the cost of keeping old technology
TRANSCRIPT
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THE COST OF KEEPING OLD TECHOLOGY
HOW TO REDUCE YOUR IT COSTS BY UPDATING YOUR SYSTEMS
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LEE DRAKE
• [email protected]• WWW.OS-CUBED.COM• WWW.LINKEDIN.COM/IN/LEEDRAKE • OWNER OF OS-CUBED AND IT CONSULTANT FOR 35 YEARS.
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MANUFACTURING ENVIRONMENTS
• MANUFACTURING ENVIRONMENTS FEATURE SOME OF THE WORST EXAMPLES OF NOT KEEPING TECHNOLOGY UP TO DATE
• LOOKING AT EQUIPMENT IN TERMS OF ITS “LIFE CYCLE COST” IS FAR MORE IMPORTANT THAN CONSIDERING THE COST OF THE INITIAL CAPITAL EXPENDITURE
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MANUFACTURING ENVIRONMENTS
• DOWNTIME IN A MANUFACTURING ENVIRONMENT IS EXPENSIVE, AND THAT EXPENSE IS EASILY DOCUMENTED
• CYBER SECURITY IS AN INCREASING CONCERN, FROM BOTH A RISK AND A REGULATORY POINT OF VIEW
• INVESTING IN NEW TECHNOLOGY FREQUENTLY PAYS BACK VERY QUICKLY DUE TO INCREASED EFFICIENCY AND INCREASED PRODUCTIVITY
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KEY CONSIDERATIONS WHEN LOOKING AT TECHNOLOGY INVESTMENTS• DOES THE OLDER TECHNOLOGY PUT US AT RISK FROM A
PHYSICAL SAFETY POINT OF VIEW?• DOES THE OLDER TECHNOLOGY PUT US AT RISK FROM A
DIGITAL SAFETY POINT OF VIEW?• WHAT ARE OUR ONGOING COSTS TO SUPPORT THE OLDER
TECHNOLOGY, WHAT WOULD WE SAVE IF WE CONVERTED TO NEWER TECH?
• HOW MUCH PRODUCTIVITY LOSS CAN BE ATTRIBUTED TO OLDER TECHNOLOGY?
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KEY CONSIDERATIONS WHEN LOOKING AT TECHNOLOGY INVESTMENTS
• DOES OUR OLDER TECHNOLOGY EQUIPMENT PROVIDE THE ACCURACY AND CAPABILITY OUR CUSTOMERS REQUIRE FOR QUALITY ASSURANCE?
• DOES THE FAILURE RATE FOR OLDER TECHNOLOGY EQUIPMENT EFFECT OUR PRODUCTION CAPABILITY?
• WOULD CONVERTING TO NEWER TECHNOLOGY REDUCE THE COMPLEXITY OF OUR IT SOLUTION?
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IN IT – COMPLEXITY = COST
• THE MORE DIFFERENT SYSTEMS THAT NEED TO BE SUPPORTED, THE MORE EXPENSIVE IT IS TO SUPPORT THEM
• STANDARDIZING SYSTEMS AND REDUCING COMPLEXITY LEADS TO COST REDUCTION
• MODERN SYSTEMS HAVE LESS PATCHES, LESS BUGS, AND MORE SECURITY BUILT INTO THEM
• WITH INCREASINGLY POWERFUL SERVER AND CLOUD CAPABILITIES YOU GET FAR MORE BANG FOR YOUR BUCK WITH A SMALLER CAPITAL INVESTMENT
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WHAT DOES IT COST TO MAINTAIN A WINDOWS XP SYSTEM TODAY• EVERY WINDOWS XP WORKSTATION IN YOUR SYSTEM ADDS
$300/YEAR IN IT SUPPORT COSTS TO YOUR ORGANIZATIONS• THE ABOVE COST DOES NOT FACTOR IN THE HIGHER FAILURE
RATE OF OLDER MACHINES AND THE RESULTING DOWNTIME TO REPLACE THEM. WHEN YOU FACTOR IN EQUIPMENT FAILURE THE SUPPORT COSTS JUMP TO ALMOST DOUBLE THAT OR $600/YEAR (INCLUDING DOWNTIME COST)
• EVERY WINDOWS 10 MACHINE AVERAGES $75/YEAR IN MAINTENANCE COSTS
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WHAT DOES IT COST TO MAINTAIN A WINDOWS XP SYSTEM TODAY
• A NEW DESKTOP CLASS WINDOWS 10 BUSINESS MACHINE IS AROUND $500-700, PLUS SOME INSTALLATION FEES. FIGURE AROUND $1000/MACHINE
• THE NEW MACHINE WILL BE FASTER, MORE RELIABLE AND LESS LIKELY TO FAIL
• IT TAKES JUST 2 YEARS TO PAYBACK THE INVESTMENT COST IN A NEW MACHINE. YOU COULD LITERALLY REPLACE MACHINES EVERY 2 YEARS AND BE COST NEUTRAL.
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WHY THE RESISTANCE TO UPDATE• MANY REASONS WHY MANUFACTURERS ARE RESISTANT TO UPDATE• CONTINUING TO USE OLD SOFTWARE THAT DOESN’T WORK WELL ON
NEW MACHINES (HAS IT’S OWN COSTS AS YOU INEVITABLY REPLACE MACHINES WITH NEW ONES)
• HARDER TO TRANSITION NON-TECHNICAL USERS TO NEW OPERATING SYSTEMS AND INTERFACES
• SUNK COST OF SUPPORT ISN’T MONITORED VS CAPITAL COST OF UPGRADES
• DOWNTIME COSTS AND PRODUCTIVITY COSTS ARE HIDDEN IN OTHER COST CENTERS
• THE “YOU CAN’T CHANGE JUST ONE THING” FACTOR
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WHAT DRIVES UPDATES
• OLD TECHNOLOGY NO LONGER SUPPORTED OR SERVICED
• CANNOT RUN OLD SOFTWARE ON NEW COMPUTERS• SECURITY NO LONGER EFFECTIVE OR COMPLIANT
WITH STANDARDS• NEW HARDWARE REQUIRES NEW SOFTWARE
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WHAT DRIVES UPDATES
• COST OF SERVICE EXCEEDS COST OF REPLACEMENT• LACK OF EXPERTISE TO SERVICE THE OLDER
TECHNOLOGIES• HIGH FAILURE RATE CAUSING PRODUCTION IMPACT• BROWSER AND MALWARE PROTECTION NO LONGER
SUPPORTED
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THE BATHTUB CURVE FOR IT FAILURES
For many IT systems the “X” axis is in a range between 5 and 10 yearsThis means that 2/3 into that range you will begin to destabilize and accrue additional costSo if your technology is 3-7 years old you are probably already in troubleThis means that technology older than 2012 is probably already costing you money
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SOME TELLING QUOTES FROM ARC ADVISORY GROUP
• HTTP://IOM.INVENSYS.COM/EN/PDFLIBRARY/MANAGINGOBSOLETETECHNOLOGIES-STRATEGIESANDPRACTICES.PDF
• “RESEARCH ESTIMATES THERE IS APPROXIMATELY $65 BILLION DOLLARS WORTH OF INSTALLED BASED OBSOLETE AUTOMATION TECHNOLOGY”
• … A SURVEY “REVEALED THAT OVER 75 PERCENT OF END USERS INDICATED THEIR PLANT SYSTEMS WERE MORE THAN 20 YEARS OLD AND MOST OF THESE HAVE UTILIZED TECHNOLOGY BEYOND THE TECHNOLOGY SUPPLIERS STATED END OF LIFE”
• “TOTAL COST OF OWNERSHIP FOR AN AUTOMATION SYSTEM IS 4.5X THE INITIAL LIFESPAN BASED ON A 20 YEAR LIFECYCLE”
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SOME TELLING QUOTES FROM ARC ADVISORY GROUP
• “60 PERCENT {OF MANUFACTURERS} DO NOT HAVE A CLEAR STRATEGY AND PLAN TO DEAL WITH EQUIPMENT OBSOLESCENCE AND 85% PLAN ON EXECUTING OBSOLESCENCE PROJECTS DURING NORMAL TURNAROUND AND SHUTDOWN PERIODS”
• “UNLIKE PROPRIETARY SYSTEMS, COTS SYSTEMS RELY PRIMARILY ON IT RESOURCES WHICH HAVE A SHORTER RISK CYCLE (3-5 YARS INSTEAD OF 10-20) AND THEREFORE REQUIRE DIFFERENT STRATEGIC MANAGEMENT.”
• “60% OF MANUFACTURERS HAVE MATURE OR OBSOLETE SOFTWARE. 85% HAVE MATURE OR OBSOLETE CONTROL SYSTEMS. 45% HAVE MATURE OR OBSOLETE IT SYSTEMS”
• “THE MOST COMMON CHALLENGES FACED BY MANUFACTURERS IN SUPPORTING OLD TECHNOLOGY: 70% HAVE NO SUPPLIER SUPPORT, 75% HAVE NO QUALIFIED PEOPLE TO MAINTAIN IT AND 58% HAVE NO WAY TO FIND PARTS FOR THEIR TECHNOLOGY”
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QUOTES FROM INDUSTRY WEEK STUDY
• AVERAGE COST OF DOWNTIME IS $17,000/INCIDENT• THE NUMBER OF UNPLANNED DOWNTIME INCIDENTS HAS GONE UP
FROM 2012 TO 2013 FROM 4 PER YER TO 7 PER YEAR• THIS PLACES THE DOWNTIME COST AT SOMEWHERE BETWEEN
$68,000 AND $119,000 PER YEAR – WHAT IS YOUR ANNUAL IT BUDGET?
• ONLY 1 IN 3 MANUFACTURERS HAS A HIGH-AVAILABILITY PLAN TO SHIFT IT ASSETS IN THE EVENT OF DOWNTIME.
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OTHER ADVANTAGES OF UPGRADES• BETTER INTEGRATION OF BUSINESS METRICS AND ON-THE-
FLOOR PRODUCTION• DEEP DATA INTEGRATION• BETTER CONTROL OVER IT AND NETWORK ENVIRONMENT• ABILITY TO CONTROL FOR BOTH SECURITY AND
PRODUCTIVITY PURPOSES USE OF COMPANY NETWORK ASSETS
• BETTER COMPATIBILITY WITH NEW MODERN SOFTWARE
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WHAT ARE COBIT AND ITIL
• COBIT = CONTROL OBJECTIVES FOR IT AND RELATED TECHNOLOGY• ITIL – IT INFRASTRUCTURE LIBRARY• THESE ARE STANDARDS TO HELP GUIDE IT DECISIONS IN ANY
BUSINESS ENVIRONMENT, INCLUDING MANUFACTURING• USING ITIL AND COBIT YOU CAN GUIDE THE STRATEGIC PLAN,
ACQUISITION, IMPLEMENTATION, MONITORING AND PROCESS IMPROVEMENT IN IT SYSTEMS
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CURRENT IT TRENDS TO WATCH• MIGRATION TO CLOUD – MOVING INFRASTRUCTURE AND SUPPORT
COSTS TO MONTHLY OR YEARLY COSTS, AND MOVING RESPONSIBILITY FOR UP TIME AND BACKUP, ESPECIALLY VIABLE FOR NON-CONTROL RELATED TECHNOLOGY (EMAIL, TELECOM, HR, PURCHASING, ETC)
• VIRTUAL SERVERS – MAINTAINING MULTIPLE PHYSICAL SERVERS AS VIRTUAL SERVERS, MIGRATING OLD SERVERS TO NEW INFRASTRUCTURE, CONSOLIDATING MANAGEMENT AND REDUCING FAILURE RISK
• LAYER 7 CLOUD-MANAGED NETWORK INFRASTRUCTURE• CLOUD MANAGED WIFI INFRASTRUCTURE
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CURRENT IT TRENDS TO WATCH• APPLIANCE AND VIRTUAL APPLIANCE BASED SECURITY• SOPHISTICATED ENDPOINT PROTECTION, MONITORING AND
MANAGEMENT• BYOD DEVICES AND THEIR THREAT TO BOTH SECURITY AND
PRODUCTIVITY• THE INCREASING USE OF MOBILE DEVICES IN THE
WORKPLACE FOR PRODUCTION USE• INTERNET OF THINGS CONNECTED APPLIANCES
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SPECIFIC AT-RISK TECHNOLOGIES
• WINDOWS XP IS NOW END OF LIFE• WINDOWS 2003 SERVER IS NOW END OF LIFE• MOST CISCO ASA HARDWARE GOES END-OF-LIFE NEXT
MARCH• THREAT DETECTION AND PREVENTION SYSTEMS MORE THAN
5 YEARS OLD ARE NO LONGER RELEVANT
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SPECIFIC AT-RISK TECHNOLOGIES
• MANY IOS BASED CISCO ROUTERS AND SWITCHES ALSO GO END-OF-LIFE NEXT MARCH
• MOST CISCO CME EQUIPMENT GOES END-OF-LIFE NEXT MARCH
• WINDOWS VISTA GOES END OF LIFE IN 2017• WINDOWS 7 WILL NO LONGER BE SOLD ON NEW MACHINES
OR SUPPORTED AFTER OCT 2016
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DO YOU HAVE EQUIPMENT FROM THESE COMPANIES?• 3COM• COMPAQ• IBM PERSONAL SYSTEMS• ASCEND COMMUNICATIONS• BANYAN• BAY NETWORKS• SEIMANS• BURROUGHS• DEC• CDC• MAXTOR• NEXGEN
• CABLETRON• ONSTREAM• SHIVA• UNISPHERE• AST• COMPUTERWARE• EXANET• HYPERION• SYQUEST• WANG• REAL3D
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COMPUTER SECURITY
• FIREWALL AND EDGE PROTECTION• INTERNAL NETWORK HARDENING• ENDPOINT PROTECTION• FILE SERVER AND DATA PROTECTION
• DISASTER RECOVERY• BUSINESS CONTINUITY• THEFT OF PROPRIETARY DATA• SATISFYING REGULATORY
REQUIREMENTS• PCI COMPLIANCE
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MOST COMPANIES RARELY UPDATE SECURITY• NETWORK TECHNOLOGY• EDGE PROTECTION• LEVEL 7 CONTENT MONITORING AND
FILTERING• CONTROLLING SECURITY AT THE
SWITCH PORT LEVEL• KNOWING WHAT IS GOING ON IN
REAL TIME• MOST DANGEROUS NEW TREND IS
RANSOMEWARE
• THE SINGLE MOST VULNERABLE POINT OF FAILURE IN YOUR IT SYSTEM IS THE OLDEST SYSTEM ON YOUR NETWORK
• COMPROMISING ONE AGED SYSTEM, CAN IMMEDIATELY COMPROMISE ALL THE MORE MODERN SYSTEMS
• AGED SYSTEMS ARE LESS ABLE TO RUN ENDPOINT PROTECTION EFFICIENTLY
• THE CROOKS DON’T TAKE A BREAK
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BUSINESS CONTINUITY
• ACCORDING TO GARNTER THE COST OF DOWNTIME IS AROUND $17,000 PER INCIDENT AND BUSINESSES AVERAGE BETWEEN 4 AND 7 DOWNTIME INCIDENTS A YEAR
• SECURITY FAILURES CAN HAVE COST RAMIFICATIONS OUTSIDE DOWNTIME, FROM LOSS OF COMPETITIVE ADVANTAGE TO LOSS OF CONTRACTS DUE TO NON-COMPLIANCE
• THE MORE PRODUCTIVE YOUR ENVIRONMENT IS – THE MORE YOU LOSE WHEN THERE IS DOWNTIME.
• ONLY 1 IN 3 MANUFACTURERS HAVE A HIGH-AVAILABILITY PLAN CAPABLE OF PREVENTING RATHER THAN RECOVERING FROM DOWNTIME
• THE AVERAGE SERVER RESTORE PROCESS TAKES BETWEEN 2 AND 4 DAYS – EVEN WITH A 24X365 WARRANTY!
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THE INCREASING THREAT OF RANSOMEWARE
• RANSOMWARE IS A $20M INDUSTRY IN 2014
• ONCE FILES ARE ENCRYPTED BRUTE FORCE DECRYPTION DOESN’T WORK
• IF YOU’RE USING A BACKUP SYSTEM THAT WRITES TO DISK (AS MANY ARE) AND YOUR BACKUPS ARE ALSO ENCRYPTED YOU MAY NOT BE ABLE TO RECUVER USING YOUR DR
• SINCE RANSOMWARE TARGETS BOTH USER FILES AND SYSTEM FILES, FERRETING OUT ALL THE CORRUPTED FILES CAN TAKE WEEKS.
• THE MOST FREQUENT VECTOR FOR INCOMING RANSOMWARE IS EMAIL ATTACHEMENTS
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WHAT CAN YOU DO
• IDENTIFY ASSETS IN NEED OF REPLACEMENT – FULL INVENTORY
• DEVELOP A REPLACEMENT PLAN FOR ASSETS THAT KICKS IN AS THEY ENTER THE PERIOD OF INCREASED COST (2/3 INTO LIFECYCLE)
• CONTINUALLY UPDATE YOUR INVENTORY, STRATEGIC REPLACEMENT PLAN AND BUDGET
• HAVE END-OF-LIFE PLANS FOR ALL HARDWARE AND SOFTWARE
• EVALUATE NEW TECHNOLOGIES CONTINUALLY FOR STRATEGIC ADVANTAGE
• STAY ON TOP OF THE SOFTWARE REQUIREMENTS FOR CONTINUALLY IMPROVED SOFTWARE USED
• MANAGE YOUR IT SERVICES AND MEASURE DOWNTIME AND PERFORMANCE OF INDIVIDUAL DEVICES, AND ALL DEVICES AS AN AGGREGATE
• DEVELOP A SCHEDULED STRATEGIC REVIEW