KEYSTONE, Colo.—Resellers need to shift to a services-centric model and reduce their dependency on box pushing by branching into horizontal opportunities such as consolidation, an industry expert told an audience gathered at the GE Access New
Frontiers conference here.
Conducting a keynote panel discussion with GE exectives and resellers, IDC analyst Janet Waxman said horizontal opportunities offer a better ROI and greater long-term business potential because they are “”repeatable services.””
“”Lead with the services and not with the hardware,”” Waxman said, adding the hardware sales will follow once the services piece is in place. “”Consolidation is constant; it’s a continuous service – it’s like breathing,”” she said. “”It creates opportunity to have an ongoing relationship with the customer.””
Indeed, resellers are an important part of the equation because customers need help understanding what technology best suits their business pressures, growth plans, strategies in a down market and cost reduction plans, said Dave McClymont, GE Medical Systems’ infrastructure manager, who has been involved in a few consolidation gigs and knows the drill. McClymont said the company has had great success in consolidating not just servers and storage, but helpdesk and telecom systems.
Consolidation – which is usually driven by some type of problem – comes in many forms, Waxman said, including server and storage consolidation, as well as facilities and organizational, and application. Customers who have soaring maintenance costs and an underutilized IT infrastructure are ideal candidates for consolidation, she added.
“”It’s like vanilla ice cream from which you build what flavours you want onto it,”” she said, highlighting e-mail, disaster recovery and wireless are some key examples of what can come after a customer undergoes consolidation.
Given today’s choppy environment and tight budgets, consolidation helps CIOs and CFOs – traditionally the key decision-makers holding the purse strings – cut costs and better manage their infrastructure and maintain service, she adds.
Consolidation offers a way to simplify the IT environment in a more secure way, agrees Charles Cautley, CIO, vendor financial services of GE Corp. Cautley, who’s also been involved in countless consolidation assignments, said the process is tricky because it involves changing people’s attitudes and job specifications.
“”While the IT community is good at introducing change, they aren’t good at doing it themselves.””
And while consolidation involves “”some pretty big risks”” including data loss, platform failure/downtime, hardware performance, and application performance, Waxman said the benefits far outweigh the risks.
She said the process eliminates inefficient and obsolete systems. “”It helps companies get ready for the next wave of IT.””
Sam Oliver, director, infrastructure, GE Access, considers downtime a considerable challenge of any consolidation project. “”Increasing complexity by consolidation is a factor,”” he said, adding this requires added training costs and additional back-end support.
Waxman agrees, saying while consolidation helps simplify the IT infrastructure, the system ends up becoming more complex. But the trick, she added, is to understand the long-term impact – and that’s where resellers are key.
Despite the risks, Cautley offered this advice to resellers looking to get into the consolidation market: Get to know how a company ticks. “”Spend time getting to know what the drivers are – the challenges and the company vision. It takes awhile, but understanding us can help us work out an optimal plan. And we open the doors to those people.””
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