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The New Data Center

The New Data Center

IT Spending Is Shrinking – The Cloud Is Growing

If you happen to be selling hardware to Amazon or Google, you’re probably in good shape. Especially if you sell storage. Cloud storage requirements are growing. IT spending isn’t.

Steve Norton, contributor for the Wall Street Journal published some figures last week from Gartner and others that should serve as a wake up call to you if you are a technology reseller – especially if you are selling to the small or mid-sized businesses.

Here’s What Gartner Predicts:

“Global IT spending will shrink 1.3% to $3.66 trillion in 2015 amid a strong U.S. dollar, slowing PC sales and a continued switch to software-as-a-service, research firm Gartner Inc.IT -0.72% said in its latest quarterly forecast.” They were calling for 2.4% growth. New predictions are negative. 1.3% might not sound like a big deal, but you can multiply that for small companies looking to cut costs. They’re likely to move to cloud services first. Forrester was calling for 80% of these companies to be in the cloud within 5 years, but the time is shorter now. In other words, expect it to be far less than 5 years.

Also from Gartner: “Microsoft killed the XP licenses, but people are still running XP,” Gartner analyst John Lovelock told CIO Journal. “PCs are plummeting, but there is still a desire to get some of that new functionality.” In other words, people are going to keep their old computers and run their apps from the cloud – Microsoft 365, Google Apps, etc.

Steve Norton’s Comments:

“Gartner noted a substantial reduction in their forecast for office suite spending, reflecting an uptick in adoption of cloud services like Microsoft Corp.’s Office 365”, says Steve Norton.

He also notes that “IT services spending is forecasted to shrink…this year, with the largest drop seen in implementation services.” Expect it to drop more than you think. With Microsoft moving more to the cloud, your support services will be in less demand.  Less infrastructure also means less installation. The smaller the business, the less likely it is that they’ll be adding servers or disk.

What About Managed Services?

This is clearly becoming a price war. Managed services is a commodity business right now, and it will get worse.  Many of the resellers I am working with tell me their prospects just want to know how much they charge per device. That’s a bad sign!  They are also being undercut with low prices from both very large providers and the guy who works out of his garage.

Security is Still In Play

The good news is, there’s still a strong market for technology. Amazon will certainly cash in on cloud services. Apple is killing it with the iPhone. But you can grow too if you’re selling something clients really need. Security demand will continue to grow. The more companies more to mobile devices and cloud apps, the less secure they’ll be. There’s also an opportunity to move upstream with compliance and assessment offerings. Firewall management is not what I’m talking about.

Consider services like hosting policy, ongoing assessments, event correlation services, and monitoring for breaches. The small business can’t afford the technology required to detect a breach, and they most certainly can’t staff a team of responders. Virtual CISO services are another great offering. People need help with their security strategy as they move toward digitization. The CISO function will become more important for smaller companies, yet still unaffordable.

© 2015, David Stelzl

P.S. Find out how to sell into the security market…. (Read More)

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Trump Building

Yesterday’s educational security event, just north of Chicago, was a great success. I am grateful to those who sponsored and hosted the event – McAfee, HP, and FireEye all had representatives there, along with the owners and directors of Paragon Micro, a nationwide integrator and reseller headquartered here.  This meeting was set up to explore the trends of information security and share with business leaders what steps to take in order to defend a company’s key assets in the coming 12 months.  Around 20 business leaders attended – most either presidents or CIOs of mid-market companies in the northern suburbs of Chicago.

At the end of my presentation, Jeff Reimer, president of Paragon Micro offered up a complementary assessment – from my count, every single attendee agreed it was time!  Over the next few weeks these companies will be taking one of the most important steps needed to stop more government security regulations (and more data misuse and theft) – that of assessing and fixing the things that end up on the front page of the Chicago Tribune.  At the same time, Paragon Micro has an opportunity to bring a valuable service to these companies – one that most of them really need right now.  It’s a critical time in IT as threats from all fronts threaten to steal data, disrupt production, and destroy brands.  Next week I will be sharing some similar things with law firms the central Florida regions.  But not before heading back to Charlotte for a relaxing weekend…

© 2013, David Stelzl

I love Seth Godin’s book, Permission Marketing.  In my recent webinar on Gaining Access to Decision Makers, I recommended reading this in the context of demand generation events and selling with assessments.

Gaining permission requires demonstrating value.  In last week’s demand generation event we targeted business owners from the start (rather than going to IT).  Normally I recommend meeting with IT people to better understand the business before calling into higher level people…but in this case we set the stage to make this work.

We arranged for this event to be held at an upscale location, I was brought in as a speaker (Speaking on the trends of Data Security and Cybercrime), and a follow up program was designed to show business leaders in the local community what is going on with cybercrime and how local businesses are under fire.  Our goal was to show them, as reported recently in the Wall Street Journal, that security is no longer a custodial issue, but that companies must have someone at the executive level overseeing this and reporting right to the top!  This was a perfect segue into a business-level technology conversation.  No products,  no tech talk, and no Power Point slides discussing the hosting company’s profits, employees, or certifications.  Instead, we created a reason for attendees to meet us.  45 out of 50 signed up for an assessment…this is a powerful statement as to the value we delivered.

Business leaders don’t have time for sales pitches, product slinging sales calls, or interruption type marketing campaigns.  They do have time to hear about trends that affect their business, and education relevant to the success of their company.  This requires permission, and permission requires demonstrable value.

© 2011, David Stelzl

In just 60 minutes of presentation, these attendees were willing to stay and talk.  They received books, signed up for assessments, and looked forward to our next visit, a visit that would take place in their office, with a focus on their risks.  They wanted to know how to ensure that global cyber thieves would not victimize their businesses.    In fact, we gained permission to see them three times!  The first meeting was at the luncheon.  From there they agreed to invite us to their office, and finally, we had permission to see them a third time to deliver our findings from the promised assessment.  If a sales person can’t close business with three executive meetings and compelling justification from an assessment, a new sales person is needed.

Yesterday we completed day one of our three day training class in Mumbai – my friends from India were kind enough to have ordered pizza for lunch without me knowing (Dominos in Mumbai pictured here!)  Notice the unique arrangement of Indian veggies on this slice…Not from NY, but much appreciated!  On the other hand, Dominos has managed to deliver a consistent pizza in just about every country I’ve been to.

In our class we focused on recent trends in cybercrime and where opportunities for creating business exist.  The most important concept here is that of creating business rather than waiting on requests for products.  One insightful comment worth repeating here is that IT wants a product, not a strategy…while sales books and trainers are saying, sell solutions, IT doesn’t often appreciate this approach.  They earn their keep by being the brains behind solution architecture and look to vendors for discount pricing on product.  That doesn’t mean they are qualified or able to deliver business value – but their value depends on it and they know it.  If this is true, separating IT from business decision makers is an important part of the sales process.  Giving IT in-depth technical knowledge (which generally must come from the technical side of the provider) makes sense, and then preparing business value for conversations that will take place with economic buyers and business level influencers.  Both are required in order to sell higher level architectural solutions.

Today’s agenda takes us to the next step of preparing that messaging.  Everything from opening meetings, to introducing your offerings, to discovery and proposal delivery, must be designed with marketing in mind.  Documents don’t sell anything – messaging is key.  You can choose the be the low price solution, or you can show up with million dollar messaging.  It’s always your choice.

© 2011, David Stelzl

Here are some ways to increase fees without penalizing your clients.

  1. Measure risk – Impact and likelihood, of a disaster, jointly place a value on it and set your fee accordingly.
  2. Look for problem areas that consistently show up across the companies you do business in.  Come up with solutions and use this material to call higher.
  3. Trade product gross profit for recurring revenue.  This builds annuity rather than a one-time transaction.
  4. Use Assessments rather than traditional open-ended questions to discover larger opportunities.
  5. Be willing to give away assessments in order to reach higher-level people in the account.  This leads to selling larger value priced deals.
  6. Propose options to build adjacent business in the accounts you are already working.
  7. Build greater expertise into your consulting group to offer more complex solutions
  8. Develop presentation skills that appeal to the executive level.  You’ll find that you are worth more to them than the next guy.
  9. Pass up smaller transactions to create more time for complex deals that offer greater reward.
  10. Develop stronger marketing programs to position your company as the expertise leader, rather then the low price leader.

© 2011, David Stelzl

What IT Wants

October 20, 2010 — Leave a comment

What does IT want?  A vacation…  Here are ten other possible answers:

1. Higher pay

2. A better chair

3. A new laptop – probably a MacBook Pro

4. Add to it a new Ipad for personal use

5. Education – on technology, to improve the resume

6. Recognition

7. A promotion

8. Better stuff to oversee

9. Better stuff to oversee with

10. A new job that just is…better.

So why are we spending some much time negotiating prices, selling ROI, or talking about risk and liability?  IT doesn’t really care.

Listen in as Randy Sklar, president of Sklar Technology Partners and recent present of his regional VTN chapter interviews me – this clip was made specifically as a follow up to a very successful, decision maker level, educational seminar.  The event received strong sponsorship from companies such as Zenith Infotech – one of the only managed services companies I know of that financially supports this type of event.

© David Stelzl, 2010

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