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Ok, the Economy is Bad, Some Cost Savings Tips

By michaeljmorris on Sun, 11/16/08 - 10:21pm.

I wrote a blog back in August about how the economy wasn't that bad and good jobs were available. Well, I'm going to have to revise that comment....the economy is bad and will probably get worse.

As everyone knows, in September and October we saw the banking and credit crisis, a 3,000 point drop in the Dow, and the beginning of layoffs, even in IT.

Companies have frozen budgets, stopped hiring, and initiated massive cost savings projects. So, here are some cost savings tips and projects that we are working on now.

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Start a Capacity Management Program
Before you can do anything, you need to know what you have. Metrics will be key in a tight economy to justify would you do need and to identify what you can get rid of. There are plenty of free, open-source tools out there to do what you need. It will just take some labor time to install, develop, and implement this software. But, the first step is a good Capacity Management policy and plan.

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Circuit Reductions
Telecom costs are one of the largest OPEX expenses to a business. Let's be honest; are you really using all that bandwidth? Or did you overprovision circuits to be sure there was enough room for the future? Cut some bandwidth. If users complain, be sure to ask them what applications are slow. Is it Oracle and SAP, or YouTube? Use your Capacity Management program to justify the reductions.

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Consider Using Burstable Circuits to Reduce Costs

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Implement QoS
If you are going to cut bandwidth, then you should have a good QoS policy and design to protect key applications. In can be hard to pick which applications should be at the top, so I'll give you a simple, 5-level QoS policy:

1. VoIP
2. Sales Applications and Customer Support Applications
3. Video Conferencing
4. All Other Internal Applications
5. Internet, UDP, and Backup Traffic

A real simple policy that most businesses can easily understand. Voice is at the top because it has to be. Critical applications come next because revenue and customers are more important than video. The rest is self-explanatory.

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Make Your Routing Protocols Dynamic
Many companies are forced to buy two Internet circuits at offices because their routing protocols are not fully dynamic. Routing protocols are FREE, you just have to design them. Take the time to make your routing protocols fully dynamic and then get rid of an Internet circuit at each site.

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Don't Buy GIG Ports for Users
They don't need it!

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Start Using VMware
Seriously! It's not that hard. With all those open source capacity management applications you'll be installing, you won't want to put each of them on a server and waste money, power, cooling, and DC space. Get one server, load ESX on it, and run all your applications on a single server, each in its own VM. Encourage other people to use virtual machines too, particularly with other network tools and applications.

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Use Internal Conference Call Systems
If you're like most companies, you love meetings...and with a global workforce, that means meetings via teleconference. Too bad these conferences calls via external teleconference services can get pricey, fast. We estimated a one hour call with 5 participants was $57. Now multiply that by the number of meetings that occur each day. You can cut all this out by using the conference button your phone, a simple internal conferencing system like Cisco's Meet-Me, or a more robust internal conferencing system (this one may take some investment, so do a good ROI first).

Just make sure your capacity management program is tracking your VoIP usage, DSP usage, and call volume. You don't want to anger your users and have them revert back to the external (costly) conferencing provider.

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Use Tail-End-Hop-Off
Especially for international calls. You can save a lot by using your IP network to deliver a call to the PSTN in the country to which the call is destined instead of making an international PSTN call.

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Good luck out there. I know times are tight.

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