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Reducing IT infrastructure costs via outsourcing

New research shows that instead of cutting staff, IT leaders are leveraging new technologies like virtualization and cloud computing to deal with reduced budgets.

New research commissioned by Savvis shows that infrastructure outsourcing and cloud computing efforts are being taken very seriously by CIOs. IT leaders appear to be more oriented to reduction in infrastructure spending, where other industries such as media and retail, focus on staff reductions.

  • 67 percent of all IT leaders are under pressure to do more with reduced budgets. (I would have expected an even higher percentage.)
  • 52 percent of IT executives noted that the greatest cost savings will emanate from reducing infrastructure costs, reducing staff levels (49 percent) and a virtualization strategy (44 percent)
  • 72 percent of IT executives believe cloud computing will play an important role in the future of IT in helping companies gain efficiencies and reduce cost.

One immediate way IT execs could save money on infrastructure costs would be through the use of open-source alternatives, but the research questions were geared toward outsourcing and not software alternatives. Interestingly, financial services respondents reported that virtualization would provide their biggest cost savings.

Top cost savings in 2009 by industry:

  • Financial services--virtualization strategy
  • Media--reducing staff levels
  • Health care--reducing infrastructure costs & standardizing IT infrastructure solutions
  • Business & Professional services--standardizing IT infrastructure solutions
  • Retail--reducing staff levels
  • Manufacturing--reducing infrastructure costs
  • Public sector--infrastructure consolidation

When asked "where do you see your cost savings or efficiencies coming from in 2009?" it's clear that IT leaders are looking holistically across all areas, as opposed to any one specific place for cost reduction:

  • Core server(s) support, 21 percent
  • Data centre infrastructure, 16 percent
  • Storage and back-up support, 15 percent
  • Desktop support, 14 percent
  • Network support, 14 percent
  • Non-application software, 12 percent
(Note: the above is based on a total of 100 percent)

Asked where cost savings or efficiencies will come from in 2009, about half of the respondents will reduce both infrastructure and staff. Only 2 percent reported that they weren't being asked to reduce costs.

  • Reducing infrastructure costs, 52 percent
  • Staff levels, 49 percent
  • A virtualization strategy, 44 percent
  • Infrastructure consolidation, 42 percent
  • Standardising our IT infrastructure solutions, 38 percent
  • Nowhere, we're not being asked to cut costs, 2 percent

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