RESPECTING THE VALUE OF YOUR IT INFRASTRUCTURE

It doesn’t matter if you are a one or two person company with a single shared PC or a 70 person multi-office company with three servers, 50 workstations, printers, plotters, CAD stations, and more – one fact remains true regardless of the size of your business. If you need a computer at all, you need to recognize that your IT infrastructure, i.e. all of the various network and computer hardware and software that your company uses, represents the central nervous system of your organization. Oh sure, you may manufacture stuff, sell widgets, or serve food and you will need people and probably other hardware as well, but what ties it all together, tracks costs, place orders, prepares invoices, calculates payroll , and facilitates communication between employees, vendors, and customers are all of the digital pieces and parts that make up your IT infrastructure. And like a human central nervous system, a failure anywhere in this system can make running your business very hard or even impossible.

So why is it that every day we find small or medium-sized businesses (SMB’s) where the sales floor is all marble and chrome, trucks are wrapped with the latest in glitzy vinyl advertising, and leather couches and fish tanks decorate waiting rooms. But the ancient server equipment is in a cluttered, poorly ventilated and insecure broom closet (or a ladies room – you know who you are), and employees are using 10 or even 15 year old computer systems, obsolete software, and aging networks built with long-abandoned technology. When we point out the myriad risks ranging from downtime to loss of critical business data, identity theft, and even total failure of the business, we are more often than not greeted with shrugs, skepticism, and an utter failure to appreciate the critical role that the IT infrastructure plays in the health and well-being of any modern business. As mentioned earlier, IT is the Central Nervous System of most businesses, and yet it is treated as less important than a haircut or a new suit. Outward appearances count for more than the equipment and services that the success of the business, indeed its very survival, depends upon.

KEY RATIONALIZATIONS USED TO DEVALUE THE IMPORTANCE OF IT

If the importance of a robust and capable IT infrastructure is so fundamental to the success of an SMB, what’s behind this seeming indifference or downright aversion to the many important reasons for keeping the IT infrastructure up-to-date and well maintained? After 23 years as an IT services provider, I find that there are five typical rationalizations that SMB’s characteristically embrace:

1. BUSINESS INERTIA – “It’s working fine, why change?” This is avoidance exemplified. Not only does the business ignore or minimize the risk associated with aging equipment, it completely fails to appreciate the economical and operational benefits presented by newer technology.

2. VALUE/COST INSENSITIVITY (or hypersensitivity) – Most often seen as “Cadillac ambitions but a Volkswagen budget”, this can also appear in the opposite form, i.e. fear of the required cost keeps the business from looking for or considering worthwhile upgrades.

3. RISK INSENSITIVITY – Failure to appreciate the increasing risks associated with aging technology. Those risks might be physical, such as hardware failures, or they might be operational, such as slow performance or lacking newer but necessary features.

4. OBSOLESCENSE INSENSITIVITY – Failure to comprehend the ever increasing rate of technology changes, or conversely, the increasing rate of obsolescence of the IT infrastructure. This is actually a failure or reluctance to embrace or keep pace with new capabilities, security measures, or technologies. In many ways, this is another form of Business Inertia

5. CAPABILITIES OVERESTIMATION – In more simple terms, this is an inflated sense of the available in-house IT capabilities. Increasing professional or casual familiarity with technology, such as that often seen among medical professionals who use sophisticated diagnostic and laboratory equipment, leads many otherwise very capable professionals to think that they (or sometimes an employee or relative) can handle their IT infrastructure on their own. While they may grasp the basics, such persons for whom IT is a sideline at best seldom have a complete appreciation of the scope and complexities of their IT infrastructure or their needs.

A few types of SMB’s embrace all of these rationalization, but even the most enlightened embrace some of them. It goes with the territory, a part of being a small or medium-size business. There’s never enough cash for everything, so where do I cut corners? Sadly (albeit illogically), for one or more of the above reasons IT expense seems to be the go-to choice for SMB’s. Enterprise-level companies don’t commonly suffer from this lack of appreciation for their IT infrastructure – and it just may be that that is one of the key reasons they became Enterprise-level companies.

KEY CONSIDERATIONS THAT EMPHASIZE THE VALUE AND IMPORTANCE OF IT

1. BUSINESS GROWTH – If you ever hope to have more than one location, or more than a hundred customers, more than a few employees, or offer more than a few products or services, face it: you are going to need a computer to keep track of the myriad details that go along with running a growing business. And the more you grow, the more equipment you need and the more important that equipment, that infrastructure, becomes. Look at your business today: Could you operate at anything close to full capacity if you lost a server, an important workstation, or your access to the internet? Judging from the service calls we get at my IT service business, the answer is almost certainly NO!

2. VALUE/COST – Any realistic analysis of the value that your business derives from your IT infrastructure will almost certainly justify the cost of maintaining that infrastructure and keeping it current. Penny-wise and pound-foolish decisions like using a residential firewall/router or pressing an already obsolete home computer into service as your business server will cost you plenty in downtime, poor performance, and lost productivity. And those $399 big-box store computer bargains you see in the Sunday paper are typically underpowered and come with consumer versions of the operating system software that will not network correctly with a business server or more than few workstations. And for heaven’s sake, keep up to date with anti-virus and anti-malware software, and with the upgrades and security patches for your operating system and line-of-business applications (e.g. bookkeeping or estimating software). Saving $100 by not buying or upgrading that software can cost you $1,000’s in lost productivity if your computers get hacked or infected with a virus or ransomware.

3. RISK – The older your IT equipment becomes, the more likely it is that you will experience a hardware failure or exceed some capacity limitation that will bring your business network to its knees. When (not if) that happens, how long can you afford to be without your IT equipment? For many SMB’s, the loss of their IT infrastructure means lost productivity and lost revenue that adds up at a staggering rate. Think about your own business and how long you could operate with a server, important workstation, or your internet access down. Chances are the answer is ‘not very long’ before your reluctance to buy new equipment or make necessary repairs becomes far less important than getting your IT infrastructure back up and running.

4. OBSOLESCENSE – A good Rule of Thumb for replacing business servers is every five years AT MOST, and for workstations the typical replacement period is more like every three years. Why? Well, for starters business equipment is used more steadily for longer periods of time than the typical home computer so they experience more wear and tear. But other reasons include increases in the performance and capabilities of newer equipment and increases in the hardware requirements for new operating system or line-of-business software. And the five and three-year rules of thumb are not a complete license to keep using your equipment for those periods. With the increasing rate of change in capacity and capability for newer versions of hardware and software, coupled with the increasing demands of a growing business, your IT infrastructure could be obsolete in shorter periods. If you find yourself limping along from one major IT repair to another or suffering from the poor performance of your servers or network, you are probably fighting obsolescence and are desperately in need of updated equipment.

5. IN-HOUSE CAPABILITIES – Just because you run a small network at your house or can operate sophisticated diagnostic equipment, it doesn’t automatically follow that you are the best choice or even an OK choice to set up or administer a business-class network. You, or your nephew, or an employee, may be an IT legend in your own mind, but if you were that good at it why are you not doing THAT full time? We run into this every day, and these ‘local experts’ create plenty of service calls for us. There are lots of details associated with business-class network administration and server operation that the educated user or home hobbyist just doesn’t get exposed to often enough to be any good at it. My advice? You will save significant money in the long run, and have a better business as well, if you leave network administration and server configuration and operation to the experts and instead focus on being the best at your primary occupation.

SOUNDS EXPENSIVE? IT DOESN’T HAVE TO BE.

So we are back to the crux of the matter. Operating and maintaining a robust and reliable IT infrastructure may be the best thing for your business, but how about the cost? Well, it’s been my experience that when the cost question comes up, most SMB’s picture the huge capital expense that they have to face every three to five years in order to put in place and maintain a solid IT infrastructure. If you have plenty of capital that kind of periodic outlay may work for you, but most SMB’s typically become catatonic at the thought. They eventually reach a point where they can’t avoid it anymore, but that is all too often after experiencing a catastrophic failure and long after they should have upgraded to properly support their business.

The good news is there is a way to avoid those periodic large capital expenditures and make your overall IT expense for hardware, software, and service a predictable monthly operating expense that is far easier to budget for than the less frequent but much larger capital improvement projects. It’s called “Infrastructure-as-a Service” (IaaS) and from my perspective as an IT service provider it makes a lot of sense for many of my SMB customers, and for my business as well.

I have a few business associates that have, after many years of trying, succeeded in converting their customer base to this service model, and their customers have enjoyed better reliability, stability and performance as a result. But it takes a lot of time and service provider capital, engineering, development, and finally marketing to convince an SMB to convert to a homegrown IaaS service model developed by their own IT service provider, so many SMB service providers don’t offer IaaS.

But a company in the UK founded by some highly successful software entrepreneurs has taken advantage of current trends towards hybrid infrastructures and made IaaS not only relevant but also easy and affordable to implement. The company is Zynstra (www.zynstra.com) and after enjoying much success and winning awards in the UK they entered the North American market in September 2014 with a line of Hybrid Cloud SMB IT Appliances offering enterprise-class services on a cost-effective all-inclusive monthly or annual subscription basis. At the renewal of each 3 or 5-year subscription period, the server is replaced to ensure use of the latest technology, and upgrades within a subscription period can be entertained although the monthly price will rise to reflect the larger resource capacity and license usage.

Using highly regarded HP Proliant servers, the Zynstra solution lets you choose what to run securely on‐premises, and what to run and store in the cloud. It includes innovative features to manage the infrastructure remotely, keep it current, keep it safely backed up in the cloud, and deliver a robust virtualization environment to efficiently run line-of-business applications. These servers come in sizes that support from as few as 5 users to as many as 250 users, and they can be clustered in a high-availability configuration or used at multiple sites throughout a distributed wide-area network where local performance is important.

Now Zynstra may not be the only company that offers an IaaS solution, but they are certainly the first to enjoy widespread success. And most importantly for SMB’s, they offer a way to avoid altogether the periodic large capital outlays for infrastructure renewal and instead have an always-current infrastructure with both on-premises and cloud capabilities at a steady and predictable monthly cost. No more huge capital expenses, just an easier-to-budget monthly operating expense for the costly majority of your IT infrastructure.

IN CONCLUSION

For many SMB’s, the shift from the large capital expense (CAPEX) model to a more manageable operating expense (OPEX) model via IaaS promises to address the major factor behind most of the rationalizations that lead SMB’s to devalue their IT infrastructure: fear of the unplanned or hard-to-budget-for capital expense. Moving to Infrastructure-as-a-Service removes that fear and will quickly demonstrate the considerable value of an always-current, properly maintained, and periodically renewed IT infrastructure.

George