The accelerating pace of change due to the surge of the digital economy has left many organizations in a Catch-22: They need to speed up IT transformation, but their existing funding processes leave no flexibility to make more than incremental change. To drive innovation successfully, top leaders must rethink how they acquire and pay for IT. The traditional IT acquisition model generally means a capital outlay (most commonly with over-provisioning) along with depreciation. This can tie up infrastructure assets for 5 years or more and limit an organization’s ability to invest in digital transformation. We call this “legacy lock-in.”
Too many organizations suffer from a “legacy lock-in” problem that makes it all but impossible to transform their existing systems into the digital architecture they need to accelerate revenue growth, improve the customer experience, and deliver new products and services to the market. As legacy equipment ages, maintenance costs rise, as does depreciation. Together with software licensing costs, up to 70 percent or more of the IT budget can be consumed—not leaving much for innovative technology required to support crucial mobility, data analytics, and customer engagement projects that are crucial to compete in today’s modern economy.
IT leaders understand the business value of deploying modern digital technologies—citing increased agility, better utilization of assets, reduced costs, and growth in existing markets as the top impacts from implementing digital technology in their organization.1 Because innovative deployment of mobile and big data technologies can create a competitive edge, some funding may come from both the budgets of business lines that will benefit as well as IT. A well-thought-out funding strategy can help companies find ways to release the value of their existing equipment and systems through capital acquisition and leases.
A growing trend in financing IT infrastructure revolves around consumption-based financing and usage. This means cash outlays are spent as resources are used. This prevents large capital outlays and enables the business to more effectively manage their cash resources as well as optimize the usage of IT infrastructure.
Rethink the way you acquire, pay for, and use IT
As a leading provider of enterprise infrastructure solutions that enable digital transformation, Hewlett Packard Enterprise offers more than just technology. They provide a financing arm that offers a variety of innovative and flexible IT investment and funding models.
HPE Subscription: One predictable payment for all your IT needs—delivering a simpler, easier way to acquire and pay. Wrap up the payments of HPE servers, storage, networking, and hyper converged solutions as well as software and support services into one monthly payment.
HPE Adaptable Use Models—Flex Down: Deploy projects with a greater speed, flexibility, and efficient use of resources. Acquire the new servers you need for an affordable monthly payment and if you need to make an adjustment later, exercise the option to return unneeded servers, up to 10%, at 12 months.
HPE Adaptable Use Models—Extended Deployment: Acquire your forecasted compute and storage capacity in advance of the actual need, and align payments with deployment for added flexibility and budget efficiency.
HPE Accelerated Migration: Unlock the hidden value in your existing IT assets as you transition to new IT solutions. Shift existing, owned IT assets to a flexible usage payment model during the transition and free up cash for new IT investment
HPE GreenLake Flex Capacity: An infrastructure service that offers on-demand capacity, combining the agility and economics of public cloud with the security and performance of on-premises IT.
The question of transforming your IT infrastructure to support next-generation apps and services is not really a question of if, but more of when and how. As you think about modernizing your infrastructure with innovative technology, think about the complementing innovative financing options from HPE Financial Services.
Interested in learning more? Give us a call: 847-637-4300.