Is IT the fifth utility?

By: Adrian Smith

Date: 7 July 2011

Electricity pylons

Is IT as important as electricity to your business? (Image: Ixsocon on Flickr.)

The past 20 years have seen IT become absolutely essential to businesses. For many companies, it's every bit as important as their electricity, water, gas or telephone service. And as the technology has developed, so too has the pattern for using and paying for it.

IT on the meter

The last couple of years have seen a shift away from the capital purchase of computing equipment, like the ‘office in a box’ solutions popular in the late '90s. Instead, companies are moving towards cloud computing services.

This means many businesses are purchasing IT as if it's a utility. They pay a 'metered’ cost determined by usage and demand. The price can fluctuate, just as the cost of energy changes between the summer and winter - although many providers offer fixed prices.

Can IT as a utility save money?

Treating IT, and especially cloud computing, as a utility can be an attractive consideration. Many companies spend a lot on servers only to run them at 10% - 20% capacity.

Small businesses look for opportunities to maximise their IT capabilities, while spotting where they can make savings. They also want to avoid over-investing in IT resources like unnecessary hardware and software, and reduce the time staff have to spend maintaining and upgrading equipment.

The balance between cost and reliability

However, although it's important to ensure your IT is cost-effective, you also need to ensure you have taken precautions in case problems occur.

While you may have a plan should the electricity cut out in the office, can the same be said of your IT? Considering that so many of today’s businesses are built on and around digital capabilities,you need to think about this business continuity issue.

Indeed, according to Aviva’s February SME Pulse, half of small business owners asked about business continuity said they had no plan. Even more worryingly, 16% believed they didn’t need one.

However, a third of participants estimated it would take a week to get back up and running following a significant problem. What impact would five days of downtime have on your company's finances and reputation? The answer to that question probably brings home how crucial IT is to your company.

It's absolutely fundamental

For some companies, cloud computing (buying IT as if it's a utility) can make it possible to recover more quickly in the event of problems.

For many businesses, IT is the fifth utility, because it's absolutely fundamental to their survival. And with the right IT support it can be as straightforward and reliable as any other essential office service.

Adrian Smith is MD of Flexsys.

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