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In an economic downturn, Windows shops spend to save

Christina Torode, Editorial Director
An economic downturn doesn't necessarily break IT budgets. Sometimes it's a chance for Windows managers to get their creative juices flowing and boost efficiencies using new technology that can help save time and money.

For many, it means a chance to cut costs by going green, an opportunity to roll out new virtualization projects, and even a chance to get more from underused staff and infrastructure that's already in place.

Chris Lehr, network administrator with a medical center in the southwest, is among those who are going green.

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When the warranties ran out on its servers, IT proposed a plan to cut its number of servers from 20 down to four by adding VMware Inc.'s software for server virtualization. The center is also looking at Citrix Systems Inc.'s XenDesktop for remote desktop virtualization.

"Going green is a big part of the protocol…using less electricity and air conditioning," Lehr said. "By the time we're through it will be just as cheap to virtualize as to buy 20 new servers. So in the first year we'll break even, but next year we'll recoup some of the money we spent."

Across the board, top executives are telling IT to find ways to save money. And, to do so, IT shops are shoring up outdated infrastructures, says Bob Menning, practice lead of the application delivery team at systems integrator Inacom Information Systems in Appleton, Wis.

"The procrastinators are finally paying the piper," Menning said. "Bosses are coming to [IT] and saying cut our number of servers and desktops. But they don't have the technology to do it."

Many companies were waiting to install new servers in 2009 or 2010 to take advantage of virtualization technologies. The dates have been moved up. "I'm seeing it in a lot of different areas, where companies just don't have the right infrastructure in place to move forward with projects meant to cut costs and are being told to speed these projects up," Menning said.

As a result, a project that may have cost $50,000 or $80,000 is now costing $250,000 to get the right infrastructure in place quickly, he said.

Heads are not rolling, nor is spending disappearing at Casie Protank, a company that specializes in cleaning up toxic waste sites. On the contrary. Dan Lein, a systems administrator and facility manager at the Vineland, N.J., company, said he already spent a bit more than usual to fix a licensing problem, update end user computers and install a new backbone and Web interface for different departments.

Up next is a look at some RFID tools for its trucking fleet.

At the same time, Lein said the company is shifting responsibilities to streamline information delivery and consolidate management tasks.

For example, one department in the company may be able to finish its particular job more quickly and then step in to help do some of the work handled by another department. The company will also consolidate all of the company's Microsoft SQL Server databases into one master database that will then be accessed by users through a Web interface.

With a project like this, Lein said that information is delivered quickly to users and that IT management tasks are simplified and more can be done with less staff. "We can serve a bigger client base with the people that we have," he said. "We avoid eliminating positions."

More of the same

Before the roller-coaster stock ride on Wall Street and the $700 billion bail-out for lenders, most companies were already spending with caution.

For many companies it will be business as usual because it's been a long time since the days of spending money like a drunken sailor, said Gordon Haff, an analyst with Illuminata Inc., a Nashua, N.H., consulting firm. Spending continues but IT is emphasizing projects with near-term results. One particular area of interest is projects that would replace the traditional fat client, whether that is through thin client technologies or virtualization, he said.

"Where you may see some pull back is projects that are long-term ones that have more speculative paybacks," Haff said. "Those projects that promise increased sales may be looked at more skeptically versus cost savings projects."

IT spending survey

Prior to the tumultuous market fluctuations of September and October, IT managers participating in a TechTarget spending priorities survey for 2009 identified the projects given the highest priority for the next year and which would be vulnerable.

Of the management initiatives taking place in 2009, 49% of the 1,166 IT managers who responded said the highest priority will be given to disaster recovery projects. Forty-seven percent said server virtualization would be a top priority, and 24% said Windows Server 2008 would be a top priority. Other initiatives with less traction were energy-efficient computing or green computing (18%), storage virtualization (18%), desktop virtualization (16%) and storage security (16%).

In August, 25% of IT managers expected no change in their budget for 2009 over 2008. About 21% said they expected to see it increase by 5% to 10%. Another 16% of managers said they would see an increase of more than 10%, and 14% said they would see a budget increase by less than 5%.

About 10% said they would see a budget decrease of 5% to 10%. Roughly 7% would see a decrease by less than 5% and another 7% of managers said they would see a decrease of more than 10%.

If the economy had not headed south, about 59% of IT managers said their budget would be growing more than it is. About 57% of IT managers said the economy was a "significant" factor in determining their IT budgets.

Margie Semilof, Senior News Director, contributed to this story.


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