Digital technology drives nearly all aspects of business and our daily lives. Over the last 18 months we’ve also witnessed the important role technology plays in enabling businesses to adapt to rapidly changing market conditions, innovate and grow.
However, as we see advancements like restaurants implementing QR codes for menus and payment, and hospitals offering more telehealth options, companies must also address the challenge of increasing infrastructure complexity. Moving forward, how organizations manage their IT infrastructure will be as important as the modern systems that power it.
Businesses are increasingly taking an “everything-as-a-service” approach to IT. The benefits of an as-a-Service model are clear: increased IT team agility, simplified digital transformation, and decreased low-value IT work.
IDC predicts that by 2024, more than 75% of infrastructure and applications and more than half of data center infrastructure will be consumed as-a-service. Thus, striking the right balance of CapEx and OpEx to run an agile business.
In today’s cloud computing era, there are numerous reasons to take an as-a-service approach in any company’s modernization efforts.
#1 Saving Capital and Innovating Smarter
Since the beginning of the pandemic companies have had to reshape budgets quickly and drastically, with many having to reduce overall spend. When a company can consume IT on an as-needed basis, via an as-a-service model, it’s easier to track which projects are or aren’t working according to plan. In turn, this helps companies know where and where not to commit additional funds.
For example, a technology company investing in AI will experience major benefits. With many projects in the pipeline, funding is a challenge without visibility into which are performing successfully. If the CapEx for the projects weren’t approved during the annual budget planning timeframe, they must go through an approval process with the CFO. This process is often slow and painful with uncertain results. With an as-a-service model, the company more easily can approve spending for successful projects without making a case for a large capital expenditure.
#2 Gaining More Data Access on the Edge
From digital healthcare in hospitals to smart manufacturing, edge deployments are incredibly diverse and increasingly common. Gartner predicts that by 2025, 75% of enterprise-generated data will be created and processed at the edge – outside of a traditional, centralized data center or cloud.
An as-a-Service approach helps remove limitations from edge deployments. Companies finding value in the data they access outside of their data centers are also trying to figure out how to make the most use of it. With as-a-service, companies can put their infrastructure where they get the most value from it and utilize only the resources they need.
For railroad companies, maintenance is critical to keep trains running. If one train is delayed for repairs, it likely must wait for other trains to finish using the tracks before it can continue on its journey; having a cascading effect on profitability. Maintenance has a significant impact on delivery times, customer satisfaction and costs.
Moving to an as-a-service model, a railroad company was able to build trackside edge locations that visually inspect train cars in real time as they pass by monitoring stations along the tracks. As a result, they reduced 16 hours of inspection time to eight minutes without the train needing to stop.
#3 Pay-for-use Resources Make Variable Workloads Less Challenging
It’s common for companies to have workload variability. For example, some workloads will follow a daily work schedule like virtual desktop infrastructure (VDI), HR systems and identity access and management systems, which are utilized most during employee working hours. On the other hand, log processing tends to happen at night when employees are offline.
Another variable workload is cyclical utilization, where systems recognize trends around weekly, monthly or yearly cycles. For example, accounting and sales systems have heavy loads at the end of each month, quarter and fiscal year. These workloads can be highly utilized, straining resources during their critical cycle time.
In both cases, average utilization is often well below ideal. Adopting an as-a-service model and paying only for the resources used makes it more effective running variable workloads while optimizing infrastructure utilization. It takes the guesswork out of planning and the risk of being wrong.
#4 When IT is Agile, so is the Business
IT teams are no strangers to the “do more with less” game. It can be painful for teams who spend precious resources only to keep systems up and running. Managed services help IT free up resources to innovate and work on new projects that benefit customers, like improving SLAs and increasing SLOs. With infrastructure-as-a-service (IaaS), IT can minimize environmental impact, meaning that IT teams don’t have to deal with decommissioning old hardware as the service provider owns the hardware.
Having the ability to map computing resources to projects accurately helps eliminate much of the routine “keep the lights on” work IT experiences and makes it easier to scale teams. Businesses are increasingly looking at expanding as-a-service adoption to focus on what matters most for their business: delivering business outcomes and value to customers.
It’s safe to say that the as-a-Service model is the future of the modern enterprise. The four benefits outlined above are just a taste of what’s achievable when taking an OpEx versus a CapEx approach to IT. We will continue to see increased adoption of IaaS in business strategies over the next decade as companies build flexibility and identify opportunities for innovation in their businesses.
About the Author:
Travis Vigil is the SVP Product Management, Dell Technologies