Is your company big enough to bring your IT crew in-house? Most arenâ€™t. Utility-based computing is an alternative that can eliminate tech burdens and costs.
In today’s business environment, every company is a technology company. Right?
The notion sounds far-fetched until you examine the operational structure of your own business. American companies depend on information, and the only way to guarantee access to crucial data is through a sophisticated network that includes PCs, servers, printers, Internet connections, software and more.
As companies struggle to improve their financial performance in a slowly recovering economy, it’s time to question the wisdom of carrying the technology burden in-house. The massive investment that this technology infrastructure requires, both in cash and man-hours, has prompted reconsideration of a once-discarded notion: utility computing.
An idea that was hatched before its time ?? in the early 1990s ?? utility-based computing now is backed by the technology and economic realities needed for a comeback. And it just might make sense for your business.
Reviving the model
If the business community has learned one thing from the economic downturn, it’s that the most successful companies focus their efforts on their core competencies. Their time and energy is directed at being the best in their chosen field. This means eliminating operational distractions, especially those that can become increasingly complex and costly as the months and years pass.
Technology tends to take on a life of its own, quickly transforming into an IT monster. The challenges it creates can creep into every aspect of a business. The typical small to mid-sized company doesn’t have the time or financial resources to create a world-class IT infrastructure, and as a result:
Expenses for ongoing IT support skyrocket
IT performance and user experience degrades over time
Mobility of IT resources is limited, creating problems for branch offices and teleworkers
License compliance becomes outdated
Data is at risk, since system backups and disaster recovery plans are inadequate
Software upgrades eat up IT staff’s limited time
The concept of utility computing is as simple as flipping a switch. Businesses don’t own the power plants that supply their electricity or the treatment plants that clean their drinking water. Instead, they pay for the electricity and water actually consumed in their offices each month.
Similarly, firms taking advantage of the utility computing model offload the burden of owning, managing and maintaining a technology infrastructure to an IT services provider. They have access to the same applications, data and Internet services. But instead of buying the hardware and software needed to make these services a reality, they pay a monthly subscription fee that is based on the specific features needed.
Utility computing’s perfect storm
Three factors have collided to make utility computing more attractive than ever before. First, the technology industry’s persistent replacement cycle requires equipment and software to be updated every 18 months for optimal performance. While most businesses refreshed their computing assets in the lead-up to a supposed Y2K fiasco, a weak economy forced many to skip the last replacement cycle in 2001. As a result, the vast majority of U.S. businesses are operating IT systems in desperate need of updating ? now.
That leads to the second factor, an economy in slow, steady recovery. While the economic outlook is much-improved over 2001, businesses remain leery about spending precious dollars on investments not considered critical to their core competencies.
Finally, mobility has become increasingly important in today’s workforce. Passing data between users ? whether they work in separate offices, home offices or on the road ? has become critical. Yet most small and mid-sized businesses lack the technological resources to make mobile computing and centralized data management a reality.
All three of these challenges can be solved with utility computing:
Service providers give users access to the latest versions of software, as well as state-of-the-art computing power
Rather than dropping thousands to buy IT assets that will be outdated in a matter of months, companies can simply pay as they go
Utility computing gives users access to the same data and applications, regardless their location
More power for less money
By embracing the utility computing model, small and mid-sized businesses can access Fortune 500 computing power, without paying the high price. In fact, utility computing can reduce the total cost of ownership over the IT lifecycle by 40 percent or more. That equation doesn’t even take into account enhanced corporate productivity, which results from less IT downtime, enhanced IT resources and better access to data across the organization.
When considering a utility computing services provider, companies should evaluate two major factors: the computing resources they will have access to, plus the network operations center (NOC) that will back them up. The provider should allow their customers (small- and mid-sized companies) to have a minimal IT structure in place but still give ubiquitous access to users. They should be able to get data, work on applications and download e-mail from any remote location. Key to any provider is its infrastructure. Make sure they offer:
Data storage farm
Application server cluster with load balancing and redundancy
Redundant, high-speed Internet bandwidth
24 x 7 technical support
Nightly tape backups
Price is another big consideration. A utility-based computing provider typically charges a monthly base price per user. At Aztec Systems, it costs approximately $100 per month per user. Each user has access to a pre-defined set of core applications such as word processing, spreadsheet and e-mail programs, as well as spam filtering, data storage and unlimited Internet bandwidth. Clients can then add on other applications, including industry and custom applications.
This computing approach is relevant to most small- and mid-sized business. It gives each company access to high-powered computing resources on a daily basis, without the worries and unbudgeted expenses that an in-house IT infrastructure can create. For companies that have recently invested in a significant technology refresh and own both the hardware and software licensing, the utility approach may not be valid. The same goes for tech companies that enjoy tinkering with their own IT infrastructure and for those firms with single offices and no interest in mobility or remote access.
So is it right for you? It just might be time to pull the plug on the IT monster.
Andrew Levi is founder and president of Aztec Systems( www.aztecsystems.com ), an IT services provider in Dallas , Texas .