On the infrastructure side, consolidation, if done along with a good bit of capacity planning, can lead to significant savings by means of server consolidation and virtualization.
While the cost of hardware has rapidly come down, the key component that has remained high is operational expenditure; be it at the level of software where maintenance contributes, or at the level of infrastructure where management contributes.
Infrastructure management costs are influenced significantly by operational aspects like data center power, cooling, etc., as well as by the need to manage more and more systems. Virtualization is playing a big role in bringing down these costs, by means of leveraging lower cost of powerful hardware to create multiple virtual systems on one physical host.
While virtualization as a concept is useful, it still needs to be planned for; unplanned virtualization is a bigger headache than a non-virtualized environment. Similar to the synergy between IT and business roadmaps, the infrastructure roadmap must also be synchronized with these roadmaps to ensure that the infrastructure also scales to meet the IT and business needs.
Software management costs can be reduced by considering a combination of in-house software plus a software as a service (SaaS) model for non-business critical requirements. Microsoft has called this S+S (software plus services) and has followed it up with an interesting set of offerings in this space. Here again, the key is to plan for which parts of the business can actually be run using a SaaS model, and which cannot.
New IT-Driven Business Models
IT has enabled multiple new business models to come into being. eCommerce earlier and now syndicated ad-based revenues on the Web are telling examples. For IT to better adapt to the change it itself is bringing on, it is important for businesses to keep abreast of technology evolution, and predict how business models are likely to change as a result of a specific IT breakthrough.
While these are hard to predict, it is essential to get an early visibility into such changes so you can react quicker. Most new business models have faster time to market as a critical success factor. IT is expected to support this. For this, IT must look to reuse instead of attempting to build from scratch. Reuse in the enterprise space can be realized by using a service oriented architecture (SOA) that can quickly enable new functionality by combining and aggregating instead of creating from scratch.
From the technology angle, the main factors that lead to changes in the IT landscape are:
The evolution of technology at its current rapid pace is a double-edged sword. While it promotes new ways of doing things, it also leads to a rapid obsolescence of earlier technology, and with it, brings other issues such as unavailability of skilled resources, lack of support, etc. However, these alone shouldn’t be the factors taken into account when looking at transitioning to new technologies.
Other aspects like what time lines the change entails, how end users are impacted, etc., must also be taken into account. In many cases, a combination works out better: retain existing investments, but also build new applications in newer technologies. In this, ensuring interoperability by using open standards is important, so that integration across technology stacks becomes easier. Cognizance must be taken, however, because the presence of too many disparate technologies in the landscape is not good either, and should be avoided.
Most applications have been targeted at stationary monitors or kiosks, while now the focus has shifted to mobile computing. Computing form factor has hence changed rapidly. New paradigms like Surface from Microsoft, or iPhone from Apple have also resulted to changes in the way a computer is envisaged. It is important to consider these alternate computing form factors when devising software. Software then needs to be agnostic to form factor, but must also be capable of being customized to fit into computers with less computing power than a sixteen quad-core processor server system.