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Innovate in 2009 Using OPEX not CAPEX Funds

By January 12, 2009Asigra Inc

To say that organizations are approaching 2009 with more than just a little apprehension would be an understatement. Scandals are rocking the financial markets on an almost daily basis. There is the looming threat of new legislation in 2009 which will make it more expensive to conduct business going forward. And, in the US, nearly 700,000 individuals in the private sector lost jobs in the month of December alone – Yikes! That leaves those left in organizations trying to figure out new ways to deliver the same amount of value and services with less money and people and nothing is more clearly in the sights of businesses than lowering their IT costs and keeping them under control.

By way of example, I recently received an email alert from the Pennsylvania State Employees Credit Union (PSECU). Thankfully, the credit union is on solid financial footing, added $28 million to its reserves in 2008, and has over $312 million in reserves with no exposure to subprime lending and option ARMs. But that does not mean it is about to spend a bunch of money in 2009 as it is looking more to survive than thrive in 2009. To do that, PSECU is lowering its interest rates on deposits, trimming its 2009 budget in terms of salary increases and will not expend any money on new technology unless it is required by regulators or adds to member security.
 
For the most part, I agree with all of the steps PSECU is taking but wary about the last one. I’m certainly not suggesting that PSECU go out and spend money on new technology like a drunken sailor. But to stop spending money on new technology, even in a tough economy, carries its own set of risks. It could put an organization behind the 8 ball when the economy picks up plus make it more difficult to lower costs should the recession continue into 2010 as some economists forecast. But part of the issue that organizations such as PSECU grapple with is how to bring in new technologies without massive capital expenditures.

In this economy, probably one of the best ways to avoid this cost is by identifying IT providers that give organizations the option to eliminate the need for upfront capital expenditures (CAPEX). Rather, they should bring in technologies where organization can use their more stable, but flexible, operating expenditures (OPEX) budget.

One way organizations can accomplish this is to look for providers who offer flexible ways of leveraging state-of-art technology either as rental licensing or as a service for which flexible operating expenses can be used by organizations that are unwilling or unable to invest large upfront capital expenditure but have a pressing business need. A logical place for any organization to start thinking in terms of OPEX budget is with data protection – especially as data is growing exponentially and upgrading the storage infrastructure and protecting the company data is not an option.
 
I say this because despite all of the innovation and changes the last few years, backup is still consistently listed as on the number one IT problem in organizations. Data  protection that is available as a service has evolved significantly – both in the features it offers, how it is priced and its maturity  – so organizations can now reasonably and confidently introduce it into their environment with all of the features they need using funds in their OPEX budget without fear of losing data or disrupting their current operating environment.

Asigra Televaulting offers its backup software as a service and licenses it on a per GB basis through its vast network of Managed Service Providers. Further, it includes many enterprise backup software features as part of its core offering, such as agentless backup, continuous data protection (CDP), compression, deduplication, disk-based backup, encryption and support for multiple applications like Microsoft Exchange and SQL Server, just to name a few so organizations immediately gain access to these features.
 
For enterprises that want to manage the backups in-house and do not want to leverage a service provider for any reason, Asigra offers its platform in a rental licensing format – which can be converted into a perpetual license at any point in the future. Regardless of which path an organization selects, the organization can eliminate the upfront CAPEX costs associated with implementing a new data protection product while leaving IT department some flexibility to innovate even when its purchasing hands are partially tied.

I respect every organization that is trying to keep its costs in-line and not spend money unnecessarily. But to stop innovating and bringing in new technologies in 2009 is a risky proposition short and long term. That is not to say innovation is not going to be easy in 2009 but neither is it impossible. Organizations that utilize their OPEX instead of CAPEX funds to procure data protection solutions can meet both their tactical requirements to keep their costs under control while still bringing in new technologies that address existing problems while better positioning them for the future, regardless of what that future may hold.

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Jerome M. Wendt

About Jerome M. Wendt

President & Lead Analyst of DCIG, Inc. Jerome Wendt is the President and Lead Analyst of DCIG Inc., an independent storage analyst and consulting firm. Mr. Wendt founded the company in September 2006.

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