT environment can also take the form of redundancy—particularly where storage and other essential functions are concerns—so as to avoid costly inefficiencies like downtime. Again, this is where cloud computing and virtualization come in. 

The HPE report cited earlier includes a case study of a bank's IT manager who was able to regain 10 hours of his workweek by implementing HPE-powered virtualized storage pools for redundancy—as recovery time plummeted and both patch management and system reliability improved dramatically. As such, the IT manager needed less time for keeping the lights on and was able to reallocate more time to enabling and creating new revenue.

Moreover, as renowned as virtualization and the cloud are for dramatically reducing enterprise IT costs (i.e., reducing fragility), the more convincing argument to make to your CIO or CFO is probably agility-based. Enterprise IT organizations are known for indicating that their moves to digital transformation solutions were motivated not by cost reduction but instead by revenue creation (i.e., enhanced agility).

Still, moving from the legacy environment of so-called central IT to a hybrid IT environment does require upfront and ongoing costs. Therefore, the transition to hybrid IT technology must itself be cost-effective.

Know what you need

The first—and ongoing—step in transitioning to hybrid IT is to enable easy and intuitive visibility into your entire IT workings, both on premises and, especially, in the cloud. In addition to helping fight the scourge (and added cost) of shadow IT, unified platforms for measuring and monitoring your organization's levels of cloud consumption and other service utilization are imperative for controlling hybrid IT costs.

For starters, enterprises, especially those whose IT organizations are new to the cloud, rarely have an accurate picture of how much cloud they really need. Cloud oversubscription runs rampant in the industry. Ancillary fees tacked on top of normal subscription costs are similarly common, and cloud service-level agreements are full of costly traps for unwary IT managers who skim the fine print. 

Perhaps the bigger issue, however, is that enterprise IT organizations—often faced with generic directives to "virtualize" and "go to the cloud" from a C-suiter buying into the buzz—frequently do not have a clear picture of exactly what they are going to do with their hybrid IT environment once they have it. IT managers are thus well advised to conduct top-to-bottom assessments of what exactly they need, what exactly they use, and where their pain points are.

Cloud and virtualization: The perfect pair

From there, a variety of usage monitoring tools can be deployed. Here, virtualization offers its own self-supporting benefit insofar as virtualization solutions like network functions virtualization and software-defined networking are inherently geared toward real-time network updates. As such, they can be leveraged to help efficiently monitor both cloud and local network usage in the hybrid IT environment.

Moreover, virtualization and cloud are both highly flexible and highly scalable. Accordingly, when enterprises face the conundrum in their hybrid environments of whether to risk vastly overprovisioning or downtime due to underprovisioning, the easy solution lies in cloud-based virtual network functions (VNFs). In a virtual cloud, VNFs are able to navigate network inefficiencies and help prevent network congestion by scaling out bandwidth loads as circumstances demand, improving the virtualized infrastructure as they go along.

"There [are] so many different factors to influence application performance that cloud makes it really easy to add more virtualized servers," says Chris McReynolds, vice president of core network services for product management at Level 3 Communications. "If the performance doesn't get any better, it at least helps you troubleshoot where the issue might be."

Hence, the keystones of transitioning to hybrid IT infrastructure, cloud computing, and virtualization perpetually work to support each other, adapting with and around each other as both local and cloud-based network needs evolve. As such, for the hybrid IT CIO, they are the ultimate gifts of efficiency that keep on giving—fighting fragility, adding agility, and resurrecting the organization's dead money for digital transformation.

Consolidate and virtualize: Lessons for leaders

  • Consolidation and virtualization apply to almost every infrastructure.
  • Virtualized environments can make existing legacy IT more robust.
  • Managing costs is still a major central IT priority.

Related links:

Forrester report: Hybrid IT strategy insights - Composable infrastructure and business breakthroughs

Misconceptions about the Cost of Consuming IT in Your Data Center

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.