Ronald Hudson - Fotolia
Build a comprehensive outline for your data center budget
Including all necessary data center expenses during budget planning can be daunting. IT managers can start with costs for software licenses, hardware upgrades and cloud migration.
Data center budget planning can be a massive undertaking. It often involves IT management collaborating with executives, vendors, service providers and data center administrators. The key to a comprehensive budget -- and getting it approved -- is to include current, future and emergency costs and to justify each expense.
Organizations can divide spending into three main areas: software licenses, hardware expansion and data center maintenance contracts.
One important budgetary item is software upgrades. Over the past 20 years, the software industry has moved toward subscription-based licensing models, which require renewal once a year at minimum.
The main benefit of a subscription-based model is predictable costs. But it's important to note the organization never actually owns the software. Plus, over time, the long-term costs can be higher than an outright purchase. During budgeting, check to see if the vendor or reseller is planning to change its subscription terms or pricing.
Most organizations also have applications installed under a perpetual software license. For these applications, organizations should check to see when new versions will be released, if the new versions will be beneficial to the organization and how much the upgrade will cost.
Another part of software budgets is license compliance planning. This is all about confirming that the organization has the correct number of legally required licenses for the software it uses.
During this process, managers should re-evaluate how many seats they need for specialized software, double-check how many seats they are paying for and if cost per seat will change over the next year.
Hardware acquisition and scaling
Because organizations must consistently replace aging hardware, hardware acquisition costs are part of almost any annual data center budget. There is also a good chance that the business will bring new workloads online over the next year and need the data center infrastructure to support expanding processing needs, both on premises or in the cloud.
The adoption of a cloud-first strategy can make hardware acquisition somewhat complex because, now, organizations need to invest in more on-premises hardware. However, using cloud technology is driving data center infrastructure spending habits.
"We are now seeing some reasonably strong growth in enterprise data center infrastructure spending, with the main catalysts being more complex workloads, hybrid cloud requirements, increased server functionality and higher component costs. We are not seeing much unit volume growth in enterprise, but vendors are benefiting from substantially higher [average selling prices]," said John Dinsdale, chief analyst at Synergy Research Group.
During a data center budget evaluation, determine what workloads will continue to run in-house and if any of those workloads need new or expanded hardware. If a workload is moving to the cloud, then IT managers must budget for the cost of running the workload in the cloud and include any license or subscription fees.
Hardware refresh and upkeep
Most organizations have a long-standing hardware refresh policy. These guidelines dictate how often hardware gets replaced. This could mean that servers are replaced every five years or that uninterrupted power supply batteries are replaced every two years. In any case, IT managers can use their organization's refresh policy to justify hardware spending.
Another consideration is hard drive refresh costs. Some organizations have a policy of replacing hard drives every three to five years. If an organization engages in this practice, then the cost must be factored into the maintenance budget; admins should provide management with an estimate of how many hard drives they want to replace, the cost of new storage options and any associated service costs.
Mandatory maintenance
Maintenance costs are tricky to plan for because they can change year over year, but they are an essential part of data center operations.
The most obvious maintenance cost is vendor service-level agreements, especially if the organization outsources facility upkeep or hardware management. Storage vendors, server vendors and value-added resellers often require the purchase of an annual maintenance contract. The price of these contracts tends to change from one year to the next, so it is important to confirm any cost increases or service changes.
Organizations must also set aside some money in the maintenance budget for unexpected repairs, such as a cooling unit failure or faulty power connectors.
Smart spending with capacity planning
Regardless of what the data center budget includes, there is a chance IT managers will be asked to justify their spending plan.
Take advantage of capacity planning tools, such as eG Enterprise and Turbonomic, or data center infrastructure management software. These applications track growth and resource consumption and can help organizations more accurately allocate IT resource spending. Managers can use capacity planning data to show that their numbers weren't pulled out of thin air but rather were based on valid consumption analytics.
Capacity planning data gives C-suite executives information to justify any future spending and also helps the organization avoid overspend on unnecessary data center components or coming up short on resources.
