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Servers May Be (Relatively) Resistant To The Downturn

Surveys show that some IT spending will continue unabated, with servers being the prime example.
Surveys show that some IT spending will continue unabated, with servers being the prime example.The world is not ending (we'll assume, especially as the alternative leaves us little to talk about.) That means that some IT spending must continue, to support on-going business operations (there being no way to go back to paper methods) and to position the enterprise for the eventual upturn. That means that certain kinds of IT spending will probably increase during the downturnespecially servers.

And if you think I've just whistling past the graveyard, I'll now quickly pointy out that there are those who agree with me. One forecast indicates that the main areas likely to experience spending increases during 2009 are servers and virtualization. Of course, virtualization allows cost cutting because you have to virtualize multiple smaller servers onto one big one. So in such cases spending on servers actually goes up momentarily, since you have to buy bigger servers to virtualize onto.

(If you are not currently on the virtualization bandwagon, don't be embarrassed. As this blog explains, it's of benefit mostly if you have more than 50 servers.)

Meanwhile, more virtualization will also mean more spending on IT infrastructures, since virtualization puts more demands on LAN bandwidth and storage. It also triggers changes in disaster recovery spending, since virtual servers have a fail-over architecture built in. And as virtualization spreads, the IT department will need more specialized management tools.

Green IT initiatives (which often involve servers) are also likely to experience increased spending, primarily because little was previously spent on them and because management equates them to cost-cutting through lower power consumption. An IDC survey found that 47 percent of the respondents will be buying new applications to implement green initiatives, while 37 percent will be hiring consultants for that purpose.

Admittedly, another IDC survey found that, faced with the current downturn, 38 percent of small firms and 42 percent of medium-sized firms were contemplating a reduction in IT spending. But these figures are reminiscent of weather forecastswhere, if the chances of rain are less than 50 percent, it probably won't rain. Both figures, you'll note, are less than 50 percent, indicating that most SMB IT departments not anticipate withering away.

Indeed, while most SMB respondents whom IDC considered to be "pragmatists" were strongly concerned about the economy, fewer than half of the "forward-looking" firms were as concerned.

In all probably, spending will continue in areas where benefits are clear and will suffer in others. And that's probably the way things should always be, during a downturn and otherwise.


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