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Enterprises seeking to thrive in an innovation-centric economy are capitalizing on multi-cloud strategies to leverage unique cloud services. These services help accelerate initiatives supporting AI, data processing, and other pursuits, such as driving compute to the edge.

That’s all well and good – until the CIO gets the bill.

In a survey of more than 1,000 global IT decision makers conducted by Forrester Research with HashiCorp, 94% of respondents said their organization was currently paying for avoidable cloud expenses.1

Meanwhile IDC’s Archana Venkatraman, Research Director, Cloud Data Management, Europe, adds: “While cloud adoption has accelerated, cloud governance and control mechanisms haven’t kept pace. As a result, up to 30% of cloud spend is categorized as ‘waste’ spend.”2

Examples of cloud cost surprises

Even inside the controlled environment of an enterprise’s datacenter, it’s not always easy for IT staffers to keep track of resource utilization. Now imagine the challenge of tracking usage from dozens of engineers in a multi-cloud environment where each service provider has its own tooling, processes, and procedures. Being able to bring all that data into a single view is extremely difficult.

Here are the top three cloud cost surprises that CIOs are likely to encounter.

Unused resources: Over time, cloud environments inevitably sprawl, leading to unused storage volumes, idle databases and zombie test instances.

Modernization: Businesses are slow to adopt newer instance types which offer 20% or more efficiency gains due to lack of visibility and understanding of the upgrade path. Given the hundreds of instance types, it’s easy to understand why.

Anomalies: The biggest cloud cost surprise is the one that comes out of nowhere – an unexpected spike that could be caused by a variety of factors – misconfigurations, orphaned instances, runaway crypto-mining malware, or unauthorized deployments.

Enter FinOps

FinOps has become the de facto way in which enterprises manage cloud cost uncertainties, typically with machine learning used to help deliver insights to DevOps, CloudOps and the C-Suite. What’s more, FinOps provides a common language between the developers, infrastructure and business leaders to help show Return on Invetsment per project or set of services.

A disciplined FinOps practice, coupled with tools like OpsNow, helps in three ways:

FinOps tools can discover unused or orphaned resources and enable organizations to “rightsize” their cloud deployments.

Through the use of anomaly detection, FinOps provides an early warning system that alerts IT teams to usage spikes and budget overruns before they get out of control.

Cloud environments are constantly changing, so FinOps is never done; it’s an ongoing process that can help organizations optimize their cloud spend over time, do a better job of budgeting and forecasting, as well as avoid those billing surprises.

The OpsNow approach

There are many options for FinOps ranging from developing tools in-house to purchasing FinOps platforms. Managing your own platform and tooling presents  CIOs with investment and ongoing maintenance challenges.  In the fast moving world of the cloud that is a risk many prefer to not pursue.

OpsNow offers a different take and allows you to deploy without the investment nor maintenance.  Coupled with its methodologies and metrics you have a way to monitor and track your success.  

OpsNow, a spinoff from Bespin Global, provides  a SaaS platform which utilizes a “shared savings”  model – customers only pay a small percentage based on actual savings and are free to utilize the breadth of capabilities at no cost otherwise.

The OpsNow platform provides a single pane of glass across multi-cloud environments to identify unused resources, recommend capacity adjustments, provide AI insight for optimization, and provide no-risk cost savings from their AutoSavings tool which best even  the multi-year commitments offered from the clouds.

Advanced cost analytics and machine learning also ensure this technology can support a more efficient approach to cloud spend, which ensures IT leaders can innovate without worrying about unexpected costs. The automation is one aspect, but the ability to closely model true usage and ensure the coverage and utilization are closely aligned to the forecast is where the savings typically add up. 

Begin your journey to better cloud cost efficiency now.

1 HashiCorp, Forrester Research Report: ​​Unlocking Multicloud’s Operational Potential, 2022
2 IDC, IDC Blog, The Era of FinOps: Focus is Shifting from Cloud Features to Cloud Value, February 2023

Cloud Computing

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Stemmer Distribution, the largest French company to provide dental products to healthcare professionals since 1978, was able to reduce costs while improving their customer experience with the help of Avaya. With 250 employees and 14 companies across six sites, Stemmer needed a flexible and fluid communication solution for their customers as the brand experienced a high level of growth over the decades; Avaya was the solutions provider to create the strategy needed to achieve this goal. 

As 2020 drew to a close, Stemmer Distribution realized that its old infrastructure was outdated, inefficient, and costly. The company needed a system that could combine its communications cross-functionally with the goal of adjusting the framework and bringing it into the 21st century. That’s where Avaya stepped in.

Stemmer Distribution was able to create an effective digital customer engagement strategy that allowed them to better serve their customers. Using Avaya’s UCaaS solution, Avaya Cloud Office® by RingCentral, Stemmer could mass produce a communications solution that reached every facet of their business. While migrating to a hosted solution in a datacenter was a consideration, understood through Stemmer’s provider Artelcom that the Avaya Cloud Office solution provided reliability and a higher level of efficiency for employees.

Stemmer worked closely with Artelcom throughout the implementation of Avaya Cloud Office, which spanned a nine-month period. Development progressed in four phases that began at smaller company bases and ended in Stemmer HQ, located in Tremblay, France. Alexandre Sicard stated that project teams provided excellent assistance and advice, helping to create the perfect, customizable solutions for Stemmer’s customers:

“In line with our expectations, our annual telecom budget has been cut in half thanks to the Avaya Cloud Office solution. With several months of hindsight, we are fully satisfied with the solution, which has allowed us to achieve our goals of improving the employee experience while optimizing our costs.”

The goal of Avaya Cloud Office, in addition to effective customer communications, is to provide a unified communications platform for employees that can call, meet, and message wherever they are. Because Stemmer has multiple locations, this integration makes sense; the need to communicate quickly, particularly in the healthcare industry, is paramount. 

Avaya Cloud Office allows for a great experience for all employees, whether they’re remote, hybrid, or on-site. Communication with other aspects of a business is fluid, meaning that dentists can speak with techs, techs can pass messages along to patients or administrators, and so on. One of the most important factors to Stemmer was the ability to provide excellent customer service as soon as it’s needed, and having a unified communications platform enables employees to effectively handle any customer needs.

The employee adoption of Avaya Cloud Office was quick. As the solution fits perfectly into the mobility needs of a company, understanding the mechanics and benefits is simple for employees to retain and use. Training also comes easily, which saves time overall for support teams.

Ultimately, the integration with Avaya Cloud Office resulted in a 50% reduction rate of Stemmer’s overall telecom budget. This means the company could potentially employ the Avaya Cloud Office solution to other European divisions that could benefit from this technology. As growth and development is key to any business’s objectives, this could be huge for an established company like Stemmer.

Having one unified communications platform across organizations means breaking down department silos that would otherwise remain disconnected from one another. Other than having a more streamlined communications system, cost savings is ultimately one of the most important benefits when it comes to UCaaS. Consolidating the individual costs of voice, messaging, etc. into one unified platform means fewer dollars spent on old systems that do not benefit the overall organizational structure. 

Interested in learning more about how Avaya Cloud Office can optimize your organization’s communications systems? Reach out to an Avaya solution provider to request a demo.

Digital Transformation

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Evaluating and managing billions of dollars in IT spending across 400 tech providers in 200 countries provides valuable experience in verified ways to cut costs and accelerate IT financial management tasks. Want to tap into a wealth of cost-cutting knowledge gleaned from 60 IT cost management consultants who are engaged in hundreds of cost-reduction projects each year, saving companies as much as 20% or more on their IT spend? Here are the top lessons learned according to Tangoe’s cost management consultants. 

Companies Can Cut Costs by 10-40% Across Multiple IT Domains 

Creating an effective methodology for IT expense management and optimization is no longer a strategy used only by large enterprises in specific use cases. It’s an approach used widely by companies of all sizes and applied to the entire IT environment—cloud, mobile, network, and security. Although savings vary across each IT domain, an effective cost optimization program typically produces significant savings.  

At Tangoe, we commonly see companies: 

Save 20% on their IT costs overall Save 10-15% in telecom costs through service optimization and as much as 20-25% or more when combined with an effective contract negotiation consultancy Cut mobility costs by 15-30% while improving both IT productivity and the end-user experience  Save 15-40% in cloud costs, eliminating unnecessary services and reallocating underutilized IaaS and SaaS resources When investing in an IT expense management platform, on average new clients see triple-digit ROI within the first year 

While cloud cost optimization and FinOps may seem like a post-pandemic trend, the IT expense management (ITEM) industry is a mature market with more than 20 years of historically proven results. Known results allow ITEM providers to offer clients the advantage of a savings guarantee, and with the market heating up, providers are actually making guarantees a contractual commitment. 

Acting on Cost Savings Is Harder Than Simply Identifying Them 

In today’s information age, AI-powered analytic tools make it easier to crunch data and pinpoint millions of dollars in potential IT cost efficiencies. But then what? Opportunities are worth nothing if you can’t capitalize on them quickly. Actioning identified opportunities is where the real work begins and where speed to savings is key, as every month that goes by is a lost opportunity that increases the savings you’ll never see.   

With staffing tight and other priorities taking precedence, all too often we see identified savings go unrealized for months if not years.  

Given the criticality of quick response, leveraging a firm to implement identified savings makes sense. Better yet, the firm should be able to automate the process to confirm those savings are actually realized and continue to be achieved on an ongoing basis. For these reasons, we recommend asking about professional services (staff augmentation) when your IT team is too overstretched. 

To cut costs faster you also need an automated IT expense management platform integrated with the service portals and dashboards of the technology service providers themselves. This way, modifications and service changes can be made faster and with less manual work.  

Secret to Avoiding Waste: An Accurate Inventory of Services 

Rapidly changing times make for a rapidly changing corporate IT environment. It’s critical to ensure you know what IT assets you have now, understand how efficiently they’re being used, and then charge back those costs to the departments using the most resources.  

Cloud cost management is top of mind today because companies are wasting as much as 30% of their cloud resources and overspending in the cloud by as much as 50%—even 70%, according to Gartner. And it’s not just the cloud creating IT waste. Mergers, divestitures, corporate rightsizing, a return to travel and hybrid work environments are all contributing factors to misalignment between IT resources and business needs. Any time the company evolves, IT services need to come into alignment, and when assets aren’t right-sized waste, inefficiencies, and overpayments are the result. 

To get rid of IT waste, you must first identify it. Knowing what you have, where you are paying too much, and where assets are going unused requires gleaning intelligence from an accurate inventory of all mobile, cloud, and network services. Visibility is only as good as your system for tracking and categorizing costs. A disciplined inventory and vendor management program establishes a corporate catalog of providers and uses automation to collect granular account information, invoices, and service data. Insights can shed light on current trends in usage and efficiency as well as serve as a launchpad for cost control, policy decision-making, and security risk reductions.  

Migration Mismanagement Slows Technology ROI 

Change is the new normal. Whether it involves moving services to the cloud, shifting employees to more secure corporate-owned mobile devices, or transitioning services to optimize and modernize a network, the management and administration of technology migrations is everything.  

At Tangoe, we see the ROI on digital transformation initiatives decline (and even turn negative) because companies underestimate the time and resources needed to carry out change. Designing, managing, and monitoring transitions becomes a full-time job that can distract internal teams from more meaningful work. In the end, it’s more efficient and less expensive to augment those internal teams with outside resources or outsource enterprise-wide deployments together. Mismanaged technology migrations can significantly hinder a company’s digital innovation strategy. 

Careful consideration is needed when it comes to deciding how corporate resources are allocated. We see network service transitions, SD-WAN implementations, as well as migrations to cloud-unified communications as areas that benefit from staff augmentation. While we all know outsourcing can help curb costs, this is where we see consultancies payout in significant ways.  

Insider Knowledge Provides a Level of Confidence That Is Priceless 

A highly dynamic mobile, cloud, and network environment highlights the importance of obtaining insider intelligence. When corporate service transformation is on the line, IT spending decisions shouldn’t be made in a vacuum. IT budgeting decisions are far easier when consulting an authority on the latest pricing benchmarks for services or tips for negotiating telecom contracts in your favor. They evaluate how millions of dollars are spent (and misspent) every year, and they bring with them valuable insights into tech spending trends that can help you compare your corporate strategies against hundreds of other companies. Consultants are versed in helping tackle the big stuff: 

Fiduciary responsibility when IT budgets and spending are rising despite slow economic growth Reigning in cloud sprawl and cloud costs all while strengthening cloud security  Establishing governance after innovation has run amok  

After all, it’s the insider intelligence that helps CIOs and CTOs sleep at night. That confidence is worth its weight in gold. 

To learn more about IT expense and asset management services, visit us here.   

IT Leadership

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IT services and consultancy firm Accenture said it would lay off 19,000 staffers, or 2.5% of its workforce,  over the next 18 months to reduce costs amid uncertain macroeconomic conditions.

“While we continue to hire, especially to support our strategic growth priorities, during the second quarter of fiscal 2023, we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs,” the company said in an Securities & Exchange Commission (SEC) filing on Thursday.

“Over the next 18 months, these actions are expected to result in the departure of approximately 19,000 people (or 2.5% of our current workforce), and we expect over half of these departures will consist of people in our non-billable corporate functions,” the company added.

The job cuts reflect stabilizing demand, following explosive post-pandemic growth, and prudent cost management, according to Ignacio Rasero, vice president for Moody’s Investors Service.

In addition, the company has revised its fiscal year 2023 revenue growth.

“Accenture expects revenues for the third quarter of fiscal 2023 to be in the range of $16.1 billion to $16.7 billion, an increase of 3% to 7% in local currency, reflecting the company’s assumption of an approximately negative 3.5% foreign-exchange impact compared with the third quarter of fiscal 2022,” the company said in a statement.

Despite the reduced forecast, Accenture’s diversified business and industry mix can help offset weakness in specific sectors, such as technology, and provide stability, Rasero said, adding that long-term demand prospects for Accenture’s services remain high as the company continues to benefit from digital transformation trends.

Accenture’s decision to cut jobs comes just after Amazon decided to fire another 9,000 more workers from several business units, including AWS, at the beginning of the week.

Earlier this month, Meta announced that it would fire 10,000 employees, over and above the 11,000 job cuts that it announced four months ago. 

Uncertain macroeconomic conditions have forced technology companies to announce massive layoffs since 2022 through 2023.

IT Consulting Services, Technology Industry

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One of the key advantages of the cloud is cost savings, and yet cloud costs are on the rise and overspending by as much as 70% is commonplace, according to Gartner. Much like gyms make their money off members who never actually use the equipment, cloud providers profit from those who underutilize their resources. That’s a problem for financial leaders and IT leaders trying to govern digital transformation costs and tighten their budgets in response to economic pressures. With cloud spending doubling every four to five years, it pays to cut cloud costs.

But how do you get a handle on your corporate cloud spending?

From Infrastructure as a Service (IaaS) to Software as a Service (SaaS) and Unified Communications as a Service (UCaaS), here are four leading strategies for cutting cloud costs.

1. Eliminate redundant cloud applications

This advice sounds basic, but it’s easier said than done. Getting the visibility to see both sanctioned and unsanctioned applications can be a challenge. Technology is key. Cloud expense management platforms help establish a centralized inventory of all cloud applications and infrastructure services currently in use. Cloud Access Security Broker (CASB) security technologies can also be helpful. Gaining deep visibility is the first step in reducing app redundancy and improving cloud security.

Those who do it best plan a cross-functional project tapping into data from Single Sign On systems, as well as financial expense systems. You’ll want to identify the most cost-effective app consolidations and rank your apps based on cybersecurity risk. This helps teams prioritize response efforts around app elimination and security polices for acceptable cloud use.

2. Reduce cloud infrastructure waste

With a centralized inventory, the next step is to reconcile infrastructure usage against ownership. The key is to know what you already pay for and how efficiently you’re using it. All too often, companies overestimate their needs and resources go underutilized. There are many examples, whether it’s an ambitious IT engineer wanting a big piece of infrastructure so he can sleep at night, data transfers triggering unnecessary charges, or virtual servers forgotten after their owner left the company. In some cases, servers will run for no reason at all.

Cost analysis efforts take on exercises in:

Evaluating your IT environment over periods of time, creating usage benchmarks aiding the analysis of traffic charges and storage forecastingUnderstanding how and when to use pausing features to ensure you’re paying for IaaS services only when you need themKnowing when to remove or downgrade infrastructure — the same way you downgrade a phone plan from unlimited data to a lower tierOptimizing costs for direct network connections to cloud providers, as the provider’s service is not always the best optionExploring spikes in IaaS usage and knowing when retention plans create unnecessary backups burning a hole in your pocket

Software powered by artificial intelligence can “see” these types of inefficiencies instantly, bringing forward misappropriated tags and cost savings recommendations informed by normalized data and pricing information updated in near real time. Beware: Default dashboards from cloud providers will not deliver cost optimization insights. Nonetheless, the data is available. Simply plug in analytics tools to reveal savings. It’s not uncommon to immediately find 20% in savings and achieve a triple-digit ROI in the first year.

3. Improve cloud management productivity

When cloud innovation can mean the difference between winning and losing in the market, IT teams should be spending more time transforming and less time worrying about how their cloud resources are being used and managed, how expenses are reconciled or allocated to business units, and how needs are forecasted. IT staff efficiencies are cited as one of the most important benefits of moving workloads to the cloud, but those productivity gains can be undermined by manual vendor management tasks.

Outsourced services can offload the manual work of IaaS usage audits, application optimization, and expense management. They’re also helpful in bill pay, contract renewals, and integration projects following mergers and acquisitions.

4. Put checks and balances in place

Give a leader or team the authority to govern the cloud. Create initiatives to reassess assets with cost top of mind, understanding that the long-term strategy is to create thoughtful usage that allows room for more meaningful cloud adoption as innovation evolves. Allow this team to work beyond defined perimeters and identify cloud usage policies in addition to key risks in the areas of finance, IT, and security. If you have more than 50 applications and more than two cloud infrastructure providers, consider a dedicated resource or ongoing partner program. 

The cloud triggers other reasons for oversight. Challenges include cloud application performance and reliable connectivity issues when increased cloud usage demands more of the IT network. With a team experienced in effective cloud expense management, companies are better guided through modernization initiatives, deploying SD-WAN solutions designed to manage 5G and internet service providers cost-effectively.  

Payouts worth the investment

In the end, don’t expect to tackle all four steps at once. Prioritization is key. Investments in cloud cost management have a high likelihood of paying for themselves, as benefits materialize in dollar savings, productivity gains, and security. If companies spend 2023 evaluating cloud costs and ensuring their spending aligns with needs, efficiency, and innovation are sure to follow. Now, is the time to inventory and reconcile cloud assets. Right-sizing will help avoid cloud investment hangovers and empower companies to effectively govern the past three years of innovation run amok.

To learn more about cloud cost optimization, visit us here.

Cloud Management, Cloud Security, Endpoint Protection

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In the age of digital innovation and work-from-anywhere, every company has a lengthening list of cloud services and applications compounding complexity for their IT team. Consider today’s trends that make cloud resources more prolific — sometimes without any regard for cost or risk to the company:

The advantages of cloud scalability and management off-loading have more companies leaning into cloud Infrastructure as a Service (IaaS) with most managing multiple clouds. TechRepublic reports 82% of IT leaders are adopting the hybrid cloud, half of which are deploying 2-3 public clouds.Security over the past 10 years has been about adding point Software as a Service (SaaS) solutions in a whack-a-mole response to new cybersecurity threats. Not to mention Zero Trust strategies calling for more technologies in the name of identity-based security with multi-layered protections.The pandemic triggered accelerated SaaS adoption, particularly in the areas of collaboration and unified communications, so companies could simply survive in the rush to remote work.

With digital innovation run amok over the past few years, many IT leaders are finding themselves in a governance phase according to the CIO.com State of the CIO Study. That means executives are trying to understand what cloud resources they have, how to manage them efficiently and cost-effectively, and — better still — how to secure them. There is a strong need for cloud governance.

But herein lies the core problem.

Cloud governance distracts executives from leveraging the cloud for what it is – an innovation incubator. “CIOs need to shift their focus from the micro to the macro. That is, they need to spend less time managing every cloud application and service operated by IT, so they can drive strategic innovation,” said Johnna Till Johnson, CEO, Nemertes.

Cloud technologies that reduce cloud complexity

IT environments have been expanding at such a rapid pace that IT resources have scarcely kept up. This has knocked the IT team sharply out of balance with the cloud assets for which it is held responsible. Like staring at the vast horizons of the Grand Canyon, IT teams often feel overcome by the endlessness of their management duties.

In response, most IT leaders are quick to hire more staff to help level the balances; however, that response is only half of the solution equation. Simultaneously, leaders must take back control of their clouds by – you guessed it – using more cloud technology. That’s right, your IT environment has become so complex, you need another cloud technology to manage all your cloud technologies.  In fact, a recent study finds that budgets allocated specifically to cloud resources are expected to increase by 12% over the next two years.

But before you shake your frustrated fist in the air, the beauty of adding a cloud expense management (CEM) platform is the tangible and immediate cost savings that can make for an easy approval conversation.

Reality hits at CEM implementation. While the AI-powered software typically takes a matter of hours to come back with insightful recommendations, finding the right people with the permissions and authority to connect the CEM software to your cloud data — that is typically the hardest part. But ask companies already using CEM alongside similar mobile device management and telecom management platforms, and they will tell you CEM investments deliver even more cost savings in comparison.

So, what does a CEM platform do and where does that value come from?   

Controlling cloud resources, costs, and security too

Some of the most used features of a CEM platform are inventory visibility, usage data, and expense tracking, which together help companies eliminate cloud overspending. On average, the anticipated use is not equivalent to actual use, which generates hard dollar savings whether it’s unused application licenses or excess data center storage. CEM technologies are good at answering questions like:

How much can I save by pausing my cloud services or consolidating my applications?Which department or cost center is using the most cloud resources?How is data functioning and flowing across our company infrastructure?How can I get a report of vendors and contractors accessing our company information?How many of my app licenses really need to be upgraded?

Moreover, CEM provides a data-driven strategy showing where to start with any optimization efforts. Solutions are also known for having the latest pricing information with databases updated daily – if not more frequently.

In addition to savings, these insights are key for security. After all, you can’t secure what you can’t see. The list of SaaS applications are stack-ranked by both usage and security risk, supporting shadow IT discovery and cloud security initiatives. Other key features include:

Comprehensive cloud services addressing both IaaS and SaaS, including UCaaSThe ability to evaluate and optimize both public and private cloud infrastructure servicesThe number of customizable reports and flexible processes for building workflowsProfessional services in addition to basic services 

Beyond data readouts, clients and their IT teams may still need help, and solutions vary in their abilities to make data actionable. From bill pay and employee on- and offboarding to contract renewals and integrations after mergers and acquisitions, clients will want to think about what management tasks they intend to outsource versus keep and ask questions accordingly.

Empowering CIOs and CTOs to innovate again

IT budgets have been hit hard by cloud costs, and resource management has only become more complicated. Financial officers and technology leaders bear the burden of finding more efficient ways to reign in and right-size their expanding assets. When they rebalance innovation with operational excellence, not only do they make IT budgets more recession-ready, but they also let their partners calm the chaos. That lets them get back to using cloud technology for what it was intended for – digital transformation. Investing in cloud cost optimization is the first step in clearing the haze off the corporate cloud landscape, so leaders can get back to the sunnier days of innovation.

To learn more about cloud cost optimization, visit us here.

Cloud Management, Cloud Security

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The world is experiencing an onslaught of economic uncertainty, and the IT industry is facing headwinds just like any other. Gartner recently lowered their expectations for IT budgets to increase by just 2.2% in 2023 on average – lower than the projected 6.5% global inflation rate.

But the economic turmoil doesn’t mean your competitors are going to stop investing in technology – CIOs still need to spend to improve operational excellence. The spending just needs to be more focused on modernizing legacy systems and streamlining tools for higher efficiency and lower redundancy where possible.

Here are tips for making the most of your IT budget in a recession.

Invest in revenue growth edge

If you have on-premises solutions, now is the time to upgrade. Modern edge solutions represent a generational shift, expanding the capabilities of the cloud while reducing the costs of stitching together piecemeal solutions and managing servers.

Let’s take a look back. The first wave of cloud provided flexibility and lower total cost of ownership (TCO). But these offerings were still the same primitives as your on-premise technology. Servers were replaced with cloud servers (like EC2) and network-attached storage with cloud storage (like S3). If you experienced a traffic spike, the cloud provided the flexibility to provision more infrastructure but the work to scale up (and down) was on your team to manage.

New edge solutions abstract this away. Developers can deploy applications, and it’s automatically hosted and delivered as appropriate without having to manage servers. Modern edge platforms are built to unify application tools to lower TCO, increase efficiency and reduce errors. This can double developer velocity.

Many businesses don’t realize updating their legacy technology stacks can be a hidden source of increased revenue. According to McKinsey, developer velocity is an often overlooked issue that can improve business revenue fivefold for all companies.

2. Beware of the tool tax

Nearly half of DevOps use between two and five tools, and 41% use between six and 10 tools. It’s costing companies $2.5 million per year – and, in fact, 69% of development and operation teams want to consolidate their tools due to hidden costs, insufficient agility, and the time maintenance takes away from managing security and compliance.

In other words, businesses are paying an invisible “tool sprawl tax,” which is adding to the TCO and cutting into businesses’ ROI.

While three disjointed tools may somehow be cobbled together – they don’t necessarily play nicely together. To lower your TCO, you need one that actually integrates and manages tools for you. This means investing in a holistic, unified platform rather than having to buy from multiple vendors.

3. Don’t skimp on security

New CVEs and zero-day attacks are being discovered at higher rates year after year. Threats are increasing faster than your headcount. Do not let up on security; others certainly aren’t. In fact, security improvements are the number one reason for tech budgets increasing in 2023.

Learn from others: 71% CIOs rate their internal organizations’ security as good or excellent. Yet 43% feel “somewhat” or “very” unprepared for the future. Why is that?

Invest and spend wisely by asking yourself these questions:

Does your vendor have the network scale to stop increasingly large attacks at the edge, to maintain the highest levels of reliability and performance?

Are you using automation and/or machine learning to help you adapt to constantly evolving threats?

Can you deploy virtual patches and update the WAAP ruleset across your network to mitigate Zero Days threats immediately?

Do you have flexible engagement models, including self-service with simple and predictable pricing?

If the answer to one or more of these is no, it’s time to re-evaluate your current solution and consider one that reduces friction points through automated operations at the edge.

Conclusion

Sometimes, the best starts are born during a recession. Ironically, the smartest investment to your out-of-control technology spending is more technology – but better suited for leaping past your competition and growing revenue. You don’t want to be too busy sawing the tree to take time to sharpen the saw.

Forward-thinking companies need to look for ways to address friction points through scaled, automated operations that only the edge can provide. Find an edge-enabled solution that integrates application security and performance into the development process for efficiency, compliance facilitation, and cost reduction.

Edgio operates a global edge network with vertically integrated edge solutions for web apps and APIs. Click here to learn more.

IT Leadership

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Organizations that have embraced a cloud-first model are seeing a myriad of benefits. The elasticity of the cloud allows enterprises to easily scale up and down as needed. In practice, rather than commit to just one cloud service in today’s world of more distributed organizations due to Covid-19, many enterprises prefer to have multiple cloud solutions they source from a variety of vendors.

The cloud also helps to enhance security, improves insight into data, and aids with disaster recovery and cost savings. Cloud has become a utility for successful businesses. Around 75% of enterprise customers using cloud infrastructure as a service (IaaS) have been predicted to adopt a deliberate multi-cloud strategy by 2022, up from 49% in 2017, according to Gartner.

“Businesses don’t want to be locked into one particular cloud,” says Tejpal Chadha, Global Head, Digitate SaaS Cloud & Cyber Security. “They want to run their applications on different clouds so they’re not dependent on one in case it were to temporarily shut down. Multi-cloud has really become a must-have for organizations.”

Yet, at the same time, companies that tap into these multi-cloud solutions are opening themselves up to additional, and potentially significant, security risks. They become increasingly vulnerable in an age of more sophisticated, active cyberhackers.

To address security risks, cloud services have their own monitoring processes and tools that are designed to keep data secure. Many offer customers basic monitoring tools for free. But if companies want a particularly robust monitoring service, they often must pay added fees. With multiple clouds, this added expense can be significant.

“The cost goes up when you have to have specific monitoring tools for each cloud,” Chadha says. “Monitoring also needs to be instantaneous or real-time to be effective.”

Organizations using multi-cloud solutions are also susceptible to cloud sprawl, which happens when an organization lacks visibility into or control over its cloud computing resources.The organizationtherefore ends up with excess, unused servers or paying higher rates than necessary.

For enterprises safeguarding their multi-cloud solutions, a better tactic is to use just one third-party overarching tool for all clouds – one that monitors everything instantaneously. ignio™, the award-winning enterprise automation platform from AIOps vendor Digitate, does just that.

ignio AIOps, Digitate’s flagship product, facilitates autonomous cloud IT operations by tapping into AI and machine learning to provide a closed-loop solution for Azure and AWS, with versions for Google Cloud (GCP) and private clouds also coming soon. With visibility and intelligence across layers of cloud services, ignio AIOps provides multi-cloud support by leveraging cloud-native technologies and APIs. It also provides actionable insights to better manage your cloud technology stack.

ignio is unique in that it cuts across multiple data centers, both private and public clouds, and seamlessly handles everything  in a single window. It gets a bird’s eye view of the health of a company’s data centers and clouds. Then, ignio continuously monitors, predicts, and takes corrective action across clouds while also automating previously manual tasks, which ignio calls “closed-loop remediation.” The closed-loop remediation enables companies to automate actions for both remediation, compliance, and other essential CloudOps tasks.

“The ignio AIOps software first comes in and, in the blueprinting process, gives a holistic view of what companies have in their universe,” Chadha says. “We call that blueprinting or discovery. Then, we help automate tasks. We’re completely agnostic when it comes to monitoring or taking corrective action, or helping increase automation across all of these clouds.”

As Digitate ignio customers automate processes and reduce manual IT efforts, they’re finding they’re saving money — some millions of dollars a year. For many companies, tasks that once took three days now take only an hour.

“The biggest benefits are that less manual work is ultimately needed, and then there’s also the costs savings,” Chadha says. “Enterprises using this tool are managing their multi-cloud estate much more efficiently.”

To learn more about Digitate ignio and how Digitate’s products can help you thread the multi-cloud needle, visit Digitate.

IT Leadership

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CRM software provider Zendesk has decided to lay off 300 employees from its global workforce of 5,450 employees to reduce operating expenses, a recent filing with the US Securities and Exchange Commission (SEC) showed.

The decision comes just months after the company was acquired by a consortium of private equity firms for $10.2 billion. “This decision (layoffs) was based on cost-reduction initiatives intended to reduce operating expenses and sharpen Zendesk’s focus on key growth priorities,” the company wrote in the SEC filing.

In a separate press statement, Zendesk’s executive team took responsibility of the job cuts and said the company is pulling back from the ways it had previously invested in “hiring growth”, much in advance of the business growth.

“…we grew our team much faster than we should have based on revenue growth expectations that were not pragmatic. As an executive team we take responsibility for that,” the company said.

The statement outlined how Zendesk’s top management tried different measures, such as closing over 100 positions, to try and address its bottom line but was unable to get past the issue.

The roles impacted by the layoffs were decided on five strategic priorities, the company said, including “optimizing our processes and systems, reducing duplication of effort, increasing our spans of control and rebalancing our roles towards Go to Market to build on our enterprise opportunity while continuing to build and deliver compelling products for our customers.”

Layoffs to cost Zendesk $28 million

The layoffs are estimated to set Zendesk back by about $28 million, primarily due to costs incurred on severance payments and employee benefits, the SEC filing showed.

Out of the total estimated cost, the company expects to incur $8 million in the fourth quarter of 2022.

As part of the layoffs, Zendesk said it will provide outgoing employees three months of base salary along with one week’s pay for each year of full service.

Other benefits include a prorated portion of the employee’s annual bonus payable at target, two months of equity award vesting, health insurance benefit coverage and job search support resources.

Tech firms continue to see layoffs

The CRM software provider’s decision to layoff almost 5% of its workforce comes at a time when other tech firms such as Salesforce, Meta, Twitter, Microsoft and Oracle have announced job cuts in the wake of economic headwinds.

On Wednesday, Meta, the parent company of Facebook, Instagram and WhatsApp, said it is preparing to cut thousands of jobs, impacting 13% of its global workforce.

Salesforce, another CRM software provider, too announced mass layoffs this week, cutting at least hundreds of jobs from its 73,000-person workforce.

Last month, Microsoft had said it would be laying off close to 1,000 employees. Cloud service provider Oracle is also continuing to layoff staff globally in the past few months.

Tech industry prepares for more layoffs

Announcements of thousands of job cuts in the past couple of weeks may not be the end of the trouble for the technology sector. Analysts expect the worse is yet to come.

“It’s a good bet that tech companies that haven’t yet laid off employees are carefully considering whether or not to do so. It wouldn’t be surprising to see more layoffs in the next few months, particularly among firms whose fiscal year ends on December 31st,” JP Gownder, principal analyst at Forrester said in a statement.

Gownder said the job cuts were a result of these companies trying to set up finances for success in 2023. “Widespread economic concerns—some prompted by rising interest rates, others by the war in Ukraine, high fuel costs, and supply chain issues—are prompting these moves in anticipation of lower demand.”

The layoffs, according to the analyst, also point at skilling challenges being experienced by several employees. 

Positions that don’t require “enough” IT skills will find it more difficult to find jobs compared to people who are considered top talent in the technology sector, said Gownder. “Many of the laid-off tech workers have skills that will be valuable in other sectors. Nearly every company, regardless of industry is now a “technology firm” that relies on software developers, engineers, and IT talent. So top tech talent who lose their jobs will find other positions, most likely.”

IT Jobs

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The end of the Great Resignation — the latest buzzword referring to a record number of people quitting their jobs since the pandemic — seems to be nowhere in sight.

“New employee expectations, and the availability of hybrid arrangements, will continue to fuel the rise in attrition. An individual organization with a turnover rate of 20% before the pandemic could face a turnover rate as high as 24% in 2022 and the years to come,” says Piers Hudson, senior director in the Gartner HR practice.

The Global Workforce Hopes and Fears Survey, conducted by PwC, predicts that one in five workers worldwide may quit their jobs in 2022 with 71% of respondents citing salary as the major driver for changing jobs.

The challenge for IT leaders is clear: With employees quitting faster than they can be replaced, the rush to hire the right talent is on — so too is the need to retain existing IT talent.

But for Kapil Mehrotra, group CTO at National Collateral Management Services (NCMS), high turnover presented an opportunity to cut costs of the IT department, streamline its operations, and find a long-term solution to the perpetual skills scarcity problem.

Here’s how Mehrotra transformed the Great Resignation into a new approach for staffing and skilling up the commodity-based service provider’s IT department.

Losing 40% of domain expertise in one month

From an IT infrastructure standpoint, NCMS is 100% on the cloud. The company’s IT department comprised 27 employees, with one person each handling business analytics and cybersecurity, and the rest of the team split between handling infrastructure and applications. The applications had been transformed into SaaS and PaaS environment.

With a scarcity for experienced and skilled resources in the market and companies willing to poach developers to fulfill their needs, it was just a matter of time before NCMS too saw a churn in its IT department.

“In March, 10 of the 27 employees from the IT department resigned when they received job offers with substantial hikes. At that time, application migration was under way, and our supply chain software was also getting a major upgrade. The sudden and substantial drop of 40% in the department’s strength made a significant impact on several such high-priority projects,” says Mehrotra.

“Those who left included an Android expert and specialists in the fields of .Net and IT infrastructure. As the company had legacy systems, it became tough to hire resources that could manage them. Nobody wanted to deal with legacy solutions. The potential candidates would convey their inability to work on such systems by showing their certifications on newer versions of the solutions,” he says.

Besides, whatever few skilled resources available for hire were expecting exorbitant salaries. “This would have not only impacted our budget but would have also created an imbalance in the IT department. HR wanted to maintain the equilibrium that would have otherwise got disturbed had we hired someone at very high salary compared to existing team members who had been in the company for years,” says Mehrotra.

Nurturing fresh talent in-house

So, while most technology leaders were scouting for experienced and skilled resources, Mehrotra decided to hire fresh talent straight from nearby universities. Immediately after the employees quit, he went to engineering colleges in Gurgaon and shortlisted 20 to 25 CVs. Mehrotra eventually hired four candidates, taking the depleted IT department’s head count to 21.

But Mehrotra now had two challenges at hand: He had to train the freshers and kickstart the pending high-priority projects as soon as possible.

“I told the business that we wouldn’t be able to take any new requirements from them for the next three months. This gave us the time to groom the freshers. We then got into a task-based contract with the outgoing team members. As per the contract, the team members who had exited were to complete the high-priority projects over the next months at a fixed monthly payout. If the project spilled over to the next month, there would be no additional payout,” Mehrotra says.

“Adopting this approach not only enabled completion of the projects hanging in the limbo, but also provided the freshers with practical and hands-on training. They ex-employees acted as mentors for the freshers who were asked to write code and do research. All this helped the new employees in getting a grip on the company’s infrastructure,” he says.

In addition, Mehrotra also got the freshers certified. “One got certified on .Net while another on Azure DevOps,” says Mehrotra.

New recruits help slash costs, streamline operations

The strategy of bringing first-time IT workers onboard has helped Mehrotra in slashing salary costs by 30%. “The new hires have come at a lower salary and have helped us in streamlining the operations. We are getting 21 people to do the work that was earlier done by 27 people. The old employees used to work in a leisurely manner. They used to enter office late, open their laptops at 11 a.m., and take regular breaks during working hours. The commitment levels of freshers are higher, and they stay in a company for an average of three years,” says Mehrotra.

After three months of working with the mentors, the freshers came up to speed. “We started taking requirements from business. The only difference working with freshers is that as an IT leader, I have stepped up and taken more responsibility. I make sure that I participate even in normal meetings to avoid any conflicts. Earlier what got completed in one day is currently taking seven days to complete. Therefore, we take timelines accordingly. We are currently working at 70% of our productivity and expect to return to 100% in the next three months,” says Mehrotra.

Sharing his learnings with other IT leaders, he says, “There will always be a skills scarcity in the market, but the time has come to break this chain. Hiring resources at ever- increasing salaries is not a sustainable solution. The answer lies in leveraging freshers. Just like big software companies, CIOs also must hire, train, and retain freshers. We must nurture good resources inhouse to bridge the skills gap.”  Mehrotra is now back to hiring and has approached recruitment consultants with the mandate to fill 11 positions, which are open to all, including candidates with even six months to a years’ experience.

IT Skills