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Five overlooked cost categories for new servers

Budget planning and careful negotiation in frequently overlooked cost categories can ease server expenses beyond the initial purchase.

New servers are an important part of a technology refresh cycle,

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bringing more computing resources, better energy efficiency and other benefits to the data center. But acquiring new servers isn't just a matter of cutting a purchase order and paying the bill. Just as any automobile carries additional costs after the initial purchase, IT professionals and business planners need to identify and account for the added costs of new server deployments. Let's consider five general cost categories that can inflate the cost of your next server refresh.

Proper system configuration

A common mistake when selecting a new server is to pick a low-end model or a high-end model. The problem here is that if you simply pick a low-end (or base) model, it may be necessary to install upgrades later on, which can be expensive and disruptive. Similarly, picking a high-end model with all the bells and whistles may throw money away on capabilities that you just don't need. The idea is to define the "optimum" server configuration of processors, memory, I/O and other features, and know what features and capabilities you need before committing to a purchase.

Understand that the notion of optimum is completely subjective -- an optimum server for one company is not necessarily an optimum configuration for another. For example, a company planning on heavy system consolidation may want lots of memory to host a large number of virtual machines, while a company that requires heavy network access may opt for multiple fast network interface ports that support NIC-teaming and TCP-offloading features.

If you get the system configuration right the first time, it will probably run throughout its entire life cycle without requiring costly upgrades or downtime to install them.

System configurations should also go beyond essential computing characteristics and consider software such as the host operating system and system management tools -- or ensure that the new servers will integrate properly with the existing system's infrastructure. This can be a tricky goal in heterogeneous shops where system management tools may not provide the level of granular control that the business prefers.

Annual server maintenance costs

Maintenance contracts and software licensing are recurring costs for every new server. Although these are typically not hidden costs, they are rarely considered part of the system's total cost of ownership. However, annual maintenance and licensing are typically unavoidable because every business needs technical assistance, software patches and other support from the vendor. Without a maintenance agreement in place, a business would have a much harder time troubleshooting system problems and would have no access to spare parts.

When evaluating a server refresh, be sure to know the expected working life of those servers and include the anticipated cost of software licensing and maintenance contracts over that lifetime. Remember that maintenance contracts typically go up over time; this is how vendors pressure businesses into buying new systems. But maintenance can also be a point of negotiation for the sale, and savvy IT professionals may be able to wring some additional free maintenance from the vendor, especially for large purchases.

Pricey vendor services

Once the new servers arrive, they will need to be unboxed, tested, prepared and deployed while the old servers are removed from production. Many businesses have the personnel and expertise to deploy new servers, but there will be situations where vendor assistance is needed with deployment and workload migration.

Vendor services such as IBM Global Services or Dell Services can be expensive and are rarely negotiable, so a business that needs help with the technology refresh should take the time to assess those costs and compare them to similar services offered by local or regional value-added resellers (VARs), which may be cheaper or more responsive. As an alternative, the business may rethink its deployment goals and select a pace that its in-house IT personnel can handle.

Redeployment and disposal of old systems

Redeployment and disposal costs are frequently overlooked. When a new server is installed in production, one or more old servers will be displaced, so it's important to consider what happens to those old servers and how much it will cost. Many companies will choose to reuse at least some of those older servers for secondary tasks. For example, old servers may be redeployed to a disaster recovery facility, test and development uses, or spread out across the organization as departmental or workgroup servers.

Remember that redeploying these displaced servers will also usually displace even older equipment that may already be in place. Each redeployment and workload migration will take time and impose additional cost for in-house personnel, VARs or vendor services.

And what happens to the equipment that you just can't use anywhere else? In many cases, the vendor will remove and recycle that old equipment for you, but that service may not be free. Before you pay a vendor to recycle old equipment for you, consider contacting other local or regional recycling services that are willing to remove the unusable equipment for you at little or no cost.

Technical support jail

Troubleshooting is probably one of the most unpredictable and perplexing hidden costs of a server life cycle. When a server experiences problems, a business will typically invoke the maintenance contract with the vendor for troubleshooting support. The problem is that most vendor support staff -- especially first-tier telephone support -- are unwavering in their adherence to an inflexible and annoying troubleshooting script that can take hours to work through -- even when the business's IT staff has a pretty good idea of the problem.

This can be a costly waste of time. Every hour that IT staff members wrestle with the vendor's technical support is an hour of labor -- possibly production -- that is lost. Unfortunately, a business usually can't get field service or access to spare parts without going through technical support jail. So a new server acquisition should include a consideration of the prospective vendor's support system to see just how knowledgeable and responsive the support staff can be, and determine how problems are elevated to engineers and higher support tiers.

A technology refresh cycle is an opportunity to bring more efficient, powerful and capable equipment to bear on a business's computing tasks. But there are costs involved in a technology refresh that go far beyond the initial purchase and extend through the entire working life of the equipment. A business should take the time to consider these hidden costs, because they will provide a more realistic view of the total cost of ownership.

This was first published in February 2013

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