Blog: Converting CAPEX to OPEX with the Meridian Power Cloud

By Andy Haley, Director of Managed Services, Meridian IT UK

The events of the first half of 2020 have shown UK businesses just how unpredictable life can be. The initial wave of COVID-19 may now be past its peak and many businesses are beginning to reopen their doors to employees and customers, but there’s no guarantee that the crisis is over. If a second wave leads to further lockdowns, even on a smaller scale, the impact on businesses and their supply chains is likely to remain uncertain for months to come.

Moreover, we’ve yet to see the full economic impact of both the current period of lockdown and the measures taken by the government to protect businesses and save jobs. Most economists are predicting a significant downturn, and the gloomiest believe we may face a long recession before UK plc gets back on track.

In such an uncertain climate, the last thing most businesses want to do is make significant capital investments. Capital expenditure (CAPEX) is a bet that the future will be stable and predictable and will follow the plan that the business has made. But in the shadow of COVID, all bets are off.

This is a particular problem for IT teams whose strategy depends on on-premises infrastructure. If your servers and storage systems are coming to the end of their support period and you need to refresh your hardware, the up-front investment can be significant.

Moreover, sizing and configuring systems to support a three- to five-year infrastructure plan is extremely risky if you don’t have a clear enough view of the future to forecast demand accurately. If you purchase more than you ultimately need, that capital is sunk, and you can’t get it back again. But if you underestimate your requirements, you may need to upgrade sooner than planned, which means further CAPEX that you didn’t budget for.

For companies that primarily rely on commodity hardware to run their applications, moving to the cloud is the obvious solution. Public cloud services that can run Linux or Windows applications on low-cost x86 hardware are mature and widely available, which makes them a default option for many IT teams.

With their flexible, subscription-based commercial models, these cloud services eliminate the need for up-front investment and convert CAPEX to operational expenditure (OPEX)—a much more attractive solution when companies don’t know what the future holds and need to be able to react in an agile manner as events unfold.

However, for companies that use specialist platforms such as IBM Power Systems, the path to cloud hasn’t been so clear. In many cases, these companies have highly reliable core applications built on IBM i or IBM AIX, which have been running for decades. These applications often pre-date the Internet, let alone the cloud, so moving them into a standard public cloud environment is virtually impossible without rewriting hundreds of thousands of lines of legacy code.

That’s where the Meridian Power Cloud comes in. Our cloud platform is one of the largest privately owned IBM Power System Platforms in the world, supporting more than 400 clients worldwide from six data centres in the UK and many more in Europe and North America.

But the Meridian Power Cloud is so much more than just flexible cloud infrastructure: it’s the whole package. We’re renowned among IBM Platinum Business Partners in the UK for our IBM Power Systems expertise, not only in terms of system administration and management, but also software development and maintenance. We’ve proven time and again that pre-Internet-era IBM i and AIX apps can run in the cloud, and we provide the expertise to make it happen.

Best of all, the Meridian Power Cloud enables you to benefit from the same economies of scale and flexibility of resources as any commodity public cloud service. If your business needs change at short notice, you can ramp up or scale down your usage on the fly, and pay only for what you use. In a time where so much is uncertain, the Meridian Power Cloud gives you the assurance that you won’t be trapped by a rigid contract or choked by a huge CAPEX requirement that your business doesn’t have the resources to swallow.

To learn more about the benefits of the Meridian Power Cloud, watch our video—or to explore our vision for cloud computing in a post-COVID world, read our new white paper. And if you’d like to discuss how Meridian IT can help your business convert CAPEX to OPEX, please reach out to us at info@meridianit.co.uk

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