As budgets shrink and hardware ages, IT strategies are in disarray. But we can find solutions in the clouds --...
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not cloud computing, but the actual white, fluffy things in the sky.
Over the past 10 years, the U.S. airline industry has weathered some pretty rough storms. As several larger airlines folded and merged, Southwest Airlines’ business took off, thanks to three strategies that relate directly to IT and virtualization: standardization, scalability and purchasing.
In the airline industry, planes are the platform. Southwest standardized on a single model of airplane to reduce operating costs -- maintenance, parts, training, etc. -- on a large scale. In virtualization, hypervisors and management tools are the platform, and admins can realize similar savings through standardization.
The greater the variance introduced into IT, the less efficient IT becomes. It is not uncommon to see a mix of backup strategies, disaster recovery methods, management tools, storage platforms, server platforms, networking infrastructure and hypervisors. When you mix technologies that ultimately replicate functionality, you multiply tasks such as planning activities, maintenance and training.
You cannot underestimate the negative effect this redundancy has on operating expenses. This waste can easily erase any capital expense savings that were expected from your virtualization project.
Southwest addressed scalability by focusing on a small number of high-density routes. Likewise, IT needs to focus on the fewest number of solutions that are capable of meeting the greatest amount of needs. The same can be said for hypervisors and storage platforms.
This strategy directly ties in with standardization. There is value in selecting one, single platform, but you should only standardize on technologies if they can scale enough to meet your needs.
And in the area of purchasing, Southwest utilized a controversial strategy of buying fuel in advance, insulating the airline from the extremes of the oil-market rollercoaster ride. In IT, you can similarly avoid wild cost fluctuations with enterprise licensing agreements (ELAs).
With an ELA, you are able to lock in a low price over an extended period of time. In exchange, you are committing to a certain amount of purchases over that same period. There is risk involved in these commitments, but ELAs usually reward you with much higher discounts.
IT pricing is generally not as volatile as the oil market, but consumption of technology can be. If you negotiate an ELA that locks in a fair price and does not restrict growth, your savings will multiply as your organization becomes larger.
The U.S. airline industry is very different than the IT market, but as these examples show, successful strategies in the airline industry can be just as helpful to IT.