Cloud may be driving your transformation, but hardware maintenance will keep your business running in the meantime. The lure of digital transformation is strong – and if you’re like most businesses, you’ve already decided to move part or all of your business to the cloud. That transition has already started at most companies and will, according to a recent survey of 280 Interactive customers, probably take years to complete.
Transformation Strategy
Digital transformation, however, doesn’t happen overnight. Of the customers surveyed, 42% claimed they would be making major changes to their IT infrastructure within the next 12 months, and an additional 34% indicated they would be making such changes in the next 12 to 24-month timeframe. Just 10% said they weren’t expecting major changes in the foreseeable future. By 2020, IDC has predicted half of Australian companies will have nailed down their organisation-wide digital transformation strategy and will be in the process of executing it.
This means that every company transitioning to the cloud faces a period in which they must operate a hybrid environment that includes a continued reliance on old and ageing on-premises infrastructure. Which leaves the question of how to reduce the costs of existing physical servers, desktops and other equipment while you complete the transition to the cloud.
Many companies are already considering how to redistribute their on-premises equipment budgets to support the cloud migration. Australian spending on cloud services and cloud-enabling hardware, software and services is expected to more than double by 2021 – to more than $9.8 billion. Future budget allocation takes into account that the hybrid state is likely to last for a while. Asked about the anticipated split between on-premises and cloud-based infrastructure, just 14% said they would be running fully in the cloud three years from now, while 6% said they would still be fully relying on on-premises or hosted infrastructure. The rest expect to be in a hybrid state for years to come, with 21% projecting a 50/50 split between on-premises and cloud. More respondents expected to have more than half of their infrastructure in the cloud, with 35% saying they would be in that position versus 23% that expected they would still be mostly using on-premises systems.
The significant impact of this change is already forcing IT managers to adopt different strategies for managing and maintaining their on-premises hardware. Keeping on-premises applications running is essential to the functioning of the business, but changing budgets mean companies can’t justify investing as much on new equipment: shifting workloads shrink ROI periods and threaten recovery of new capital investments. Instead, IT managers’ on-premises strategies will shift towards finding cost-effective ways to support thousands or millions of dollars’ worth of old equipment that is getting older and more breakage-prone every day.
Ensuring ongoing quality of service in this environment means guaranteeing longer operational life for equipment that may already be out of its manufacturer’s warranty period. This means partnering with a hardware maintenance service provider that can keep systems running smoothly for the long term – and function as a trusted partner to support companies as they transition away from on-premises and hybrid environments.
The Good News
You may already have a relationship with a maintenance service provider. Maybe you engaged them to access more cost-competitive or timely support services than your equipment manufacturer can provide. Or, perhaps you’re using a single hardware maintenance provider to provide consistent service levels across a fleet of equipment from many different manufacturers. Whatever your current situation, the wholesale migration to the cloud is likely to make your maintenance partner relationship more important as cloud migrations push companies into ever-more-complicated hybrid computing models.
This change, Gartner believes, will push maintenance service providers to expand their offerings and find new ways to make themselves ever more price-competitive. These offerings will be driven by customer demand for service providers that can offer capabilities such as faster and more intelligent quoting processes; proactive maintenance and faster turnaround; seamless procurement capabilities; and access to complimentary services that strengthen the overall value-add of the managed service provider.
Gartner expects full-service options to expand as customers’ commitment to the cloud deepens. By 2020 this trend will, for example, see the consolidation of data centre maintenance, network maintenance and secondary hardware provision capabilities that allow a single service provider to offer extended support across servers, storage, and network equipment.
The expanding range of hardware maintenance options is great news for businesses looking for a cost-effective way to extend the life of their existing systems while respecting cloud-focused budgets that increasingly consider hardware maintenance as a non-strategic expense. Ultimately, the goal of engaging a maintenance provider is to minimise outgoing costs while retaining business-critical assets for as long as possible. These assets have significant business value far beyond notional hardware end-of-life dates, and the right maintenance strategy will help maintain that value even as the rest of the organisation looks forward to the new world of cloud-enabled digital transformation.
