Monday, November 18, 2013

Why Spend So Much?

I'm helping out with a strategy for an enterprise. They've got less than 10 thousand people, but they've grown through mergers and acquisitions. Which means they've got about 100 different organizations that are scattered around the globe who are driving the 10 billion or so in revenue they earn. With all the fragmentation and overhead redundancy they are spending a ludicrous amount on IT infrastructure. My question is "Why?"

Being a Microsoft veteran and deeply wedded to their stack on many levels doesn't stop me from wondering, why on earth anyone is doing anything in-house, on-premise. More than 10 years ago, I was helping companies move to virtual IT infrastructure management with British Telecom and MCI. Have we learned nothing?

Here are some anecdotes about how obvious it should be to pick better options but how much waste there is in the enterprise.

Cloud Storage
Why is anyone paying for These guys are parasites taking advantage of the fact that companies are stupid. A typical seat for an enterprise runs about $200/year. For a small user base of around 2k people you'll kick them $500,000. For disk space. When that same company gets a similar amount of per/user storage through their enterprise agreement from Microsoft as part of SkyDrive for free. If this company woke up and moved to Google they would get even bigger storage packed into an enterprise agreement that costs less, and the storage would still be free!  The big boys get that storage is the table stakes so you will buy their apps like email. Just being willing to properly leverage tools they already have would save this company hundreds of thousands of dollars a year for this one thing.

Cloud Print
Moving to cloud printing from Richoh, Xerox, or (gasp?!) Google means a typical company would get printer management basically for free. If you are leasing hundreds of printers, then managing and printing through the cloud is just table stakes. If you are small company, just buy or lease cloud-print enabled printers and you can ditch the local print server completely. One company I advised just ditched a $2 million a year contract. Additionally, by upgrading to cloud-printers they now have 30% more printers for half of what they were spending to capitalize old hardware.

To keep this example going, the next thing to get off-premise would be identity management. Again, I have to go with Google on this one who has an end-to-end offering that works with all their other products with virtually no configuration. Or get some hosted Microsoft Exchange and you'll get an AD for free just like Google. Again, table stakes to pay for the real products that are going to pay for anyway.

And this list goes on with servers, scanning, accounting, web content, etc. A really interesting and recent example is with hardware like phones. A company I work with spends more than 10 million a year on communication hardware. Everyone gets a mobile phone, laptop, desk phone, and there are projectors, cameras and speaker phones in every conference room. Compare that to a similarly sized company I just advised who lets employees bring their own phones, leases laptops, and has Chromebooks with Chromecast in the conference rooms. They use Office Communicator and Google Hangouts with integrated AD. Everyone is available through managed Google Voice numbers that route dynamically to laptops, conference rooms, and mobile phones. They video conference using the built-in hardware in Chromebooks and anyone can use the big LCDs in the conference rooms via Chromecast. Want to collaborate with someone? Sit at their desk and pull up your desktop on their laptop or just send your desktop to their display virtually. They have more ways to get in touch, easier video conferencing, and most importantly save almost 10 million dollars a year in hardware, cabling, and other infrastructure. (Note to self: I really should look into getting paid a percentage of what I can save a company.)

There are tons of other examples of how using the right tool for the job saves you money. Don't let the niche players sucker you into spending more than you need. If you are an enterprise, you probably have what you need and don't realize it. Need help, just ask.