We all hear it on the news every night. Goods are taking longer to get to customers, and they are costing more. The technology field is not immune to these challenges. From cell phones to cars, nearly every device reliant on semiconductors and chips is experiencing supply chain delays.
Apple CEO Tim Cook acknowledged the tech giant faced “very significant supply constraints” in the last quarter, and the company is expecting more of the same this quarter, potentially hurting sales by as much as $8 billion.
As if all of the delays and shortages over the past two years haven’t been challenging enough, last week’s concerns of an impending rail strike had many on edge. The four largest U.S. railroads limited service in preparation for the possible strike which stood to halt freight rail movement across the country. While the active threat has since been neutralized, it has not gone away entirely, adding yet another supply chain-related challenge to our radar.
Networking equipment that businesses purchase on a regular basis now has delivery dates exceeding six months or more in the future. The impact supply chain shortages and slowdowns have on businesses is significant, forcing organizations of all sizes to plan purchases further in advance, increase budget expectations, and delay planned investments in the hope that prices come down and availability improves.
Supply Chain Shortages and the Public Cloud
The public cloud has been one of the most popular options for businesses looking to expand infrastructure and embrace digital transformation. However, with current supply chain shortages, some leaders think this option is starting to look less attractive. In reality, nothing could be further from the truth.
Continued supply chain disruption and shortages are leading to a variety of consequences including price increases and longer wait times for products and new services. But savvy CIOs are leaning into IT investments even more. They recognize that the cloud provides the tools necessary to adapt in challenging environments. Investing in the cloud now is a great way to mitigate the risks of future uncertainty in the supply chain.
According to IT Jungle, “CIOs are accelerating IT investments as they recognize the importance of flexibility and agility in responding to disruption. As a result, purchasing and investing preference has been focused mostly on cloud computing and security.”
Supply Chain Shortages and On-Premises Infrastructure
Current supply chain shortages are also affecting businesses that are running on-premises data center infrastructure. The same chips and materials that are in short supply for the public cloud are also used in data centers around the world.
For example, IBM i and AIX operating systems prices are on the rise as costs to support and maintain these systems from IBM feel the impact of inflation and supply chain constraints. This has led to a number of challenges for businesses, including longer wait times for new equipment and higher prices.
In some cases, the price of data center equipment has more than doubled. This is due to the fact that there is a limited supply of these chips, and manufacturers are able to charge a premium for them. If your business is planning to expand your on-premises infrastructure, this could have a major impact on your budget.
What Does This Mean for Your Business?
Enterprise IT spending on public cloud computing will overtake spending on traditional IT in 2025, according to Gartner. If you’re planning to expand your infrastructure, either in the cloud or on-premises, keeping the current supply chain situation in mind is important. Prices for both public cloud services and data center equipment are expected to increase, and there may be longer wait times for new services and equipment.
If your budget is flexible, you may want to consider expanding your infrastructure sooner rather than later. However, if your budget is tight, you may want to wait until the supply situation improves. Either way, staying informed about the current state of the market is essential so that you can make the best decision for your business.
If you do have ambitions to expand your cloud footprint, a partner like Connectria can help. Managed cloud providers can mitigate the pain of inflation and supply chain challenges. From pre-purchasing capacity and future planning to helping optimize a hybrid cloud environment to provide for maximum return on investment, Connectria is helping businesses of all sizes successfully navigate a challenging economic climate.
In the end, there are ways to mitigate the impact of inflation and supply chain shortages. By planning ahead and working with trusted partners, you can ensure that your data center remains up and running. Consider the following questions first before making a new investment in your infrastructure.
Questions to Ask Before Expanding Infrastructure Investments
Do you need to make this purchase now or can it wait?
New technology purchases are made because they can help your business grow. That said, some purchases can be carefully planned to avoid any significant negative impact on your business. Aged hardware can hold your business back. Not having enough cloud resources can slow down your progress. It’s important, however, to separate “must have” from “nice to have” when making infrastructure investment decisions during a time of price hikes and supply chain constraints.
Does the scalability of the cloud help?
One of the well-known benefits of the public cloud is the ability to add and subtract resources as needed. While the timeline for starting a new service can be a challenge depending on your needs, you certainly should be open to adding and removing resources as needed to help control costs. If your business is seasonal or has predictable resource needs, try and plan ahead to use only what you need instead of leaving resources running for no reason. Careful monitoring and management of your cloud resources can lead to significant savings in this challenging time if you are paying attention.
In the current market, it is important to be aware of the potential price hikes and supply chain disruptions when planning your infrastructure expansion. However, by being strategic and working with trusted partners, you can ensure that your data center remains up and running despite these challenges. Consider the questions we’ve listed to help get started in your decision-making process.
If you find you need guidance or you’re simply curious about your options, our team at Connectria can help. From helping manage public cloud deployments and keeping your costs in line to providing infrastructure tailor-fit to your needs, Connectria has a long history of helping small and mid-sized businesses get the most out of their infrastructure investments.