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Will your suppliers prosper this year?

In my last entry, I asked you to examine your organization. Is your company focused and ready to prosper this year? If not, you still have some work ahead of you on that front. Go back to my last post and use that to help you get focused. Those of you who already have the focus can now turn your attention to your suppliers. How are they going to do this year? How can you know?

The first thing is to understand what their debt is. In this industry especially, debt is bad. In this economy, it is quite possibly the kiss of death. Make sure that your suppliers have no long term debt or if they do, that it is manageable. This allows them not only to survive the tough economic times but also to help with one of the key problems right now: getting credit. Spectra Logic announced its own financing program. I am sure others will follow suit.

Next, ask yourself whether your suppliers have a product that is going to solve the problems that people are going to pay to solve THIS year. I call these instant ROI projects. In this economy, expenditures cannot be justified over the course of three years. (Unless you’re in Congress, in which case you can pass a spending bill and call it a stimulus package. But I digress.)

Real businesses are going to invest in solutions that will lower their costs right now. Obvious examples of such solutions are the ones that reduce or eliminate the need to purchase other technology. Server virtualization is a great example. Data reduction projects — for example, those involving real-time compression solutions like those from Storwize or deduplication solutions from NetApp or Data Domain — are another example.

Power reduction and greening remain important but do not seem to be the key reason people are selecting solutions. If a project that will save money right now has a side benefit of power reduction, that’s great. However, in most cases, “green” has an ROI that takes years to deliver.

Finally, and often missed in a downturn, are solutions that can make your customers more efficient. They will be asked once again to do more with less; if you can actually provide them a tool that allows that to happen, you’re in great shape. Tools like those from Tek-Tools or VKernel allow customers to increase the utilization of what they already have in place. In storage, this could allow them to redistribute storage capacity to either increase performance or turn off shelves of unused storage as the result of a data reduction effort. In virtualization, this could be further optimizing their virtualized workload to make sure they are getting full value out of it.

As you get 2009 rolling, make sure you have suppliers in your portfolio that can not only survive but prosper right along with you. So, make sure they’re well-run organizations without a lot of debt or overhead, and make sure they offer technologies that your customers need right now to help them through this economic climate.

George Crump is president and founder of Storage Switzerland, an IT analyst firm focused on the storage and virtualization segments. Prior to founding Storage Switzerland, he was CTO at one of the nation’s largest storage integrators.

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