Squeezing IT Dollars Without Squashing Service
March 30, 2009
Do more with what you have: Bob Muglia, president of the Server and Tools Business at Microsoft, talks about smart ways businesses of all sizes can control IT costs in tough economic times.

REDMOND, Wash. — March 30, 2009 — The global business downturn has left many IT decision-makers scrambling to figure out how they can reduce or restrain spending without sacrificing quality of service or falling behind competitors. For most, that means squeezing more value out of their existing IT resources, and limiting new IT purchases to technology that will pay for itself in lower operating costs or increased strategic capabilities.

That’s why Microsoft Corp.’s Server and Tools Business sees its primary mission today as delivering innovative solutions that will help its customers thrive in the new economy. To that end, the company continues to invest in new and enhanced server operating systems, virtualization technologies, security solutions and cloud computing.

Bob Muglia, president of the Server and Tools Business at Microsoft.
Bob Muglia, president of the Server and Tools Business at Microsoft.
Image: Page | Print

“Rather than decreasing their IT spend in challenging times, some companies are choosing to recalibrate their budgets and invest in technical solutions that deliver savings over the long run,” says Bob Muglia, president of the Server and Tools Business at Microsoft. “For example, many of our customers that have virtualized their datacenters are already seeing significant savings resulting from server consolidation, faster resource deployment and IT process automation.”

The virtues of virtualization

Other companies are upgrading to Microsoft’s latest server operating system with enhanced management tools, migrating specific workloads to cloud-based services and adopting systems management best practices as part of a long-term cost-savings strategy, according to Muglia.

With a price that’s about two-thirds less than the leading competitive solution, Microsoft’s virtualization platform proves to be more cost-effective than other options. In addition, Microsoft’s management toolset spans the physical and the virtual worlds, which simplifies the job of maintaining a typically heterogeneous datacenter.

The Slough Borough Council, the governing authority for the Borough of Slough in southeastern England, took advantage of the savings potential of the Microsoft virtualization platform when the borough needed to expand its municipal services but faced datacenter space and power constraints. Converting physical servers to virtual machines solved both the space and power problems, but it also generated significant financial rewards as well. “We’ve achieved hardware savings of $148,000 (U.S.), and we expect to reduce server deployment costs by $23,700 (U.S.) annually, based on rolling out 20 servers a year,” says Chris Wintermute, technical infrastructure manager for Slough Borough Council.

Virtualizing a datacenter also lays the foundation for service-based IT. Since virtualization enables workloads to move between on-site datacenter software and the cloud, IT managers don’t have to choose between running applications in the cloud or on-site; it can be a combination of both. “For example, a business might move an application that’s well-suited for the cloud, such as e-mail, from their datacenter to a hosted cloud service, but they may keep more sensitive applications, such as their payroll system, on-premises,” says Muglia.

Invest Today for Returns Tomorrow

When selecting server software and upgrades, Muglia recommends that IT professionals maintain a long-term view. “The important question isn’t how much you pay for a platform upfront, but what a system will cost your organization year after year, and if the company providing the platform will be there for you in the long run.”

Microsoft infrastructure products generally provide excellent return on investment (ROI). For example, when researchers at consulting agency Capgemini looked at companies and institutions in the financial services, education, retail and high-technology industries that had begun using Windows Server 2008, they found that IT costs were reduced by an average of $124,000 per year. These cost reductions resulted from a wide range of areas, including the recovery of five IT staff hours per server and a 91 percent reduction in downtime. A white paper detailing usage scenarios and providing more data on the impact of deploying Windows Server 2008 is available here.

All in the Family

Microsoft’s server family includes comprehensive, cost-effective solutions for businesses of various sizes, all the way from a small family bagel shop to a university research lab that has to crunch terabytes of data.

Several enhancements to the IT infrastructure family are due out within the next two years, including these:

  • Windows Server 2008 R2, which will offer new virtualization tools, Web resources and management enhancements that will give customers greater control, increased efficiency and the ability to react to front-line business needs faster than ever before.

  • Microsoft Forefront, code-named “Stirling,” an integrated security system that makes it easier to manage security capabilities across an enterprise’s IT infrastructure, and will help reduce administrative and support costs.

  • Identity Lifecycle Manager “2”, an identity management product that will ease the burden on IT departments and help desks and extend identity-management capabilities to end users.

  • Visual Studio 2010 and the Microsoft .NET Framework 4, which will make it easier for developers and development teams to build, test and deploy applications.

  • Enhanced versions of SQL Server targeted at business intelligence and high-end data warehousing.

Optimizing the Datacenter

Microsoft recently released the results of a two-year study of the impact that datacenter best practices could have on IT operations costs. The study shows that businesses also can realize immediate savings just by operating their existing datacenters more efficiently. As part of the study, the company commissioned a survey of CIOs and IT managers at 162 organizations regarding six typical server infrastructure workloads: collaboration, data management, identity and access, e-mail, connectivity, and print server management.

The survey found 31 systems-management best practices — such as automated backup, hierarchical storage management and server clustering — that can result in significant savings and improved service levels for businesses of all sizes. For example, organizations that adopted certain practices in the areas of e-mail and collaboration management reported IT costs of at least $10,000 per server per year less than those that did not.

The study also found that many of the most beneficial practices, such as software imaging or cloning, automated restore, and automated deployment processes, are rarely performed today.

“We’ve found dozens of cost-saving best practices that can be put in place at little or no cost with existing IT assets. Yet, surprisingly, many companies are overlooking these opportunities,” says Muglia.

The findings are available in a white paper called “Server Infrastructure Optimization: Best Practices to Reduce IT Operational Costs,” which is available for free download at http://SpotlightOnCost.com.

Read More: