Understanding the Value of Your Hardware to Software Ratio for IT

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By: Daniel Newman|

Most modern companies evolving within today’s digital landscape are finding a link between the strategic use of hardware and effective software deployments. As a single piece of hardware becomes more powerful and manageable, companies and CIOs can streamline and secure their digital transformation by maximizing their hardware and leveraging their software to power business.

Tomorrow’s CIO will focus on leading business transformation during rapidly changing tech advancement, and finding the balance between your hardware and software is the key to success.

Watch for the Hybrid Cloud Solution

Let’s face it: most enterprises can’t afford to follow Amazon’s example. The company simply purchased a private cloud with plenty of room for seasonal peaks, and rents out what it doesn’t need during slower times. Smart, but also efficient. Then there’s Netflix, maybe a better example of a practical future; it plans to fully embrace the public cloud and shut down its data centers altogether. But many organizations—schools, hospitals, financial institutions—see the hybrid cloud as a better compromise—a way to keep private info off the net, and still reap the benefits that cloud computing delivers.

I mentioned as early as last November that I thought businesses should be pursue pursuing hybrid cloud. We can see how that idea worked for entrepreneurs. The hybrid cloud market is expected to top $80 billion by 2019, and CIOs are slowly adapting their IT architecture to accommodate public cloud services that work in tandem with privately owned data centers. Any CIO who isn’t addressing this is doing his or her company a huge disservice and will likely be catching up as the hybrid cloud market continues to evolve from commodity to necessity.

As hybrid cloud continues to attract CIOs, the bigger picture is one of less hardware and more functionality through software. This trend is driving the adoption of Software as a Service (SaaS) and cloud solutions. This ratio is a key indicator of where your organization is in the digital transformation scale. I’m not advocating for the obliteration of hardware—it’s still critical in many areas. But focusing on it alone may be a costly mistake.

Balancing Hardware and Software

Many companies have embraced hardware and software as package deals. Apple became the most valuable company in the world by creating modernized platforms with proprietary hardware and software. In today’s mobile-driven world, everyone knows how annoying it is to switch to a new cell phone—especially one from a different carrier. Imagine switching your company’s entire IT structure and all of its hardware to accommodate new software. Any complications here would be more than annoying.

More and more companies are adopting hybrid cloud solutions because they’ve become entrenched in their in-house data storage, and moving decades’ worth of data to a new system typically isn’t an ideal solution for businesses that can’t afford operational disruptions. This is the shining advantage of the hybrid cloud: your organization retains the in-house system it’s used for years, and processes are integrated to use the cloud. This eliminates the need to expand servers or dedicate floor space for larger data centers.

Leverage Software for Its Flexibility

By nature, software is more flexible and upgradable than hardware. This agility is a competitive advantage now, but it may be a cost of doing business in the future. Adopting SaaS business models means that while you’re saving money by not creating your own proprietary software in-house, licensing software on a subscription basis from centrally hosted providers is going to create new B2B pathways and a new set of concerns for CIOs who want to keep their organizations’ IT structures competitive.

IT is no longer about managing things; it’s about managing business systems. The burden of maintenance will be reduced, leaving space for strategic, real-time implementation of new functionality. CIOs need flexible teams who can adapt to new SaaS solutions and support the software their organizations need. CIOs also need to participate in their company’s business decisions, since IT is turning toward SaaS and hybrid cloud solutions as necessities.

Embrace Big Data as Part of IT

CIOs will need to leverage big data to remain competitive. The Internet of Things (IoT) is no longer simply data streams from wearable fitness trackers and appliances. The concept of the Industrial Internet is gaining traction, and it may add trillions of dollars to the global economy in coming years by tracking all kinds of machinery and operating hardware to cut costs and completely analyze performance.

This trend is going to open innumerable doors for IT professionals and create entirely new analytical metrics for countless industries. Another key reason CIOs need to change up their tactics and balance their hardware and software is the impact of big data in business.

Hybrid cloud solutions allow enterprises to cut hardware costs by storing data off-site while retaining their in-house IT structures. SaaS and hybrid cloud will necessitate specialized IT services, so CIOs are going to need to embrace business acumen as a much more vital component of their job. You can’t simply disregard the importance of hardware in the looming face of big data—but coupling it with the flexibility of software and the hybrid cloud may be a game changer.

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About The Author

Daniel Newman

Founder and President, Broadsuite, Inc.

After 12 years of running technology companies including a CEO appointment at the age of 28, I traded the corner office for a chance to drive the discussion on how the digital economy is going to forever change the way business is done. I'm an MBA, adjunct business professor and 4x author of best-selling business books including "The Millennial CEO" and "The New Rules of Customer Engagement." Pianist, soccer fan, husband and father, not in that order. Oh and for work...I'm the co-founder of V3B [Broadsuite], a marketing firm specializing in the digital space, helping companies be found, seen and heard in a cluttered digital world.

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