How to Significantly Reduce Network Costs in These Turbulent Times

Transcription

1 Gartner Webinar How to Significantly Reduce Network Costs in These Turbulent Times Neil Rickard Research VP 24 June Gartner Inc. and/or its affiliates. All rights reserved. These materials belong to Gartner and can be reproduced only with written approval from Gartner. Such approvals must be requested via at Gartner is a registered trademark of Gartner, Inc. and/or its affiliates.

2 How to Participate Today Audio Announcement You have joined the audio muted using your computer s speaker system (VoIP) by default. To call in, please select use telephone in your audio pane of the Webinar panel for the conference number and access code

3 Neil Rickard 11 years at Gartner -- Networking analyst Networking Services Networking Equipment Network sourcing 25 years in the Networking industry R&D, Product Management, Sales, Marketing for vendors including Nortel and Cisco

4 Participant Poll Question 1: When do you expect that your networking expenditures will return to prerecession levels? 1Q or 2Q10 3Q or 4Q10 Beyond 2010 We weren t significantly affected by the recession Don t know / not sure. Please select the option that best fits your situation Responses are confidential

5 Optimize Networking Costs Network Support Simplify: - Centralize - Standardize - Integrate - Formalize Automate Multi-source Network Services Consolidate Negotiate Manage: - Assets - Suppliers - Usage Understand Total Costs Hardware Business unit Carrier fees spend Personnel User self-support Support services Facilities Start With a Plan Equipment Negotiate: - Through channels - Maintenance and support Buy only what you need Time purchases Consider alternate vendors

6 Baseline Networking Costs Gartner ITKMD provides peer comparisons. Network bandwidth continues to grow ~ 30% / year. Network service rates still trending down ~ 10% / year. Annual Cost Network Cost per Attached User 2,000 1,600 1, $2,111 $1,937 Data Voice

7 Create Cost Cutting Team NOW Assign some of your best staff Include a financially qualified professional (perhaps on loan, or on temporary contract) Strengthen relationship management roles Define cost cutting goal and a project timeline Determine a rapid decision go/no go criteria Establish minimum delay approval process Meet at least weekly.

8 2009 Network Cost Containment Ideas Defer non-critical Key Initiatives that do not result in shortterm payback Open up major contracts NOW Make sure you are paying for just what you have Make sure you have just what you need Consolidate networking; use networking to consolidate I&O Utilize networking to reduce business costs. Tools: y

9 Defer Non-Critical Key Initiatives I&O/Networking Key Initiatives IT Modernization Virtualization & Consolidation Process Improvement Microsoft Migrations* Green IT Mobile & Remote Working * Does not apply to networking VolP & Unified Communications Is the KI needed by the business NOW? Does the KI reduce costs within 18 months? If NO, Don t do it!

10 Open Up Major Contracts NOW Tell vendors: Help or non-help will be remembered Often, lower market prices trigger re-negotiation Provide your vendors something for example, increase term or commitment Ask for service credits in 2009 Consolidate network service providers; consider Tier 2 NSPs Selectively combine voice/data, wireline/wireless, WAN and MAN Gartner reviews client contracts -- typically reducing costs 10-20%

11 Make Sure You Are Paying For Just What You Have Telecom Expense Management (TEM) Network Service Provider Executives Department Managers Communications Analyst Invoice Methods Paper CD-ROM Spreadsheets Databases Call Accounting Asset Management Telephony Systems TEM software/services can reduce affected costs 10%+ EDI File Transfer Financial Web Download Accounting Personnel Other: HR, CRM IT Support Personnel

12 Make Sure You Have Just What You Need Standard Bandwidth Guestimating Approach Gartner Bandwidth Estimation Model (BEM) Enterprise type Numbers & types of sites Number & types of users Vs. App. Profiles User/Site Profiles Traffic Engineering Refining Bandwidth Estimates Can Reduce These Costs 15%! Bandwidth required by site by year Applications utilized Available to IT Leader clients: May 2009

13 Make Sure You Have Just What You Need Small Office Typical Enterprise Network Design Teleworker Regional Office 99.99% Availability 99.99% Availability MPLS Network 99.99% Availability Corporate HQ DR Site 99.99% Availability 99.99% Availability Data Center

14 Make Sure You Have Just What You Need Small Office Teleworker Regional Office 99.0% Availability 99.9% Availability Internet MPLS Network 99.99% Availability HQ Corporate HQ DR Site % Availability % Availability Hybrid Net with Rightsized Availability Can Reduce Net Service Costs By 50%! Data Center

15 Consolidate Networking; Use Networking to Consolidate I&O Consolidate into fewer, larger data centers Data Centers Larger Office Systems Converge to IP net Relocate office functionality to data centers. Adopt managed diversity strategy Client Devices Metro/Wide Area Networking Branch Office Systems Consider Branch Office Box (BOB) Integrate platforms Network Security Integrate and evolve to Unified Communications /Messaging Storage Adopt terabit switching and move towards all-ethernet In-Building Networks Network consolidation opportunity Consolidation opportunity enabled by networking NOC Consolidate ITOps

16 The Application-Fluent Network Spend more on Networking to reduce other IT Costs Data Centre Application Delivery Controller WAN Optimizer Reduces Bandwidth 50%+ Branch office WAN Optimizer Recover 80% of Server Resources Consolidate Branch Servers Improve Response Times 3-10x Application fluent networking is not just plug and play Requires collaboration with the applications teams If necessary externally source commodity functions to free up resources for application fluent networking

17 Participant Poll Question 2: Of the following networking consolidation opportunities, which have you substantially completed (80%+ implementation level)? Voice and data (VoIP) Voice and data (IP WAN) and messaging (UC) Terabit switching in the Data Center NOC and IT Ops Please select the options that best fits your situation Responses are confidential

18 Utilize Networking to Reduce Business Costs Lower Travel Costs with Telepresence Travel Costs Full Telepresence $/month Telepresence Lite Standard Videoconferencing Person-trips/month

19 Reducing Network Costs: Further Thoughts Move to corporate liability for wireless services Deploy VoIP but don t invest in fancy IP phones Use IP trunks instead of PRI lines Don t future-proof your network equipment investments Selectively utilize managed services, outsourcing, cloud services and other alternative delivery models.

20 Network Cost Containment Ideas Defer non-critical Key Initiatives that do not result in shortterm payback Open up major contracts NOW Make sure you are paying for just what you have Make sure you have just what you need Consolidate networking; use networking to consolidate I&O Utilize networking to reduce business costs. Tools: y

21 Participant Poll Question 3: Of the following network cost reduction opportunities, which TWO do you feel STILL offer you substantial opportunities to further reduce networking costs? Defer non-critical Key Initiatives that do not result in short-term payback Open up major contracts NOW Make sure you are paying for just what you have Make sure you have just what you need Consolidate networking Please select the options that best fits your situation Responses are confidential

22 Recommended Gartner Reports and Tools Gartner Research Cost Cutting Using Top Strategies to Reduce Spending on Wired/Wireless Services G Cost Cutting in Enterprise Telephony G Hybrid WAN Connectivity Using MPLS and IPSec Virtual Private Networks Cost Cutting by Rightsizing Network Reliability - G The Big Picture for Enterprise Telepresence G Virtualization Changes Virtually Everything G Gartner for IT Leader Toolkits Toolkit: Use Best Terms and Conditions in Wireline Contracts to Maximize Savings G Toolkit: Use Best Terms and Conditions in Cellular Negotiations to Save Millions of Dollars G Toolkit: Bandwidth Estimation Model G Toolkit: RFP Template for Managed MPLS WAN Services - G Toolkit: Best Practices to Consolidate IT Infrastructure G Toolkit: Vendor Influence Curve Self-Assessment Tool - G Please contact your Gartner Account Executive

23 Want to Learn More? Become a Gartner for IT Leaders client -- Exclusive, pragmatic, how-to research -- Exclusive access to Gartner s benchmarking data -- Interactive, web-based research product that brings everything Gartner has to offer to help you be successful in your role. Please contact your Gartner Account Executive

24 Gartner Reduces IT Cost in Four Distinct Ways Visit gartner.com/economy now to see exactly how Gartner takes cost out of IT

25 Thank you for Participating! Please submit your questions now using the Webinar Questions pane. If you have additional questions, comments or requests, please follow-up with your Gartner Account Executive If you need help with who that is, please If you would like a copy of today s presentation, contact your Gartner Account Executive or us at: GartnerWebinars@gartner.com

26 Gartner Webinar How to Significantly Reduce Network Costs in These Turbulent Times Neil Rickard Research VP 24 June Gartner Inc. and/or its affiliates. All rights reserved. These materials belong to Gartner and can be reproduced only with written approval from Gartner. Such approvals must be requested via at Gartner is a registered trademark of Gartner, Inc. and/or its affiliates.