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Recession Recovery Trends in IT: Addressing End User Companies' Focus on ROI and TCO

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January 30, 2012

Recession Recovery Trends in IT: Addressing End User Companies' Focus on ROI and TCO

By Mae Kowalke
TMCnet Contributor

With ITEXPO East 2012 just around the corner, TMC CEO Rich Tehrani sat down with Mark Ricca, Senior Analyst and Partner at IntelliCom Analytics (News - Alert), to get a preview of what the professional services and business research provider will be focusing on at the show.

Ricca, who will be moderating two sessions (one on HD videoconferencing and the other on hosted and managed services), talked about a range of marketplace trends, including cloud services, video and social media. Unsurprisingly, effects of the recession came up several times.

For example, Ricca said, many end user companies are focusing much of their energy on return on investment (ROI) and total cost of operation (TCO), as they operate with an “if it’s not broken, don’t’ fix it” mentality.

Two main trends are beginning to turn around this attitude as the economy recovers: an aging installed base of IT products which need replacement and productivity benefits that can be realized by upgrading.

The full conversation with Ricca is below.

What was the most significant technological advancement in the past 12 months and why?

I believe there were three significant advancements.

First, the wide range of cloud-based offers has transitioned from over-hyped concepts to a viable set of options. Providers of cloud-based offers have improved the richness, security and compliance capabilities of the offers. They’ve also done a better job in identifying, qualifying and articulating the characteristics and objectives of organizations that can realize tangible benefits from these cloud-based offers. This helps providers target realistic prospective customers, and customers to determine if they are good candidates.

Second, significant progress has been made in the video offers technology segment. For many years, video offers were viewed as ‘an expensive cure for a non-existent disease.’ The need for cost-effective collaboration has changed that situation. Video solutions and management services play well to satisfying these needs. Today’s Video offers are broad ranged, cost effective, easier to use, reliable and more network efficient.

Third is the Apple (News - Alert) juggernaut. No other company in the past 10-plus years has had a greater influence and impact on personal and business buyer behavior. Obviously, much of the credit belongs to Steve Jobs (News - Alert). He will be missed. However, Steve Jobs built a great team that will continue innovating in his absence. Stay tuned for continued developments.

What has been the biggest trend in your market segment and how is it impacting your customers?

The difficult economic conditions of the past four-plus years have caused end user companies to intensify their focus on two financial areas when selecting an information technology product or service solution: return on investment (ROI) and total cost of operation (TCO).

If an information technology solution or service doesn’t shine in these two areas, the chances of selection are dim. The take-away for providers is to pay careful attention to proving the ROI and TCO of their offers.

What is the biggest challenge facing your customers today and how is your company helping address that challenge?

Again, due to the difficult economic conditions we’re facing, some end user companies are operating with the “if it isn’t broken, don’t fix it” mindset. A couple of factors are helping to change this attitude.

First, the installed base of information technology products is aging, and a growing portion is experiencing reliability problems. This will require replacements.

Second, today’s information technology products and services can positively improve productivity, and this is something that appeals to most end user companies. It’s a more difficult, but realistic opportunity sell. 

At IntelliCom Analytics, we’re attempting to enlighten end user companies about these facts, via white papers, lunch and learn briefings, webinars, presentations at ITEXPO (News - Alert) and hands-on consulting engagements.

How has the cloud impacted your business? How has it impacted your customers?

The impact is both positive and negative. I refer back to my previous comments.

Will cloud-based communications expedite the end of the premises-based PBX market?

In the case of public and hybrid cloud, to some degree…yes. We’re seeing a lot of private and hybrid cloud adoption

Cloud-based solutions are not for every end user organization. As previously mentioned, ROI, TCO and obviously “solution fit” will be the major determining factors for whether a cloud- or premise-based solution is best for the customer. 

What approach has your business taken to social media? If you have implemented a social media program, have you been able to evaluate your program’s success? 

We’re “dabbling” in the area of social media. No conclusions regarding success have been reached yet.

Does every business need a social media presence? Why or why not?

I believe most businesses should explore the use and value of social media, and draw their own conclusions regarding ROI, TCO and softer benefits. Social media are here to stay, and shouldn’t be ignored.

With Microsoft (News - Alert) touting tight integration between its mobile and desktop OS, can it become a major competitor in the enterprise mobile market?

In my opinion, yes. Microsoft has experienced some challenges and choppy waters in this area, but they’re not a company to be underestimated. When they direct their resources and marketing clout to something of importance, they rarely fail.

What can attendees expect from your company at ITEXPO?

IntelliCom Analytics is delighted and honored to have the opportunity to moderate four panel sessions at ITEXPO East. Attendees can expect us to measurably contribute to making these sessions informative, insightful, useful and enjoyable. 

Make one technology prediction for 2012 and consider its impact.

Similar to past years, stay tuned for a wave of mergers and acquisitions. Obviously, constant and effective R&D is a critical success factor in this industry. The pace and expense of R&D is troubling a lot of provider companies. Mergers and acquisitions can help in many cases. 

When making decisions on information products and services, end user companies should consider the implications of their provider merging or being acquired.

To be held Jan. 31- Feb. 3 at the Miami Beach Convention Center in Miami, Fla. ITEXPO East 2012 is the world’s premier IP communications event. For more information on ITEXPO registration click here. Stay in touch with everything happening at ITEXPO… Follow us on Twitter.

Mae Kowalke is a TMCnet contributor. She is Manager of Stories at Neundorfer, Inc., a cleantech company in Northeast Ohio. She has more than 10 years experience in journalism, marketing and communications, and has a passion for new tech gadgets. To read more of her articles, please visit her columnist page.

Edited by Rich Steeves

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