The Efficient Enterprise runs on Dell

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Efficiency is being Redefined

The way we procure, consume and manage information technology has changed forever. Macroeconomic conditions have placed a premium on TCO. Transformational changes such as Cloud Computing, SAN 2.0, and Web 2.0 are challenging traditional architectures. The need for ever increasing Enterprise productivity has placed a premium on virtualization and consolidation. Further, Cloud Services and compute capacity afford Enterprises a more flexible way to grow.

Now, Enterprises can drive certainty through efficiency.

The Efficient Enterprise reduces the cost associated with managing and operating IT and uses the newly created capacity to drive innovation and business advantage. It challenges the status quo of proprietary technology, limited openness, limited choice and solutions that enable complexity rather than reduce it.

The Efficiency Tipping Point

Enterprise technology – from desktop computing to datacenter – is at a tipping point that is being driven by a convergence of macroeconomic, business and technology trends. Virtualization, Cloud Computing, SaaS, and ITaaS will bring about unprecedented changes and efficiencies. Consolidation and virtualization is no longer a decision point, but a given. Virtualization is a more efficient and effective way to drive down the cost structure of a business from client to data centers and from servers to the supporting network and storage infrastructure. Everybody has a different definition of cloud, but we are seeing emerging clarity in areas such as “platform as a service,” “software as a service,” “infrastructure as a service” and “operations as a service.” Public and private clouds are real. And today, Dell powers more clouds than any other IT vendor.

The convergence of these trends is forcing a sea-change in the way technology is deployed in the enterprise. This change will bring about huge opportunity to those who embrace it.

The CIO Dilemma

CIOs face a critical challenge. Where to find the critical resources and budget to fund the shift?
Enterprises around the world spend $1.2 trillion every year on IT infrastructure. About $300 billion of that goes to hardware, $150 billion goes to software and the rest goes to labor and services. Said another way, over 50 percent of IT expenditure goes to labor. As well, more than 80 percent goes to maintaining the status quo. This means that there is an enormous opportunity for efficiency in the way we manage the enterprise and the way we manage infrastructure.

Think about your spend ratio of “keeping the lights on” vs. innovation. Let’s say “keeping the lights on” is 80 percent of your budget. This includes all the software support, software licenses, labor, application maintenance costs, and short term tactical projects. The 20 percent is what’s spent on the real programs that are at the heart of the business strategy – the ones that will help drive change as you go forward.

If we capitalize on the technology trends occurring today and achieve efficiency, we could return $200 billion in resources to companies that can be used to drive innovation, change and competitiveness. We could reduce the 80 percent of IT infrastructure costs spent on “keeping the lights” to <50%.

Viewed another way from a macro business perspective: “As a percentage of a total company’s revenue (not just IT), what if we could spend one percent more on innovation relative to what we spend today because we did not have to spend that on inefficient IT infrastructure?” The company would completely change the game in its industry. Dell is powering these companies today.

Three Steps to Enterprise Efficiency

There are the three steps to delivering on the promise of the Efficient Enterprise:

• Standardization is about deploying solutions that leverage accepted industry standards to drive out the cost and inefficiencies that come with proprietary architectures such as a closed, vertically integrated technology pool. The reality is that standards-based and open technologies from x86 architectures, to Linux and Windows have reached performance parity with proprietary legacy architectures for most business applications. Dell built its history on standardizing technology – we don’t own a proprietary stack so we have the flexibility, the experience and the relationships to build the right standards-based technology solution for our customers based on their business needs.
• Once standardized, Simplification is possible by consolidating IT footprint and management software, tiering storage, and simplifying the network architecture. Redundancies can either be consolidated or unified using pragmatic solutions such as virtualization and storage consolidation to get the most out of a company’s infrastructure. Companies will minimize the number of technologies used to run them.
• Because a more uniform environment with fewer touch points have been created, greater levels of Automation are now possible. The right tools and best operational practices can now be implemented that reduce manual intervention and boost productivity. IT as a Service (ITaaS) can be leveraged to “out-task” IT activities – as more than 5,500 Enterprises have done with Dell today.

  Automation is the single greatest opportunity to challenge the 50 percent of industry IT spend on labor. Remote infrastructure management, standardization of systems management tools, and systems management tools moved to the cloud drive automation. This means that you don’t have to maintain them, you don’t have to integrate them, and you don’t have to engineer them. And, you benefit from the experience of a partner who does this for thousands of businesses.

Dell – Unleashing Our Enterprise Efficiency

We know we can help you achieve an efficient enterprise because Dell has done it for itself already. Of Dell’s total annual IT spend, 94 percent used to be consumed by “keeping the lights on.” Dell brought this down to 54 percent. Through standardization, simplification, and automation, we were able to free critical IT resources to focus on new technologies such as EqualLogic’s SAN 2.0 storage solutions. By tiering storage, Dell was able to challenge the traditional “one size fits all” storage solutions and reduce storage costs by upwards of 50%. Dell virtualized 7,000+ servers while eliminating 6,000 leading to $100 million in savings over two years.

Unleashing Your Efficiency

Dell believes that all enterprises possess untapped efficiency. From the desktop and laptop to the data center, storage and networking—there are multiple ways for an enterprise to become more efficient. That is why we have invested in a strategy that doesn’t just enable you to thrive in uncertainty – but one that enables you to drive certainty.

Contact Dell today.