|
It's no secret that customers are reluctant to part with their hard-earned cash during the economic downturn,  but that doesn't mean IT sales will come to a standstill. Savvy solution providers will show that by spending a little now on the right technologies, customers will actually save down the road and gain a competitive edge over their rivals to boot.
With that in mind, CRN has identified 10 real cost-cutting solutions that will play big in 2009. The list features technologies that offer proven ROI with real-world examples of customers that scored huge savings.
Ultimately, these technology investments will provide the tools customers need to survive in this economy.
Data center automation
Applying automation to the enterprise data center is an important part of running mission-critical applications and making sure servers and storage devices are utilized to the fullest extent. And it is the kind of business where solution providers can prove their importance to customers, said Bob Schwartz, President of Robert Mark Technologies. "When times are good, a lot of glitzy applications get purchased, but people don't think of boring things like automation," Schwartz said. "In the last recession, we saw a lot of interest. Now, with the economy falling, we're back in the same situation."
Real world: Robert Mark Technologies automated the runbook of a money-transfer application for a banking customer, and saved it an initial $240,000 per year related to the cost of two full-time contractors who manually monitored the application.
Document management
Print and imaging VARs that aren't raising their game to master document management are not only missing out on a key aspect of the "total solution" but also ignoring one of the most important cost-cutting technologies for today's office.
That's probably why big players like Xerox, HP, Ricoh and Oki Data Americas have been fine-tuning their offerings and why mavens like Laserfiche and eCopy and newcomers like GoScan are attracting VARs left and right.
"We had a very successful year with Laserfiche and, going forward, we are heavily focused on [their] value, particularly with regard to process automation," said Kevin Smith, Senior Vice President of One Source Document Solutions.
Real world: One Source used Laserfiche technology to help Iredell Memorial Hospital save $40,000 per month in write-offs from misplaced records.
Managed services
It sounds odd, but there aren't many MSPs using the term "managed services." Rather, they market themselves as "outsourced IT departments." The terminology might be complex, but the concept is not: helping customers lower costs by monitoring and managing their IT infrastructure. In most cases, customers pay the MSP a recurring fee to take care of their IT needs. Because MSPs have more control over both their resources and the customer, the end user's costs are typically less than the traditional break-fix model.
"It's pretty easy. We take responsibility for their network. My analogy is if you had a mechanic living in your garage, your car would run forever," said B.J. Farmer, CEO of CITOC, a MSP.
Real world: PFM, a property services company for the petroleum industry, outsourced its network management to CITOC and is saving about $1 million each year.
Open source software
As the economy worsens, it's not surprising that more companies are looking to open-source software as a way to cut licensing costs. But according to VARs, open-source software has matured to the point where some products offer functionality that surpasses proprietary software.
Ron Bongo, CEO of Corra Technology, a solution provider, is seeing more companies move to applications like Openbravo (ERP), ProcessMaker (business process management) and SugarCRM, as opposed to just operating systems and databases. "Many open-source applications are not only viable alternatives to proprietary ones, they've also added new functionality, such as social networking capability, that doesn't exist in commercial software," he said.
Companies are starting to take open source seriously, said Frank Basanta, Director of Technology at Systems Solutions. "My first suggestions to customers are things like open-source file servers, print servers or FTP servers. We've had FTP servers running for two years without a reboot," he said. "There is some basic input you have to learn, but when you're administering something and don't have to worry about it, that adds up to major cost savings."
Real world: EUS Networks closed a 1,000-port VoIP deal based on Digium's Asterisk Business Edition for $250,000; a comparable Cisco solution was priced at $1.5 million.
Power management
Providing solutions in power management technology for cooling and electricity in the data center can lead to a high-margin product and services business. Five Nines Technology Group, first analyzes every device that draws power and documents the business case, said Ben Pankonin, Director of Business Development. For power management, Five Nines mainly uses products from APC and Liebert, often working the technology into a broader solution sale. "We often have the opportunity to explore energy savings at the time that clients are looking at other projects," he said. But, he warns, "Do not pretend to be an HVAC specialist. Instead, partner with mechanical engineering firms and become a valuable resource for your client."
Real world: Five Nines cut server power consumption for a community bank by more than 50 percent by combining virtualization and APC power management technology.
Server virtualization
Server virtualization actually lets customers reduce the amount of physical hardware they require while providing a platform for expanded capabilities. Putting a dollar figure on the cost savings is fairly easy using software tools that assess a customer's environment, said Mitch Kleinman, President of Ryjac Computer Solutions. "Our server virtualization methodology shows tangible savings," Kleinman said. "We've gone into a customer, dropped software on their server, and showed how much they'd save with virtualization."
Real world: One Ryjac customer invested $131,000 in VMware, two IBM servers and a SAN, saving $1.3 million in power, maintenance and acquisition costs over three years.
Software-as-a-Service
Given the current economy, software-as-a-service solutions and their buy-what-you-need, pay-as-you-go model are all the more attractive.
"With SaaS, there is no need to install infrastructure and no up-front capital costs, which makes it very desirable in today's economic climate," said Eric Berridge, co-founder and principal at Bluewolf, which specializes in SaaS applications from Eloqua, Salesforce.com, SuccessFactors and Xactly, among
others.
SaaS solutions require fewer infrastructure resources on the customer side to deploy, run and manage vs. packaged software, and they help cut requirements for on-site maintenance and support staff. They also typically offer more flexibility and are quick to roll out.
Real world: By implementing SaaS applications, Bluewolf helped a cable services company improve sales-lead qualifications and reduce its sales cycle by 40 percent.
Thin-client computing
Recent advances in thin-client technology—along with increased interest in improving IT efficiency—have led to renewed interest. Advantages such as lower hardware, IT administration and energy consumption costs make such solutions extremely attractive, said Wade Wyant, Managing Partner of ITS Partners. "In this climate, you need to look at technologies that offer instant ROI for customers," he said.
Real world: Insight Public Sector outfitted Florida's Seminole County Schools with an NComputing solution, saving it 50 percent on hardware, 70 percent on life-cycle maintenance and 90 percent on energy.
Unified communications
It may sound expensive on the surface, but unified communications has a proven track record for delivering rapid ROI. By tying together VoIP, IM, e-mail, videoconferencing, smartphones and PDAs, VARs can help customers cut costs and generally do more with less. Cisco Systems, Microsoft, Avaya and others have been preaching the ROI story for years, and solution providers and end customers are catching on.
"Through [unified communications] we can consolidate vendors, improve corporate productivity, reduce hard costs and reduce our customer's overall bottom line," said Glenn Conley, CEO of Metropark Communications. Real world: Metropark used AltiGen IP telephony and conferencing products and 3Com gear to save a medical equipment sales outfit $10,000 per month in telecom services.
Videoconferencing
Travel budgets often take a hit when times are tough, but that doesn't mean businesses have to cut back on face time with contacts. And as improvements such as high-definition video and telepresence go mainstream, the videoconferencing experience mimics real-life meetings more than ever.
"We've got technical experts that are available to all of our salespeople, but they're centralized," he said. "They can meet with four customers in four parts of the world all in the same day and never travel," said Charlie Macli, Executive Vice President of Sales and Marketing at IVCi LLC.
Real world: IVCi implemented a Polycom VCX 7000 videoconferencing system to help an expanding East Coast-based law firm cut travel to its West Coast offices by 25 percent. |