10 ways to trim your IT budget

In this election year, everyone is worried about the economy. Experts disagree about whether the United States is headed for a recession, but the housing slump, losses on Wall Street, and the skyrocketing price of oil have both individuals and companies looking for ways to tighten their belts and trim their budgets.Nobody likes being told to spend less, but the tough reality is that in many organizations, all departments are seeing their budgets cut -- and that includes IT. The question now is not whether to trim the budget, but how to do it in a way that's least painful for the company and its employees. In this article, we'll take a look at a few ways you may be able to save big bucks by making little (and not-so-little) changes.

Note: This information is also available as a PDF download.

#1: Put off unnecessary upgrades

If your IT department is in the habit of automatically upgrading to the latest version of the operating system as soon as it comes out (or as soon as the first service pack is released, or any other arbitrary timeline), rethink that strategy. Do you really need the new features offered by the new OS? Will those features actually increase productivity, solve some problem with the current software, or otherwise save you money? If not, maybe you can get along just fine without upgrading for another year or so.

Remember that upgrading the operating system doesn't just require the money for those licenses, but also often requires that you spend more money to upgrade the hardware to support the new OS. And there are indirect costs, such as the administrative overhead involved in the upgrade and end-user training.

The same thing goes for productivity applications, such as Office. Will you benefit from the new features or have you been just automatically upgrading every time a new version comes along? Many companies save money by upgrading only with every other new release. Of course, there may be good reasons to upgrade, but do a cost-benefits assessment first and be sure those reasons are sound.

#2: Don't buy top of the line

Like it or not, hardware does eventually fail or become obsolete. When it comes time to purchase new computers -- whether servers or desktop machines -- you can save a lot of money by not buying the top-of-the-line product. When you buy the fastest processor on the market, for example, you pay a big premium. The processor that's one step down may be considerably less. And one thing you can count on in the IT industry is that the top-of-the-line model won't stay in that lofty position for long. In a few months, a new, faster model will come out and the price of that expensive piece of equipment will drop like a rock.

Of course, you don't want to go cheap by buying the oldest, slowest systems available, either. The best value usually comes one or two steps below the top-of-the-line model. For example, at the time of this writing, a Dell Optiplex 755 with a 2.40 GHz Core 2 quad processor costs $320 less than the same model with a 2.66 GHz Core 2 quad, yet the difference in performance will hardly be noticeable. And when you start buying dozens or hundreds of workstations for a business, that $320 difference can add up fast.

#3: Consolidate servers

Server virtualization is all the rage now, and there's a good reason: Consolidating multiple physical servers on one (or fewer) machines, using virtualization technologies such as Microsoft Virtual Server, VMWare ESX Server, or (coming soon) Windows Server 2008's Hyper-V, can save money on hardware costs, power and cooling costs, and administrative workload.

Dedicated servers are often underutilized, but combining server applications/roles on the same computer can become an administrative and security nightmare. With virtualization, each server role functions in a separate logical (virtual) machine that appears on the network with its own name, IP address, etc., but multiple logical machines run on the same hardware.

Server consolidation also cuts down on the amount of server room space you need, allowing you to save money on valuable office real estate.

#4: Virtualize applications

Server consolidation isn't the only use of virtualization technology in today's cost-conscious IT environment. Application virtualization using technologies such as Microsoft's SoftGrid can save you money by reducing the administrative costs of installing, maintaining, and troubleshooting application software. Because the virtualized application is installed on the server instead of the clients, admins don't have to deal with multiple installations of a program on different machines.

Application virtualization can also provide a way to protect the OS and other applications from software with bugs or glitches, reducing or eliminating expensive downtime. And because it uses fewer resources than separate virtual machines, less expensive hardware can be used.

#5: Use thin clients

Thin client computing is another way to cut hardware costs and allows you to provide users with a modern desktop while utilizing older or low-powered client machines. Windows Terminal Services in Windows Server 2003 and the soon-to-be released Windows Server 2008 can be deployed to allow users to access the full Windows desktop or selected applications on the terminal server over the LAN or Internet.

As with application virtualization, administration, maintenance, and troubleshooting of applications is centralized, saving administrative overhead. Programs can be deployed and updated more quickly, and less network bandwidth is used to access remote applications.

There are many approaches to thin client computing, including new "zero client" technology such as that offered by Pano Logic.

#6: Consider selective deployment of open source software

Open source software is often available free of charge, but may also come without warranties, formal training programs, or technical support. Updates may or may not occur. Some organizations have deployed open source operating systems and applications, only to return to commercial software due to these problems. Another disadvantage of some open source products for business use is lack of integration/interoperability with commercial software that may be in use by other departments, partners, customers, etc. Traditionally, open source programs have tended to require more technical expertise on the part of the users, although some open source software has become more user-friendly.

All that said, open source may have a place in your organization if deployed carefully and selectively. Open source (Linux/UNIX-based) server software may be appropriate for certain dedicated servers if you have IT personnel who have knowledge and expertise in the OS. Open source operating systems on the desktop may work fine for more technically savvy users. Open source applications such as Open Office that offer compatibility with the file formats of commercial applications might be the right choice for some users, especially those who only need to create documents occasionally and don't need the advanced features of commercial programs such as Word.

A careful assessment of where open source software can and can't be deployed in your organization without undue disruption and a steep learning curve can help you integrate it into your network in a way that saves money.

#7: Have fewer, smarter meetings

Meetings eat up a lot of time that could be better spent on more productive work. This is true across all organizations, and the IT department is usually no exception. You can cut down on meeting wastage by careful planning, having a set agenda and staying on-topic, and requiring only those who really need to be there to attend.

In many cases, the purpose of a meeting can be accomplished much more efficiently via e-mail or a telephone conference. Meetings at remote locations cost even more in travel time and expenses. If face-to-face communication is essential, you can use videoconferencing to save both time and money.

#8: Look at new training options

Training is often one of the first items to suffer when budgets have to be cut, but arbitrarily slashing all training dollars can end up costing the company more in the long run. It's necessary for IT personnel to keep current on the technologies they deploy and administer; mistakes can result in expensive downtime or even loss of critical data.

When cutting training allocations, it's important to have a plan for personnel to continue to maintain and update their knowledge and skills. There are a number of ways to save money on training. Instead of attending expensive offsite conferences that involve travel and per diem costs, you may be able to set up onsite training or utilize computer-based training and self-study programs to accomplish the same thing.

Encourage IT personnel to keep learning. If the company can no longer afford to pay all the expenses for employees to obtain industry certifications, for example, you may still be able to cover part of the expenses (such as the exam fee) and/or offer incentives -- monetary and otherwise -- to employees who complete the training on their own time.

#9: Replace dedicated WAN links with site-to-site VPN

If your business has multiple physical locations and you have dedicated leased lines connecting them, it might be time to think about ditching the expensive dedicated links and replacing them with site-to-site VPN connections instead. Midsize and large businesses may be able to save thousands of dollars on monthly fees by doing this.

Likewise, small businesses that are currently paying hundreds of dollars per month for a T-1 line should look into new Internet service options. In some areas, you can get a business FiOS line (with static multiple IP addresses) for less than half the cost of your T-1, and it provides up to 10 times the downstream bandwidth and twice the upstream.

#10: Outsource some services

Outsourcing is a sensitive subject. Many people, hearing the word, think only of personnel cuts and jobs going to foreign shores. But judicious outsourcing can allow you to better utilize the personnel you have and to more efficiently and cost-effectively run your IT operation, without entrusting your data to people half a world away.

For example, as your business grows and your need for more servers expands, you might find that it's less expensive and less hassle to use a hosting service for your Web servers or e-mail, rather than buying more hardware and hiring more personnel. As with other money-saving measures, this is not a one-size-fits-all solution, and you should first assess your specific needs, compare prices, and do a cost/benefits analysis to determine whether outsourcing really is the most cost effective option in both the short and long run.

Debra Littlejohn Shinder is a technology consultant, trainer and writer who has authored a number of books on computer operating systems, networking, and security. These include Scene of the Cybercrime: Computer Forensics Handbook, published by Syngress, and Computer Networking Essentials, published by Cisco Press. She is co-author, with her husband, Dr. Thomas Shinder, of Troubleshooting Windows 2000 TCP/IP, the best-selling Configuring ISA Server 2000, and ISA Server and Beyond.


Debra Littlejohn Shinder, MCSE, MVP is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. Deb is a tech editor, developmental editor, and contributor to over 20 add...


My current employer has approximately 8500 users and several hundreds of applications of all sizes (from single user to internet applications). It is a permanent mission of a computing service to optimize its costs. But some opportunities are not real ones and, beyond a given limit, there is no such thing as a free meal. #1: Put off unnecessary upgrades For me, this is the most problematic of all the suggestions, at least as long as servers, OS, RDBMS software, and middleware are concerned. Mostly because of time pressure, there are cases where we must delay software upgrades and there has always been problematic consquences. One of them is that getting patches to correct some serious bugs is slower and the corrections are of lower quality. another one, is that there comes a moment where upgrades are madatory and cannot be delayed any more. this is where big problem begin, especially where several upgrades must be done in order to put a system up to date. #3: Consolidate servers As someone else mentionned, virtualizing servers saves money in the hardware department. But it doesn't in server and application management. It may also have a serious drwaback: hardware maintainance are likely to impact much more applications and people and urgent operations may become very problematic. So the consolidation of servers must be carefully planned. #4: Virtualize applications Well, all applications are not compatibility with virtualization. But, IMHO, deploying n-tier applications which only need thin clients make a lot more sense. In addition, many n-tier applications have very important qualities (scalability, robustness, and so on). #5: Use thin clients Several years ago, a department of my employer with 1000 users chose to use thin clients and it proved a failure. using thin clients means that there must be servers behind them. the licence costs for them are far from negligible (even for large organizations) and they must be managed. Things get worse when the business need applications with incompatible software requirements, or, even worse, applications wich are uncompatible with thin clients. At least in our situation, the TCO of thin clients (with all the required infrastructure) proved higher than the cost of traditionnal PCs. #6: Consider selective deployment of open source software We have deployed quite a few Open source applications (Server OS, web servers, appplication servers, LDAP servers, WCMS, Electronic Document Management software and so on). Many of them are excellent and work very well. But they are not a financial miracles. In this domain, their interest is that they eliminate the "entry cost" and there are cases where this cost may be a blocking factor. But there is no miracle when on needs urgent patches, services and so on. All of this exists, but come for money. On the other hand, OSS software helps a company spending its money on what it really needs (and uses).


Unfortunately, and all too often, the first thing CIO's think of regarding 10 ways to trim their budgets is - fire 10 employees! No matter how many times the business world proves that you can't save your way to prosperity, CIO's demonstrate that destructive mind-set. Of course, there's very often poetic justice involved. How so? Fire people, and the word gets out. The good ones won't work for the "fire 'em" CIO, who quickly finds him/her/itself looking for a job. As the classic song goes, when will they ever learn?


To win in the scratch off lottery tickets.


This is a good list. Thanks! If you're a drudge fan: drudgetracker.com


MSP (Management Service Providers) is another key initiative that will provide significant cost savings for many small enterprises. MSPs can efficiently handle a lot of administrative functions remotely such as system & network administration, DBA functions (database setup, configuration, security and tuning). MSP firms share resources across multiple clients, so they cost a lot less for smaller firms than hiring full-time personnel, since they are often under utilized


I agree with almost all of these except for the comments on server consolidation. We are a VM shop and we have saved money in cooling and power. However, there are no savings in administration. I consolidated 40 servers into seven VM physical servers. We still have to administer the 40 servers (patching, monitoring applications, etc). In addition to the administration of the 40 servers, we have to administer the VM servers, including backups with is an additional cost.


*Consolidate desktops* A desktop per user can be a big wast of hardware, energy and IT managers time. In an location (e.g. office, class room, home) where users are (can be) relatively close to each other, a desktop can easily serve two, three, or four users, if the extra monitors, keyboards, mouses, headphone, microphone and other necessary hardware are provided. Consolidated desktops are significantly less wasteful than single user desktops (obviously) and also can have an advantage over one user thin clients, both in terms of hardware cost and energy consumption. *Upgrade to OpenOffice instead of MS Office 2007* From my experience, user have a smother upgrade moving to OpenOffice than MS Office 2007, and the present and future saving are ... so nice! *Lock down the user's work station to prevent malware and configuration changes* If the user needs any configuration change or software install let them call an administrator that will make the change, if adequate obviously. This is a BIG time saver for the IT team. Linux and FreeBSD are very easy to look down with little (or no) loss of functionality. Windows 2K/XP/Vista are much more difficult to lock down because of badly written software requiring administrator privileges for no good reason. Warning: If you are a member of the IT team you may want to ignore this advice, depending on your work load. *Don't stop using it just because it's old* Old computers (and not just computers!) can be very effective & efficient for the right work with the right software. If it stopped being useful to you consider giving it to others that can put it to good use.


GenesisGlobalInc.com recycles old equipment fixes and resells at a fraction of what you normally pay 800-908-9665 x107

Editor's Picks