It’s hard not to be impacted by the devastating effects of Covid-19. The unprecedented restrictions, social distancing, losing employment and sickness has had a profound impact on our society, not to mention those who have lost loved ones. We want to help!
We have been looking at ways to help those affected and one practical way is to provide practical help to those whose livelihoods have been impacted.
At TIQQE, each day consists of reading different CV’s from applicants, listening to our customers needs and understanding what they require. We have together read 1000s of CV’s, received 1000s of customer requests, prepared 1000s of employees before going for a customer interview and we think that this is an area in which we can help.
If you are looking for a new job and need help with the following:
Many companies are under tremendous financial pressure due to the COVID-19 virus. We sat down to figure out what we can do to help and came up with 4 ways of how we can reduce cost and increase liquidity in the short term for a company. We are posting these 4 ideas in a blog series.
4 ways to reduce cost and increase liquidity
We provide 4 hands-on ideas of how you can reduce cost and increase liquidity in the short term. All ideas include financial examples to provide a clear view of the potential of each idea in your context. We have created 4 business case templates to help you customize and translate each idea into tangible value for your organization, just give us a call and we will help you. Bring some good news to your CFO in these challenging times with some hands-on, concrete and proactive ideas of how to reduce IT costs.
Idea #1 – Hardware refresh
With a depreciation cycle of 36 months, you’re looking at a 33% replacement of servers and storage in your datacenter this year. Now is a good time to challenge the default decision to replace those servers with new ones and consider cloud instead.
Idea #2 – [ insert integration product here ] replace
Every organization needs to connect data between applications and databases to support their business processes. There are a lot of ways of solving the integration need but many companies have bought an integration platform from one or more of the major product vendors in the market such as Microsoft Biztalk, Tibco, Mulesoft, IBM Websphere etc. If you’re one of them, we have good news for you and your CFO.
Incident handling is often a highly manual process in most companies. It requires 1st, 2nd and 3rd line resources in a service desk to manage error handling of the applications, databases and infrastructure. Further more, some expert forum, or Change Advisory Board, are usually in place to work with improvements to reduce tickets and incidents. A lot of people is required just to keep the lights on. Imagine if you could automate most of your incidents.
Managing cloud infrastructure is different to managing infrastructure on-prem. It’s easy to provision new resources but it’s equally easy to forget to decommission resources when they’re not needed. Further more, performance tuning is often not part of daily routines and only performed when there are performance problems. Optimization is not supposed to be performed occasionally but rather on a regular basis to ensure a cost effective use of cloud computing. If you need to find quick ways of reducing your costs, optimizing will be one tool to use to bring good news to your CFO.
Many companies are under tremendous financial pressure due to the COVID-19 virus. We sat down to figure out what we can do to help and came up with 4 ways of how we can reduce cost and increase liquidity in the short term for a company. We are posting these 4 ideas in a blog series and in this blog post, we will present the first idea to improve your financials – hardware refresh. Most importantly, we will put numbers on such a refreshment which would cheer up many CFO’s today.
#1 – Hardware refresh in your datacenter
With a depreciation cycle of 36 months, you’re looking at a 33% replacement of servers and storage in your datacenter this year. Now is a good time to challenge the default decision to replace those servers with new ones and consider cloud instead. Here are a few reasons why:
You don’t have to make the capital expenditure upfront which will have a positive impact on your cashflow and your balance sheet.
You will lower your cost by an average of 30-40%
You don’t have to buy capacity to last for 36 months with low utilization the first couple of years.
You pay for what you use and you can scale up or down in capacity by pressing a button.
You are making the inevitable move to cloud sooner than later
Example – a company with 300 servers, 50TB of storage
In this example, we’re looking at a company with a total of 300 servers and 50 Terabyte of storage running in a datacenter or a co-location. They have a depreciation cycle of 36 months which means that they normally refresh 33% of the estate each year, in this case 99 servers + 16TB of storage.
The graph shows a cashflow comparison between replacing the hardware compared to running the same workload in the cloud. The greatest benefit from a financial perspective becomes obvious in the graph, you don’t have the capital expenditure upfront when using cloud. This company is looking at an upfront cost of 16.1MSEK. Instead of spending 16MSEK in refreshing hardware, it will do more good as free cash and liquidity.
Another observation is that cloud seems more expensive on a yearly basis and that’s true. However, when considering the upfront costs, the accumulated savings are considerable, see graph below. Beside keeping 16MSEK in the balance sheet, this company would save 4.5MSEK per year or 27MSEK in 6 years by using cloud instead of refreshing the servers.
In this example, the customer are paying for the transition project and the cost is included in the business case. Most of the time, AWS offers generous fundings to reduce the so called “migration bubble”, which is the time when you run the workload both on-premise and in cloud during the migration project.
There are of course a lot of ifs and buts in any calculation and the numbers are just interesting if you can identify yourself in them. We have created a template for helping companies calculate a comparison between doing a hardware refresh versus cloud. We can customize most of the data to simulate your specific prerequisites to make it as accurate as possible.
Please contact me or any of my colleagues if you would like to do the exercise for your company, we’re here to help.
Stay tuned for more examples of how we can help you reduce costs and increase liquidity.