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5 minute readThree Ways to Cut Wasteful Data Center Spending

Cut Data Center Spending

You save money when your data center runs efficiently. The money saved is then available for other purposes.  You can do this by reviewing support contracts, ensuring communication lines are open to prevent rolling-over unnecessarily expensive contracts, and using an ITAM or SaaS platform to monitor your upcoming expenses.

How To Save Budget in Data Center Procurement

Cut Data Center Spending

Efficient and Effective Data Centers are Possible

As IT managers and leaders, we face unprecedented challenges to run smooth and efficient operations. The COVID-19 pandemic added to normal everyday stresses by rapidly accelerating the need for a 100% remote workforce while also negatively impacting the supply chain. The risk of the unknown, caused by the pandemic, placed additional strain on companies’ IT departments. More than ever, IT is being asked to squeeze every drop of value from the current infrastructure while businesses minimize operating budgets.

Optimizing data centers to operate more efficiently and reduce wasteful spending can free up budget funds to be spent elsewhere, such as new hires, or improving training for existing employees.  Extra revenue means it is possible to provide raises, bonuses, and better benefits to keep good talent. The money found from operating more efficiently can also mean the ability to launch new IT initiatives and other projects that boost ROI and, finally, to invest in tools and assets to make teams more productive. Money is saved when running Data Centers more efficiently. Those funds are available for good purposes, as shown.

The question remains, what are some ways to cut Data Center spending? Here are three:

 

1) Review Support Contracts

Data Center maintenance expenses take a big chunk out of IT budgets. The highest costs are usually associated with OEM (Original Equipment Manufacturer) support. While OEM services are sometimes necessary, their contracts are expensive because of premium fees, shorter asset lifespans, and wasted money supporting assets that have been decommissioned or are out-of-service, but have been overlooked.

A wiser alternative may be to move OEM supported assets to a Third Party Maintenance and Support provider, which could cut many of the costs in half while maintaining the same, or even better levels of service. Third Party Maintenance contracts can cover various makes, models, classes, and families of products under one umbrella, making it much easier to manage.

There are a few compromises, like receiving software upgrades or OS patches on systems, which aren’t usually covered. Aging or fully EOSL equipment, however, typically have stable Operating systems so this is not a major compromise. Still, the cost savings on maintenance and support could more than make up for any fees needed to update or ensure daily productivity of the equipment.

Review your contract terms, licenses, and supported assets list

Regardless of what maintenance services you choose, it’s essential that you periodically review your contract terms, licenses, and supported assets list. External maintenance support services can quickly become a tangled web of unknown variables, especially in large-scale enterprises with a diverse infrastructure, each of which could eat away at your budget.

You can identify opportunities to reduce spending by trimming overlapping or unnecessary services and negotiating better contract terms. Similarly, physical device maintenance agreements, or SaaS leasing subscriptions, may often come with premium support clauses or roll-overs that are sometimes excessive or overly expensive. These should be reviewed and replaced when possible.

 

2) Avoid Compartmentalizing

A lack of clear communication between the boots-on-the-ground who understand your infrastructure’s ins-and-outs, and those holding the purse strings, is often a catalyst for wasteful spending.Take the example where recurring maintenance and renewal spending is managed exclusively by the Finance Department. In this case, Finance might simply renew all maintenance contracts as they see the expiration date approaching, because they assume that everything remains an essential Operating Expense. Or, the procurement team might negotiate new contract terms without contextual input from the Data Center administrator.

Both of these situations can lead to a continuation or procurement of maintenance contracts that aren’t necessary or are not the best-fit for your needs and budget.

As an IT manager, you need to establish clear, two-way communication between all stakeholders to ensure everyone knows who to approach for the critical information gathering.

 

3) Utilize Maintenance Optimization Platforms

Many IT departments still facilitate their data center maintenance tracking through spreadsheets. While this can be a convenient and accessible solution, it may not be the most efficient practice. Instead, you should use better tools, like an IT Asset Management (ITAM), Hardware Asset Management (HAM), or a Software Asset Management (SAM) solution to effectively leverage inventory data. These tools will give IT managers the visibility, analytics, and governance capabilities to stay on top of their data center assets and related maintenance costs.

Financial systems and contract management software rarely track data center maintenance information efficiently. They may, however, help solve niche challenges and could even potentially be integrated with IT management solutions via API (Application Programming Interfaces).

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This is just the tip of the maintenance optimization iceberg, having most of the seemingly complex process live just beneath the surface, but it doesn’t have to be. Contact Reliant Technology for an in-depth look at how Reliant Technology can help save money and time as your Third-Party Maintenance and Support provider.

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Reid Smith-Vaniz

by Reid Smith-Vaniz

Reid is the founder and CEO of Reliant Technology and for 14 years has pursued his mission to remove the pain associated with maintaining IT infrastructure. Reid writes on common challenges related to maintaining, servicing, tracking, budgeting, and upgrading technology.

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Reliant Technology Cares

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About Reliant Technology


As Data Center and storage experts, Reliant Technology is available to provide consultations and solutions to your server backup needs. Our experienced engineers and IT specialists are ready to help you determine the best option for your Data Center. If you have a topic you would like to see discussed, or if you would like to submit an article for possible publication, please, get in touch with us.

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