Organizations supporting on-premises data centers rely heavily on the performance and availability of their IT hardware. The failure of a critical server or hardware component can severely impact companies. Businesses can rapidly lose customers when a crucial application suffers degraded performance due to hardware issues.
Many companies find it challenging to maintain their data centers’ hardware inventory, and can slowly drift into technology debt that negatively affects their business objectives. However, some solutions can minimize or eliminate the risks of technology debt. Businesses can protect themselves by embracing the many benefits of cloud computing with a reliable managed service provider (MSP).
What is Technology Debt?
Technology debt, as it applies to IT hardware, is the hidden cost for an organization running obsolete, legacy physical infrastructure. Companies can also incur debt by failing to maintain their existing hardware efficiently. This debt can accumulate over time and lead to significant issues that directly affect business operations.
Risks and costs of technology debt
Technology debt is not simply an abstract concept for IT decision-makers to consider. Debt can lead to several issues and risks for a company’s bottom line and operational efficiency.
- Hardware failure: Old or poorly maintained hardware can fail unexpectedly, potentially affecting business-critical applications. External and internal users may be unable to access vital systems for an extended period while new hardware is procured.
- Degraded performance: An organization’s legacy hardware may be unable to run modern software efficiently, undermining employee productivity and customer satisfaction. The lack of performance can make it impossible for companies to leverage emerging AI solutions, putting them at a significant competitive disadvantage.
- Security vulnerabilities: Older hardware may be unable to support modern firmware or encryption, making it an attractive target for threat actors. These security vulnerabilities put valuable and sensitive corporate data resources at risk.
- Increased maintenance costs: Companies may be running legacy hardware with no vendor warranties and must pay higher prices for replacement parts and specialized support. These costs directly affect profitability and may continue to rise as the equipment ages.
- Energy consumption: In most cases, legacy hardware consumes more power and generates more heat than modern alternatives. Companies must cool this equipment, adding to the cost of higher energy bills.
How Do Companies Accrue Technology Debt?
Most organizations do not knowingly or willingly accrue technology debt. They will typically be unpleasantly surprised by slow or unavailable systems and high maintenance bills. The following are common reasons behind a company’s increasing technology debt.
- Deferred equipment upgrades: Organizations may be reluctant to replace aging equipment to conserve financial resources and avoid capital expenditures. This approach risks hardware failure, expensive maintenance, and operational disruption.
- Long-term commitments: Companies may enter into long-term equipment leases that make it impossible to upgrade to take advantage of emerging software solutions. Deals that may have made financial sense in the past can become costly over time.
- Ignoring gradual performance impacts: Teams may not notice gradual performance degradation until it reaches a level that disrupts operations and affects customers. A solution to this issue is comprehensive performance monitoring that allows historical evaluation to identify slowdowns while they are still manageable.
How Do Businesses Address Technology Debt?
A company aware of the risks of technology debt can adopt several strategies to address it and minimize potential business impacts. We will look at three approaches that offer businesses different costs and benefits.
- Upgrade existing hardware: This strategy continuously upgrades an on-premises data center’s hardware to keep up with new technology and support advanced software applications. It is an expensive approach that requires deep pockets and a highly skilled technical team.
- Maintain existing hardware: Companies may avoid extensive technology debt by ensuring all equipment is properly maintained and serviced. They may still fall behind competitors by failing to leverage advanced solutions.
- Migrate to the cloud: Cloud migration is the most effective way to eliminate hardware technology debt. The cloud service provider (CSP) is responsible for supporting the hardware, freeing customers to focus on core business activities. Companies can engage a reliable MSP to assist with the migration and manage the cloud environment.
Businesses Face Rising Hardware Costs and a Lack of Availability
Unfortunately, companies may not be able to resolve the problem of aging or underperforming hardware by simply purchasing new equipment. Hardware costs are rising rapidly, and vital components such as memory chips are becoming harder to find. Even companies willing to spend the money may be unable to refresh their hardware.
The rising costs of hardware and memory are due to the demands of large-scale data centers and AI workloads, which require more memory than traditional applications. Memory can represent up to 25% of a system’s cost, and prices for this essential commodity may be up to 50% more expensive than last year. These factors increase the cost of servers and memory upgrades that may be necessary to maintain a data center’s operational efficiency.
Another impediment to addressing technology debt through hardware purchases is the increased lead time some customers are experiencing when ordering equipment. Teams that identify failing infrastructure components may have to wait longer than anticipated for delivery. These delays may impact mission-critical applications and lower customer satisfaction, and result in lost business.
VAST Can Eliminate Your Company’s Technology Debt
VAST’s managed cloud services can eliminate your company’s technology debt by providing the infrastructure you need to run your business successfully. Our extensive experience with cloud computing and strategic partnerships with leading technology vendors give us the tools to assist with every aspect of your cloud journey.
- Our cloud migration works with you to develop a migration plan that aligns with your unique business requirements. We assist with planning, execution, management, and post-cloud transition support.
- VAST’s managed public cloud service makes sure you are getting the most from your cloud investment. We can manage every aspect of your cloud infrastructure so you can concentrate on your business.
- Companies that want to maintain an on-premises data center will benefit from our managed infrastructure service, which will optimize your existing environment and make informed recommendations for improvement.
Talk to our experts today and learn how our managed services can help you escape from technology debt.
