Data Centers or Infrastructure as a Service: Comparing Cost and Security

Deciding between building and maintaining your own data center or moving to the cloud or IaaS can be quite the head scratcher for an IT executive. In some cases, the terms “data center” and “cloud” might be interchangeable. The first step in decision-making is clarification of terms and a clearer understanding of your options.

Why move to the cloud? Can Infrastructure as a Service (IaaS) be used for a data center? Which option is better for the future needs of the organization?

Data Centers

“Data center” is a general term used to define an organized area of servers and storage, either onsite or offsite, that is managed by trained data center and IT specialists. The data center equipment is used to store user and organizational data and make it accessible when needed. With many data centers kept onsite, network users do not rely on an Internet connection to access the local data. As long as the local network connection is available, the data is accessible.

Cost

Building and maintaining your own data center include the following cost factors:

  1. Staffing and training – hiring IT expertise and paying for training to maintain, backup, restore and upgrade data center equipment, as needed.
  2. Architecting – forecasting for current and future data storage requirements, workload and scalability
  3. Facilities – finding an expandable location for the equipment that is secure, safe and with a low risk of break-ins and natural disasters
  4. Utilities – covering the cost of electricity, wiring, air conditioning and other utilities required to keep the servers running 24/7/365
  5. Equipment – purchasing and evaluating ever-changing equipment and storage needs, year over year
  6. Redundancy – ensuring the data is backed up or available immediately should the storage equipment or servers encounter a failure
  7. Software – purchasing the software required to keep the servers running efficiently and the data storage secure
  8. Expansion – planning for expansion of the data center as the data storage requirements increase

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Security

If there is an emergency situation at the data center location, such as fire, flood or other physical damage, or an attempted data breach, the actual servers and storage are at risk of being harmed and unavailable. Backing up the data or maintaining a data center elsewhere may help mitigate the risk of failure or loss of data.

Cloud Computing

In plain terms, cloud computing is defined by the National Institute of Standards and Technology (NIST) as a set of shared resources and services available to end users (cloud clients), quickly and with little management, via an Internet connection. Cloud computing provides these services via three general models: software as a service (SaaS), platform as a service (PaaS) or infrastructure as a service (IaaS). An example of SaaS would be an email application accessed through a web browser. Platform as a service is typically used in the web or software development world. When developers need to collaborate on a project such as an application or software creation, PaaS offers a good option for a tool or platform to be used in this way. In the case of data centers, IT executives considering the “cloud” would be interested in using Infrastructure as a Service (IaaS). IaaS provides servers, storage, virtual machines and more for the use of running software and other necessary components needed in the IT environment.

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Infrastructure as a Service (IaaS)

An IaaS environment is also considered a data center that is accessible via the cloud or Internet-based services, hence the reason the terms can cause some confusion. The difference is that the data center equipment is not purchased or maintained by the organization but rather purchased as an on-demand service from an IaaS provider. IaaS can be available via the “public cloud,” where the shared infrastructure services are open for public use. “Private cloud” is also an option, where the services are available, but only for the single organization and via a private network. Some providers are also offering a combination of these options, referred to as “Hybrid Cloud.”

Cost

The cost of building and maintaining IaaS is different from an organizationally-owned data center and can significantly assist in controlling budgets. As part of the service, the IaaS provider does the staffing and training of storage experts, provides the facilities and utilities, furnishes the equipment, backs up and builds redundancy of the data and offers security – all for a single price. With an in-house data center, the organization is paying for these requirements all the time. With “pay only for what you use,” IaaS provides customization, agility, control, dynamic scaling, optimization, security and efficiency for a lower total cost of ownership. And with an IaaS provider, there is also the ability to have the “latest and greatest” in technology, making it easier to stay up to date.

Security

When using a private cloud, IaaS offers dedicated servers for the organization’s mission critical data. The IaaS provider is offsite and builds redundancy and backups into the service so the organization’s sensitive data is always secure and available.

See also: What is a High Security Data Solution for IaaS?

Why NEC for Private Cloud IaaS?

As an original equipment manufacturer of servers and storage, NEC is uniquely positioned to offer IaaS to clients without the use of third-party sourcing. IaaS is not a “one size fits all” solution and NEC can tailor customizable configurations based on your organizational needs.

Cost

Because of the lower total cost of ownership, NEC’s IaaS solutions offer long-term scalable and quantifiable benefits to organizations at a predictable and financially manageable expense.

Security

NEC’s hosts its private IaaS infrastructure 200 feet underground at Iron Mountain’s Western Pennsylvania Data Center. Iron Mountain provides FISMA (Federal Information Security Management Act) compliance to ensure Department of Justice Level 4 security. This security level is the highest federal regulatory standard.

When considering cost and security, IT executives are weighing options for highly sensitive and mission-critical operational environments. As the organization’s needs expand, so will the cost of maintaining an onsite data center, equipment, real estate, utilities and more. Moving to IaaS, as part of a cloud computing solution, is an opportunity for enterprise environments to manage expanding requirements for security, regulatory compliance and business continuity at a lower total cost of ownership. NEC’s managed IaaS solution, as well as “best in breed” server and storage options, offers organizations dedicated servers, stored and physically secured deep in Iron Mountain’s underground data center.

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No Budget to Replace or Upgrade Your IT Technology… No Worries!

In today’s environment of constant change, you may find yourself needing to replace or upgrade your IT/communications technology due to circumstances out of your control. For instance:

  • Vendor may have announced end-of-life for the system you currently have
  • An unexpected event has occurred that has compromised your system
  • Vendor has filed bankruptcy  and you don’t know what the future holds
  • New functionalities are being requested by end users that your system is not capable of
  • IT cannot expand and support the growth of your company’s communications requirements

When these situations arise, more often than not, it is not in the budget. And, as long as there is dial tone, it’s hard to convince the powers that be of the necessity of spending dollars on replacing their communications system. So, what are your options?

  • Do nothing and run the risk of your system going down or not being able to support your end users with the services they require
  • Look to see where you can find dollars in the existing budget and where you can make cuts on other projects

Or…

  • Consider financing or leasing options for your technology acquisitions

Financing is a great alternative to traditional funding sources. It lets you act quickly and does not negatively impact your budget. When choosing this path, you need to consider carefully the funding source. You need a source that is responsive and understands the nuances of acquiring new technology and has the expertise to meet your exact needs. One such company is NEC Financial Services.

NEC Financial Services has provided IT/communications finance solutions for more than 30 years and during that time has supported many companies in getting all their technology needs through flexible financing options. They start with a transaction team and use underwriting and financing contracts that are customizable to their clients’ needs. Their unique system enables them to create a better solution that ensures their clients have what they require to grow their business.

NEC Financial Services team offers several options for the financing and leasing of technology acquisitions. And, the best part? You can purchase various IT hardware, software and associated items from multiple vendors and have NEC create a financing package customized to your specific needs.

Some examples of the different financing and leasing approaches they offer that you will find are very different from a more traditional lender or bank:

  • Programs based on customer requirements – most organizations face the same business challenges that are not easily resolved with standard finance transactions. NEC Financial Services provides different types of programs based on customer requirements. From a purchase to own arrangement to an OPEX finance option, the program is designed to fit the business need. Including:
  • Terms to Protect Against Technology Obsolescence – for clients where obsolescence is a real issue, they can structure shorter terms so they can keep up with important technology updates to grow their business.  
  •  Maintenance Financing – option to finance one of the more expensive, yet critical components of a new technology purchase – maintenance.
  • Tech Refresh Lease – clients can get technology updated with a simple schedule as an addendum to the master lease or finance agreement. It’s easy and gives a customer an opportunity to keep on top of technology changes.
  • Software Financing an option for leveling out investment costs versus having the initial capital investment cash flow impact the budgeting cycle.
  • Off Balance Sheet – many organizations find it more attractive to acquire technology as an operational expense, giving them additional financial benefits.
  • Driven by cash flow – if an organization has a specific budget amount they need to meet, NEC Financial Services will work to structure financing to accommodate that number.
  • Our job would be to align the budget expense to the cost of that technology over time. For example, with a $10K budget a month – the goal would be to get that number to $10K or less.
  • Beyond the traditional – NEC Financial Services designs financing options to ensure that clients can receive funding for their technology upgrades and investments, even during the installation or implementation phases. Many times this can be accomplished through various offerings that include direct and working capital loans or structured financing.

In addition to the financing options, NEC Financial Services also provides asset tracking. They find that many of their clients require a more robust asset tracking system than they have in-house. They can track assets by jurisdiction, county, state, and zip code, taking the burden from their clients while providing added value.

NEC Financial Services goal is to support their clients’ ongoing business growth through long-term relationships. They make great efforts to understand client’s business requirements and growth strategies so that they can structure finance options to meet their needs and successfully implement their plans.

Technology is in NEC Financial Services DNA – especially since they are a division of NEC which was named as one of the 50 most innovative companies in 2016. They are truly committed to providing excellent service to their clients to ensure they are able to get the technology they need to remain competitive.

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Is Your Business at Risk Running an Outdated Communications System?

(Editor’s Note: This is an update to an article originally posted June 2, 2014.)

You know your communications system is way past its prime, and economic pressures have led you to delay its upgrade or replacement.

But there comes a point in time when it no longer makes sense to put off replacing your communications assets—from both a financial perspective and a business/productivity perspective. Retaining outdated equipment can essentially increase your IT costs and prevent your users from utilizing communications tools that help your business processes.

Plus, keep in mind; the greatest risk to your business if your communications go down is your business shuts down. This can lead to huge losses for your business, including customer dissatisfaction, customer loss, damaged reputation and costs related to regaining your reputation. These all can greatly affect your business and result in huge losses.

Phone systems are one of the assets that many companies take for granted as long as they have dial-tone. They don’t think much about it and will definitely spend their budget elsewhere if they can. As a result, many of these organizations are sitting on archaic (or end-of-life) equipment that is no longer efficiently supporting their business while possibly putting it a risk.

Yet for some, the prevailing practice is to continue operating the existing system well past its useful life and beyond the end-of-support – not realizing the potential costs and the risk they are putting their business in.

We often hear the following reasons to avoid upgrading:

  • We don’t have the budget, or there is a higher priority budgetary request.
  • The lifespan on the last communications system was too short.
  • We’re afraid that if we upgrade tomorrow, something better will come out next week (a.k.a. the cycle of obsolescence).
  • We’re unclear on our unified communications plans and how our phone system should fit in with UC.
  • Newer phone systems are becoming too complex to use.
  • The buying cycle is too long, and we will have to get too many people involved who will all have different opinions.
  • We don’t know which approach to take—i.e. premises, hybrid, or cloud-based.

There’s a chance that the phones you think are supporting your business aren’t. While the value of your older technology may not have appeared to change—for example, the phones still work, and you can still make calls—the outdated system may be hurting your business.

Free White Paper:  Time to Replace that Old PBX

We know the decision to move to a new telephony system is sometimes a difficult one to make. That’s why we’ve created the following list of 3 of the benefits of a modern unified communications system over an outdated phone system.

1. System Stabilization

If you are a business owner or decision maker, you have probably thought, “We save money keeping the old system. What’s the worst that can happen?”

Every day your business uses an analog, TDM, or older VoIP phone system that has reached end-of-life, you run the risk of having your phone system fail without access to support. If that happens, revenue will likely be lost as a result. How much? Well, you could lose what equates to hours, days, or even weeks of revenue—depending on the amount of time it takes to quickly repair or worst case find and install a new system. Not to mention what was previously stated about customer dissatisfaction and loss.

And hurrying to find a new system isn’t ideal. If your system fails, it could mean you are forced to make a quick replacement decision. Companies that don’t have the time or don’t take the time to research properly before purchase usually discover they’ve spent too much money or are unhappy with their purchase after it is too late to change it. Taking the time to find the right IP Telephony solution or Unified Communications solution will improve your business processes and efficiencies without over-extending your budget.

2. Improved Operational Costs

Maintaining separate systems like directories, conferencing software, voicemail, and telephony is expensive and time consuming for IT departments to sustain. In fact, it can be so time-consuming that the IT department spends the majority of their day keeping these systems functional—time that can be better spent on more strategic IT projects.

The older the system, the higher the operational cost is when you don’t upgrade. Some of the costs businesses accrue using older systems include:

  • Proprietary hardware at each location (equipment, phones, PBX)
  • Installation
  • Licensing
  • Maintenance, repairs and upgrades
  • Additional services
    • Fax
    • Business SMS
    • HD video meetings
    • Audio conferencing

When you factor the lost IT time spent maintaining each separate communications system with the opportunity cost of not having the advanced applications and features that modern unified communications provides, you end up with a total cost that is just too high for most businesses to ignore.

3. Competitive Advantage

Have you stopped to think about whether your competitors are taking advantage of modern communications software? If they are and you’re not, then chances are they are able to work smarter, faster, and more efficiently. Working smarter gives them an edge by increasing their productivity and creating a competitive advantage.

Your competitors that are working with updated communications systems, most likely have these advanced features at their disposal:

  • Audio/video/web collaboration, white boarding and document sharing
  • Support for the mobile workforce with a consistent user experience across smartphones and tablets
  • UC clients that provide status, presence, call history, call control plus more
  • Integrated vertical applications through standard and open services

While the cost of upgrading may seem high, the advanced applications and features associated with modern communications systems will help re-gain lost competitive edge and offer companies an opportunity to better serve their customers.

Unified communications can help businesses re-gain competitive advantage in two ways:

First, a new system can help you increase your revenue by providing your business with the communications applications needed to be more productive and efficient. You could gain better advantages and increased competitive edge by choosing a modern solution with a lower total cost of ownership and features that enable collaboration across your business, improving the speed of your communications.

Secondly, UC provides communications software that makes enterprise-level communications applications available on an ad-hoc basis. This either gives you access to applications that you might not have previously been able to budget for, or, saves your organization money as you no longer have to pay the fees required to utilize multiple services. Replacing hosted web, audio or video conferencing services is a perfect example. The accrued savings can boost the return on your unified communications investment, and expand your competitive edge through re-investment into other IT projects that help your business grow.

Increased Productivity

If you fear that your new technology will become obsolescent and use that as an excuse to avoid upgrading, you shouldn’t. Look for vendors that offer software assurances and extended warranties for hardware that will provide your business with more security and less risk in the long run.

With a modern communications solution, you ensure that your system has the flexibility to handle rapid growth, giving you the ability to provide support to your increasingly mobile and distributed workforce. Your IT team will re-gain some of their time, allowing them to focus on other strategic IT initiatives. And, your employees will re-coup benefits that improve the speed of communication from access to applications that positively impact your daily business—whether it’s through more efficient collaboration with colleagues, or improving customer response times.

Options Available to Your Business

Ultimately there is a high cost, in terms of inefficiencies and operational cost, when you continue to operate an outdated or end-of-life phone system.

Some organizations struggle with selecting the best model (premises, hybrid, or cloud-based) to meet long-term communication needs. Ultimately you’ll look for the platform and vendor that has the flexibility to customize the right solution to meet your specific needs.

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Time to Replace that Old PBX

To learn more about the risks associated with running an outdated communications system and the steps you should take in purchasing a new system, fill out the form to download the white paper written by Dave Michels, principal analyst at TalkPointz.

 
 
 
 
 



In times of financial uncertainty, NEC’s stability is part of the solution

Last week, we learned that Avaya has filed in federal court for Chapter 11 bankruptcy protection due in large part to a significant debt burden carried over a nearly 10-year period. Only time will tell whether the debt restructuring process under bankruptcy will be kind to Avaya. Regardless, I’m sure our industry and the media will continue to study the legacies of both Nortel and Avaya as history lessons for many years to come.

What I know from my own 30-plus years of experience with NEC is that financial stability through diversification and creating operational efficiency has benefited not only us as a company, but our customers and partners through the years. Continuous improvement and innovation are probably the two biggest reasons for NEC’s 117+ years of longevity.

The next reason is our commitment to providing quality, future-proof unified communications and collaboration tools that will last and be relevant for many years to come. As a result, NEC has always had a ready willingness to step in and offer help to customers and partners who need it the most.

Another reason for our longevity is our ability to adapt and transform. NEC has reinvented itself numerous times through the years and will likely do so many more. As TalkingPointz Principal Analyst Dave Michels observed in his No Jitter coverage of our 2016 Advantage Executive Conference, we’ve done this most recently through the virtualization of our UC offerings, the launch of UC as a Service, and the integration of our UC solution set into a broader IT portfolio we call the Smart Enterprise.

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By leveraging one of our Smart Enterprise solutions, businesses can also benefit from our data center technologies – like our fault tolerant servers, storage and software defined networking – as well as market-leading biometrics and analytics.

As a result, NEC was chosen as one of the 50 Most Innovative Companies by the Boston Consulting Group. Furthermore, Frost & Sullivan recently honored NEC for its “astute strategies for migration of enterprise legacy communications systems to modern solutions” with a 2016 North America Frost & Sullivan Company of the Year Award.

All of these things add up to one clear call to action.

If you are a customer or partner of Avaya and are unsure about your future, please don’t hesitate to contact us for a free consultation. At the very least you’ll learn something about our current programs and migrating to an NEC Smart Enterprise solution. At best, you’ll come away with a better idea of how you can protect your business down the line.

Stay tuned to NECToday.com for additional ideas on how you can future-proof your business with NEC.

What’s the Big Deal About High Availability Unified Communications?

Lately we’re hearing more and more about employee mobility trends and continuously accessible unified communications systems, about high-availability servers and the importance of staying connected at all times. So why is it such a big deal? Well, for one thing, the world has evolved into one huge marketplace where everyone seems to be on the move, and having answers and information at our fingertips, 24/7, has become an absolute necessity – or else!

With the growing need for employees to be able to access their work and collaborate with co-workers wherever they are, and at any time, unified communications applications are now commonplace. In fact, UC has become such a primary business concern that 56 percent of enterprise organizations recently surveyed by IDG Enterprise plan to upgrade or install new UC solutions within the next year, and 66 percent of small and medium sized businesses are also actively planning for upcoming UC improvements.

What’s driving the increase in UC investments?

With the increasing mobility of workforces today and a growing number of remote workers, it’s not surprising that the IDG Enterprise survey also reveals that 43 percent of the organizations reported their UC improvements were driven by the need for improved collaboration between their employees. The ability to resolve issues quickly, to share information, the immediacy of creative brainstorming and collaborative problem solving; these are some of the benefits of these powerful communication tools.

Similarly, 33 percent of the companies specifically attributed the upcoming upgrading of their UC to their need for increased flexibility for onsite employees and for mobile personnel. Enabling their employees to work from anywhere, and at any time, and to access and know when a co-worker is available and be able to quickly connect, these capabilities have serious value to businesses across all industries.

One of the top motivators for improving their UC was evident in the 42 percent of organizations who plan to install or upgrade for reasons of increasing their overall productivity—gaining the efficiency that results from streamlined operations and the immediate information share between departments and personnel.

What is High Availability anyway?

What does high availability of your unified communications have to do with the success or failure of an organization? Why is it so critical? Well, let’s look at what this term actually means.

*Gary Audin states that in the world of IT, the term High Availability refers to “a system or component that is continuously operational for a long length of time.” To repeat, that means constantly working, without any breaks or downtime, providing unified communications that are “continuously operational.”

Usually the ability of an employee to effectively do their job requires them to access the system to submit or alter their work. If the user cannot access the system, then it is termed “unavailable.” This kind of downtime impairs productivity, and causes workflow inefficiency and lost revenue. It has become critical for the UC system of any sized organization to be immediately accessible, with no disturbances or interruptions, for optimal business continuity.

What are some risks of being without a High Availability UC solution?

Your unified communications is mission critical, and accessibility is the very lifeblood of a successful organization, however these investments can suffer outages if not on a high availability infrastructure.  Without reliable redundancy and back up, you risk your people and your customers being cut off from information, workers from the workflow, and everyone from collaboration with each other. The loss of UC, for even a few hours, can mean a substantial loss to an enterprise.

What kind of losses are we talking about here? When your infrastructure fails for any length of time, along with lost productivity that obviously impacts revenue, businesses suffer the sharp decreases in customer satisfaction levels, the number of business relationships and customers lost, a damaged reputation, and the high costs of recovering that reputation.

In fact, the Ponemon Institute reported some interesting 2016 average costs associated with system outages:

  • Business Disruption – $256,000
  • Lost Revenue – $209,000
  • End-User Productivity – $138,000
  • IT Productivity – $62,000
.@PonemonPrivacy reported some interesting 2016 average costs associated with system outages. Click To Tweet

In Conclusion

So what is the big deal about High Availability UC? It becomes evident that the risk of incurring some of the losses that accompany broken communications and business disruption can become a very big deal.  For Smart Enterprises, UC has become a major focus for their strategic budget planning because it is a very big part of the success of their organization, and a critical factor for future growth.

Question: Do you have a true High Availability infrastructure that provides 99.999% UC reliability and prevents these kind of business disruption losses?

To learn more, download our Smart Enterprise eBook called “Achieving High Availability in UC” by industry expert, Gary Audin. This eBook takes a comprehensive look at UC and the importance of system availability plus examines the key components needed to build and sustain a UC-enabled environment.

(*Gary Audin has more than 40+ years of experience in computer, communications and security consulting and implementation, and is a well-known author of over 1000 blogs, articles, podcasts, white papers and webinars. Our quote is from the “Achieving High Availability in UC” ebook.)

 

Free Ebook: Achieving High Availability in UC

Free Ebook:

Achieving High Availability in UC

This eBook by communications and security consultant Gary Audin, president of Delphi, Inc., takes a comprehensive look at UC and the importance of system availability. Also examined in-depth are the components needed to put together and sustain a UC-enabled communications environment.