Solution provider takeaway: Solution providers should position their storage services offerings to take advantage of upcoming spending related to Congress' economic stimulus package.
Solution providers have been feeling the impact of the general economic meltdown for a while now. Forrester, for example, estimates that IT spending will decrease 3.1% in 2009 over 2008. It's tempting to look at declining sales and assume the worst. Yet, the situation for storage services is not dire and, in fact, is primed for a quick uptick. Ironically enough, the reason is the stimulus package that was passed earlier this year by Congress.
Hidden in the fine print are dozens of new regulations, many aimed at financial institutions, but some that impact business generally. One notable example calls for laws to encourage companies to "buy American." However, within the context of a global economy, what constitutes "American" is not very clear. Presumably, this will mean that products that do not pass the "American" sniff test will be subject to some form of government-applied leverage, possibly in the form of longer depreciation schedules or other tax penalties. Such regulations will make it imperative that companies track things like inventory to a finer level of detail than ever before.
Another example of the new stimulus regulatory climate is the focus on environmental impact. While the new bill has not mandated carbon management, it does set the stage of such upcoming regulations by imposing new standards on things like power plant emissions. It is virtually certain that these will lead to a new carbon market in which every business will be forced to play. And while the outcome of cap-and-trade policies being debated in Washington is uncertain, it is certain that tracking power consumption, managing that consumption and then reporting it will ultimately become a major concern for many businesses.
These are two simple examples (there are many others), but the net is that businesses will soon find that they are being forced to track more, report more and manage more in order to operate in what is likely to be a semi-socialized market environment. This is bad news for business, but it is very good news for storage services.
All of this new tracking, often with prolonged periods of latency, means that customer storage requirements are primed to increase dramatically. And record keeping is likely to become more complex as more attributes are required for each entry. Remember "buy American"? What happens if an audit requires some form of proof that what is being bought is predominantly American?
Three stimulus package action items
How can channel pros benefit from this rapidly developing need?
First, know the regulations. While much of what will come out of the regulatory process has yet to be developed, there are very good hints in the stimulus bill itself. Know the implications and be prepared to help your customers through the new maze. The first step to credibility is to be able to interpret the new rules and show how your services map to the new regulations.
Second, be prepared with "stimulus response" solutions that incorporate not only the storage services, but audit support and other data management bells and whistles. And, although the term is becoming somewhat threadbare, marketing such services as "stimulus response" solutions makes the intent completely unambiguous. These new services can include stimulus compliance audits, regulatory compliance records storage services and real-time business telemetry storage for reporting purposes. As the new market evolves, managing the storage assets will become at least as important as having the assets ready in the first place.
Finally, remember, the rules will apply to you as well. Knowing the regulations as they develop and positioning your services to match enables you to prepare your own business for what is likely to be a much more intrusive government presence.
The bottom line is that the stimulus package is essentially a zero-sum exercise, wherein the government imposes new burdens on business in exchange for new incentives. Like any government plan, there is a difference between the benefits and the costs, and this is represented by the overhead that the government adds to ensure that its rules are being followed. Storage is an integral part of this new dynamic, and related storage services can represent a new and growing opportunity for the savvy solution provider.
About the author
Mike Jude is co-founder of Nova Amber, a consulting firm specializing in business process implementation and technology.
