Find immediate savings in your Oracle infrastructure to fund modernization

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by John Thacker, Global Oracle Strategy and Offerings Leader for DXC

In my many years working with Oracle customers I’ve found that, without exception, the push for Oracle modernization goes nowhere without a convincing business case.

Most Oracle customers have a portfolio of legacy applications they’ve curated over time, and often these applications provide them with a competitive edge in their industry. An argument I hear often is, “it would be great to update my existing infrastructure, but I consistently use my CAPEX budget every year, leaving no remaining funds to re-platform. How can I modernize if I don’t have funds?”

The answer lies in the bottom line. There are short-term savings that can be captured from legacy infrastructure and reinvested into modernizing IT — welcome news for those who find themselves locked into aging platforms with limited potential and spiraling maintenance costs. These savings also serve as the core of the IT modernization business case and are sure to get the attention of CXO sponsors and stakeholders.

Pulling cash from your existing Oracle infrastructure

I always recommend the best place to start is with maintenance fees. For both hardware and application software, these fees can run 20-25% of the original solution investment. And things get worse with aging infrastructure, as support and maintenance costs on equipment and applications can become prohibitive as they near end-of-life.

Licensing is another area that’s ripe for optimization. Long-term Oracle customers can struggle to decipher their legacy license agreements. However, understanding what’s been purchased versus what’s been used to date can yield impressive savings. As well, Oracle and other software providers are eager to move customers to more current (often cloud-based) plans and may offer you significant incentives to replace legacy licenses with simpler, more cost-effective options.

Infrastructure consolidation can also add to the bottom line and boost your business case. A detailed audit will help you uncover non-functioning hardware, poor server utilization, and computing assets that can be consolidated into more cost-effective platforms. These ‘orphaned’ assets take up rack space, use power, and are often covered under expensive manufacturer support contracts. And it’s even better if you can lower capital spending by consolidating this infrastructure into an OPEX-based cloud or hybrid solution.

Unlocking these potential savings requires a detailed assessment of each aspect of the current Oracle environment (which can be done relatively quickly): operating systems, hardware, storage and database, server management, and facilities.

 

CAPEX reduction — Red meat for CXOs

There’s no better way to get Oracle modernization on the radar of a CIO or CFO than to identify significant capital cost reductions. These reductions can be found across the entire Oracle infrastructure.

For example, a CIO will be happy to substitute spending on SPARC servers with an OPEX-based cloud solution, provided there is no loss in functionality. Replacing Linux charges with an Oracle autonomous database running on a cloud appliance can accomplish similar CAPEX reductions.

Other legacy hardware infrastructure also presents an opportunity to lower CAPEX. While initial hardware expenditures may have been completed long ago, additions to legacy platforms are capital-intensive and can add up quickly. Cloud-based alternatives can provide greater utility while lowering capital spending.

Additionally, the CFO and other executives will dig deep into how modernization initiatives will help manage and reduce business risk, lower capital spending, improve competitiveness, and help drive corporate and regulatory compliance.

That said, the business case starts with IT

IT will be performing the lion’s share of the modernization work, and the IT organization will be the most structurally impacted by the changes.

Aside from ROI, it’s about the technology benefits, compatibility of the new cloud with legacy on-prem platforms, and creating flexibility while eliminating vendor ‘lock-in.’

Other teams will be concerned about functional aspects — for example, what application features or functionality may change, will retraining be required, and how the modernization may impact customer engagements

Leveraging an Oracle advocate

As the business case gains more exposure, customers almost always raise two questions: First, how best to engage with Oracle? Second, how much of the modernization roadmap work can be completed with internal staff and tools?

Oracle is transforming rapidly, and not just on the technology front. The company is driving a culture of simplicity, transparency, and innovation that stands to benefit both existing and new customers. That said, the Oracle business model is complex, as are its solutions, licensing structure, and commercial terms. It hasn’t been smooth sailing for every customer, and a number see the benefit of having a trusted partner act as their advocate and go-between with Oracle.

As for the second question — organizations may be able to build and execute the modernization roadmap on their own, but it won’t be easy. While some may have the internal resources and expertise to audit their Oracle infrastructure, identify savings, craft the business case, and execute the IT modernization roadmap, most would admit ‘we don’t know what we don’t know or can’t find.’

The endgame— Delivering on the modernization roadmap

While removing costs from the current infrastructure is critical, it’s not the endgame. That comes with reinvesting those savings into modernizing the Oracle environment and creating a platform for innovation. Delivering this endgame requires building and executing against a roadmap — one that typically results in a hybrid cloud environment of on-prem applications plus SaaS-based solutions.

Modernizing your Oracle environment can be a long, gradual journey. Even the most progressive organizations may end up leaving some applications and infrastructure alone for some time, as they prioritize migrating the applications that deliver the most benefits with the least amount of risk.

But for every organization, the first steps should always be the same: identifying short-term savings from the existing platform, and crafting a compelling business case with a positive return on investment.

What next?
Learn more about deploying an agile, modern infrastructure for no new money.


John_Thacker_headshotJohn Thacker is the Global Oracle Strategy and Offerings Leader for DXC Technology across IaaS, PaaS and SaaS in addition to industry priorities across each region. He received his B.Sc. in Computing before embarking on a fulfilling career initially in industry with Commercial Systems responsibility before working at Technology giants such as Siebel Systems, Oracle Corporation and IBM where he developed his sales and delivery skills in addition to P&L practice management responsibilities. John joined DXC as part of the global Oracle leadership team with a focus on our next generation Cloud offerings and brings his industry client centric insight to driven leadership positions in a fast-moving Oracle marketplace.

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