10 Real Cost-Cutting Technologies For 2009

It's no secret that customers are reluctant to part with their hard-earned cash during the economic downturn, but that doesn't mean IT sales will come to a standstill. Savvy solution providers will show that by spending a little now on the right technologies, customers will actually save down the road and gain a competitive edge over their rivals to boot.

With that in mind, CRN has identified 10 real cost-cutting solutions that will play big in 2009. The list features technologies that offer proven ROI with real-world examples of customers that scored huge savings.

Ultimately, these technology investments will provide the tools customers need to survive in this economy.

Data Center Automation

5 Key Players: BMC, CA, HP, IBM, mValent

Applying automation to the enterprise data center is an important part of running mission-critical applications and making sure servers and storage devices are utilized to the fullest extent. And it is the kind of business where solution providers can prove their importance to customers, said Bob Schwartz, president of Robert Mark Technologies, Cottage Grove, Minn. "When times are good, a lot of glitzy applications get purchased, but people don't think of boring things like automation," Schwartz said. "In the last recession, we saw a lot of interest. Now, with the economy falling, we're back in the same situation."

Real World: Robert Mark Technologies automated the runbook of a money-transfer application for a banking customer, and saved it an initial $240,000 per year related to the cost of two full-time contractors who manually monitored the application.

Document Management

5 Key Players: eCopy, HP, Laserfiche, Oki Data Americas, Xerox

Print and imaging VARs that aren't raising their game to master document management are not only missing out on a key aspect of the "total solution" but also ignoring one of the most important cost-cutting technologies for today's office.

That's probably why big players like Xerox, HP, Ricoh and Oki Data Americas have been fine-tuning their offerings and why mavens like Laserfiche and eCopy and newcomers like GoScan are attracting VARs left and right.

"We had a very successful year with Laserfiche and, going forward, we are heavily focused on [their] value, particularly with regard to process automation," said Kevin Smith, senior vice president of One Source Document Solutions Inc., a Greensboro, N.C., solution provider.

Real World: One Source used Laserfiche technology to help Iredell Memorial Hospital save $40,000 per month in write-offs from misplaced records.

Managed Services

5 Key Players: Kaseya, Level Platforms, N-able, Nimsoft, Zenith Infotech

It sounds odd, but there aren't many MSPs using the term "managed services." Rather, they market themselves as "outsourced IT departments." The terminology might be complex, but the concept is not: helping customers lower costs by monitoring and managing their IT infrastructure. In most cases, customers pay the MSP a recurring fee to take care of their IT needs. Because MSPs have more control over both their resources and the customer, the end user's costs are typically less than the traditional break-fix model.

"It's pretty easy. We take responsibility for their network. My analogy is if you had a mechanic living in your garage, your car would run forever," said B.J. Farmer, CEO of CITOC Inc., a Houston-based MSP.

Real World: PFM, a property services company for the petroleum industry, outsourced its network management to CITOC and is saving about $1 million each year.

Open-Source Software

5 Key Players: Digium, MySQL, Novell, Red Hat, SugarCRM

As the economy worsens, it's not surprising that more companies are looking to open-source software as a way to cut licensing costs. But according to VARs, open-source software has matured to the point where some products offer functionality that surpasses proprietary software.

Ron Bongo, CEO of Corra Technology Inc., a Montclair, N.J., Linux solution provider, is seeing more companies move to applications like Openbravo (ERP), ProcessMaker (business process management) and SugarCRM, as opposed to just operating systems and databases. "Many open-source applications are not only viable alternatives to proprietary ones, they've also added new functionality, such as social networking capability, that doesn't exist in commercial software," he said.

Companies are starting to take open source seriously, said Frank Basanta, director of technology at Systems Solutions, New York. "My first suggestions to customers are things like open-source file servers, print servers or FTP servers. We've had FTP servers running for two years without a reboot," he said. "There is some basic input you have to learn, but when you're administering something and don't have to worry about it, that adds up to major cost savings."

Real World: EUS Networks closed a 1,000-port VoIP deal based on Digium's Asterisk Business Edition for $250,000; a comparable Cisco solution was priced at $1.5 million.

Power Management

5 Key Players: APC, Belkin, Eaton, Liebert, Tripp Lite

Providing solutions in power management technology for cooling and electricity in the data center can lead to a high-margin product and services business. Five Nines Technology Group, Lincoln, Neb., first analyzes every device that draws power and documents the business case, said Ben Pankonin, director of business development. For power management, Five Nines mainly uses products from APC and Liebert, often working the technology into a broader solution sale. "We often have the opportunity to explore energy savings at the time that clients are looking at other projects," he said. But, he warns, "Do not pretend to be an HVAC specialist. Instead, partner with mechanical engineering firms and become a valuable resource for your client."

Real World: Five Nines cut server power consumption for a community bank by more than 50 percent by combining virtualization and APC power management technology.