Starting at Zero

By Jessica Davis  |  Print this article Print


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All bets are off when it comes to IT spending, as customer organizations examine how they spend every dollar. Smart resellers are helping customers assess how to cut costs, thereby freeing up funds for more strategic IT projects.

About six months ago when Channel Insider asked resellers and solution providers if they were feeling any effects of a recession, the answer was a resounding "no." While resellers and solution providers may have become aware of the first chill out there in the market, certainly none of it had filtered into their businesses yet.

Today’s business environment is a stark contrast. Ask most resellers and solution providers how business is, and they will tell you it’s tough out there. But because they’ve been successful businesspeople who know how to pursue the opportunity, they will also tell you about potential deals that could hinge on economic stimulus package funds or even other pockets of opportunity where they are focusing their efforts.

Ken Lamneck, president of distributor Tech Data in North America, says that IT budgets start at zero these days. It used to be that there was a standard amount of money allocated to basic IT spending that solution providers could count on, and then they would go after additional dollars in project spending. No more. Now, Lamneck says, budgets are starting at zero and solution providers must sell and negotiate for every cent.

How do you sell in this kind of environment? Many experts say that now more than ever it is time to change your approach to sales.

Consider this: There’s a certain amount of money spent in IT every week, every month, every year, just to keep the lights on. There’s a certain amount of money that goes to maintaining the systems and keeping them running the way they are. Experts say keeping the lights on uses up between 65 and 70 percent of your customers' entire IT budgets.

As a trusted adviser looking to help your customers do more with less, what if you could reduce that percentage to 60 to 65 percent of IT spending? What if you offered your customers a free assessment to help them reduce their IT costs and found the efficiencies in the system?

Juniper’s global channel chief Frank Vitagliano and Gartner Vice President Tiffani Bova both recommend this approach as a way to sell during this recession. If you can reduce the cost of maintaining your customers’ IT operations, not only do you gain customer loyalty in hard times, but you also potentially free up budget for spending on strategic IT projects.

Maybe the CIO at a customer site has business intelligence on his wish list, as Bova says many CIOs do. Or maybe your customer is targeting server consolidation or a long-overdue refresh of computer hardware. Your customer wants to spend money on IT in 2009.

But your customer’s IT budget is currently zero. What are you going to do to help your  customer find the money to spend with you?

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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