No one enjoys cutting costs, especially in areas that are as business essential as IT. Nevertheless, IT spending has dropped throughout 2016, and it certainly isn't because IT isn't important. Instead, businesses are learning to optimize their spending, concentrating their budget and resources into the right places. As we can see from the statistics by Gartner, businesses are now focusing on outsourcing their data and resource needs: data center systems posted 1.8% growth in a time when spending was cut in every other category.
By outsourcing, companies are likewise cutting back on software, devices, in-house IT services, and communications services. IT hiring is expected to be limited throughout 2016 as this trend continues. IT specialists are going to need to learn how to streamline and optimize their IT infrastructure and systems if they are to take advantage of this new wave of leaner IT operations.
Moving More Assets to the Cloud
Both owning and maintaining physical IT assets can be extremely expensive. A server needs to be purchased, maintained, upgraded, and repaired -- in addition to being secured and connected to a reliable utility system. In fact, the actual hardware and software costs related to maintaining a server are generally only 15 to 25 percent of the total cost of ownership. These expenses can be mitigated without losing functionality by transferring some or all of your assets to the cloud. On-premise infrastructure is far more expensive -- and often less reliable -- than cloud-based infrastructure.
Moving assets to the cloud means fewer employees, reduced utility costs, and the ability to scale upwards without a significant investment of funds. Cloud resources are inherently more stable and flexible than on-premise resources, thereby reducing the chances for an expensive business interruption or other emergency issues. Moving resources to the cloud also frees up internal IT resources to concentrate on further reducing spending and improving productivity. The average cost reduction when moving to the cloud is 23% throughout the US and the UK.
When utilizing on-premise resources, companies have to invest a significant amount in their internal IT staff. IT staff members have to be available even when they aren't strictly needed -- just in case something arises and a situation needs to be fixed as soon as possible. Cloud service providers and cloud hosting solutions will instead manage your infrastructure for you, usually as part of a flat rate monthly subscription package. Because of this, IT spending is not only cut dramatically but also becomes extremely predictable and easy to plan for.
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