The IT landscape is often inundated with a rapid introduction of new business models and technologies, presenting CIOs with the challenge of adapting to these changes as well as continuously providing IT as a service, said Werner Knoblich, VP and general manager of EMEA region at Red Hat.
Addressing delegates at the Red Hat Forum in Midrand, Knoblich said companies that still struggle to find innovative ways of implementing traditional business models for a digital world will continue being on the back foot.
"The traditional in-house IT model is very resource-intensive just to sustain day-to-day operations, which is not ideal for a lot of businesses," explained Knoblich. "There are major financial costs associated with having a company-owned IT infrastructure on even the most basic level."
When it comes to IT infrastructure, for example, Knoblich stated that companies spend a lot of money on recycling of software and hardware licensing, which is mandatory with agreements ranging from every one to three years. Also large amounts of capital are spent to upgrade hardware, in-house and contracted labour is needed to install and maintain hardware, and staff members have to periodically be retrained on mandatory software updates.
"All these processes can prove very costly, especially in a small business environment where there are long periods of downtime due to the lack of capital required to have secondary systems to test upgrades."
Knoblich cited the emergence of the cloud as an example, remarking that enterprises of varying size and complexity can benefit from this technology.
"The benefits associated with adopting an outsourced IT infrastructure, such as the cloud, are quickly noticed. Due to the low cost of entry to market, fewer amount of resources required to meet and maintain IT demands, and the ability to adapt to new technologies on a company-wide level as a result of having fewer employees, the rewards are evident."
Knoblich urged companies to have a sufficiently granular understanding of the costs associated with the resources required by the workload(s).
"Costs must be identified and sized, with the total cloud cost compared to costs of alternatives such as a traditional in-house infrastructure. This will enable companies to make informed decisions in the transition phase."
Digital business models are simply evolutionary advances on traditional business models, according to Knoblich, and not a revolutionary change to how companies do business.
"By understanding the change as evolution instead of revolution, companies won't risk overthrowing the old order and making the same mistakes," he concluded.
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