By 2012, 20 percent of businesses will own no IT assets. Several interrelated trends are driving the movement toward decreased IT hardware assets, such as virtualization, cloud-enabled services, and employees running personal desktops and notebook systems on corporate networks. The need for computing hardware, either in a data center or on an employee’s desk, will not go away. However, if the ownership of hardware shifts to third parties, then there will be major shifts throughout every facet of the IT hardware industry. — Gartner Group
This trend has been underway for a while. Data centers have shrunk to server rooms. Server rooms have been virtualized to a rack or two. Desktop workstations are now laptops and tablets. The price to equip your workforce has dropping and the capital budget has shrunk with it. Licensing of enterprise suites is also feeling the tremors as paying in an on demand mode is becoming a core part of the vendor conversation.
This shift in lowering capital expenditure frees up capital. How this capital is used is where the uncertainty and variability lie. Done poorly, much of this capital will be accounted for with an increase in support costs to accommodate a range of new needs. Done well, further increase in support costs will take place as learnings from best in class companies have shown it is possible to drive to razor-thin workforce support needs.
What will certainly increase is the shift in necessity for very strong vendor selection, vendor management, and contract negotiations. More to the point, this is all pointing to strong partnerships which will be forged with vendors. Driving to lowest cost may help you in the very short run, but as these trends play out, lowest price will be less important than reducing complexity and risk mitigation. The stronger the partnership, the more you will be able to do, and the greater your value-add contribution to the enterprise.
While you will most certainly have many partnerships in place now, how will they be stressed by the complexities of the trends underway. By fast forwarding five years, you will find your partnership needs different from what they are now. Hardware and software asset supplying vendors will have to pick up their game to compete for your business. The future will not necessarily be won on the balance sheet but on overall value delivery. It’s early enough to shape your current partnerships to meet this need. It’s also early enough to look for new partners with a better value proposition. But make no mistake, your partnerships in five years out will necessarily differ than those of five years ago.
