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How to reduce IT infrastructure costs

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How to reduce IT infrastructure costs

In the current global crisis, companies have to cut down costs as much as possible. Laying off employees or overhauling the production process is extremely hard, and not always the best choice. Companies tend to look at non-essentials, where IT infrastructure often falls, especially for non-IT companies.

To help you find ways to reduce the IT infrastructure costs of your organization, we’ve compiled a list of the most common places where the IT infrastructure spends more than it should.

Outsource as much as possible

While it’s great to use in-house solutions, such an approach may be more expensive and challenging in the long run.

Having a capable team of IT technicians in house costs much money. A systems engineer salary in the EU will, on average, be over 50 000 € yearly. In the US, these costs are even higher, bringing to more at 70 000 €. Considering you need several engineers to cover shifts and sick leave, you might be looking at 150.000€ yearly. And these are just wages! Cost of labour rapidly increases as soon as we take other expenses into account (office space, utilities, supplies and more).

Outsourcing helps you reduce these costs by allowing you to use the knowledge of IT experts for just a fraction of the cost, and only for the things you need (planning, monitoring, support, troubleshooting, etc.). You can still keep talent in-house; however, they can focus on business-related tasks, such as growing your business and making your customers happy. 

A great example of lowering costs by outsourcing IT is AdRoll. With 20 full-time engineers needed to support their server infrastructure in a traditional data centre, and with an average engineer salary of 150000$, AdRoll would spend around 3 million $ yearly on staffing costs. By moving to an outsourced solution (AWS), AdRoll outsourced the IT infrastructure, reducing the operational costs by 83%.

If you’re looking to outsource some of your IT, check out our Managed Infrastructure service. With Managed Infrastructure, we take over the setup, configuration, monitoring and maintenance of your server infrastructure, in turn allowing you to focus your resources into the development of your products and business growth.

Predict your needs

Both on-premises and cloud solutions require you to know your project and its needs inside out – make sure to look at trends, patterns of usage and anticipate growth. If you estimate your project’s needs well, you can ensure you’re using as many resources as actually needed by your project.

Correct estimations are especially crucial for on-premises systems, as they offer less flexibility in terms of acquiring new resources. Overestimating your project’s needs results in more resources than needed, and you’ll end up with unused resources. Underestimating resources may result with failing to deliver on your SLA, and in turn, financial loss. 

With cloud providers, you have the flexibility offered by pay as you go; however, they are much more expensive. Most cloud providers provide options such as spot instances or reserved instances to achieve further savings. 

Reserved instances offer various cost reductions, depending on the provider (usually 70% compared to the on-demand model).

With such savings, reserved instances are a must-have when considering your cloud infrastructure costs. 

Lowering costs for on-premises solutions

On-premises IT infrastructure is usually more expensive than it’s cloud counterpart; however, you can still achieve savings even in such an environment.

Switch to storage as a service (StaaS)

Storage is an integral part of any IT infrastructure. Compared to on-premises setups, cloud solutions offer much flexibility when it comes to storage management. For on-premises environments, storage management can quickly become a nightmare for IT departments. With organizations requesting more and more resources (especially last-minute and unforeseen demand), hardware failures and upgrades, storage management is definitely a challenge.

With StaaS, you can utilize the flexibility of the cloud, while keeping the integral parts of your IT in an on-premises environment. The provider also takes care of the maintenance, allowing you to focus your resources elsewhere. 

TechTarget wrote an excellent article detailing the benefits of using STaaS compared to traditional storage, so check it out for more details on this topic.

Move to the cloud 

A full cloud solution is still a no-go for many organizations (e.g. financial institutions, healthcare, government institutions, and similar). However, most enterprises can make the transition and utilize the benefits offered by a cloud infrastructure. If there are no technical or legal requirements keeping your organization on an on-premises setup, we wholeheartedly recommend considering switching to a cloud Infrastructure.

We’ve already discussed why cloud computing is better in terms of flexibility, cost reduction and agility in one of our previous blog posts, so make sure to check it out if you’re still not convinced. 

If your organization is unable to move to the cloud, you can still move some of your resources to the cloud while keeping the business-critical applications on-premises. With a hybrid cloud, you’ll be able to retain control over your assets as you would with an on-premises solution, all while utilizing some of the benefits of cloud computing. If you’re looking for more information on such an environment, check out RedHat’s “What is a hybrid cloud” article as it explains the subject in much more detail.

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Lowering costs for cloud solutions

As mentioned many times before, cloud computing offers many benefits, one of which is cost savings. However, many cloud users can quickly become overwhelmed with the number of services available, and in turn, end up with much higher costs than needed.

Monitor your billing

With cloud computing, billing can quickly get out of hand. With various addon services and many instance types available, you need to monitor your cloud expenditure closely.

Some of the things that can help you with that are: 

  • alerts which notify you when you’ve reached a pre-set threshold
  • consolidating multiple accounts into one to get a full picture of your usage
  • checking billing and usage reports periodically if available 
  • utilizing your provider’s cost management tools.

Monitor the usage of your service

To accurately anticipate how much resources your project needs, you’ll need to monitor your application usage carefully.

You can use your cloud provider’s tools, such as Amazon CloudWatch, Azure Monitoring or Google Cloud Monitoring, or you can use third-party software. Based on the data collected while monitoring your application, you can assess workloads and scale instance sizes.

Keep an eye at your assets

Proper asset management is vital in reducing overall infrastructure costs. When your organization grows, the number of resources you utilize grows with it. Without proper asset management, it’s easy to lose track of unused assets.

Buying servers without customizing their resources to fit your needs is one of the ways you might be losing money. Another thing to look out for is unused or unattached resources, which are usually a result of a temporary need due to testing or spikes in usage. Once they are not needed anymore, the administrators should terminate them. However, in large organizations with many people working on the same project, it often happens that some assets remain available even when they are not needed anymore. Proper asset management helps you avoid such situations, and in turn, eliminate wasteful spending.

Use auto-scaling features

All cloud providers provide auto-scaling mechanism to help users handle load spikes. Instead of spending more to ensure enough resources in all situations, auto-scaling allows you to utilize extra resources only during the times they are needed. By monitoring your application’s performance, you can anticipate when you might experience a load spike (e.g. black Friday deals, more traffic during the weekend, etc.). Then, you can up an auto-scaling mechanism which provides more resources during high-load times, and terminate them as soon as they are not needed anymore. 

Serverless Computing

The term serverless computing may sound confusing. To clarify, you’re still using servers, however not in the traditional way (e.g. database, ETP or website servers). 

Serverless computing is a form of utility computing used for simple functions, such as a single-purpose application, code deploying, etc. Typically, it’s used in situations where developers need to deploy code quickly and without thinking about server infrastructure. It starts up when needed, and shuts down when it’s done, in turn costing much less than a pre-purchased capacity. Most cloud providers offer some form of serverless computing, such as Amazon Lambda, Azure Functions, and Google Cloud Functions.

Proper lifecycle management

Another thing to consider is your data lifecycle. A typical scenario is where you access some of your data often during the early stages of the lifecycle, and then less frequently, during the later stages. By setting up your data lifecycle correctly, you can utilize various storage classes to ensure maximum efficiency. For example, instead of keeping all of your data in S3 buckets, you can archive objects to the S3 Glacier storage class one year after creating them, or set an expiration date if you don’t need the data anymore. 

Conclusion

Moving to the cloud is the best choice for most on-premises companies; however, there are some steps they can take to reduce infrastructure costs even before that. A hybrid solution can be a good alternative if moving all of the business to the cloud isn’t possible.

If your business already utilizes the flexibility offered by the cloud, there are still many ways you can save money. Monitoring your IT infrastructure resources and usage, outsourcing management, and anticipating your project’s needs are the most important steps you can take to lower your IT infrastructure costs.

We hope this short guide helps you get a better idea of where you can look for savings, and as usual, our experts are here to help you. 

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