A recent study of 900 CIOs conducted by Rimini Street, a global provider of enterprise software products and services, found that while the vast majority (96%) of surveyed CIOs say increasing spending on innovation is a strategic priority of their organization they also (71%) struggle to find budget for IT innovation. The same study highlighted that 63% of those CIOs feel locked into their organization’s enterprise application software vendor relationship. In addition, a recent Gartner research article found that 62% of respondents cited saving money to invest in digital business transformation as the motivation for IT optimization projects — the highest cited motivation. The second-highest motivation cited was that major IT provider(s) were increasing costs. 

It’s clear that driving cost out of existing IT in order to invest in digital transformation is a priority for customers and is, at the same time, a challenge. Organizations want to spend less on what is no longer providing differentiation and invest more on what is differentiating and at the same time align new investments with a future that is no longer plagued with the same limitations of their current situation. 

But what are the best investment opportunities organizations can make to differentiate and how can organizations get started?

At Red Hat, we believe that a fundamental building block for digital transformation is an open hybrid cloud platform that helps to increase application portability across public clouds and on-premises infrastructure while providing robust choice to customers. Furthermore, we believe that hybrid cloud presents an opportunity to greatly simplify IT infrastructure and that technologies such as Linux containers and Kubernetes are redefining how development and operations teams create, run and manage infrastructure to be more effective. Through our subscription model, we enable customers to pay for what they need and obtain enterprise software, support and community leadership to leverage the power offered by the open source development model. 

One way organizations can begin is by analyzing current IT budget allocations and asking the following questions:

  • Is this technology providing differentiating value to the business?
  • Is the technology the best strategic choice for a hybrid multi-cloud future?
  • Is there no known alternatives that can provide roughly the same capabilities for a lower cost?

If the answer to these questions is no, it may be time to analyze the feasibility of divesting from the technology by embracing a lower cost alternative. It is also important that the alternative aligns with a hybrid and multicloud future.

For many organizations, server virtualization may be a prime example of a technology that can be assessed for such cost reduction and strategic technology alignment. CorpFlex, a managed services provider, recently assessed its virtualization spend using the Red Hat infrastructure migration solution and determined it was possible to reduce their virtualization cost by 87%. This reduction in per virtual machine cost from $4600/year to $600/year is allowing them to rebalance their investment from virtualization to containers. With increased investment in containers CorpFlex can offer new container services to their end customers – maintaining a competitive advantage in their industry. 

If you would like to learn more about how the Infrastructure Migration Solution can be used to reduce your virtualization costs and accelerate your adoption of containers please visit the Infrastructure Migration Solution page or email the Red Hat Modernization and Migration team.

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