Every global company operating today is in some phase of digital transformation. Yet the current state of the global economy has driven businesses across all sectors to search for ways to cut costs, and IT is no exception.
That’s hardly surprising, since IT expenses can consume a significant part of a company’s budget. By implementing IT cost reduction strategies, organizations free up resources that can be reinvested in critical areas such as research and development, employee training, or expansion into new markets. Streamlining processes and adopting innovative technologies can also help speed up response times, improve customer satisfaction, and increase operational agility. What company wouldn’t want that?
However, balancing cost-cutting measures with maintaining high-performance IT infrastructure poses challenges. Should you replace legacy systems now or when the technology advances further? Are the alternatives scalable and flexible enough to avoid costly, complicated upgrades down the line? Do they support security and compliance needs?
Adopting a strategic approach to IT cost reduction can help solve these challenges. This involves thorough assessments of existing IT infrastructure, identifying areas of inefficiency, exploring new technologies and solutions, and establishing a clear roadmap for implementation. Let’s dig into some key examples.
Teridion’s Network-as-a-Service is designed to be cost-effective since it doesn’t require hardware or expensive maintenance.
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Understanding IT cost reduction strategies
Generally speaking, most IT cost reduction strategies involve finding ways to do more with less to maximize efficiency – whether it’s less hardware, less energy use, less employee overhead for maintenance, or preferably all three.
IT infrastructure optimization has lots of moving parts and the rapid pace of technological advances in global network connectivity continually sets new standards of optimization. The following approaches represent current best practices, though each organization must evaluate current and future needs to determine the right approach.
Cloud migration can significantly reduce costs because cloud providers offer flexible pricing models that allow businesses to pay only for the resources they use. This removes the need for maintaining and upgrading on-premises servers, reducing hardware and maintenance costs. Additionally, cloud services provide scalability and agility, enabling organizations to adapt resources based on demand.
Server consolidation and virtualization, in other words running multiple virtual servers on a single physical machine, leads to substantial cost savings by reducing hardware costs and energy consumption while optimizing data center space. Virtualization also simplifies server management and provisioning to enhance operational efficiency.
Network optimization minimizes bandwidth consumption and improves performance. Using traffic shaping, quality of service (QoS) policies, and caching techniques to prioritize critical applications also reduces data transfer costs.
Application performance optimization consumes fewer server resources, resulting in lower hardware requirements and decreased maintenance costs. Techniques such as code optimization, database tuning, caching mechanisms, and content delivery networks (CDNs) can enhance application performance and reduce operational expenses.
IT process automation streamlines repetitive tasks, reduces manual intervention, and minimizes errors. In this way, automation saves time and reduces labor costs, allowing IT staff to focus on more strategic activities.
Regular review of vendor contracts leads to cost reduction by negotiating better pricing, consolidating vendors, and selecting cost-effective service-level agreements (SLAs). Evaluating the value and cost-effectiveness of vendors ensures that organizations are making informed decisions that align with their budgetary constraints.
Managed services and outsourcing for certain IT functions makes up for a lack of skilled personnel. Outsourcing reduces the need for in-house expertise, infrastructure investments, and ongoing maintenance expenses. Managed services can be leveraged for activities such as network management, data backup, security, and 24/7 help desk support.
Data deduplication and compression techniques reduce storage requirements and are particularly beneficial for backup and archival data to save on storage costs.
Finally, energy-efficient practices reduce the operational costs associated with IT infrastructure. For example, adopting energy-efficient hardware, optimizing data center cooling systems, and utilizing power management techniques can lower electricity bills. This not only reduces costs but also contributes to environmental sustainability and will become increasingly important as regulation of ESG standards tightens.
Achieving cost-effectiveness with MPLS replacement
MPLS networks can be expensive to deploy and maintain, requiring dedicated hardware and complex configurations. Alternative networking solutions to MPLS, such as software-defined wide area networking (SD-WAN), cloud-based virtual private networks (VPNs), or Network-as-a-Service (NaaS) solutions often offer more cost-effective options. AI-powered NaaS is particularly cost-effective for global enterprises that require support along the mid-mile. These solutions use existing internet connections, eliminating the need for costly dedicated lines and reducing ongoing operational expenses.
For example, MPLS networks often have fixed bandwidth allocations for each location, which can result in underutilization and wasted resources. Alternative solutions provide dynamic bandwidth allocation and load balancing capabilities, allowing for efficient use of available bandwidth across multiple links. This optimization leads to reliable network performance, reduced congestion, and potential cost savings by better utilizing existing connections.
Another way that replacing MPLS can save on IT costs is through simplified management and automation. MPLS networks often involve complex configurations and manual management, which can be time-consuming and prone to errors. Alternative solutions offer centralized management platforms that provide visibility, control, and automation capabilities. These platforms enable simplified network provisioning, policy management, and troubleshooting, reducing the need for extensive (and costly) IT intervention and streamlining operations.
When evaluating specific requirements, consider factors like network size, traffic patterns, and desired service levels to determine the most suitable alternative solution.
SASE and SD-WAN: Alternative network models for enterprises
SASE (Secure Access Service Edge) is an emerging architectural framework that combines network and security functions into a unified cloud-based service.
Regarding cost reduction, both SASE and SD-WAN offer significant benefits. For example, SASE and SD-WAN solutions combine multiple network and security functions into a unified platform, reducing the need for separate devices and appliances. This infrastructure consolidation simplifies the network architecture and lowers hardware and maintenance costs.
SASE and SD-WAN also both offer centralized network management and configuration, providing organizations with a unified control plane. Centralization streamlines network operations, reduces administrative overhead, and minimizes the need for specialized IT staff. And perhaps most significantly, SASE and SD-WAN solutions offer scalability on-demand. Enterprises can easily scale their network and security services based on their changing requirements, avoiding upfront investments in additional infrastructure. This flexibility enables cost-effective growth and adaptation to evolving business needs.
It’s important to note: actual cost savings will vary depending on factors such as the size and complexity of the network, the existing infrastructure, and the specific implementation of SASE or SD-WAN. Furthermore, SASE and SD-WAN can also have potential drawbacks in terms of cost, the most notable of which is network dependency. Both infrastructures rely heavily on a reliable and robust internet connection for seamless access to cloud-based services. If an organization’s internet connection experiences disruptions or latency issues, it can impact the performance and availability of SASE services. Businesses may need to invest in redundancy and failover mechanisms to mitigate these risks, which can add to the overall costs.
Leveraging the Cloud to Reduce VPN Costs
Cloud computing has had a significant impact on cost savings across all of IT, VPN included. VPN adoption has been increasing globally, driven by concerns about online privacy, data security, and the need for secure connections and remote access to corporate networks. Instead of maintaining and managing VPN infrastructure independently, businesses can use cloud providers with scalable VPN to cut costly hardware and maintenance.
Cloud-based VPN services often follow a pay-as-you-go pricing model, meaning companies only pay for the resources they use. Additionally, cloud-based VPN solutions also have auto-scaling capabilities, adjusting the VPN capacity based on demand. This ensures enough resources during peak periods while minimizing costs during low-demand periods.
Companies with multiple cloud environments or regions can leverage Virtual Private Cloud (VPC) peering to establish secure and private network connections between them. Similarly, organizations that have a hybrid infrastructure with both on-premises and cloud environments can consider implementing a hybrid VPN architecture or Transit Gateway services. These cut the need for a VPN gateway and reduce the costs associated with managing multiple VPN connections.
Utilizing the transformative power of the cloud doesn’t just reduce the associated costs of using VPN. It also reduces the dependence on VPN connections in general. Cloud-based applications allow organizations to offload data to the cloud, open up direct access to cloud services and collaboration tools, leverage scalable infrastructure, and adopt zero-trust network access solutions. These measures significantly reduce VPN traffic and enable organizations to downsize their VPN connections while still ensuring secure and efficient access to critical resources.
Accelerated network performance with the power of AI
AI networking is an emerging category that optimizes routing for cloud applications by using machine learning algorithms and real-time data analysis for intelligent routing. By achieving routing optimization, AI networking is expected to become an increasingly important component of IT cost reduction strategies.
“By achieving routing optimization, AI networking is expected to become an increasingly important component of IT cost reduction strategies.”
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AI networking systems continuously monitor network traffic, collecting real-time data on network latency, packet loss, and congestion. This information provides insights into the current state of the network and helps identify areas that require optimization.
AI networking also introduces dynamic routing. Routing decisions are made in real-time based on current network conditions to select the most efficient path for data transmission. This ensures seamless connectivity for critical applications such as video and voice.
As AI networking spreads, it will continue to raise the bar on end-user expectations for connectivity performance and redefine the standards for SLA agreements. Global enterprises will be able to get better connectivity while investing a lot less in implementing and maintaining it.
Success Stories And More: How Teridion Uses AI-Powered Networking To Optimize IT Infrastructure
Teridion’s Network-as-a-Service platform uses AI-powered route detection to monitor networks in real time and dynamically direct traffic to the most available pipes. Teridion is more cost effective than either MPLS or SD-WAN, and IT teams can deploy it within just a few hours to start reducing IT costs from day one.
Notably, Teridion upgrades networking for global enterprises looking to operate in regions of the world where poor connectivity impedes business performance – including China. One such example is Merrill Corporation, which runs 25 percent of the world’s M&A activity through their technology and services. Using Teridion, DataSite (Formerly Merrill Corporation) could successfully break ground into the Chinese M&A market. Similarly, Thru Inc, a global company that provides enterprise-grade file sharing and collaboration solutions, gained optimal China connectivity and even decommissioned a local data center in Hong Kong.
As a cloud-native solution, Teridion accelerates to the cloud with agility, improving network performance and minimizing downtime. Teridion ensures reliability and prevents costly network failures by utilizing 25 cloud providers around the globe. Our NOC team delivers 24/7 expert support to resolve networking issues before they arise. IT teams are free to handle day-to-day operations more efficiently and with less resources.
