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5 Ways to Reduce Network Costs for Business


Network costs have historically been hard to control or trim, but with rising costs elsewhere, many organizations are increasingly looking to reduce budget. Network costs make up a significant portion of IT budget, despite most organizations using networking as a support service.

The good news is that new technologies, managed service providers, and modern maintenance and automation allow organizations to trim costs like never before. Understanding the total cost of ownership, total device usage, and automating network management and control will help you to greatly cut costs. These 5 ways to reduce network costs for business will get you started.

Design Your Network Around Application Needs

Most organizations build a network for what they have and then slowly expand on it as needs change. This can result in server and solutions bloat, with a complex or difficult-to-maintain architecture. Conducting a network needs-analysis will help you understand what you need and why.

Here, applications are the most important aspect of your network. The network exists to allow employees to work on applications. The network has to meet those peak needs first, and secondary/tertiary needs like print, personal device usage, etc. later. All network upgrades have to be geared towards enabling applications if they are to contribute to organizational goals.

Understand Cost of Ownership and Streamline Solutions

It’s important to understand your hardware, software, and their Total Ownership Cost (TOC). Here, you can review several key factors in costs:

  • Hardware cost vs cost of network management – As network hardware ages, it costs more to maintain and more to manage. Pay attention to the ongoing cost of ownership and be prepared to replace hardware when it becomes more costly to maintain than to replace.
  • Network maintenance costs – Network maintenance, including monitoring, support, network downtime, and hardware maintenance are huge costs for most organizations. Review these costs, where they are coming from, and how you can reduce them. For example, implementing new monitoring software, implementing servers with remote upgrade and management options, and implementing automated monitoring and data-load configuration.
  • Network complexity costs – The more complex your network, the more time and staff it requires to maintain. Here, you can review how and where to simplify your network, add redundancy to prevent downtime, and reduce local strain on hardware.
  • Direct costs – Review hardware to determine if newer solutions might be cost-saving. For example, switching to SD-WAN instead of WAN, using cloud servers or cloud security (especially in remote locations) etc., might offer considerable savings.

Network optimization is often less about scrapping what you have and quite often about streamlining it. This means integrating new solutions into your current network, upgrading current network, and working to drive the most value. This means working with vendors who are cognizant of your current tech stack and are able to help you optimize it rather than replace it with solely their own technologies.

Monitor Your Network and Integrate Automation

Network management and monitoring are two of the most time-intensive IT tasks, meaning that you can greatly reduce costs by switching to automated network management. Network automation is typically provided as part of service from managed service providers, but can typically be installed with tooling as well.

Here, you should look for tools that enable live monitoring and flagging, automatic redirects, health measurements for servers, and real-time triggers to prompt IT to act when something does go wrong. Most organizations don’t manage anything close to full-time network monitoring, simply because the costs would be exorbitant. Switching to an MSP or integrating software to do so instead will reduce existing monitoring costs, while keeping IT informed of network load and usage for further optimization.

Develop a Cost-Saving Network Vendor Strategy

Vendors can make up a great deal of network costs, especially when you have more than a few vendors. While it’s true that it’s often a mistake to lock in to a single vendor, simply because one vendor is unlikely to provide a perfect full-package solution, it’s also a bad idea to work with too many vendors.

Vendor Fees

In most cases, paying for too many vendors means paying for the same services multiple times. Review vendor contracts to determine what you’re paying and why, and where you’re paying for the same services multiple times. For example, if you contract several vendors to maintain servers and cables, you’re likely paying the same fees to several vendors. More vendor contracts also directly correlate to an increased cost of management, which you should work to cut as well. What’s the solution? You should be able to switch to a single ICT supplier who can contract everything out on your behalf, and move you over to a single contract, greatly reducing total fees and management costs.

Subscription Fees

Subscription and rental fees add up, especially when you have multiple subscriptions. It’s important to evaluate the real costs of both purchase and subscription fees for any network, with maintenance and management differences accounted for. Subscriptions often reduce costs by cutting internal IT costs and management, but may cost more for base hardware per month. This is especially relevant if you’re choosing a package or a bundle, which may or may not be a good deal. If you’re not using everything in a package, you likely want to consider dropping the bundle and switching to another solution that may cost less.

Any vendor strategy you adopt should be focused on finding a middle-ground between best vendor fit and best value. It’s also critical to choose strategies and solutions based on integrations, application support, and ease of replacement. If you lock into a vendor solution because you know the vendor and find that it doesn’t meet your needs, you might have to replace your entire network if it’s a custom solution.

Your vendor strategy should manage redundancies, avoid vendor lock-in, and quite often avoid single-vendor solutions. While you can source all services through a single ICT provider, it’s critical to have redundancies and backups in place, to have the option to move to a new vendor, and have the option to source new solutions as they become available.

Don’t Get Into the Network Business

Most organizations strongly benefit from investing in core services (the products and services they sell to customers) and outsourcing the rest. At the same time, many invest in managing and maintaining their own network teams, hardware, and servers. This can be a costly mistake, simply because your ability to maintain a network and experts to run it is significantly lower than that of a vendor specializing in networks. Any specialists you employ will be limited to managing your networks under your specific circumstances, will have to test and identify new issues through trial and error, and you will have to pay for training to upgrade to any new technology.

Outsourcing to an ICT provider or managed services provider means cutting those costs. The vendor specializes in network management, already invests in the latest tools and training, and can offer higher quality support for less money. While you will pay more for upfront service fees, you’ll reduce costs for training and employees, and likely for ongoing maintenance and downtime as well.

It’s important to run a cost and needs analysis on any network solution before implementing it. However, most organizations can greatly benefit from simplifying networks, restructuring vendor contracts to simplify them, reviewing cost sources, and reducing total manual work for network maintenance.

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