Cutting IT Cost in Financial Crises

Author: Edward Popoola

Most Enterprises depend on their Information Technology (IT) departments to maintain business continuity. As such, the IT department is expected to ensure maximum uptime and provide round the clock support for the various technologies behind an organization’s business process. From the core servers that run the business logic to the CEO’s printer, the IT department is responsible for ensuring availability of these technologies.

For large businesses that expand rapidly, the IT department is usually indulged for its ever increasing cost. Cost to bring in more consultants, more software licences and more infrastructure. Small and medium sized businesses (SMB) do not usually have the luxury; they still spend a lot on acquiring productivity technologies all the same.

But then, good times are over. There is financial crisis and the global economy is shrinking.

Nations are cutting cost, businesses are being bailed out, and bonuses are being slashed. The most popular of phrase of the world being a global village is now a nightmare for us. Gradually Nigerian enterprises are feeling the ripple effect of financial decisions that were taken in Europe and America. For businesses that are yet to collapse, there is so much pressure across board to cut cost or totally eliminate new ones.

However strong the impact of the IT department is within an organization, it is one of the first that gets the phone call for a reduction in budget. As such, management wants the IT department to cut cost while still delivering the same performance and overall IT value. For organizations that have legacy systems that continuously gulp a large percentage of the overall IT budget year in, year out, it is time for the managers of these systems to consider a change in technology strategy. Legacy systems and vendor lock-in are not healthy for IT departments in a receding economy. Flexibility is needed.

IT budgets get bloated by the time you add up costs from software licensing fees, new hardware replacement or procurement and staff training among others. Here are some suggestions on how to reduce costs in a way that will not hurt business continuity.

Take a look at Open Source Software

According to the Open Source Initiative, Open source is a development method for software that harnesses the power of distributed peer review and transparency of process. The promise of open source is better quality, higher reliability, more flexibility, lower cost, and an end to predatory vendor lock-in.

You probably have heard about Open source, but then if all that comes to your mind is a collection of free software that needs to be used only on your home desktop, then you had better think again.

Today, the Open source movement has evolved to include software developers using the Open source model to build enterprise ready software. Software products of Oracle, Microsoft and other big companies now have viable open source alternatives competing aggressively for their share of the software market. Support used to be the main argument against Open source software, but then that has changed. Companies like SUN, HP, IBM, Novell and Redhat among others are solidly behind popular open source alternative software.

Open source software gives businesses the ability to modify software systems to respond to rapidly changing business conditions. What this means is a drastic reduction in the time it takes for companies to innovate and introduce new products into the market. There will be a lesser dependence on enterprise vendors who profit from locking businesses into their one-size-fits-all proprietary systems. With Open source, businesses have access to the highest quality of software built by more developers no single proprietary software company can afford.

Cut the licensing Fees

Heavy Software licensing fees are not about to go away. In fact, this is the time companies like Microsoft would come after you for your valid software licence. Enterprise open source software comes with a zero licensing fee and there are tonnes of them out there. Businesses can take these enterprise open source software and use without paying any fee.

With open source, conventional wisdom of getting what you pay for is wrong, apart from saving money, open source software give enterprises better performance and flexibility.

Enterprise Open source software too comes at a cost. Such costs are those associated with an optional support from the software company. These fees are still comparatively lower than licence fees for proprietary alternatives. Today there are many high quality open source software in the categories of Office productivity tools, Enterprise Content Management System (ECM), Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and Unified communication among others. An example of open source software that is being used for mission-critical systems today is the Linux Operating system.

Enterprise Linux is renowned to be far more stable, reliable, secure, flexible and scalable as well as far more cost-efficient. It is for these reasons that, all over the world, companies are beginning to see large amounts of value in implementing Linux; many more companies are already finetuning their migration strategies.

In Nigeria, Linux deployments are beginning to grow; from banks and oil companies to telecommunication companies that are known to predominantly use UNIX, Linux is enabling these businesses to deliver value while reducing cost. And like any open source software, all you need pay for is support, if you want one.

Maximizing existing hardware resources

Acquiring more hardware might be in the form of acquiring more server machines or more network appliances. Hardware resources are today cheaper and more powerful than they used to be a while ago. And going by Moore’s law, we will still see more reduction in the coming years as innovation continues to show up in the industry. But then, for the IT manager considering bringing down cost to the barest minimum, buying more cutting edge servers to run new applications might be another strain on the budget.

IT departments do not need to buy cutting-edge servers all the time they need new servers. For instance, instead of buying a new server to complement an old file server, an idle desktop system could be upgraded with a faster RAM, larger hard disk and converted for the same purpose. This is especially useful for small to medium-sized businesses. Furthermore, it is noteworthy to mention that operating systems like Linux with its low hardware requirements allow businesses to maximize investments in low end commodity servers. Linux allows you to use many small clustered servers in place of a single outrageously expensive high end server, and yet gain the same performance benefit in addition to high availability.

Pay Attention to Security

Internet attacks are more sophisticated today than they were last year. There is no better time than now to make sure your business infrastructure is secure. This is the worst time for an enterprise to have a downtime as a result of a denial of service (DDOS) or related attack. Prevention they say is better than cure. Having a downtime in the middle of a financial crises is a recipe for disaster and definitely too expensive for shrinking IT budgets.

This is the time to critically watch production servers for a remarkable or outrageous drop in performance. As such before writing off servers, IT managers should make sure security audits are performed on them to look for signs of a compromise. Common scenarios exist where business servers would have been compromised and turned into an internet file sharing server or a gaming zone by some hackers from anywhere in the world. This has a negative effect on business productivity.

In addition, the marketplace is more competitive today, thus this is also not a good time for your business strategy to fall into the wrong hands. More than you know, your competitors might be all over trying to know what you are up to.

Take a look at virtualization

To achieve more with less today, enterprises are looking at virtualization as an option to cut down cost. In simple terms, virtualization allows you to abstract as many operating system environments out of a single operating system environment, with a single hardware.

Virtualization reduces the cost of managing many real physical servers as against managing a single physical server and a few other virtualized servers. It also helps keep down the additional cost of Heating, Ventilation and Air conditioning (HVAC) systems in data centers.

A quick example of a virtualized system is having many operating systems (virtualized guests) sit on a single hardware server (host). Each of the virtualized guests will have access to the components of the single server including their unique IP addresses and system resources. Virtualization improves the efficiency and availability of IT resources and applications.

There are many virtualization options to consider today and as usual, cost is a significant factor. Proprietary options available include Microsoft’s Hyper V solution and VMware Server. As usual, Linux provides a stable and robust licence-free alternative that is available for the enterprise.

*Popoola is an Enterprise Architect at Blue Identity. Blue Identity helps businesses deploy cost effective, reliable, stable and secure enterprise computing infrastructure using the power of Linux and other open source tools. He can be reached at edward@blueidentity.com

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A Second Thought About Open Source Software

It took awhile before I took to the use of open source software. The reasons were not far fetched. One, I knew little about it, to be honest. And secondly, I am simply a Windows person. I have worked with Microsoft Windows since the late 90′s and have taught Windows for the past 10 years as an IT instructor. And lastly, which is the main reason why I am writing this article, (is) are the technical reservation I had about Opens Source software.

I read with interest an article by a friend, Edward Popoola of www.blueindentity.com titled: Cutting IT Cost in Financial Crises, sometime ago, in which he advocated the use of open source as one way of cutting IT cost in financial crises. I sent him an email after I read the article, with my reservation about open source software, and he took time to reply. His school of thought was very helpful. I asked for permission to republish his article, hoping that, a handful of people may find it useful. And he agreed.

Working with Open Source now is not just fun for me but also cost effective. From open source blogs like WordPress, Joomla, Drupal etc to Linux operating system (I have combined Linux Ubuntu 9.04 with Windows OS on my laptop) and even the sluggish OpenOffice.org, is not bad at all.

Before I publish the article, I have decided to first publish the email conversation we had about my reservations on Open Source for your reading pleasure. Please, read these open emails about open source with an open mind. Your comments are welcomed.

I wrote:

Hi Edward,

I read your article Cutting IT Cost in Financial Crises. The publication was thoughtful.

It is true that government agencies and many people are deploying open source software like Linux. OpenOffice offers its functions similar to Microsoft Office.

Can you shade more light on some of these reservations I have about open source software?

1. Incompatibility with different applications or devices run with commercial software platforms such as Microsoft’s Windows or Apple’s MacOS.

2. Security features included in commercial software may also block some open source software.

3. Similarly, open source software may lack security features, making it vulnerable to hacking or infection with harmful software such as computer viruses. Commercial software products usually offer rapid personal tech support for users.

4. Finding help in solving problems that occur with open source software may require much more effort, particularly if the user is not an expert with computer code.

Regards

Sefa Tsegha

Edward’s reply:

Hi Sefa,

Thanks for your email. Please find below my thought on your questions

1. Incompatibility with different applications or devices run with commercial software platforms such as Microsoft’s Windows or Apple’s Mac OS.

>>> A great deal of progress has been made in terms of making open source software interoperable with other commercial software. As long as commercial software is built using open standards, it can work with any open source software because open source software is built using open standards.

[“The reason why you can plug you Ethernet cable in your laptop and it will also work on your server is because the cable is made from open standards and manufacturers recognize that”]

Please note that the fact that open source software is not working for a hardware platform does not mean it cant work for that platform, it just means that the version for that platform has not been developed. Most open source software work on both windows and the Mac platform.

In the long run however, Open source software is better because you system will be built on open standards and you won’t be locked into proprietary standards. An example, if Microsoft word disappears tomorrow, should all your documents saved in .doc also disappear? Open standards present software in a way that is compatible with as much of other open standards software so the user is not locked in….this gives the user freedom to choose.

2. Security features included in commercial software may also block some open source software.

>>> There are few cases where commercial software ‘blocks’ Open Source software. The major issue here is whether the commercial software was built to recognize and accept open standards. Assuming we all agree to speak English language in a country and then this guy shows up to speak Spanish…The reason we cant communicate with him is not because we cant talk, rather its because, he is using a different language. So if commercial software plays by the rule, then everybody can work together. That’s why windows, Mac and UNIX servers can work together today. But then, the Spanish guy still sticks to his Spanish because he thinks Spanish is the better way to go instead of English.

It’s only badly written software that will not recognize open standards. Imagine internet explorer not opening your website because you’re using PHP? You would agree there are rare cases of that ever happening because open source software is not built using hidden standards, they use the generally recognized open standards.

>>> Open source software is more secure. This is because the software is developed by more people from all over the world. There are thousands of people working on MySQL, more than the people working on Microsoft SQL server. The fact that the code is open for everybody to see, means that it is easy to quickly see bugs and fix it. Unlike bugs in commercial software developed by a handful of people, when you have more hands in software, you have more eyes looking at the code.

And the fact that commercial software are developed by just a bunch of people means that it is easy for them to do dirty work just to make things to work – and nobody knows until something bad happens down the line. In open source code, every body sees the code and the dirty codes are easily wiped out of the software. You can’t hide your dirty code in most open source software.

Which Operating system has more Viruses? Windows or Linux? You decide. Redhat provides 24X7 supports for its Enterprise Linux, same thing with other companies that sell support for open source software.

4. Finding help in solving problems that occur with open source software may require much more effort, particularly if the user is not an expert with computer code.

>>> This is where the issue of support comes in. There are open source software that are free of support, but there are many that has support fee attached to them. Linux is free, but then Linux support is not free. Red Hat gives its Linux free and you can use it without support. But if you want to use it in your business, RedHat offers an annual support subscription fee that will allow you to call them anytime for help.

Please note that Open Source Software does not mean free software. Most Enterprise (Business) Open source software come at a cost (for support) while free software is just free without support fee. What we are saying is people should use open source software in their business, not free software without support or anything. The overall idea is that Open source software is cheaper to maintain than commercial software and can help you cut your cost, while still delivering same value for your business.

I hope this helps.

–

Edward Popoola
Snr. Technical Consultant
RHCE | SCSA | CEH

E: edward.popoola@blueidentity.com
W: www.blueidentity.com

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Brand Tip: Don’t Make the Mistake Everyone is Making in Economic Meltdown..

: Brand TIP

Everyone is making this mistake the world over since the economic crunch came head-on on the financial system. The very giants in corporate branding have followed suite, slashing down their work force. Destroying the customers’ confidence, which took them years to build. The economic crunch seems to take a hold on them, so they ignore the havoc they are causing to their brands with the huge slash. The huge job loses are scary. And, the news guys are having a filled day propagating their downfall.

We at EP-IT Consult have seen the other side of the coin. We see the cup half full instead of half empty. If there is any time to build an effective brand it is now. The economic meltdown is the right time. I am not kidding! There are more opportunities. The big guys may be crumbling, that does not mean I must go with them.

Discussing on business development, we have resolved on a lot of things to serve our clients in greater opportunities. We can not give them an excuse why we could not give the necessary assistance they have been receiving from us because of the times we are in. There have believed in us all this while and we can not afford to fail them now. If we shared in their business development, now is the time to lead them through the dark tunnel as we shine the way through.

It is quite expensive in all economies of the world, and at this time in particular, not to talk of an economy of a country like Nigeria, to effectively deliver on qualitative and professional IT solutions when you have so many challenges and huddles working against you. Things like poor power supply, poor government policies and illiteracy; also high cost of the internet and unavailability of original IT resources, to mention but a few. These and many more constitute a difficult terrain in IT project management.

Instead of following everyone else in chanting the recession slogan and failing to achieve what we have been employed to do, we have resolved to stick to the vision ‘to lead with integrity and professionalism’ and take advantage of the Downturn. There is no better time for business than now!

We have increased our budget on mobile and online support to effectively meet our clients’ demands. We have increased our offline flayers’ production by 50% to burst our advertisement. We are still giving out a reasonable prize slash-down on our hosting packages in promos and has plans to expand our products sooner than we thought we would.

Hey, I know you may be wondering what is making me speak this way or may be asking my credibility and experience in corporate branding to talk the way I am talking.

Let me confess, I am not Martin Lindstrom, the Brand Sense guru, nor Bill Gates to give you the money to run your business. Needless to say, that I don’t have a sit on the marketing boards of Mercedes-Benz, Disney or the Reuters. I am just the right guy, in the right place at the right time. And don’t need all those accolades to write on a topic that affects you and me. But suffice it to say that I know what I am talking about. Take advantage of the economic downturn and sell your brand.

Nevertheless, this tip is not magic and may not work as such for you. But be careful as you slash down your work force or spending because everyone else is doing it. By this I am not encouraging a lavish spending habit, but prudent management of resources to deliver on goals and targets in economic crises.

If you have read this article down to this point, then I can really see that you are looking for ways to improve your business. We will be glad to give you the professional advice to move your project ahead and improve your brand value.

If you decide to partner with us, we will apply sophisticated research and analysis techniques which result in an action plan unique to your company’s branding, its challenges and goals. At the root of those goals will be a pointed, focused marketing plan for all levels and layers of communication.

Sefa Tsegha
sefa.tsegha@epitconsult.com

Tips on Choosing a Domain Name

Sefa Tsegha

Setting up a website is one way of getting your business accessible to everyone. You have more than your immediate community to showcase your products. You have the whole world as your market.

Even if people do not know the name of your website to go to it directly from their browsers, the chances that someone in another part of the globe would see your site is a ‘Google Search’ away. People can find your website as they surf the web through search engines like Google, Yahoo etc.

After you might have settled in your mind on an appropriate design and have gotten a web hosting space to host your website, you will have to register a domain name so that your visitors can locate your website. A domain name is that unique address associated with your website on the internet. This is not a technical definition, but it is simple enough to help you understand what I am talking about.

A good domain name can add traffic to your website and a bad one can send people away. If you have a site or you intend hosting a website but you do not know how to come up with a suitable domain name i.e. the site address for your site, then these tips will help you.

Domain Name Tips

Know your target audience and your visitors, why do they visit your website? Choose domain names that you think clearly represent your company. You may have several names popping your mind, or you might be glued to some phrases or words, but don’t just resolve to using them just because you like them. Take them through the test.

Your Domain is your Identity

Try and make your domain name as close to your company name as possible if your company name is already well established outside the Internet. Many visitors may try to guess your domain name based on your company name.

Like the British Broadcasting Corporation (BBC) which was well established before the advent of the internet could have never thought of another name for their website than BBC.co.uk. This is just the tell people that we are the same people online. BBC.com is our online identity.

Government agencies could easily be guessed by people if the names are not changed when represented online. And I believe this is one of the main aims of setting up a website—easy access to information. So don’t hide it in a name.

Choosing a name that reveals your company’s identity is important.

Avoid Trademark Domains

Ensure that there will be no trademark or other legal problems with the domain name you choose. Website owners know that they need traffic to their sites to remain relevant—so they work for it. But some tend to climb on others backs to achieve this. Internet scams may try to mimic or copy a popular Domain Name to scam people so that they could draw traffic to their sites; but there are huge consequences behind this method.

Yahoo, Google, Microsoft, Yamaha etc have made a name for their brands and these are registered trade marks. Avoid using Trademarks as domain name so that no one may see you as a scammer. If by coincidence your domain name is similar to a Registered Trademark, I device you change it.

The easier your domain the better

Keep domain names short and simple and you will make them memorable. It will be easy for your visitors to remember your site name and visit it again if it is short and simple. It is easier to remember short domains than long ones.

Remember that people may misspell your domain if it’s too long and complicated. For example it would have been awkward if the National Information Technology Development Agency choose www.nationalinformationtechnologydevelopmentagency.gov.ng for a domain name. This name is too long. However they have www.nitda.gov.ng which is short and memorable.

Try to avoid using Dashes

The bottom line with hyphens is that most domains don’t include them. So, when you tell someone your domain, they’ll probably try typing it without any hyphens.

By this I am not saying you can not use hyphens (-) if it is inevitable to use them to make a distinction use them. But it is just that people are used to words without hyphens so they may omit them when typing your domain except they use to it.

Make use of Simple Words

Don’t use words that are tough to spell. Look for simple words or simple phrases. I don’t think it necessary to send your visitors to school to learn how to spell your domain name correctly. Avoid them such stress.

Similarly, don’t use words that are spelled differently in some countries. For example, “ColorChart.com” may confuse those of us in the Antipodes who would probably expect “ColourChart.com”.

Remember to Renew your domain

Remember, you don’t *own* your domain name forever. You are merely renting it for a specified period.

When you register for a domain name, it is not permanently yours. It expires after the time duration you paid for is exhausted. Don’t let your domain name expire, or your competitors may snatch it out from under you. Many people don’t know that.

If I own www.bigfoot.com, and it has become so popular, and I fail to renew this domain name after it might have expired, my competitors may register the name and I won’t have access to it again. So to avoid that, it is good to renew your domain name early enough before it expires if you intend to keep holding unto it.

Final Note

Let’s get started. Find a web hosting company of your choice and get your name registered. The above tips will help you do just that!

Author: Sefa Tsegha
Sefa Tsegha is the Project Manager, Benue Digital Village (Donated by Microsoft Nigeria under Microsoft/Nigeria (NITDA) Information Technology Agreement) and part of the Greater Benue Online Team (www.greaterbenue.com); a regular guest on Radio Benue ICT WORLD programme.

He is the Content & Design Manager, EP-IT Consult (www.epitconsult.com).