How IT Can Scale and Manage Costs in an Economic Downturn

scale and manage costsThe full impact of coronavirus (COVID-19) on the world is yet to be seen, but it certainly has taken an immediate and drastic toll. Although not as important as the human toll, one that will have a broad effect is a downturn in what was a booming economy. During economic downturns, companies must start to look for ways to reduce costs, slim budgets, and make the difficult decisions required to minimize the impact on your business.

In this article, we’ll talk about a few things businesses can start doing now to help reduce infrastructure and database costs, but still, keep things running smoothly. Some you may already be considering, while others may be options to consider should the situation continue to demand action.

Five Easy Ways to Cut Costs Quickly

  1. Scale Down

In the recent past, talk of scaling databases and systems was the hot topic — making sure you could respond to quick growth and customer demands on your business. However, when talking about scaling, businesses either didn’t want to consider or simply forgot to consider procedures and options to scale down should business demands drop.

The great promise of the cloud, as a managed service, was to provide elasticity to increase and decrease capacity as demand increased and decreased. The problem is a lot of people take advantage of the flexibility to scale up, but they don’t often act quickly to scale down. We have seen customers be able to cut a third from hosting costs simply by “right-sizing” and taking a few key steps:

  • Audit Your Systems: Reduce cloud spend by eliminating extra servers that aren’t in use. If needed, spin up a backup.
  • Shrink Your Footprint: Move to smaller instances to match the reduced workload. Reducing the amount of data you store can lead to big savings. Hoarding digital data is expensive.
  • Consolidate Workloads: In the past, there would be a desire to split out additional slaves or cluster nodes to process specific types of workloads (ie: reporting). However, these may not be needed as demand decreases, and can always be added later.
  • Consider Alternative Services or Components: Many providers offer long term storage, serverless, or component options for specific needs with vastly different pricing models. Evaluating if you have all of the parts of your application in the right setup may yield some positive cost results.

Taking full advantage of the tools, systems, and services you have in place is critical for your business at any time, but especially now.

  1. Improve Performance to Reduce Workloads

Another tip, especially if you are using cloud resources, is spending some time tuning and optimizing. Today, many companies have chosen to scale and tune by credit card instead of optimizing code and tuning underlying infrastructure. Taking a few days or weeks to reduce the workload on your servers can dramatically reduce your overall costs. With proper database management, we have seen some companies cut their bills in half. Calculate your savings with our ROI Calculators.

  1. Cross Train

A good way to reduce costs, and possibly provide longer-term impact, is to invest in your existing employees by helping them expand their skillsets. For example, DBA’s helping out with development or system administration duties not only helps those employees be more well rounded but and also helps them gain insight and empathy into the challenges and processes that other groups face. In the long run, this can help your organization by creating employees who can step into site reliability engineering (SRE) roles. In the short term, the company delays adding additional costs, but at the same time is building a stronger team that better understands the touchpoints between business units.

  1. Audit Your Toolbox 

In the age of software-as-a-service (SaaS) subscriptions, we all have something we have paid for but don’t use as often as we thought we would. These smaller expenses can add up quickly — $99 per month, per user, with a group of 100 users, that’s over $120k a year! Sometimes it’s not a question of do you need this software, as much as, do all of these people need access to it? Many companies overprovision the number of users who have access to the software and cutting back on licenses can often cut costs quickly.

  1. Consider Flexible Staffing

With the COVID-19 outbreak, no one is sure how long the economy will be impacted, or what impact it will have on different types of businesses. Having the ability to add or remove a workforce as demands or projects come and go can help keep things cost-effective without having a negative impact on your full-time employees. Using flexible staffing during uncertain times has always been an option business have turned to avoid committing to long term costs, while still supporting their immediate needs.

 

The Tough Questions

Should I accelerate a move to the cloud?

As mentioned above, moving to the cloud doesn’t always lead to reduced costs if they aren’t properly managed. Choosing a platform that can allow you to expand and shrink costs, as well as resources, can provide you huge long term advantages. However, migrations are not always a simple, “lift and shift”. Often, you need to evaluate the specific needs of your application before committing.

Bottom Line: Cloud migrations can be complex, with no one migration being the same. If you have been looking at how to modernize your applications before the current situation, then stick to those plans. I would not recommend accelerating, or decelerating, efforts just because there is extra pressure now. However, If you had not yet considered migrating, or were on the fence, then this may be a good time to reconsider.

Should I replace proprietary databases with open source? 

Yes — but, the answer was always yes! Moving to open source is not about immediate cost reductions, but the long term advantages that open source offers so that companies are more nimble and prepared for any business need.

Smaller and medium-sized databases and applications can often be migrated to an open source solution much easier than larger applications, and these legacy applications are where most of the licensing and support costs lie. In fact, in this age of database complexity, most companies run Oracle or SQL Server next to open source databases. But, even if a company can move applications quickly, most classic enterprise database support contracts are annual or multi-year contracts.

Bottom Line: A recession or economic hiccup should not be the only reason for evaluating open source. Open source migrations have a lot of advantages, from avoiding forced price hikes, and vendor lock-in, to an overall price reduction. Although not immediate, over a year or two, these reductions and savings can be massive financial difference-makers for your company.

Should I cancel or delay a project? 

This is a tough question to answer. Certainly, canceling or delaying projects can reduce your immediate database spend but will delaying those efforts have a negative long term impact on your business? Here are some questions to ask to help you determine which projects and or should be shelved or delayed:

  • There were likely good business reasons for undertaking projects currently in the cue. Are those reasons still viable? Will your business need these projects in the future to be profitable? What’s the downside if you delay?
  • Economically, things will turn around at some point, so what will happen to these projects when it does? Will a delay or canceling of a project impact your ability to ramp your business back up? Delaying these types of projects could actually prolong a business downturn.
  • Are there immediate and negative impacts of not completing a project? All companies are taking a hit now and it’s easy to try and cut corners, but it will make things worse if you are faced with outages, slowdowns, or can’t meet user expectations needed to simply keep your business going.
  • Can you evaluate your projects in terms of simple return on investment (ROI)? There will be applications with low ROI which may make sense to put into maintenance mode, and others to which you will obviously want to allocate resources.

Bottom Line: Evaluate your projects on a case by case basis, with clear, business impact and ROI data in hand. By evaluating needs this way, you can better staff and focus on getting the critical development done. Also, if you do go into maintenance mode, be sure to define what that means and who is responsible for ensuring at least the lights stay on.

Percona Can Help

The human impact of this challenge could be huge. The economic challenge will likely be as significant. As business and industry adapt, looking for new and innovative ways to overcome these challenges will be key. Whether its enabling developers or DBAs to realize value faster with tools, advice, and guidance, or making sure applications can scale in peak and downtimes, Percona is here to help.

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