One of the most dreaded things for me is dealing with budget, more so when I do not have visibility into the budget. So many times have I requested something and been told “it’s not in the budget”. Has this ever happened to you? What if your job is the budget? Are you using a bunch of tools to keep track or a custom excel sheet?
You are a small IT shop or small business, and IT budgeting is new to you, where do you start? Have I got good news for you, the folks over at turbonomic have created a FREE IT budget template. I personally love starting with templates as they give me a starting point and save me time.
This IT budget template was developed between turbonomic and some of it’s customers, meaning the real world value is there. I have seen other templates before and I have to say this one is a great starting point.
As a small business or even figuring out finances for a home lab setup here are some things to keep in mind.
Software Licenses – Software is the pinnacle of IT spend, There are some with yearly support costs, initial buy pricing, yearly renewals. Keeping track of this will help you maintain and plan your spending. More importantly you may find that you are over spending on licenses that you are paying for and could result in a savings.
Infrastructure – The cost of buying servers and storage is definitely something you want to plan for in your budget. Not only do you have to account for the cost of the infrastructure, you have to plan for the support contracts on that.
Training – The most important part of your finance to plan for and most over looked. The best way for your company to get the most out of both your software and infrastructure investments is deeper understanding on how to utilize it to it’s full potential.
Staying on track of your budget is vital, I wanted to share this free template from turbonomic with you all, as it can help you. Did I mention it was free? I love that part and yes I downloaded it myself and will say it is done very well. Simple to understand, if you are a beginner or just want a better way give it a look.
At the SDDC Symposium, there was a discussion around CapEx vs OpEx (video below). You can click the previous links to learn more about each but, in short, CapEx or Capital Expenditures are large, one time purchases, such as buying a SAN or NAS for example where as OpEx or Operational Expense is ongoing cost which in the technology field most closely aligns to ongoing cost such as monthy payments for Amazon AWS instances or S3 storage.
I expected a bit more discussion around actual CapEx and OpEx, however (at least early on) was mostly around technology and whether vendors can lock you in or how to be more agile.
From my perspective, CapEx and OpEx isn’t a technology decision alone, it’s a joint decision between the short/long term business goals, the finance group and how they prefer to manage cash flow and budget and what technology groups need in order to support those short and long term business goals. I don’t feel that one is any better than the other, but it should be a marriage between business, finance and technology. If short term business goals call for a more flexible end user computing solution, and additional business requirements call for lower operational cost then its the job of the technology group to find a solution. If a longer term business goal is, as Colin McNamara used in one of his examples, a more mature development solution that allows you to abstract your code/product from any particular solution then the finance and technology groups need to work together to allow for the OpEx model. Let’s assume for a moment that this conversation goes horribly wrong for you and you are instructed as a technologist to go CapEx, and are given the budget to build out multiple physical data centers, does that really change your development model? I don’t think so, build your code so it can be deployed and don’t tie yourself to the hardware where its deployed.
At the end of the day, CapEx vs OpEx is not a decision, its the result of business requirements that involve many people. I’ve worked for organizations where finance felt very strongly for a CapEx model, however, when needed we discussed business requirements that required solutions in more of an OpEx model and that worked because business, finance and technology worked together to identify the needs of the business and the solution to properly support those needs. Justin Warren made a similar point around 18:29 which I’ve often said – business doesn’t care about technology, it doesn’t care about what server vendor you use they want their business to operate, be available, perform well and provide disaster recovery options while supporting customer and local/state/federal requirements. If I can run my business application stack on AWS or on my local VMware stack, the business doesn’t care. It’s up to the technology group to take these requirements and build the right solution.
To my fellow technology folk, let’s make CapEx vs OpEx a thing of the past and focus on the needs of the business(es) we support. Technology needs to understand how the business and finance operate, and we need to educate business and finance on various solutions and make the right decision for the business.
SDDC14 CapEx/OpEx Battleground