• United States

Demand spurred by three factors

Sep 29, 20043 mins
Data Center

* Demand for mgmt. tools coming from downsizing, downtime and low spending

Last week, I relayed responses from readers who said they don’t have any pent-up demand for management tools because their company’s executives are not committed to IT. This week, we have the other side, from one reader who says there is pent-up demand.

This reader happens to be an HP Channel Development partner. He reports that his business (and competitors’ businesses) have been growing significantly over the last three to four quarters due to this pent-up demand for management tools.

He attributes the increase in demand for their services to three things.

First, the downsizing trend of the past few years has created a situation where there are fewer people to manage infrastructure, so IT organizations need to automate more tasks through management tools.

The second reason is that “IT solutions are still increasing in complexity and importance; downtime is ever more costly.” So IT organizations must discover problems more quickly and resolve them before they have an impact on the business. The solution is to use management tools to do that.

Finally, he states that “investments over the last three years have been lower than they ‘should have been.’” This has resulted in pent-up demand for updated management products. Companies now have to reinvest in IT to “catch up” with their management tools.

To summarize the feedback from our readers: it’s a mixed bag. There are companies that have started to invest again in IT, playing catch-up by now investing in management tools that they had deferred acquiring previously, tools that can help them to adapt to the changes that downsizing has created. On the other end of the spectrum, there are also companies that are still not investing in IT.

Some companies can’t wait to totally outsource IT. This shows a lack of commitment to IT on the part of company executives. An internal IT organization shows up as a major cost factor on an earnings statement. However, the decision to outsource can’t be an isolated financial exercise. It is important for the business to also consider the value that an internal IT organization can provide – competitive advantage through innovative approaches and intellectual property creation, business process streamlining, customized applications, and more. The core business and the IT processes upon which that core business depends should be scrutinized very carefully before outsourcing. I don’t have anything against outsourcing – it can be a viable alternative for appropriately selected functions – but it’s not prudent in my view to outsource across the board (at least for large companies).

Many thanks to our readers who took the time to share their experiences and thoughts on the issue of pent-up demand of management tools. It seems that my theory is true for some companies and not for others.