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September 2006 Strategic Technology Horizons
Ideas and Information for Your Business
Welcome!

Labor Day has passed and, as kids head off to school, our focus turns from summer work schedules and vacations back to business. While for many, the summer no longer provides the respite of a slower business pace, long weekends and vacations hopefully provide the rest and rejuvenation we all need to thrive.

For me, summer downtime provides time to let the mind wander. A relaxed step back, looking and thinking outside the box, often sheds light on old problems and highlights new opportunities.

For this issue of Strategic Technology Horizons, we step out of the box and offer a different type feature article -- a collection of IT facts and thoughts that will, hopefully, offer some inspiration (or at least some good food for thought).

Best Regards,
Allen

P.S. Don't miss Chris Caldwell's ideas for saving money via better vendor management.

Technology Thoughts for Tomorrow
by Allen Falcon  

Trends in the News

Recent issues of Computer Reseller News, a publication for computer and network sales and service companies, have reported several interesting trends:

  • While the average cost of a network server has declined by almost 13% over the past year, reseller- based purchases remain flat
  • Spending through resellers on networking gear has surpassed reseller-based purchasing of desktops, laptops, and peripherals, combined
Horizon’s Analysis: Server prices reflect a continuing improvement in the performance/value curve. As more end user companies become comfortable configuring and purchasing servers directly from manufacturers, resellers will continue to see pressure on resale prices and reseller margins.

At the same time, most companies do not have the necessary expertise to plan, purchase, and implement network infrastructures without assistance. With Voice Over IP (VoIP), Power over Ethernet (POE), and increasing security demands, we expect this trend to continue.

Emerging Architectures: SANs and Virtual Servers

With multiple, competing technologies and many new vendors, the cost of network-based storage has dropped dramatically, making Storage Area Networks (SANs) an affordable alternative for many small and mid-size businesses. If you have a multiple server environment, network-based storage lets you run a single, high-availability storage server. Disk space is then allocated to specific servers and/or applications. Network-based storage lowers your storage cost on a per GB basis and lets you adjust your storage allocations without having to rebuild and/or migrate systems. Network-bases storage also supports “backup to disk” capabilities that can increase the performance and flexibility of your backup/recovery solution.

Key to the lower cost of SANs is the emergence of iSCSI technology. Using iSCSI, servers can connect to a SAN device via Gigabit Ethernet. Given that most new servers ship with dual Gigabit Ethernet ports, there is no incremental cost per server. Most vendors recommend a dedicated Gigabit Ethernet switch for the SAN, a relatively modest cost. Entry level systems can provide up to 6 TB (6,000 GB) of space and support up to ten servers.

Microsoft and its primary competitor, VMWare, are practically giving away server virtualization technology. By allowing you to run multiple “virtual” servers on a single physical machine, server virtualization reduces overall hardware costs and makes it easier to load balance applications. While companies with larger data centers are still working out the “kinks”, the technology holds promise for companies with smaller computer rooms. If you run any test/development servers, server virtualization can reduce your hardware requirements.

Save Some Money
Chris Caldwell   Vendor Management Pays Off Dollar Sign coins
If you purchase hardware and software through, or with the assistance, of a network service company, how they facilitate the purchase may be costing you money. Most vendors are moving to a business model that offers discounts off published pricing based on total dollar volumes, a tactic designed to build loyalty in the battle for market share. If your service provider orders from vendors using your customer number or does not consolidate most purchases through a single account, you are likely missing out on discounts. Make sure your service provider is aggregating volume on your behalf.

Want to save more when buying hardware or software? Let your preferred vendor know which competitors are under consideration and ask for competitive incentives. Many vendors, including Cisco and Dell, will offer additional price breaks in order to keep out the competition.

A final cost saving tip: If you plan on spend more than $15,000 to $20,000 on hardware and software over the next year, share you intent with your preferred vendor. You might qualify for “preferred” account status. In addition to increased discounts based on your volume, you should receive better pre- sales support and access to technical specialists.

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