Managed Cloud Saves Money By Cutting System And People Overprovisioning

June 22, 2022 Ron Venzin

For most IBM i shops in the world, a unit of compute, storage, or networking on a cloud or a unit of time for a skilled IT specialist is always going to cost more than what it costs to have such talent in house. And so, you would think, putting an IBM i system in the cloud and managing all aspects of that system will always cost companies more money, right?

Wrong.

Here’s the part of the math that people rarely do, and that we do each time we close another cloud and managed services deal for an IBM i shop: Many of these companies are massively overprovisioned in terms of compute capacity and storage capacity and people capacity.

For example, instead of paying the cost for a machine with 8,000 CPWs in the P10 tier with lots of local disk storage and maybe some flash, you end up paying for one with 30,000 CPWs because the Power9 machine is that much more powerful. And when the Power10 machines are launched next month, as is rumored, the base amount of compute you will be forced to buy will be even higher. This is but one example of overprovisioning on hardware off the top of my head.

But the overprovisioning of people – and don’t get us wrong, we love people and our intent is to keep adding more tech savvy and application specific specialists to our team so we can sell the IBM i base cloud capacity and managed services for all kinds of things – can be even more expensive. That’s because the base unit of capacity for people is, well, one person. And if you need a skill in your shop, you can’t get a fraction of a person easily and still have them be on the payroll.

For instance, you might have high availability clustering software running on a pair of machines, and you need to have someone manage this. Maybe this requires a full-time employee – and maybe it really doesn’t. Either way, you pay for a person. The same for security, systems management and PTF patching, performance monitoring – the list goes on and on. Maybe you can get one person to wear three hats, or three people to wear twelve hats and execute all these different jobs.

But ask yourself this: Is that really optimal? And can most shops really do this efficiently?

No, they can’t.

As IBM i shops have always done, they have good people doing their best to cover as many jobs as possible, creating gaps in efficiency and effectiveness.

But with managed services, you share expertise and get only as much as you need, just like with cloud you can share the infrastructure and get only as much compute and storage as you need.

I had a good conversation with a customer this week, who is in the insurance business and who has been discussing moving to our cloud facilities for two and a half years. The straw that broke the camel’s back is the Software Maintenance increase that is effective in July, which is going to hit him in August when they need to renew. This customer told me he was tired of chasing the cost, and he was tired of chasing the people. Finding good people is costing him more and more, and adding to the burden is that somebody in his IBM i shop just retired.

He also said that, frankly, IBM’s services have declined in his opinion, and we agree with that. And he said that he was going to our cloud because he knows that we will take care of his systems. This company needs geographic separation for HA clustering, and we can do that. He doesn’t want to worry about what maintenance costs are going to be next year, and he wants to place the headaches on our shoulders by putting everything into the cloud. This places his focus on the applications and the business. When every IT vendor is raising prices for hardware, software, and services in this inflationary economy, and will be moving to the cloud and only buying what he needs in terms of systems and people, and that is how he is going to fight higher costs. And by moving to the cloud, this company is going from a six person IT staff down to two – and those two are concentrating on the application development.

We hear stories like this all the time.

We have lots and lots of Power9 iron, and we pre-paid maintenance for five years because that is how long we expect them to be in the field, and so that maintenance increase is not going to hit us for years. We get volume pricing on hardware and we have a close relationship with IBM and when things go wrong, we can reach a much higher tech level than the average IBM i shop to rectify the situation.

The beautiful thing is that we have lots of expertise that only some IBM i shops will need, such as how to operate and maintain MQ Series message queuing software or any of the major HA cluster tools such as MIMIX, iTera, Trader’s QEDD, and what have you.

Retirement of IBM i staff is a big concern out there, and something that has been covered in the pages of The Four Hundred at great length. We can help with this issue.

One of our customers is a manufacturer based in Arkansas. They have three IBM i people on staff. One retired. One got ill and had to retire immediately. They thought they were safe because they had their longest running employee still there, and he is the typical IBM i techie: He has written some CL code. He has written some RPG code and done some PHP. And he gets sick and can no longer work. So this company tried to take their X86 techies give them a crash course in running the IBM i. Two days into that, and we got a phone call. And we are going to help. We have operator services and COBOL programmers that are available on demand to perform custom coding when needed.

And because this manufacturer is only paying for the capacity they are using, they are going to be able to keep the costs down.

What our biggest customers tell us is that if they had to build up a staff with the expertise that we have at Focal Point, it would cost them a fortune. And in many cases, we build our expertise by hiring the good people of the companies that move to our managed services because they just don’t want to budget for all of that expertise any more. They just want to buy what they need and need what they buy.

With a mix of managed services and cloud, you can do just that.

Ron Venzin is chief executive officer at Focal Point Solutions Group.

This content was sponsored by Focal Point.

One thought on “Managed Cloud Saves Money By Cutting System And People Overprovisioning”

Paul Harkins says:

June 22, 2022 at 10:25 am

Excellent article, and this is exactly the future of IBM i computing, as I predicted in my Amazon book “The Future of Corporate Computing”, section “The End of the In-house Corporate Programmer” on http://www.realtimeprogramaudit.com

Ron and other IBM i Cloud providers stand to quickly make billions (as in BILLIONS) of dollars profit annually by providing powerful and revolutionary new services and capabilities to the entire 120,000 IBM i customer base, and beyond.

Fantastic job Ron

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