Gartner has forecasted that IT spending worldwide will reach $3.8 trillion in 2019, thanks to cloud computing, data centers, and the Internet of Things. However, Oracle CEO Mark Hurd observes that there is a difference in the way consumers and enterprises spend for technology.
Consumers tend to upgrade their devices every two to four years. They get the latest models, the most innovative devices, and top-of-the-line technologies. Hurd calls this “offensive” spending: getting the best, the latest, and cutting-edge technologies to improve their lives and make things more convenient.
On the other hand, Hurd writes that businesses are more defensive consumers. They buy technology that helps maintain, integrate, and protect their existing systems. Some businesses, he says, retain their technology for at least a decade or longer.
Hurd also cites statistics that says eight in 10 CIOs admit to this observation. That means they are pouring money to manage the infrastructure, systems, resources, and applications they have owned for a long time. Why is this a problem? It’s because IT departments will have very little money left for new technologies and digital capabilities, such as cloud computing.
Hurd calls legacy systems as a kind of technology debt. The legacy software, servers, storage, and infrastructure all constitute that debt, while maintenance, service fees, and staff time you spend on it can be considered as interest on that debt. You are effectively spending resources, time, and money not to move forward.
Say no to that defensive thinking when it comes to business technology
Things don’t have to be that way, though. CIOs can say goodbye to that technology debt. For sure, CEOs and the board of directors will agree that they need to cut cost and modernize. So for most companies, it’s not a question of whether or not they should get rid of legacy systems and all the resources needed to support them.
CIOs are asking how they could get out and move to the cloud. They are also wondering how fast they could get out of it. They need to make sure that when they do transition to a new system, it has to be hassle-free and seamless. Or else, the business is affected.
CIOs understand that legacy systems are going to be a challenge. These systems are often customized precisely to meet their needs, which unfortunately makes it harder to modernize and very costly to maintain.
Look to the cloud
The first step is to transfer to the cloud. Rather than making the move in one fell swoop, businesses can get rid of legacy systems one step at a time. Think of it as paying off your technology debt by installments. For example, CIOs can start off using cloud services that can help them manage their data centers and applications.
The cloud service provider will be the ones who will manage everything. Employing a cloud service provider costs less than doing all the dirty work in-house. Businesses will also have more time to focus on more pressing matters. Plus, they also get the latest application updates as soon as it becomes available. This gives them access to all the latest technologies, such as blockchain, machine learning, artificial intelligence, and other similarly cutting-edge technologies.
All these help save time. Rather than spending a lot of accumulated man-hours and thousands of dollars trying to integrate new technologies to your system, your cloud service provider will do it for you.
Hurd estimates that with a good cloud service, moving your legacy systems to the cloud — even if you do so piece by piece — can help you save 25 percent of your on-premises costs. You can then reinvest the saved money into other stuff such as training, financial planning, predictive analytics, among others.
Photo courtesy of Web Summit.