CapEx vs. OpEx: Which way is your budget shifting?

nec-uc-opex-vs-capexWhen it comes to system upgrades, several IT funding initiatives are shifting their focus to cloud technology; what will you do when you need to upgrade your existing system, but don’t have the funds available in this year’s (or even next year’s) budget?  This is an opportune moment to examine your organization’s budget in regard to capital expenses (CapEx) versus operational expenses (OpEx), as implementing new technology will likely require you to switch a majority of your spending from CapEx to OpEx. Where does your primary focus lie? Respondents to an InformationWeek Analytics IT Budget Survey report that they are increasingly focused on calculating per-transaction service costs and implementing charge backs.
What you have vs. what you need

Are you paying monthly audio/web conferencing costs plus licensing fees for each user on your staff? If you answered yes, and that works best for your existing budget, then you might favor a hosted system versus a premises-based solution. A Frost & Sullivan report via TMCnews, notes that budget pressure and increased adoption of unified communications are driving demand for integrated web conferencing. While some look to hosted providers, the report also noted that as functional needs grow, organizations are expected to move to on-premises deployments. So who is best suited for a hosted system? If your organization can gain from the following benefits, then a hosted system may be right for you:

  • low up-front costs (made possible through monthly billing)
  • standard software on a per-seat basis
  • greater ability to free up internal support staff

Additionally, the move from CapEx- to OpEx budget focus has driven cloud-based UC offerings and workplace virtualization. We have evolved to replacing stationary desk phones with virtual, mobile alternatives such as soft phones, instant messaging (IM) and video features. Still in all, this move isn’t feasible for everyone. Economic downturn has forced organizations to reduce overhead, thereby increasing mobile working and the need for consistently evolving UC solutions.

What are your options?

There are pros and cons for both hosted/cloud based approaches as well as on-premises solutions. The shift from CapEx to OpEx funding is driving demand for hosted solutions, but IT departments accustomed to on-premises technology sometimes point to security and availability concerns as part of their reluctance to transition completely to a cloud alternative.

We’ve touched on the pros and cons, and for some, the consistent service delivery, on-demand scalability, and standard suite of UC options available with a hosted solution is most beneficial, while others will look to hybrid models as a compromise.

The good news is there’s still another way to get all the benefits of an OpEx acquisition and an on-premises solution without breaking your budget. We’ve got one word for you: financing. In the next post we’ll look at the different options that are available.  To learn more about your options, check out the video below.

The Emerging Corporate Data Center Challenge: How to Embrace the Service Provider Model

The IT world is moving toward a service delivery model.good customer said something recently that really got my attention:

IT infrastructure is moving quickly toward becoming delivered through a service model. Machines are becoming virtual running in secure data centers on large, partitionable machines.  Self-provisioned virtual IT resources are the key to success for a service model, which requires all aspects of the physical hardware to be abstracted or partitioned with permissions and given only to a tenant of the service.

– Eric Miller, CEO, Genesis Hosting

That is certainly a tall order, but underpinning this direction is the value to both end users and IT infrastructure providers of the self-service model of operations. The commercial service provider market, for example, Amazon S3, has used this model to successfully enable thousands upon thousands of organizations to buy IT services whether server, storage or networking on a “per drink” basis.

As end user organizations consider what the right solution is for them, I would like to offer a few questions to help identify the best means by which long term value and resiliency can be achieved:

·         Which architecture best supports these solutions?

·         What are the implications of self-service for product features and function?

·         What are the technical and management implications of a self-service based hosting model wherein the IaaS provider performs all           provisioning, configuration and management of virtualized IT resources?

A key driver in the on-going transformation of IT infrastructure is how to maintain resiliency in the face of the broad range of customers that need to be  supported while ensuring long-term cost efficiency.

Food for Thought: Top Considerations Before Moving to the Cloud

nec-cloud-considerations-privacy-securityWe’ve all become attached to on-prem computing when it comes to our individual and business needs, so the abundance of skepticism around the cloud computing concept is understandable. The premise behind cloud computing is to “rent” space, and only pay for what you need, keeping cost and energy consumption at bay. Cloud offers benefits for both the individual and the organization, so is switching to cloud the right move for your organization? Of course, you’ll determine which of the following is top priority based on your business, but check this list out for a few things to consider when making your decision:

1) Demand & Growth: Is your organization’s growth sporadic or predictable? Assess your organization’s need before moving to cloud. Cloud favors scalable and on-demand deployments

The Harvard Business review cites research from by Gartner Vice President Mark McDonald, noting that the percentage of CIOs interested in cloud computing has grown considerably, from 5% in 2009 to 37% in early 2011. Management in larger companies have been more likely to name cloud as a “top five” IT priority. Assess your business needs and then supplement with technology to make your business the best it can be.

2) Data Privacy & Security: Is your organization one with rigid security requirements? Clouds were initially designed for individual or small group use, not larger organizations. Whether you need a system that will keep “intruders” out, or one that will control who has access within your company, Cloud computing vendors have taken this into consideration and implemented technologies to better protect devices. Bottom line: evaluate your organization’s security requirements when considering how cloud will accommodate you best.

3) Reliability and Bandwidth: Arguments have been raised questioning reliability of the cloud infrastructure versus an on-prem infrastructure. Regardless of which Cloud technology you choose to adopt, no connectivity makes cloud as useful as not having it at all.

4) Users base (Localized vs. Globally Dispersed):
Cloud enables collaboration between mobile users with ease, more so than on-prem computing. But if the majority of your users are localized, is moving to cloud the best decision for your organization?

5) Performance: While some of the greatest accomplishments achieved through Cloud technology is a result of its collaboration capabilities, look up-front at the important pieces that contribute to the performance for your organization. Will switching to cloud directly support your business operation? Will it enable your business to effectively generate revenue? Keep in mind that Cloud is just one component; application use and availability, along with bandwidth should be taken into consideration for your deployment.

Cloud computing gives you the opportunity to continue to compete effectively without owning all of the technology you use, and while the concept is nothing new, it forces the difficult consideration of consolidating your entire business framework in order to move applications like email, CRM, or storage to the cloud. It certainly merits a deeper look into the considerations above, particularly when you consider the added possibility of moving real-time applications like voice and unified communications to the cloud. Now that’s “food for thought.”

Enterprise Communications in Virtualized Environments

phones_cloudWith all the talk of cloud computing and software as a service of late, many IT organizations are wondering how communications can be deployed realistically in these models.  This discussion inevitably leads to the topic of virtualization.

Among the highest-impact issues in IT today, virtualization allows multiple applications to run on virtual machines within one or more physical host servers. A hypervisor – from vendors such as VMware, Microsoft or others – allocates server resources for all virtual machines running on it. Virtualization has long been used in data centers to consolidate the number of physical servers, better utilize existing hardware, and improve application availability.


Centralizing applications in data centers and leveraging virtualization technology to minimize associated costs and complexities has for several years been a trend among IT departments of both enterprises and mid-sized organizations. Adding communications to virtualized environments brings complexity and special requirements that not every enterprise communications provider can deliver today.

NEC has verified that UNIVERGE Sphericall, the pure software-based communications platform, runs in both VMware® ESXi and Microsoft® Hyper-V Server 2008 R2 virtualized environments to deliver voice and unified communications services in various cloud and hosted scenarios.

Some potential use cases for software-based communications in virtualization include:

  • Customers with virtualization initiatives to reduce data center costs and server “sprawl”
  • Disaster recovery scenarios running virtualized instances in carrier hosted environment, or private cloud infrastructure.
  • Implementing additional media service resources such as voicemail, auto attendant, music-on-hold and/or call recording using Sphericall virtualization
  • Hosted provider scaling a single, large server with multiple instances of Sphericall where each instance is tied to a particular customer site
  • Small or remote offices desiring to hosted multiple applications on a single machine

Apple Not the Only Company to be Releasing a Tablet

This story comes via the Best Mobile Contracts blog site…it’s a good one!

altBefore you can even say Google Chrome, NEC has already announced that it will be releasing a Google Tablet in Japan.

Yes, just a few days after the Apple iPad has been confirmed, it appears that Google is right there matching their main mobile gadget competitor in every step of the way. With the HTC Google Nexus One already stealing most of the spotlight, it was a nice change of pace to see some non-Google news when Apple announced that they will finally be unleashing their much anticipated tablet. But just when the diversion was sinking in, NEC comes out with their tablet gizmo.

NEC Biglobe’s “Cloud Device” is a pretty little gadget that gives you a 7 inch LCD touch screen, on a device that is 7.8 x 4.7 x .5 in. large, weighs .8lbs and supports WiFi.

There is a lot of promise in the device and it is estimated that the NEC device will be using the Android OS (not Chrome) and will have a price tag of somewhere around $275 US.

Since the main purpose of the tablets is for casual browsing, it is expected that the hardware on this gadget will be somewhat close to the specs of the iPad , if not a little lower. The device is confirmed to support 3G/WiMax in Japan and will be compatible with microSD cards for expandable memory. According to the image screenshots the name of the product is WebStation and it will serve as can serve as a desktop clock or calendar when not in use.