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Top IT channel topics for 2009

Cloud computing and virtualization will continue to be subjects of channel chatter, but the economy and depressed IT spending will be the top topics in 2009.

As expected, cloud computing and virtualization dominated the headlines and channel chatter in 2008. For 2009, it is the faltering economy and its effect on technology spending that kicks off the year as the biggest single story in the IT channel.

Channel partners must be flexible and also have a either a depth of expertise in a given area or a breadth of offerings to stay competitive, said Dan Mori, vice president of FusionStorm Inc., a San Francisco-based managed services provider. To survive and prosper, value-added resellers (VARs) need to have a strong specialty either in a vertical niche or in a hot technology, he added.

So what will be hot? Any technology -- including virtualization -- that provides a strong cost savings to customers in a tough economic climate.

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"Managed hosting and managed services will remain viable because the [demonstrable] cost savings to companies is very strong," Mori said.

Channel partners building this imanaged services infrastructure from scratch will have trouble gaining traction "because of the cost of getting started," he said. "But those who already have good, reliable managed hosting and services should do fine."

As for verticals, it helps to read the headlines. With home prices falling, residential construction should be fallow, although promised government spending on infrastructure projects means that IT providers with ins in those areas might prosper. And it might be prudent to steer clear of the automotive industry.

Forecast remains cloudy

In cloud computing, Microsoft started to put some details around its rather vaporous verbiage at the big Professional Developers Conference in October when it laid out its Windows Azure development platform. But the business model -- and how partners will be compensated for participating (or how they will have to compensate Microsoft for participating) -- remains largely a mystery.

Elsewhere in the stratosphere, IBM continued to woo partners and customers to its own cloudscape and will keep up the pace in 2009.

"Right now, there's a lot of interest in the consumer market and in small businesses where the [Software as a Service (SaaS)] model is taking hold," said Matt Porta, who heads up technology strategy consulting for IBM Global Business Services.

But IBM, true to its roots, focuses on business users and sees large enterprises starting to express more interest in cloud computing. What's attractive is the notion of the cloud as a black box. Cloud computing removes a lot of technical complexity, or at least shields users from it. But this is not an either-or proposition. The fact that companies embrace the cloud "does not mean that individual data centers will go away," Porta said.

Over time, companies that have adopted the SaaS rental application model will look at other models as they emerge and as they rethink their own cost structures. It may turn out that, over time, it's more efficient for them to host applications on their own internal cloud … or not.

IBM hopes to cover all these bases, wooing developers to build their own clouds with IBM tools or to have IBM actually host them itself.

As Microsoft tries to build out its own cloud infrastructure and figure out a way to bring its partners with it, Google continues to entice paying customers for Google Apps and other non-search products. The results are unclear. Whatever money Google makes on it is immaterial to its business and is not disclosed. While there are undoubtedly millions of registered users, there is considerable skepticism as to whether business users have adopted Gmail or Google Apps as their business-standard applications.

Desktop OS strife continues

Vista adoption, or lack thereof, continues to be a big subject. Microsoft steadfastly maintained that Vista surpassed expectations, and yet most partners reported that customers prefer Windows XP, even on brand new Vista-capable hardware. Microsoft even softened its stance on Windows XP white boxes enough to guarantee that system builders can keep shipping those boxes well into mid-2009. With Windows 7 expected late in the year (or more likely early 2010), it remained clear that many customers would just as soon skip Vista and go right to its successor.

Other than the Windows desktop kerfuffle, there was considerably less ink spilt on the Linux desktops this year than previously, although Red Hat and Canonical continue to push for adoption.

IT services slowdown?

Big services and systems integration companies took it on the chin as IT spending fell in 2008, and that trend also looks likely to continue into 2009.

At year's end, Unisys said it would cut 1,300 people -- about 4.3% of its employee base -- and institute other cost savings. Many saw this as a sign that whatever big, open-ended services jobs were left out there would end soon.

"We've probably seen the last of those gigs," said Christina Richmond, research manager for IDC's Hardware Channels research.

But all is not lost: Richmond sees continuing demand for "as-needed services," like help desk support.

"Unisys does ongoing services for Dell," she said. "Their people around the globe do maintenance for Dell, and those kinds of things will be bread-and-butter for services companies going forward."

Consulting itself will continue, but it will consist of more short-term jobs.

Richmond's IDC colleague Matt Healey concurred. Providers that can implement services that show near-immediate cost savings or reductions should do fine, said Healey. "Any project that says, 'I'll take you from 40 data centers to three, and your power budget next month will fall this percentage,' well, those jobs will happen," he said.

It's all about return on investment, but it "has to be hard-cost ROI," not just the hazy promise that people will become more efficient, he added.

Healey would not write off open-ended services and consulting engagements forever. "It's a bad idea to say anything is long gone," he said. "A few years ago we talked about the death of the mega deal and outsourcing, and that wasn't true. But within the services segment, economic downturns cause project-based services to contract faster than other services."

Services companies may in fact pick up business where customers try to wring more life out of existing hardware and software rather than update it.

"You'll see companies running X86 servers that are coming off maintenance after three years, and they'll see if they can extend their life," Healey said, adding that they may ask a service company to write a support contract that will keep those servers running an additional year or two.

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