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Overprovisioning compute and storage costs more than you think. Eliminate it with HPE GreenLake

The effective cost of your compute and storage infrastructure is much more than you think. HPE GreenLake offers a better way to consume your IT resources!

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 By David Lambert - HPE GreenLake Cloud Services North America Presales Manager

When you’re out doing your household shopping, the principle “buy more than you need – you’ll always end up using it!” sometimes makes good sense. For IT purchases, though … not so much. Overprovisioning infrastructure is clearly not an optimal use of an organization’s scarce resources; for one thing, it ties up cash that might be better used elsewhere. Yet something very close to the “buy more than you need” principal still dominates much decision-making around IT investments.

A new report from Futurum Research looks at the hidden and not-so-hidden costs of companies’ traditional purchasing strategies: The Pulse of Storage and Compute Consumption in 2020 (you can download a free copy with a simple sign-up). Among companies that purchase storage in an upfront capital model, fully 97% reported that they overprovision by 10 percent or more; 44 percent overprovision by 25 percent or more.

For compute, as you might expect, the numbers are a bit lower, but still striking: 85 percent of Futurum’s sample overprovision by amounts ranging from 10% to 50%.

Costs and risks – hidden and disruptive

Despite the ongoing surge in infrastructure demands for AI, big data, analytics and other heavy-duty workloads, companies are confident they can handle growth. Fully 70 percent say that they’re very confident or extremely confident in their ability to accurately predict their organization’s storage needs over the coming 3 years.

But is that confidence justified? Futurum’s data strongly indicates that the answer is no. Despite the popularity of the over-provisioning strategy, many businesses still find themselves running out of storage and/or compute! Nearly half (47 percent) say they’ve been impacted by running out of storage capacity. Forty-one percent say the same for compute.

Now while the costs of overprovisioning are, in a sense, “hidden,” the costs and adverse impacts of hitting the limits of your core infrastructure can be very disruptive indeed:

  • It takes a while to fix it – anything from one to six months for the majority of companies.
  • It costs more to add more – when you’re adding unplanned capacity, it can be harder to negotiate pricing and implementation costs.
  • It can result in lost business – delays can impact employee productivity, customer satisfaction and sales opportunities.
  • The hidden costs of expiring warranties, ongoing support and facilitates costs on underutilized, depreciating assets effectively weigh down the assets that are in use, making the effective cost per unit much higher than is usually calculated.

The pay-per-use alternative: faster, smarter, more efficient

The alternative to capital-based modes of procurement is the pay-per-use model – traditionally in the public cloud but increasingly on-premises or in colocation facilities – which optimizes utilization while providing ready on-demand capacity for organic growth or spikes in workloads. On-prem pay-per-use is close to catching up with public cloud, as Futurum’s graph below shows.

HPE-GreenLake-storage-compute.PNGHPE offers an on-premises, pay-per-use, infrastructure as a service cloud experience: HPE GreenLake. HPE GreenLake leads the industry for on-premises cloud services, with approx. $4B in contract value and customers of every size, in every geography and industry around the world. With GreenLake, HPE has been pioneering the service experience on-premises for years, bringing pay-per-use, scalable, and managed cloud services to clients.

We install HPE equipment at your site or a colo, set up capacity right-sized for your business with an adequate amount of on-demand capacity, and then apply HPE metering technologies so that you’re charged based only on what you use. It’s easy to scale up or down quickly, so you’re always ready for changes in demand with predicable pricing throughout the contract term for currently deployed capacity as well as future growth. You get a unified view of usage, cost performance, and compliance across your entire IT estate through HPE GreenLake Central, our self-service platform. We design, install, support, and can even manage the solution for you.

HPE GreenLake storage enables you to unlock the full potential of your data with cloud services optimized for your workloads. HPE compute as a service delivers resilient, secure, software-defined compute to support any workload.

The Futurum report lists three advantages of the consumption-based approaches (including public cloud):

1. Reduction of unnecessary purchases in advance of needs, and the resulting opportunity to reallocate assets to other, more time-sensitive areas.

2. Increased business agility and adaptability through expanding – or contracting – storage and compute resources in a more fluid and cost-effective basis.

3. Decreased risk of purchased technology becoming obsolete and the increased opportunity to more rapidly adopt technologies that drive business value.

HPE GreenLake can certainly deliver those gains, and I’d add a couple more:

  • Faster response to business needs. When you need more capacity, you can sidestep lengthy procurement delays. HPE provides capacity management and can deliver the infrastructure you need in as few as 14 days by way of a simple change order that aligns to our customers’ change management processes.
  • Sustainability improvements. More than 90% of CEOs state that sustainability is important to their company’s success.1 (source).The as-a-service delivery model is a powerful way for your IT organization to advance overarching enterprise goals. Eliminating wasteful overprovisioning keeps capacity closely aligned to your business needs. And by reducing the amount of under-utilized hardware, you can also reduce ongoing support and energy costs – by more than 30%, according to HPE modeling.

The Futurum paper sees a bright future for the as-a-service strategy. “Given the relatively low number of enterprises using a pure pay-per-use consumption model, and the value it can offer, we anticipate significant growth (or migration) over the coming years” from capital purchase to consumption-based models, with the majority of enterprises likely to leverage a hybrid of both public cloud and on-prem consumption models.

Learn more about HPE GreenLake Cloud Services and how we help you deliver business outcomes faster.

Join us for our online event Accelerating Next: Transforming Compute to Achieve Your Competitive Advantage, coming up April 21 at 8 a.m. PDT. (If you're in the Asia Pacific region, it's on April 22, 11 a.m. SGT, and you can register here.) HPE's President and CEO Antonio Neri and other technology industry leaders will be talking about how HPE is transforming compute systems and solutions to become your new foundation for digital transformation. Don't miss it – register today!

1. Stanford Social Innovation Review: The Next Phase of Business Sustainability

David Lambert.JPGDavid Lambert is in his 20th year at HPE and has performed in roles as an Operations Manager, Account Delivery Manager, and for the past 7+ years as part of the HPE GreenLake Pursuit team in North America supporting sales and developing consumption based models to meet customer business objectives. He has an MBA in Technology Management and is an AWS certified Cloud Practitioner as well as being a PMP certified Project Manager.

Contact David on LinkedIn


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