A Regional Perspective on Our Industry in 2009
Varrow was busy during the last months of 2008, but economic news did make it through the email filters at times. Looking ahead to 2009, it appears that our market may change “slightly”. Therefore, I thought it worthwhile to lay out a few of the key considerations for making infrastructure business decisions as we endure tighter budgets.
Cost, Cost, Cost
Although they didn’t reach the status of the .com boom, the virtualization and storage markets were fairly bullish in 2007 and 2008. As a strategic advisor and integrator, Varrow’s primary project drivers were more often customer business constraints than customer budget constraints. Savvy customers took the opportunity to build flexible, highly available infrastructures that moved their systems towards delivery rather than deployment.
Now, flexibility, availability, and streamlined management are giving way to doing more with less. The reports that we used to provide as supplemental materials outlining cost of ownership and returns associated with a project now are taking the primary focus during the decision process. Usually customers exhibit this behavior in two forms. One form is to scale the project down to match budget funding rather than purchasing the complete solution with all of its features. Another form is to stress the hard dollar savings that the project must generate, and exclude softer costs like management time savings and efficiency from the calculations. Usually the second approach produces a more strategic implementation, but we have worked successfully with customers employing both approaches.
Did the CIO just ask about iSCSI?
Organizations drove the productivity and growth booms of the last two decades by solving the problem of how to do more with less. With regard to infrastructure management, responsibility and decision making authority for greater and greater resources was pushed further and further down the org chart. In 2008, administrators and directors frequently made purchasing and implementation decisions delegated by the CIO.
Although the resources under consideration have not increased, current discussions feature much more involvement from the executive suite. Brokering strategies and conversations between organizational levels now occurs as part of Varrow’s daily business, alongside architectural work on storage layouts and consolidation ratios. The nice benefit from increased executive involvement is that decisions frequently occur faster and with greater customer buy-in across the organization.
Who’s the Big Winner (Wiener?)
One counterintuitive benefit to the current environment is the fiercer competition it creates. As service companies face greater financial challenges to their business, the desire to win projects and provide customer value increases. Customers therefore have more options for their potential projects, even if it becomes harder to evaluate the choices.
Varrow’s opportunity becomes more exciting in this situation. We’ve worked hard to build an organization that can qualify for and win almost any project that we set our sights on. The key to doing so is our focused solution set (virtualization, storage, and disaster recovery), vendor relationships (only VMware premier/EMC focus partner in the Carolinas), and engineering expertise (contributing worldwide best practices to the infrastructure community).
And in the end…
In 2009, I expect that these considerations will remain pertinent to most projects we encounter. Hopefully however, the economic adjustment has placed our region and country on firmer footing for future growth.
