Investment paralysis in IT spending

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This article appeared in the August 2014 issue of CRN magazine.

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Investment paralysis in IT spending

The problem I have with my smartphone is a bit like the challenges facing IT suppliers as more clients mull a move to the cloud. It’s a long bow to draw, but bear with me.

It’s high time I replace my ageing iPhone 4S, but I’m in a state of product paralysis brought on by too many options. Do I buy a new model now or wait for the much-anticipated iPhone 6? Should I switch to Android? What about the case for Windows Phone?

My MacBook is looking a bit old, too. Is a MacBook Air in order? Or what about the Surface Pro 3, which was a talking point at the Microsoft World Partner Conference, thanks in part to the on-site deals selling it for $400 cheaper than the Australian retail price.

The technological paralysis also extends to cloud services. I need to clean up my sprawling online life that stretches across Dropbox, Google Drive and Evernote, but don’t know which horse to back.

Now, to crowbar this into my analogy about enterprise IT. Resellers regularly tell me that customers are procrastinating over investing, and the cloud is the major factor in the delays. Check out the financial reports of some of the listed players and you’ll see that stalled projects are a common theme.

Over lunch with the CEO of a leading Sydney systems integrator last month, he agreed that his customers were weighing up cloud, which was impacting their capex decisions. They know they need to invest, but aren’t sure what is the future-proof decision.

It’s not that buyers aren’t investing at all. In fact, some resellers are successfully selling stopgap solutions to procrastinating clients who won’t commit to much-needed full infrastructure refreshes.

While it’s easy to get swept up in the “cloud will kill on-premise” hype, two things make me want to resist the spin. For one, the financial advantages of cloud – the fact it is opex not capex – can also be delivered on-premise through leasing arrangements, and I know have spoken to several resellers now pushing this option. 

And two, the hardware manufacturers are not about to just give up and let public cloud providers win. The server and storage companies will use whatever leverage they have to compete. Innovation in infrastructure is seeing prices fall and performance increase. The giants of IT will not give up without a fight.

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