Managed cloud saves money by reducing system and people overprovisioning

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June 22, 2022

Ron Venzin

For most IBM i stores around the world, a unit of cloud computing, storage or networking or a unit of time for a trained IT specialist will always cost more than what it costs to have a such talent internally. And so, you’d think that putting an IBM i system in the cloud and managing all aspects of that system would always cost businesses more, right?

Bad.

Here’s the part of the compute that people rarely do, and we do every time we do another cloud and managed services contract for an IBM i store: many of these companies are massively overprovisioned in terms of compute capacity, storage capacity and personnel capacity.

For example, instead of paying the cost of a machine with 8,000 CPW at the P10 level with lots of local disk storage and maybe flash, you end up paying for a machine with 30,000 CPW because the Power9 machine is much more powerful. And when the Power10 machines launch next month, as they say, the amount of compute base you’ll be forced to buy will be even higher. This is just one example of hardware overprovisioning off the top of my head.

But the oversupply of people – and don’t get me wrong, we love people and our intention is to keep adding more technology and application specific specialists to our team so that we can sell core capacity of the IBM i cloud and managed services for all sorts of things – can be even more expensive. This is because the basic unit of ability for people is, well, a person. And if you need a skill in your shop, you can’t get a fraction of a person easily and still have them on the payroll.

For example, you may have high availability clustering software running on a pair of machines, and you need someone to manage that. Maybe it requires a full-time employee – and maybe it really doesn’t. Either way, you’re paying for one person. The same goes for security, systems management and PTF patches, performance monitoring – the list goes on. Maybe you can get one person to wear three hats, or three people to wear twelve hats and do all these different tasks.

But ask yourself the question: is it really optimal? And can most stores really do this effectively?

No, they can’t.

As IBM i stores always have, they have good people doing their best to cover as many tasks as possible, creating gaps in effectiveness and efficiency.

But with managed services, you share expertise and get only what you need, just like with the cloud, you can share infrastructure and get only the amount of compute and storage you need.

I had a great conversation with a client this week who works in the insurance industry and has been considering moving to our cloud installations for two and a half years. The straw that broke the camel’s back is the increase in software maintenance which is effective in July, and which will hit it in August when they will have to be renewed. This client told me he was tired of chasing after cost and he was tired of chasing after people. Finding good people is costing him more and more, and to add to the burden, someone in his IBM i store has just retired.

He also said that, frankly, IBM’s services have declined in his view, and we agree with that. And he said he’s going to our cloud because he knows we’ll take care of his systems. This company needs geographic separation for HA clustering, and we can do that. He doesn’t want to worry about maintenance costs next year, and he wants to put the headaches on our shoulders by putting everything in the cloud. This puts its focus on applications and the business. When every IT vendor raises the prices of hardware, software, and services in this inflationary economy, and they move to the cloud and only buy what they need in terms of systems and people, and that’s how that it will fight against the higher costs. And by moving to the cloud, this company is going from an IT staff of six people to two — and those two are focused on application development.

You hear stories like that all the time.

We have lots and lots of Power9 iron, and we’re prepaying maintenance for five years because that’s how long we expect them to be in the field, and so this increase in maintenance isn’t going to us strike before years. We get volume pricing on hardware and we have a close relationship with IBM and when things go wrong we can go to a much higher level of technology than the average IBM i store to rectify the situation.

The nice thing is that we have a lot of expertise that only certain IBM i stores will need, like how to operate and maintain the MQ Series message queuing software or one of the main HA cluster tools such as MIMIX, iTera, Trader’s QEDD, and what have you.

The retirement of IBM i staff is a big concern, and something that has been covered in detail in the pages of The Four Hundred. We can help you with this problem.

One of our customers is an Arkansas-based manufacturer. The team consists of three IBM i people. One has retired. One fell ill and had to retire immediately. They thought they were safe because they still had their most senior employee, and he’s the typical IBM i tech: he wrote CL code. He wrote RPG code and made PHP. And he gets sick and can’t work anymore. This company therefore tried to give its X86 technicians a crash course in the use of IBM i. Two days later, we received a phone call. And we will help. We have operator services and COBOL programmers who are available upon request to perform custom coding when needed.

And because this manufacturer only pays for the capacity it uses, it will be able to reduce its costs.

What our biggest clients tell us is that if they were to build a team with the expertise we have at Focal Point, it would cost them a fortune. And in many cases, we grow our expertise by hiring the right people from companies that are migrating to our managed services because they no longer want to budget for all that expertise. They just want to buy what they need and need what they buy.

With a combination of managed and cloud services, that’s exactly what you can do.

Ron Venzin is Managing Director of Focal Point Solution Group.

This content has been sponsored by Focal Point.

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