Survey on How Irish Companies Would Spend IT Budget

TechCentral.ie did a small survey on how Irish organisations would spend their IT budget.  They question they were asked was “If you had 50% of your total IT budget to spend on one area alone, what would it be?”

The results were:

  • Infrastructure: 61%
  • Virtualisation/(Public/Private)Cloud Computing: 24%
  • Applications: 15%

I was somewhat surprised by the results, and not at the same time.  Here’s why.

Everything we’ve been hearing since the recession started in 2008 (the slide really started in August 2007) is that business could optimise their operations by implementing business intelligence applications to improve their decision making.  These are big projects costing hundreds of thousands and even millions of Euros.  But this survey tells us that Irish IT only would spend 15% of their budget on this area.  This surprised me.

Cloud computing/virtualisation also ranked pretty still brings in a quarter of the budget.  One would expect that everyone should have something done on the virtualisation front by now.  It’s clear that even a small virtualisation project can save an organisation a lot of money on hardware support contracts and power consumption (remember that we were  recently ranked as the second most expensive country in Europe to buy electricity in and we have an additional 5% Green Party tax coming for power).  Getting 10-1 consolidation ratios will drive that bill down.  Those on an EA or similar subscription licensing can even see similar consolidation of their MS licensing, especially with Hyper-V or XenServer.  Putting that argument to a financial controller in a simple 1 page document will normally get a quick approval.

But, I’m finding that many have either not done any virtualisation at all yet or have literally just dipped their toes in the water by deploying one or two standalone hosts as point solutions, a minor part of a mainly physical server infrastructure.  There is still a lot of virtualisation work out there.  And as regualr readers will know, I see a virtualisation project as being much more than just Hyper-V, XenServer, or ESX.

61% of respondents said they would spend 50% of their budget on infrastructure.  That could mean anything to be honest.  I expect that most servers out there are reaching their end of life points.  Server sales have been pretty low since 2007.  We’re in the planning stages for 2011.  3 year old hardware is entering the final phases of support from their manufacturers.  Those with independent servicing contracts will see the costs rise significantly because replacement components will become more expensive and harder to find, thus driving up costs and risks for the support service providers.

I was at a HP event in 2008 where we were told that the future in hardware was storage.  I absolutely agree.  Everyone I seem to talk to has one form of storage challenge or another.  Enterprise storage is expensive and it’s gone as soon as it is installed.  Virtualisation requires better storage than standalone servers, especially if you cluster the hosts and use some kind of shared storage.

DR is still a hot topic.  The events of 2001 in New York or the later London bombings did not have the same effect here as it did in those cities or countries.  People are still struggling.  Virtualisation is making it easier (it’s easier to replace storage or VHD/MVDK files than to replicate an N-tier physical application installation) but there is a huge technical and budget challenge when it comes to bandwidth.  Our electricity is expensive but that’s nothing to our bandwidth.  For example, a (up to) 3MB domestic broadband package (with phone rental) package is €52/month in Ireland, where available

The thing that I believe is missing is systems management.  I recently wrote in a document that an IT infrastructure was like a lawn.  If you manage it then it is tidy and under control.  If you don’t then it becomes full of weeds and out of control.  Eventually it reaches a point where it will be easier to rip out the lawn completely and reseed the lawn, taking up time and money.  Before virtualisation was a hot topic and I was still contracting before going in the cloud/hosting business, most organisations here were clueless when it came to systems management.  Many considered a continuous ping to be monitoring.  Others would waste money and effort on dodgy point solutions to do things like push out software or audit infrastructure.  Those who bought System Center failed to hire people who knew what to do with it, e.g. I twice trained junior helpdesk contractors in a bank (that I now indirectly own shares in because I’m a tax payer) to use SMS 2003 R2 to deploy software.  They were clueless at the start and remained that way because they were too junior.  Maybe those organisations realise what mistakes they’ve made and realise that they need to take control.  Many virtualisation solutions will be mature by now.  That means people have done the VMware ESX thing and had VM sprawl.  They’ve also learned that vSphere, just like Microsoft’s VMM by itself is not management for a complete infrastructure.  You need to manage everything, including the network, servers, storage, virtualisation, operating systems, services and applications.

EDIT:

I think there’s also a growing desire to deal with the desktop, much for the same reasons as I mentioned with the server.  Desktops right now are running possibly 5 year old XP images.  A lot of desktop hardware out there is very old.   There are business reasons to deploy a newer operating system like Windows 7.  Solutions like session virtualisation, application virtualisation, desktop virtualisation, and client virtualisation are all opening up new opportunities for CIOs to tackle technical and business issues.  The problem for them is that all of this is new technology and they don’t have the know-how.

There is a lot of potential out there if you’re in the services industry.  But maybe all of this is moot.  We’re assuming people have a budget.  Heck, Ireland might not even have an economy after this week!

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