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Cost-to-Revenue? The Changing Role of Data Center Management

By: Kaylie Gyarmathy on September 1, 2015

Cloud deployments are on the rise. As noted by MSPmentor, 93 percent of companies now use at least one cloud application, while 82 percent are leverage the hybrid cloud. Increasing cloud focus has led to a shift in IT investments—cost-driven deployments are quickly being replaced by revenue-driven, line-of-business (LOB) solutions which form an integral part of the to-market chain rather than mere support structure. This trend is now being carried forward into other areas of IT such as data center management; here's what you can expect.

What's Happening?

The first successful cloud deployments focused on a single characteristic of the technology: Its ability to save companies money. As the market has matured, however, this view has changed. Businesses now realize that the ongoing costs of cloud computing eventually reach and then surpass projected spend on hardware, while at the same time development and operations staff discover ways to leverage cloud resources and improve business processes. The result? Greater monetary investment with a time-based return—employees and IT professionals alike are able to dedicate more effort to long-distance business objectives instead of merely treading water.

As noted by Data Center Knowledge, achieving this aim means changing the role of IT from one of cost center to revenue center, subject to the same scrutiny and expectations as any other department. Instead of spending on infrastructure, for example, IT departments are now looking for funds to spur development and growth—which will ultimately pay ROI dividends.

Buying In

Making the cost-to-revenue transition, however, can be difficult since IT pros often balk at the price tag of new technology, preferring to build something in-house than outsource needed components. When it comes to cloud-based environments or colocation data centers, therefore, the customer experience becomes critical. What kind of security is in place to protect corporate data? How much control do local IT have over the configuration and deployment of hardware? Where are third-party servers located, and what (if any) latency is expected when companies need to scale up resources or purchase additional space?

Ultimately, providers face two challenges when it comes to empowering the cost-to-revenue shift: IT professionals and executives. Both care about the same end goal but take very different paths: IT wants the simplest, straightest route to ROI, one where security is valued over speed. C-suite executives, meanwhile, want IT services to start “paying their share” of the bottom line as soon as possible—here, immediate results and high returns are critical.

Data center services that are able to meet both needs—offering IT the ability to choose their own hardware but executives the benefit of scalability on demand—should see significant growth over the next few years as familiar cost-driven IT is replaced by revenue-generating expectation.

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