Acquiring New Technologies with Decreasing IT Budgets
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The document discusses strategies for optimizing IT spending and acquiring new technologies with decreasing budgets. It outlines opportunities in areas like cloud computing and big data, as well as challenges of flat or declining IT budgets. It then discusses how optimizing spend can deliver business value through alignment with objectives, financial savings, and improved perceptions of IT. The rest of the document provides examples of software portfolio management case studies where organizations saved hundreds of thousands or millions of dollars by better understanding their existing software assets and entitlements and developing optimized procurement strategies.
Acquiring New Technologies with Decreasing IT Budgets
- 1. Acquiring New Technologies with Decreasing IT Budges Through Software Portfolio Management
- 2. Current Landscape Opportunities • Cloud Computing • Big Data • IT as the Post Digital Catalyst • Business Driven IT (Functionality Drive Architecture) • IT Evolution (Accomplishing Old Goals with New Innovations) • The Consumerization of IT Challenges • “2/3 of IT Budgets are flat or declining”1 • “85% to increase IT services spending with external SP’s”2 IT spending needs to: • Align to the business priorities in a realistic manner • Deliver the optimum return for the investments • Take advantage of the trends in buys to optimize the spend 1SearchCIO.com 2Richard Holway (TechMarketView Chairman)
- 3. What does Optimize IT Spend Mean Business Value Financial Savings Improved Perception Delivering Business Value through achievement of objectives and clear alignment of the Technology Solutions to deliver these requirements Supporting Business Success through clear Financial Options Delivering Optimal Purchase Options Ensuring IT are perceived as a great IT Service Provider Increased Profit Margins through increased productivity and/or reduced total cost of ownership Making well informed purchases to only acquire the exact functionality needed while mitigating any risk of non-compliance both industrial and financial Ensuring IT has a seat at the Leadership Table when making Business Strategy Decisions
- 4. Optimized Tech Spend Decision Points – Business decisions tend to be internal money and time focused decisions. They often seek to: • Present a model shift for business • Identify and control costs • Decrease time to value • Accelerate cash flow • Segment customer demographics • Customize Deliverables • Help and organization lead and displace competitors Technology Decisions – Technology decisions tend to be external lifecycle decisions. They are often concerned with: • Support Lifecycle • Regulatory requirements and compliance • Revision incompatibilities Technology and Business are increasingly becoming more and more intertwined, and as an IT department, you need to be able to manage the technical aspects of the needed solutions as well as help them look at their long term needs more strategically. This includes their technical infrastructure as well as understanding how their business will evolve and advise them on how technology can enable growth that they aspire to. Examples are: • Blockbuster/Netflix • Sears/Amazon
- 5. Case Study 1 – Medium Sized Law Firm Customer Profile: 300+ Users Microsoft Office 2010 Microsoft SQL Server Microsoft Core CAL Inventory Method: Self-Inventory IT Strategies Discovered: Change Adoption of Microsoft Office Over Licensed in SQL due to new Architectural Strategy Financial Impact: Discovered $100,000+ in Cost Avoidance and Surplus Had the option to expedite IT Projects scheduled in future budgets 1. Mobility and Virtualization Project 2. System Center for Servers
- 6. Changes in Asset Landscape License model changes • Created scenarios that could lead to additional investments in deployments already paid for and deployed • Created scenarios that could lead to the management of competing technologies due to license grants • Created confusion on Licensed Item (Server/Processor/Cores) New ways to solve old problems • New Technology Bundles in Functionality Circles (Sophos/Symantec/Kaspersky) • Specific Technologies repurposed for additional solutions (Mimecast/Veeam/eVault/Centrify) New Options on the Market • Multi-tenancy • Cloud Software and Hardware Solutions
- 7. Changes in Landscape Example Are you aware of the 18 licensing changes relating to Microsoft SQL Server over the past 36 months? 1. May 1st 2010 - SQL 2008 R2 GA (General Availability) 2. Standard Edition Price Increase 25% 3. Enterprise Edition Price Increase 15% 4. Introduction of “Down Edition” Rights 5. SQL 2008 Enterprise Edition Processor Licenses with active SA Prior to GA – ‘Unlimited’ Virtualization Rights 6. Introduction on July 1st 2011 – License Mobility through SA 7. August 1st 2011 - Core CAL Price Increase 15% 8. April 1st 2012 - SQL 2012 GA (General Availability) 9. Move from Proc to Core Licensing Model 10. New B.I. Edition 11. Data Center edition discontinued 12. Enterprise Edition Per Server licensing discontinued 13. Unlimited licensing rights only with SQL Enterprise with Software Assurance 14. July 1st 2012 - SQL CAL Price Increase 27% 15. July 1st 2012 Start of Global Price List Increases (e.g UK / India etc) 16. December 1st 2012 - User CAL Price Increase 15% 17. August 2013 – Announcement of EAP contract retirement 18. August 2013 – Announcement of Windows DataCenter Per Proc increase of 28% (conflicts with Per Core optimization)
- 8. Case Study 2 – Healthcare Research Corp Customer Profile: 7000+ Users Microsoft SQL Server Inventory Method: Software Asset Management Engagement IT Strategies Discovered: Discovered Entitlements that were not known Under licensed in SQL due to new Architectural Strategy Financial Impact: Discovered $1,000,000+ in Cost Avoidance due to entitlements Had the option to purchase SQL Server Enterprise Processor Licenses instead of Core Licenses. Was able to adopt SQL Server in a company that was primarily and Oracle customer.
- 9. Old Approach, New Results Step One • Know what you own • What is the value of knowing what you own? Step Three • Reconciling the two results • What you own - what you have deployed = Delta • Is the Delta +/-? Step Two • Know what you have deployed • Does everyone in the environment understand what you are entitled too? • Do you have tools to accurately inventory deployed solutions?
- 10. Case Study 3 – Financial Services Firm Customer Profile: 2500+ Users Microsoft SQL Server Inventory Method: Software Asset Management Engagement IT Strategies Discovered: Discovered the appearance of Non-Compliance Over Licensed in SQL due to new Developer and Architectural Strategy Financial Impact: Discovered $100,000+ in Risk Mitigation and Cost Avoidance Discovered SQL Express and Development Installments were reported as licensable SQL Production Servers. An Audit would have generated a bill from the publisher. Had licensed developer installations as a practice with full licensing. Was not sure why.
- 11. Intro to Software Portfolio Management Origins – Software Portfolio Management (SPM) is a combination of ITIL Asset and Configuration Management and Procurement and Licensing Strategy. Using years of knowledge of buying strategies with ITSM. Software Asset Management What you own What youhave deployed Compliance and RiskMitigation What Technology youhave today What Technology youneed tomorrow Howdo youget there Technology Strategy And Road Mapping Cost ofcurrently ownedtechnology Cost ofNewTechnologies Commercial Analysis Procurement and Contract Negotiation Asset Life Cycle Management Software Portfolio Management (SPM)
- 12. Commercial Analysis Cost of currently owned Technologies • After determining what you have, you determine what you actually need • Are you carrying maintenance on the software that you may not need or will not upgrade? Cost of New Technologies • Buying Strategies • Promotions • Bundling • Functionality Based Architecture • Technology Alternatives • Already Owned Technologies • Functionality hidden in currently owned bundles and subscriptions • Entitlements from older purchases
- 13. Big Picture, Big Results Bringing it all together Two Possible Outcomes • Cost savings/avoidance • Strategy to become compliant without breaking the bank Risk Avoidance when facing an audit Optimized Technology buying strategy across the enterprise Increased Opportunities to acquire new technologies with saved budget!
- 14. Thank You