Every change, every enhancement, every big project needs a solid bedrock. This is basically true for everything that is supposed to last. Especially your IT. Hence, in order to achieve something great on your path to the digital transformation, you do not only need a vision and personal engagement, but also a solid IT-bedrock, like your servers.
Many IT-executives nowadays are still clinging onto an old and very tenacious myth: to get the most out of your servers, you must use them as long as possible. Doing that can be extremely counter-productive though – especially in terms of profitability. Not to mention all the opportunities your missing out on. Remember: we are living in the age of digital transformation, which does not only hold a lot of new technology, but is also offering so many brand-new possibilities to grow and achieve amazing things … but only if we have the right tools for it.
Still, a recent IDC report („Accelerate Business Agility with Faster Server Refresh Cycles“) showed that old habits are hard to break: the average server refresh cycle in companies is an extremely long 5.8 years. Let’s take a closer look at those myths, that cause this:
Myth 1: to get the most value from a server, use it as long as possible
Not true. It actually costs a company more to keep existing servers instead of refreshing them. A lot more. Companies who refresh servers every 3 years have operating costs 59% lower than companies who refresh their servers every 6 years.
Myth 2: the cost to acquire and deploy a new server is more than just keeping the old one
Wrong. The cost of operating a server in years 4-6 increases to 10 times the initial server acquisition cost. The reason is because the increasing costs are not linear and jump significantly as a server ages past 3 years. In fact, by year 6, a server requires 181% more staff time and exerts a productivity cost of 447% more than in year 1.
Myth 3: upgrading servers is a cash-flow drain
It is actually the opposite. Even when you factor in the cost of acquisition and the cost of deploying new servers, a company that refreshes twice every 6 years instead of just once will have a 33% lower net cash flow. And if servers are a significant investment for your business (e.g. 300 servers), that could translate to savings up to $14.6 million. Efficiencies of new servers and the benefits of consolidation (e.g. replacing 300 servers with 247 servers) make these savings possible.
Myth 4: it takes too long to realize the benefits of refreshed servers
Incorrect. Remember that the cost of a server starts to increase rapidly in year 4. But, if you replaced it instead, you would not incur those costs. The cumulative benefits of user productivity time savings, IT staff time savings, and IT infrastructure cost savings pays for that new server in less than a year. To be more precise, it occurs in about 9 months.
Myth 5: newer servers have no impact on increasing revenue
False. But, this concept can be a little difficult to understand without hearing from the companies who increased their revenue. IDC highlights two different companies in their report: a logistics company and an educational services company. In both cases, the greater agility, capacity, and shorter time to delivery with the new servers helped them win additional business. IDC calculated the additional revenue per server at $123,438.
Myth 6: buying servers is a capital expense
Not anymore. There are traditional leasing options as well as new innovative payment options such as Pay As You Grow and Provision and Pay from Dell Financial Services.
Don’t let yourself get slowed down in your digital transformation by these old myths. Especially now, as we have just recently introduced our latest generation of Power Edge Servers which, with their optimization for Non-Volatile Memory Express (NVMe), are better than ever before! Not only are they equipped, for the first time, with Intel Xeon Scalable processors, they are also offering intelligent automation, sophisticated integrated security and a scalable business architecture. Combined, they offer a secure, scalable compute platform which is the ideal foundation for cloud, analytics or software-defined data center initiatives.
But all theory is gray. So let me invite you to visit us at the Dell EMC Forum events, on November 7th in Zurich and November 9th in Lausanne:
There, thanks to a rich exhibition and several interesting presentations, you can experience a showcase of our innovative solutions, including the 14th generation of PowerEdge servers, and at the same time expand your network.
I look forward to seeing you there!