Do Tough Economic Times Accelerate Change?
I have to brace myself
Way back when, I did an economics degree, and I had to do a bit of macroeconomic modelling. I laugh now about that whole exercise -- a total waste of time as
It looks like
But there is hope -- challenging
One consensus example you hear frequently is the last dot-bomb bust -- the bones of which (cheap fibre and web technology) laid the groundwork for much of
So,
The IT Side Of The Equation
You probably are aware that I spend all sorts of
It's funny, though. Back
Scenario #1: IT
One group of IT people are finding themselves
My most illustrative example is data warehouse and business analytics.
My buddies at Cisco tell me that their Telepresence solution is a hot topic
At a macro level, the business is being extremely clear to IT as to
Painful, yes, but al least there's an element of good to all of this if you think about it.
Scenario #2:
More than a few IT organizations have been working along the lines of planning their long-term future. An interesting sub-thread is "
Or, put differently,
There are outsourcers, service providers and consultants out there, waiting to be leveraged. Now that there's less IT money going around, will views change?
I'd have to say "yes" -- an increasingly frequent topic is now how
One part of our business that's getting a bit more attention
Can
And I'll think you'll see more of that sort of thing
Scenario #3: IT Might Be Very Busy
Another, more interesting group, find themselves with a unique opportunity.
You see, there are more businesses than you might think who aren't really all that affected by the downturn. No one is recession-proof, but many are surprisingly recession-resistant. I find
Generally speaking,
Why? IT is on sale.
If you think about it, the demand curve for IT products and services has shifted rapidly to the left. That means that there's a supply imbalance, which means that all sorts of stuff is on sale, so to speak.
True for automobiles, real estate, luxury goods, airplane travel, as well. From an IT perspective, hardware will be cheap. Software will be cheap. Really bright people may be cheap as well. Grim, but probably true.
The thinking is "
And that's just the infrastructure side.
On the application side, there's interest
Now, understandably, that's a view through the EMC portfolio, but I feel like I'm talking to some sort of hedge fund when I talk to
I just wish I was meeting more of
The Supply Side of IT
There isn't a single supplier of IT goods and services that won't be affected by all of this. Change
First, every vendor is frantically re-positioning their storyline around saving money, being more efficient, and so on. New borchures, new advertising, new campaigns -- the works.
If you're a vendor, and you don't tell people you save IT money
Outreach Will Be Important
I think some vendors are a bit more exposed than others.
I read a post from a NetApp blogger on how it was so important to embrace this efficiency thinking going forward. I agree with the sentiment, but I think there's more to that than meets the eye.
Historically, many of us are of the impression that NetApp boxes generally have had very poor utilization. If you run a fleet of
During the last downturn, EMC had the same problem
Before the customer "discovers" the problem, so to speak.
My coaching for Netapp (and every other infrastructure vendor as well) is that now would be a good time to proactively reach out to your customers to raise utlization levels, without having to buy something entirely new to get that benefit.
Indeed, this sort of thinking goes beyond simply making the quarterly revenue number -- it focuses on your customers'
It'll be interesting to see how many vendors work with customers to leverage
The Weaker Players Will Suffer
You hear about this "flight to quality"
Look at it this way: if you're you can only afford so much -- do you want to risk it on a vendor who either can't deliver, or (ulp!) might not be around? And, with good deals everywhere, why compromise?
It was sad to watch Sun's recent "open storage" announcement, only to be followed by announcing massive layoffs. Just to be brutally clear, a layoffof this magnitude isn't just shedding a bit of excess weight, this is cutting muscle and bone.
One announcment pretty much undermines the other, which is unfortunate. Regardless of the merits of Sun's approach, they now have to operate under a cloud, so to speak. And not the good kind. My heart goes out to all those affected.
But
Vendor balance sheets, earning announcements and product portfolios really matter during
Thankfully, I think EMC is
Our executive management is characteristically conservative when it comes to financial management, which generally serves us well when the economy goes south.
Are Service Providers, System Integrators and Outsourcers Sitting Pretty?
I think so. Frequently,
None of
The Big Picture?
OK, so my crystal ball may have a crack or two
Put all of this together, and -- yes -- this economic downturn will accelerate change on both the demand side as well as the supply side of IT.
Investment should accelerate
IT organizations have a unique opportunity to sharpen their focus, and --
This sort of disruptive change isn't particularly fun, or pleasant, for anyone.
But at least some good can come from all of it -- at least, I hope so.
Courteous comments welcome as always.

