Monday, March 24, 2008

Managing in a tightening environment

I visited some customers in New Jersey last week. One customer asked me how I thought the economy would change the storage environment. I told him that overall people were not going to start suddenly to delete emails and Powerpoints to save their company money anytime soon. Therefore sooner or later folks are going to run out of storage again. If your IT department is trying to centralize storage in a tough IT spending environment it might become problematic to enforce standardization rules. If departmental budgets still exist, these departments may buy their own storage out of their own budgets. Security and storage standardization may go out the window as departments end up building their private islands of storage.

People seem to get protective of their own departments in a downturn.This may cause costs for the company to go up, but at the micro departmental level they can continue to spend if they are seen a a profit center, or revenue generating department. Most companies still view IT as a cost center and cost centers typically don't get budget allocation increases in a downturn.

So the decision needs to be made. Who will determine how to pay for growing storage requirements? This may cause more organizations to outsource storage to put these costs in the Operational Expenditure category, instead of the Capital Expenditure category. Accurately allocating storage and infrastructure costs is going to be difficult when so many departments share the current storage infrastructure.

There will probably be some loud arguments about storage costs in boardrooms starting soon.

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