Marvin Reem, CIO at Bob Jones University in Greenville, S.C., has been deploying new processes based on the IT Infrastructure Library specifications as a means of improving the efficiency of the school’s IT operations. The ITIL implementation has delivered cost savings, Reem said. But he added that he already has started looking at additional ways to cut expenses.
One cutback involved dropping a plan to buy a new service management tool as part of the ITIL implementation, according to Reem. He said he is considering other steps as well, as part of an effort to keep the focus on IT services that “really aid the organization.”
One data-point does not a solid case of reasoning sound. Nonetheless, the question of what all this financial melt-down means for IT spending keeps coming up. I’ve been in the press release quote dance a few times where vendors wanted me to say something along the lines of “what with IT managers in soup-lines, this software is looking like a good garnish, much cheaper than the surf and turf the competition is try to sell.”
There is something to this CheapITIL sentiment, though. Call it marketing coat-tails if you will. The Big 4 IT Management vendors have done a smash up job of selling the market on the idea of BSM, ITIL, and a process, disciplined intensive approach to keeping all those blinking lights green. There’s a nice, tasty looking goal setup – never mind how real or unreal it is, that’s a different point.
Upstart vendors like Zenoss, Hyperic (though, they currently prefer targeting web-ops, not enterprises), Groundwork have been sneaking into the lower areas of “enterprise IT management.” They’ve done a good job of segmenting themselves into the “affordable” slot. It’s the opposite of the segmentation the Big 4 have done, e.g., “Oh, I’m sure IBM is fantastic. It’s just too big for my company.”
As people freak-out about IT spending then, the first logical thing to do is to down-segment yourself into the cheaper slot. The Big 4 have segmented out their affordability slots based on business size – SMB vs. enterprise – instead of price. Thus, a current Big 4 customer has the chance to “downgrade” to a smaller business categorization, not just price. Of course, you can always call up your sales rep and tell them you want a cheaper price.
The question is then: how well are the IT Management up-starts positioned to be that last gas station if spending drives into the desert? There’s more than just the open source gang here: Managed Objects, PacketTrap’s Perspective, and others.
Disclosure: IBM, BMC, Zenoss, Hyperic, Groundwork, and Managed Objects are clients.
Photo from PaleOnTour.
Michael -Very interesting topic.
Clearly the financial melt-down will have an impact on IT spending, perhaps it's too early to say exactly what impact, although your peers are already announcing their (http://blogs.zdnet.com/BTL/?p=10403) estimates for '09.
Let me broaden the topic just a bit – had we skipped September all together, and the entire financial mess, companies (and universities) would still be looking for a better way to spend their IT management dollars. They are tired of the big ticket price from the big 4, and they're looking for a management solution that better fits their budget and overall initiatives.
We announced a program (http://www.cittio.com/fedup/) in September to provide IT managers and CIOs with an alternative; a program that will enable them to save some IT dollars for innovation, instead of having those dollars locked into something they never use.
Take a look at our program – we'd like to hear what you think. And if in fact spending drives into the desert, we'll be positioned along the way as the station of choice – and we won't gouge them.