By Oscar Moncada, co-founder and CEO of Stratus10, an Amazon Web Services (AWS) Advanced Consulting Partner.
Small and midsize companies often face the challenge of managing their IT infrastructure while keeping costs under control. One area where costs can quickly escalate is the data center, which requires a significant investment in hardware, software and maintenance.
As a former software engineer turned cloud consultant, I have worked with many clients who wish to move their large data centers to the cloud. While I’m all for cloud-native, this isn’t always possible. If you can’t make the leap (yet) to cloud-native, we’ve found that with the right strategy, SMBs can effectively manage their data center spend while also ensuring the reliability and performance of IT infrastructure.
Data Center Cost Reduction Measures
Implementation of cost reduction strategies should be prioritized based on the potential impact on cost savings, ease of implementation and risk involved. Each strategy may be employed to varying degrees or not at all.
Virtualization: Companies nowadays know that virtualizing servers reduces hardware costs and increases efficiency of IT operations. But IT leaders must take it a step further by exploring ways to optimize and save on their virtualized infrastructure. Common optimization approaches include using virtual or software-based load balancers and web application firewalls, containerizing applications to make the most out of each virtual machine while also increasing application availability and resiliency, and establishing hybrid backup solutions—whether SaaS-based or from a public cloud provider—to save on storage hardware costs.
Cloud computing and SaaS services: By leveraging public cloud services or other SaaS solutions (such as CDNs, load balancers and WAF solutions) companies can minimize maintenance of on-prem hardware/virtual machines. The economies of scale and pay-as-you-go pricing models of public cloud providers, like AWS or Microsoft Azure, offer a means to reduce costs and tap into additional services.
Energy efficiency: By adopting energy-efficient technologies and practices, such as energy-efficient servers, power management systems, renewable energy sources and even cooling measures like raised floors for air circulation, SMBs reduce their monthly energy costs. Of course, upfront costs and long-term ROI must be considered.
Automation: By automating repetitive tasks in data center processes, including scaling, backups and monitoring, SMBs can improve efficiency and gain back the precious time of their skilled labor.
Consolidation: With a consolidated IT infrastructure, the number of servers and other hardware needed to run applications is reduced. This can include things like consolidating storage systems or multiple smaller servers into a single larger server. Another area IT managers can consolidate to reduce costs is using virtual desktops (like AWS Workspaces or Azure Virtual Desktops) to replace traditional desktops.
Security and testing: Managing cybersecurity should be a holistic and ongoing process to keep things safe from all angles. At a high level, performing regular tests and resolving any remediation items can save you significant costs in the future—not to mention headaches—when it comes to security.
Outsourcing: Outsourcing certain IT services, such as IT security, data storage and backup, allows companies to take advantage of the expertise and economies of scale of specialized service providers rather than having to build and maintain these capabilities in-house.
Naturally, applying a combination of these strategies offers the most comprehensive approach to data center cost reduction. With cloud computing, several cost-saving measures can be tackled simultaneously. By offloading workloads to the public cloud, companies reduce the need for expensive hardware investments, ongoing maintenance and energy consumption. However, the most significant savings are realized when companies take advantage of tools available via cloud providers. This means having a proper cloud strategy in place to make it as cost-effective as possible.
Building A Strategy Around On-Premises Data Centers
While significant cost savings can be achieved by moving to the cloud, that’s a far too over-simplified solution. Much attention has been given to going “cloud-native,” and public cloud providers often push this goal; however, a hybrid cloud approach often proves fitting for many companies.
Business leaders may resist getting rid of their data centers to move to the cloud, and often for good reason. Firstly, they invested a significant amount of time, money and resources into building and maintaining their data centers. Secondly, they’re concerned about security and privacy in the cloud, as they would entrust sensitive data to a third-party provider. Additionally, planning and implementing a cloud migration is an enormous undertaking that requires leadership buy-in, upfront investment, a shift in priorities, skilled resources and staff training. Finally, companies may have concerns about vendor lock-in, comparing it to the same physical infrastructure limitations they currently operate in.
Both a natural process and an effective strategy, a hybrid cloud model can allow companies to effectively make the transition to the cloud over time, selecting which workloads to migrate when and then optimizing their environments. For remaining on-premise workloads and data, services available via public cloud providers can be further applied, thus extending the scalability, reliability and cost-effectiveness of the cloud.
In conclusion, as companies grow and evolve, their cloud requirements change, and a hybrid infrastructure model provides the flexibility to adapt to these changes while ensuring consistency in their overall approach. As leaders realize the combined benefits of running a hybrid cloud infrastructure, it becomes the strategic choice for many businesses. They get to enjoy the scalability, flexibility and cost-efficiency of the public cloud while maintaining control of their private infrastructure.
