Understanding the Value of Your Hardware to Software Ratio for IT

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Understanding the Value of Your Hardware to Software Ratio for ITMost modern companies evolving within today’s digital landscape are finding a link between the strategic use of hardware and effective software deployments. As a single piece of hardware becomes more powerful and manageable, companies and CIOs can streamline and secure their digital transformation by maximizing their hardware and leveraging their software to power business.

Tomorrow’s CIO will focus on leading business transformation during rapidly changing tech advancement, and finding the balance between your hardware and software is the key to success.

Watch for the Hybrid Cloud Solution 

Let’s face it: most enterprises can’t afford to follow Amazon’s example. The company simply purchased a private cloud with plenty of room for seasonal peaks, and rents out what it doesn’t need during slower times. Smart, but also efficient. Then there’s Netflix, maybe a better example of a practical future; it plans to fully embrace the public cloud and shut down its data centers altogether. But many organizations—schools, hospitals, financial institutions—see the hybrid cloud as a better compromise—a way to keep private info off the net, and still reap the benefits that cloud computing delivers. 

I mentioned as early as last November that I thought businesses should be pursue pursuing hybrid cloud. We can see how that idea worked for entrepreneurs. The hybrid cloud market is expected to top $80 billion by 2019, and CIOs are slowly adapting their IT architecture to accommodate public cloud services that work in tandem with privately owned data centers. Any CIO who isn’t addressing this is doing his or her company a huge disservice and will likely be catching up as the hybrid cloud market continues to evolve from commodity to necessity.

As hybrid cloud continues to attract CIOs, the bigger picture is one of less hardware and more functionality through software. This trend is driving the adoption of Software as a Service (SaaS) and cloud solutions. This ratio is a key indicator of where your organization is in the digital transformation scale. I’m not advocating for the obliteration of hardware—it’s still critical in many areas. But focusing on it alone may be a costly mistake.

Balancing Hardware and Software

Many companies have embraced hardware and software as package deals. Apple became the most valuable company in the world by creating modernized platforms with proprietary hardware and software. In today’s mobile-driven world, everyone knows how annoying it is to switch to a new cell phone—especially one from a different carrier. Imagine switching your company’s entire IT structure and all of its hardware to accommodate new software. Any complications here would be more than annoying.

More and more companies are adopting hybrid cloud solutions because they’ve become entrenched in their in-house data storage, and moving decades’ worth of data to a new system typically isn’t an ideal solution for businesses that can’t afford operational disruptions. This is the shining advantage of the hybrid cloud: your organization retains the in-house system it’s used for years, and processes are integrated to use the cloud. This eliminates the need to expand servers or dedicate floor space for larger data centers.

Leverage Software for Its Flexibility 

By nature, software is more flexible and upgradable than hardware. This agility is a competitive advantage now, but it may be a cost of doing business in the future. Adopting SaaS business models means that while you’re saving money by not creating your own proprietary software in-house, licensing software on a subscription basis from centrally hosted providers is going to create new B2B pathways and a new set of concerns for CIOs who want to keep their organizations’ IT structures competitive.

IT is no longer about managing things; it’s about managing business systems. The burden of maintenance will be reduced, leaving space for strategic, real-time implementation of new functionality. CIOs need flexible teams who can adapt to new SaaS solutions and support the software their organizations need. CIOs also need to participate in their company’s business decisions, since IT is turning toward SaaS and hybrid cloud solutions as necessities. 

Embrace Big Data as Part of IT 

CIOs will need to leverage big data to remain competitive. The Internet of Things (IoT) is no longer simply data streams from wearable fitness trackers and appliances. The concept of the Industrial Internet is gaining traction, and it may add trillions of dollars to the global economy in coming years by tracking all kinds of machinery and operating hardware to cut costs and completely analyze performance.

This trend is going to open innumerable doors for IT professionals and create entirely new analytical metrics for countless industries. Another key reason CIOs need to change up their tactics and balance their hardware and software is the impact of big data in business.

Hybrid cloud solutions allow enterprises to cut hardware costs by storing data off-site while retaining their in-house IT structures. SaaS and hybrid cloud will necessitate specialized IT services, so CIOs are going to need to embrace business acumen as a much more vital component of their job. You can’t simply disregard the importance of hardware in the looming face of big data—but coupling it with the flexibility of software and the hybrid cloud may be a game changer.

Additional Resources on this Topic:

Five Ways to Increase Your Server Consolidation Ratio
Growing up Hybrid – The Hybrid Cloud Comes of Age
Is It Time to Go Cloud-Native?

This post was brought to you by IBM Global Technology Services. For more content like this, visit Point B and Beyond.


Photo Credit: vitalspringtech via Compfight cc

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.

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