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OpEx-centric IT is mostly a good thing—if you can visualize the costs
by Alan Earls Alan Earls on

Nothing in life is simple, at least not for long. The CapEx vs. OpEx tradeoff is a case in point. For decades, a management mantra evolved that focused on trying to shift from big investments in CapEx, which might take time to yield results and often provided little flexibility – to OpEx spending. That could include outsourcing fewer essential functions or buying products overseas at a lower cost, and with less risk than, say, upgrading a factory or retraining a workforce.

In IT, of course, the biggest (though not the only) CapEx-OpEx switch has been moving to the cloud and, in particular, adopting the service model. Say goodbye to your expensive data center that’s never quite modern enough no matter how much you spend, and instead go to the OpEx candy store in the sky, the cloud, where any service you might need is there for the asking.

For many, perhaps most IT organizations, that slide to OpEx has been positive and timely. But it hasn’t been without its problems. For example, as many cloud customers have discovered, it can be hard to translate on-premises experience into predictions about all-OpEx cloud costs. The services offered in the cloud operate differently, at the very least, and one doesn’t have to be a cynic to think that some of the pricing schemes are a bit opaque and hard to understand. So, OpEx has to be viewed more carefully. It’s often the answer but without digging deeper and understanding the value proposition and pricing mechanism, the potential cost risks that may be coming along for the ride.

One factor that is not always recognized, and can contribute significantly to cloud OpEx costs, is hidden latency and reliability issues in network connectivity. These issues not only lead to user dissatisfaction but can also drive up costs.

Researchers in a 2017 University of Cambridge report noted, “Small network delays may lead to a significant performance degradation, which affects both the user’s cost and the service provider’s resource usage.” Likewise, according to the abstract for an article, titled, “Characterization and analysis of cloud-to-user latency: The case of Azure and AWS,” published in Computer Networks in January, the problem is widespread.

They note, “With the growing adoption of cloud infrastructures to deliver a variety of IT services, monitoring cloud network performance has become crucial. However, cloud providers only disclose qualitative information about network performance, at most. This hinders efficient cloud adoption, resulting in uncertainties about the behavior of hosted services, and sub-optimal deployment choices.”

More concretely, a blog post earlier this year by Accenture, noted that “as the cloud solidifies its position in enterprise operations, the consequences of latency issues grow. At any one point, your website is just a 2-second delay away from racking up a 100 percent bounce rate.” For business-critical SaaS apps, employee productivity can be directly correlated to load times.

Clearly, the OpEx costs and performance issues that come from having poor network visibility, especially in a hybrid/work-from-anywhere world where IT doesn’t necessarily own or control many remote connections, can be staggering.

But, of course, there are answers. An OpEx world is more flexible, just perhaps more complex than expected. That’s where having the right monitoring solution can pay big dividends.

Get visibility into network performance at every step of the way, including the end user view, and you can identify problems that impact the business and those that could be contributing to higher costs in your OpEx operations.

And if you and build active and passive network visibility that can provide both knowledge and control, the benefits of OpEx-orientation are clearer.

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Filed Under: industry insights

Tags: AWS, NPM, network management, network performance, network monitoring, expenditures, operational expenditures, capital expenditures, opex, capex, finance, budget, IT, iaas, paas, cloud, saas, capex, opex, budget

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