Small and medium sized businesses (SMB) have been called the engine for our economy given their sheer numbers (more than 98% in Canada). It has also been observed that this constituency will be the leading edge of the economic recovery in large part due to their size and an ability to be more nimble and responsive to opportunities that a larger organization may not be able to react to. This sounds good in theory, but is it reflected in reality?

For the last 16 months, I’ve had the privilege of speaking directly with group of small business owners from varying industries across Canada. However, they should not be seen as representative of the “average” SMB. What potentially makes them unique is their conviction that strategic investments in technology have enabled their business success. As such, their experiences and insights have been enlightening.

The following (in no particular order) are key issues facing this group:

• Access to credit;
• Government stimulus programs which incent the wrong behaviours; and
• Stimulus programs which are more trouble to access than they are worth.

But while they acknowledge the challenging circumstances in which they are currently operating, almost all of them stated that the first 3 months of 2009 were incredibly healthy, in some cases their best ever quarter. It is through that lens that I give you this list of their suggestions (again, in random order) on how SMBs can best weather the current recession:

• Focus on becoming more efficient across the entire value chain, not simply making short term, knee-jerk cuts and changes;
• Manage costs and wrap services around your products where possible in order to extend your reach into the customer;
• Continue making investments in core competencies – now is not the time to let your quality slide; and
• Innovation = Survival.

So does this reflect what other smaller and mid-sized businesses are experiencing? Please share with us your thoughts, your current situation and most importanly your best practices on how to weather -- and thrive -- in this economic crisis.

Now it would be fun to just speculate about all the low-cost airline tickets, flat-screen HDTVs and second homes we’re going to pick up for cheap during the current economic downturn.  But as  you might imagine most buyers are finding a lot less of those sorts of bargains than they were hoping for right now.  And as a result there are a lot fewer purchases than sellers were hoping for.  All of this is reflected in the most recent consumer confidence rating of 25.

Assuming your personal consumer confidence is around a 25 you will need less time to dream about scooping up a tropical island in foreclosure.  So, with all that free time you can start thinking about the best spending habits for your company.  Many companies are cutting back on expenses, but still need to maintain and grow their businesses despite the macroeconomic conditions.  While one way to maintain or grow profits is to simply reduce spending another way is to streamline and scale your business.  Maybe you buy a new phone system that allows your inside call team to handle a higher volume or instead of traveling to one customer you purchase a service that allows you to build custom videos to send out to 10 clients in the same amount of time.

As  a part of an IT organization, big or small, what are you plans during this time?

·         Reduced Spending?

·         Smarter Spending?

·         Focus on time-savings (time does = money)?

·         Money savings?

·         Both? 

We’d like to hear what your plans are and what kinds of software you would most like to see us offering you today.

With apologies to anybody who ever read the Scarlet Pimpernel by Baroness Emmuska Orczy, set during the Reign of Terror following the start of the French Revolution. The story is a precursor to the "disguised superhero" tales such as Zorro, Superman and Batman. While bizarre as a reference I will try and connect it to the theme of this blog. Where are IT professionals looking for green content when they are purchasing?  Firstly, green is still very relevant – even right now. In work we did globally in December of 2008 we checked the value of green content.

Let’s play with some examples. In the biggest organizations in the US your IT professional’s peers are most looking for green content in the following places:

All hardware purchases:

• The vendors sales person and sponsored seminars
  
• Data Center environments: Technology print, search engines and vendor events
  
• Laptops: Technology information websites, industry conferences, vendor events, vertical industry publications, sponsored seminars and microsites

In truth green is a significant issue and requires some real depth of information. Green is important and it is something that is bringing your colleagues to events or is being brought up in sales conversations.  IT professionals are seeking conversations about green, not short snapshots of green content. The implication here is quite simple – Green matters and it matters enough to drag your behind to an event or organization.

In another global study at exactly the same time (Dec 2008) IT professionals told us what sort of green information they are looking for in brands – Intel and others were measured. We funded the study to make it 100% independent.

The top green issues in India, for example, were the following:

1. Energy efficient products
2. Promotes a green image
3. Designs products that look green
4. Uses biodegradable components

What we have learnt is that green matters as a content area for IT professionals. IT professionals want content around energy efficiency and the fact a brand is up for promoting its green activities.  In an economically tumultuous time IT seems to care more and more deeply (attending events) about green than ever before. So, if as an IT pro you are following this trend, check with vendor’s positions and make sure they are making energy efficient products, but also seek the information in an environment where you can talk and question them and your peers.

You may recall Nicholas G Carr for his classic Harvard Business Review article about the commoditization of IT.

In his recent book The Big Switch: Rewiring the World, from Edison to Google quoted in Bill Snyder's CIO Magazine article he claims data centers will become obsolete with the adoption of cloud computing.

Looking beyond the hyperbole, my thought is that as the cloud is adopted in the industry, patterns of ownership for data centers will change. The situation won't be black and white, that is, either corporate owned data centers or everything in the cloud.

To the extent that corporate applications have a modular architecture, what we'll see is a gradual outsourcing of non-critical application components to cloud resources. Corporate owned data centers may become smaller, but servers that otherwise would have been there will be purchased by the outsourcing provider. This is consistent with of efficient markets. Coase argues that an optimizing process is at work where the size of an organization (or a data center in this case) is the result of finding the balance between competing tendencies ("transaction costs").

It is hard to believe that data centers will disappear. Companies may decide that their crown jewel applications and data are better run in house. However, to the extent that these applications are modular and federated, non-critical components or components not associated with LOB will be outsourced. Fewer servers will be needed to run the applications, leading to smaller data centers.

The servers needed to run the non-critical functions will not go away; the will be owned (or leased) by the outsourcing provider. These servers will run in a highly optimized, multi-tenant and virtualized environment. The overal effect is that resource usage is optimized over the whole ecosystem.

In this outsourced, multi-tenant environment, manageability and monitoring capabilities become paramount, including the conveyance of metadata across multiple logical levels and the ability to provide multiple logical views to support iron clad SLAs.

Virtualization as an essential ingredient to make the cloud work because it allows applications and their hosts to be scheduled independently. The article also brings issues of security and transparency standing in the way of the cloud. More than a fundamental roadblock, these issues are a function of industry maturity, and it is reasonable to expect that they will be eventually addressed once the outsourced resources become quantifiable with respect to the businesses served.

In my last blog, I briefly talked how small and medium sized businesses (SMBs) can contribute to the ‘Green IT' initiative that is gaining moment in the global market place. I had a couple questions sent to me to break down two topics: One, how is IT power being consumed by end users and secondly what type of impact can SMBs have as it relates to ‘Green IT'.

Think about how power is used in a business environment, yes there are the basic energy costs of lights in the building and the electricity for your heating and cooling system however there are also power needs for other workspaces in your building. If you walked into you company's breakroom/kitchen, you would probably be able to identify at least 3 items that use power (refrigerator, coffee pot, microwave, etc...).

Now think about your employees' work area. At someone's desk they can have several items that require power: a clock, a fan, a cell phone charger, maybe a singing Dilbert and likely a PC as well. When we think of that PC, there is a lot to consider. There are several studies publicly available that show how much power is being used by SMBs, and how important of an issue it is for their business. According to a 2007 Gallup survey (http://www.gallup.com/poll/tag/Americas.aspx), over 54% of small businesses rate rising energy costs as one of their top business concerns and 43% have already implemented energy saving strategies to control costs.

One of the top power consumption issues, one I have talked to many SMBs about, is the common practice of employees leaving their computers on 24 hours a day. US electricity costs of leaving PCs on (while unattended) reaches $1.7 billion a year. This equates to a lot of money taken directly away from the bottom line. Rakesh Kumar from Gartner states it in future looking terms for large business by saying, "By 2010, about half of the Forbes Global 2000 companies will spend more on energy than on hardware such as servers. Energy costs, now about 10% of the average IT budget, could rise to 50% in a matter of years." This type of energy cost for large businesses will have a similar effect on small businesses.

PC energy consumption has traditionally been a "hidden cost" receiving relatively little attention. Typically when we think power consumption, the large enterprise data centers with their rows and servers come to mind. But the reality is PC power consumption matters as well. Data presented by Gartner demonstrates that on a global basis, compared to servers, PC's actually generate more CO2 emissions as compared with Servers, including cooling. Gartner broke down power consumption in the IT space as follows:

• PCs & monitors (39%)

• Servers and storage (23%)

• Fixed-line telecommunications (15%)

• Mobile telecommunication (9%)

• LAN & office telecommunications (7%)

• Printers (6%)

Source Gartner Inc. "Tera-Architectures A Convergence of New Technologies" by Martin Reynolds July 26, 2007

Moreover, according to an EPA study (http://www.energystar.gov/ia/partners/prod_development/revisions/downloads/computer/ComputerPowerMnmt.pdf) , up to 90% of PCs have power management disabled, so PCs left running often may remain at idle rather than going to lower power sleep state. Leaving an energy efficient PC running when not in use (night/weekends) is analogous to leaving a car running when it's not being driven.

Not surprising, the main areas that require focus are PCs and monitors. Servers have received a lot of attention because they are an obvious concentration of power consumption. They are power inefficient and offer the opportunity to remove significant amounts of visible costs (and usually, but somewhat more incidentally, CO2). However, the real area where the greatest overall effect can be made is at the desktop and with client devices. This is a harder challenge because of the behavioural issues (leaving systems on the entire day) that are involved in "fixing" the problem.

One approach that many small businesses could do to help conserve energy consumption is to focus on what you can do during non-business hours. For example, if you have PCs (Desktops or Mobile) and monitors that are not turned off on Friday night and run the entire weekend - well, there are 2+ days of wasted power with no business benefit. If you look at a small business environment where there are more than several desktops, notebooks, and servers () (as you've just said that servers shouldn't be the only focus wrt power consumption...), the energy saved by having all machines shut off for the weekend can make a real difference in energy costs. In addition, make sure you purchase Energy Star ^TM (a system-level specification including components such as processor, chipset, power supply, HDD, graphics controller and memory monitors and computers) products. These products are made up of energy efficient components that will help save power when in use.

So how can SMBs start becoming more Green? Start looking at where you are using energy throughout your company workspaces. If you are not using a piece of equipment on the weekends whether it is a microwave or a monitor make sure the power is turned off to it. I recommend you start by looking look at which PCs and servers are still on when you are leaving the office this Friday. This will give you a good idea of the initial impact your company could provide by reducing your power consumption. In addition, if you are already using a manage service provider (MSP) to manage your network, ask them if they have a power savings plan that you could implement.

I would be very interested to hear what other ‘Green IT' ideas are out there. As mentioned previously ‘Green IT' does not just effect large enterprises. Energy consumption is something that not only impacts the status of our current physical environment but it also directly affects the financial bottom line for today's small and medium sized businesses.