5 Ways to Reduce IT Costs in a Downturn without Sacrificing Performance

by Carissa

5 Ways to Reduce IT Costs Without Sacrificing PerformanceThere is no doubt the recent pandemic has impacted every company on the planet in some way. As some companies take a closer look at ways to reserve cash to outlast the resulting economic downturn, we wanted to share a few insights on how you could reduce your technology costs without sacrificing performance.

Migrating to Azure

Wes is the owner of a small healthcare consulting firm in Hendersonville, TN. He helps hospital department heads optimize their staffing schedules based on analytics and proprietary software. Like most of us, as the pandemic started to spread, Wes decided to look at ways to reduce his operational costs. At the same time, his Microsoft SQL Server 2008 R2 platform reached end of support. Wes now faced a tough decision: upgrade his dedicated server or migrate it to the cloud?

In short order, we were able to do capacity planning and put together a plan that would both bring Wes’ technology current and reduce his operational costs. Wes is saving 33% each month compared to what he paid for his existing monthly dedicated hosting plan, even after upgrading to the latest Microsoft SQL Server licenses. We were able to migrate his databases, SQL Server Integration Services (SSIS) packages, reports, and custom web application to an Azure SQL Server virtual machine with no significant code changes. It gets better.

Tuning Your Azure Services

Like most of us, Wes is thinking about the long game as we navigate our daily barrage of surprises. We reviewed usage with Wes, and upon further analysis, noted there are clear periods of inactivity on his server where his clients simply aren’t logging in. By using the automated tools within the Azure Portal, we were able to schedule a power-down of the environment for 6 hours per day (42 hours per week). Neither Wes nor his clients are using the server during this overnight time, so the change to power down the servers saved another 25% of the hosting cost on Azure. In the end, Wes’ monthly hosting fees are almost exactly 50% what they were before the migration.

It is worth noting that Wes will continue to realize this 50% savings indefinitely. It puts him in a better position to outlast the economic downturn and allows him to scale back up as more clients come on board in the future or his current workload requirements change. Imagine the savings that could be realized at scale. If you are a medium to large business who has deployed numerous workloads to Azure or other cloud platforms, consider taking a fresh look at your usage logs and tuning your services to reduce costs. Even in high-availability environments, there may be periods of reduced activity where utilizing fewer servers in a cluster makes sense.

Auditing Your Licenses

Now may also be an excellent time to take a fresh look at your software licensing. Before you renew another annual contract or an ongoing monthly subscription, consider doing a fresh audit to be sure you require all the licenses you are currently paying for. Are you licensing multiple similar products when you could standardize on one? Are you paying for more seats than you currently have? Or, perhaps, you are paying for premium features that aren’t utilized by all your staff. Some software vendors will allow you to split your agreement between standard and premium licenses to optimize your savings.

Reviewing Your Support Contracts

Before canceling a contract, read the fine print.  Some contracts, such as software assurance, are required if you want to receive the latest updates from a vendor. Partner support agreements are important to your business continuity as well. However, if you are paying for software support that includes no added benefits, or if you are paying retainers for technical support and getting no value from it, it may be wise to take a fresh look.

Firms like Keller Schroeder offer high quality, enterprise-level support on an as-needed basis to companies of all sizes with no retainers required. We have technical depth in a variety of software and hardware solutions. We believe in long-term partnerships, bringing value, and earning trust in every engagement. We can accommodate a monthly budget-based billing plan for clients that prefer that approach. And yet, you can expect an hour of work for an hour of pay. Reach out to your Select Account Manager to learn more about our retainer-free or budget-based billing.

Pre-purchasing Service Hours

As you should, many companies are looking beyond the current circumstances and realize they need to come out of this period in a strong competitive position. Not only have you had to make unplanned adjustments in your existing technology stack, but you may also need to keep ongoing technology and process improvement initiatives on track. One way to save on required partner services is to negotiate a prepay rate with your business partners. We utilize this approach for clients that want to maximize their spending by agreeing in advance a project would exceed a certain number of hours.

It can be risky to prepay for services in tumultuous times – even where long term partnerships are in place. Ask the extra questions to be sure it makes sense for you. At Keller Schroeder, we are blessed to operate debt-free and have weathered several significant downturns in our 40+ years because of the grace of God, responsible leadership, and strong convictions of ownership and doing the right thing. We are blessed to work with some outstanding companies who can say the same. What can we do to help you?

Other Ideas?

“We’re all in this together.” This has never been more true than now. Some companies are seeing an increase in demand right now. As a technology company in the performance improvement business, we want to help them, too. Others face tough choices. Nobody I know wants to let staff go or take other drastic measures due to current circumstances, so let’s figure this out together. We’ll continue to share other ways we are helping our clients reduce costs during this time of uncertainty. In the meantime, if you have other ideas of ways that would help others, please let us know so we can share! We’re pulling for you. Stay safe, and stay well!

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