August 2017 | Thought Leadership, White Papers
Are you moving to the cloud and want your existing servers to last during the transition? Or are you just trying to make your hardware deliver more value? Either way, more companies are looking to keep aging hardware going for longer. Here's how to 'sweat' your assets without the risk.
Traditional three-year technology refresh cycles offered a good balance between the need to extract value from IT purchases, and the need to keep up with the latest technology. But as cloud services shift demand for computing power away from the data centre, companies are proving better than ever at 'sweating' extra value from server storage, network and other IT equipment.
If you're considering upgrading your technology, it's pertinent to have a conversation about your own sweating strategy before you even draw up a purchase order. CPUs in desktops and servers, for example, have become powerful enough that many companies have extended systems' usable life to 5 or 6 years - allowing their cost to be amortised over a longer period.
Server shipments drop
The trend towards longer lifespans has caused a visible dent in server sales, which IDC's latest Worldwide Quarterly Server Tracker said had decreased by 4.6% overall between the first quarters of 2016 and 2017. Name brands like HP, IBM and Lenovo, in particular, saw double-digit percentage declines as companies wound back their server purchases from historical highs.
Gartner figures agreed, with overall data-centre systems spending expected to be flat through 2021 and the cumulative annual growth rate (CAGR) of 0.8% well behind the 3.0% CAGR for IT overall. Servers were singled out as the most dramatically changed, declining by 0.8% this year.
There are many good cost-related reasons for sweating IT assets, but digital transformation has emerged as another, more strategic justification. If your near-term IT plans include an increasing dependence on cloud-based infrastructure, it can be prudent to defer equipment upgrades until the extent of your cloud shift is clear; there's no point committing to a rack of shiny new servers if you're going to move their applications to the cloud in the near future.
Longer lifespans don’t mean you'll have less overall computing power; with mobility, big-data, analytics, artificial intelligence and other trends demanding more and more power, this wouldn’t be a tenable strategy. Rather, observations of spending trends suggest many companies are shifting equipment budgets towards cloud infrastructure, leveraging servers owned by outside cloud service providers.
Maintaining servers during the cloud transition
IDC reported cloud IT infrastructure revenues growing by 14.9% in the first quarter of 2017 alone. Five years ago, much of that revenue would likely have ended up funding server upgrades and maintenance - but now it's being diverted to support broader goals.
Before you change your IT refresh plans, however, you should also consider the potential risks that you assume from longer IT asset lifecycles – foremost among them the potential for equipment failure. Hard drives, in particular, tend to get a thrashing in data-centre environments and growing usage (and storage density) has led manufacturers to revisit their assumptions about reliability.
Extending multiple maintenance agreements that have different SLAs and contact points can be cumbersome to manage and lead to a less than satisfactory experience. Interactive can be single point of contact for all of your maintenance. We can help you evaluate your strategic goals and identify elements of your environment that can be effectively sweated, including older equipment that manufacturers no longer offer maintenance contracts for.
This approach worked well for SEEK Limited. The online job-search website worked with Interactive to audit its infrastructure and develop a bespoke service level agreement (SLA) that combined rapid response times, specialist IT and engineering skills, rigorous maintenance schedules and 100% local parts availability.
The review led to deferred upgrade schedules and better management of ongoing costs, which allowed the company to optimise its IT investment and performance while focusing resources on growing the business instead of arbitrarily upgrading its technology.
It goes to show that if you're going to sweat your assets to success, there's no one size fits all. By auditing your environment, you can come up with a cost effective plan to determine what older technology assets - and applications - it makes sense to keep on, and those that should be prioritised for upgrading to new physical, virtual or cloud environments.