Factors for Profitability in 2009By Michael Vizard | Posted 2008-12-23 Email Print
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Oftentimes success is not dependent upon what is happening around you than what you choose to make happen. Here are 10 trends in the coming year that you can use to make profitable choices.
2009: Periods of Profit
It’s no secret that we live in one of the most challenging business climates seen in the last 30 years. That means that success in 2009 is going to be defined by good planning because the margin for error in these economic conditions is near zero. With that in mind, here are some likely things that will happen in 2009 that you might want to factor into your planning:
1) Mergers and Acquisitions
Not only will small vendors find it difficult to remain independent in 2009, but weaker solution providers are going to give up the ghost as well. That creates an opportunity for solution providers with strong balance sheets to pick up additional customers by moving to acquire other solution providers as comparatively bargain prices.
2) Managed Services
As challenging as it can be to set up managed services, customers have made it clear they would rather treat IT as an operating expense in this economy as much as possible. The good news is that vendors are making it a whole lot easier to get started by reselling managed services that they own and operate. That may not be the way to go long term, but right now it is the path of least resistance.
3) Cloud Computing
Clearly, this is the new buzzword of 2009. But while it may really only be little more than a pay-as-you-go approach to hosted computing, customers like it because it places all the capital expense weight for IT on the solution provider. So if you don’t have ready access to hosted computing services in your portfolio, now is the time to get some.
Obviously this was one of the hot topics for 2008. But in 2009 virtualization will be seeing mainstream adoption in terms of its use in production systems. But not only will virtualization increase in terms of scale, we’ll also see a lot more diversity at Microsoft and Citrix gain share on VMware. That means that cross-platform virtualization management will become a much bigger opportunity in 2009.
5) Server and Storage Consolidation
Servers dominated this trend in 2009. But now more attention will be place on storage consolidation and virtualization to reduce costs. The issue is how aggressively can customers consolidate servers and storage without compromising performance? That means solution providers are going to have to have a lot of savvy about network, which have now become giant I/O bandwidth pipes for servers and storage.
With the inauguration of a new president, a political party that has run on a platform of increased regulation is now in charge for the next four years or more. That means significantly increased opportunities for compliance software in every major vertical market.
No matter what year it is security is always on the list. But the emphasis on security is moving away from the perimeter and towards the data itself. That means more money will be spent on encryption while IT organizations increasingly turn to services to secure the perimeter.
8) Database Consolidation
With relatively new versions of all the major databases on the market in 2009, customers will be looking to save major dollars on database licenses by consolidating the number of database licenses they need to pay for.
9) License Harvesting
More than they care to admit, most IT organizations are paying for software licenses that nobody is using. Finding out how much software is actually being used and then harvesting the money that can be saved by reducing software licensing costs is an easy place to save money.
10) Video Conferencing
We’ve been hearing about the potential for this for years. But now people simply don’t have the budget to travel so they need another viable alternative to physical meetings.
There is no doubt that cash is extremely tight right now. But even in the most challenging economic times, a solution provider can position themselves as a key element of the overall solution as opposed to being an inconsequential part of the problem. Even more important, most of the key opportunities for solution providers in 2009 are by comparison to other products and technologies pretty high margin services opportunities. What that means in 2009 is that while total revenues will probably be down, the opportunity to actually increase net income exists if solution providers target the right opportunities. At the end of the day, it’s not about what happens to you, but rather what you choose to make happen.