Costs can quickly spiral out of control if IT infrastructure is not effectively managed. In this video, Rob Hirschfeld, CEO and Co-Founder of RackN, takes a deep dive into the topic of cost optimization. He shares his insights on the pitfalls companies fall into with managing IT infrastructure and what they can do to better optimize costs. Hirschfeld says, “It can be incredibly difficult to turn the temperature down on some of these infrastructure, purchases and rentals, when those costs start to add up.”

Cost optimization in IT infrastructure, including unexpected sources of costs

• Rob Hirschfeld highlights unexpected sources of cost in IT infrastructure, which includes renting and buying infrastructure where typically there are a lot of upfront costs.
• Cost management challenges arise when people struggle to know how much cloud infrastructure they will need, leading to unexpected costs and architectural challenges.

Cloud infrastructure costs and operational burdens

• There is a misconception that cloud infrastructure relieves companies of much of their management responsibilities for that infrastructure but that is not true as companies still need to own the operational constructs.
• Cloud infrastructure costs can be unexpectedly high due to dynamic workloads and a lack of operational expertise. Companies can find themselves with operational burdens they didn’t previously have due to needing to monitor consumption.
• Hirschfeld believes companies can only gain cost savings from having dynamic workloads that enable them to scale back the workload dynamically, which requires operational capabilities and the appropriate tooling.

Cloud computing costs and open source software

• Hirschfeld explains that cloud storage costs can be hard to estimate and expensive to move between clouds or into different applications. Google recently eliminated departure fees for customers to help mitigate this risk.
• Open-source software has a cost associated with running it, so it isn’t free per se as there needs to be a commercialization aspect so that it can be actively maintained.
• 2023 saw many companies change their open-source companies change license models and Hirschfeld highlights the importance of treating open-source software as a product, rather than free software, to ensure proper support and security.
• Hirschfeld recommends companies look at their open source commitments and participate in the communities that are important to them to find trustable vendors and to build a relationship with those vendors.

DIY vs vendor solutions for IT infrastructure

• Hirschfeld believes that maintaining in-house infrastructure and platforms can be a significant burden for IT teams needing to maintain in-house expertise, leading to more expensive costs and wasted resources.
• Rob discusses how outsourcing tasks like server maintenance and infrastructure platform building and maintenance can alleviate the burden on internal teams but companies must consider the direct costs and the opportunity costs.

Improving IT cost management and reducing silos

• Hirschfeld discusses how the underutilization of software that has been bought on a subscription basis and servers that sit idle is a sunk cost.
• Hirschfeld tells us that automated pipelines can increase software and hardware utilization rates, leading to improved outcomes and ROI.
• Many IT teams are not collaborating well and companies need to think about how they can build an integrated process so that teams work better together, follow standards, and that there is joint governance across all the teams.
• Some teams may resist this type of work but both overall system performance and individual team performance improve once teams have strong blueprints in place.
• Hirschfeld believes that strong leadership is needed to break down the silos of the teams and have them follow the standards and processes.

Guest: Rob Hirschfeld (LinkedIn)
Company: RackN (Twitter)
Show: Let’s Talk

This summary was written by Emily Nicholls.