In these economic times, it's best to stay close to the people in companies that buy things -- the sourcing and vendor management (SVM) professionals. At Forrester's sourcing Forum in Florida this week I hosted a dinner for ten vendor management executives and four vendor reps.
This group was fascinating. They are experts in purchasing, evaluating vendors, arranging sourcing agreements, pricing, and negotiation -- the front lines of their company's operational and capital expenditures. The role is still in its infancy -- some are still tough purchasing agents while others have graduated to a more complex model of "diplomacy" -- seeing all of the interests around the table and working to arrive at a solution that helps everyone succeed.
Over dinner the executives worked on a simple question: "What are sourcing and vendor management best practices in a recession?" So if you've ever wondered how the screws will be tightened, here's a peek under the tent:
IBM CEO Sam Palmisano gave a speech to the Council on Foreign Affairs in New York City on November 6, 2008. In the speech, he added his voice that that of Al Gore, Jeff Immelt, and Barack Obama to declare that the US can lead the world to prosperity (and out of this financial quagmire). He called his vision building a "smarter planet."
Here's how I see the smarter planet:
Intelligence and network connections are embedded in physical systems. Chips and bandwidth have helped optimize business processes and make information workers more productive. But information technology hasn't yet really helped optimize our physical systems. A company on a smarter planet will put computers and connections into every physical system so that machines can phone home, operating problems can telegraph themselves, and power grids and distribution systems can be monitored, controlled, and optimized. (Forrester first identified this trend of an extended "Internet of things" in 2001 with a report entitled "The X Internet.")
By Gil Yehuda Those who drink the Web 2.0 Kool-aid live in a idealistic world where we can mentally connect a great idea to a great implementation of that idea. We live on faith that the great implementation will come, since there are plenty of smart people out there who will eventually figure out how to make value out of technology building blocks. Sometimes our faith is tested when the killer-app does not show up for a long time. But evidence can restore our faith.
Great customer references fuel great B2B marketing. But getting customers to testify or submit case studies is challenging. Good references require investment. But how do you keep customers from feeling like shills for their vendor firms? By involving them in communities of like-minded advocates! That is one hypothesis I plan to explore further in 2009 -- investigating the connection between social activity and greater customer advocacy.
In a number of recent client interactions with both enterprise IT end users and vendors, the question of “Is the ‘green’ in Green IT dead?” has come up. Primarily driven by the current economic climate, IT end users want to understand how relevant the environmental benefits of Green IT should be to their strategic planning; likewise, vendors want to know how palatable green messaging of their products and services is to their customers.
The benefits of virtualization are quite obvious but when you start to really increase the density of virtual machines in order to maximize utilization suddenly it ain't such a simple proposition. The latest CPUs from AMD and Intel are more than up to the task of running 10-20 or more applications at a time. Most servers run out of memory and I/O bandwidth well before processing power. Recent announcements from the leading server vendors have been made to address the memory side by packing more DIMMs onto a single motherboard (including blade server boards), but you can only add so many Ethernet cards and Fibre Channel HBAs. Oh yeah, and then there's the switch ports to go with them (blade systems help a lot here).
On November 7th, I facilitated Forrester’s second sales enablement roundtable – this time in Foster City,California.Joining us were sales and marketing executives from:Intel, NetApp, Borland, Informatica, Sun, Interwoven, Microchip, Renesas, Juniper Networks, Trend Micro, and Thoughtworks.
Overall, we had an extremely high energy session, even though I lost my voice the previous week.It’s hard to summarize a whole day of intense discussion into a blog post, but I’ll give it a try.
But now comes Intel's announcement that it expects revenue for the fourth quarter to be down 10% from its original forecast. What does this mean? I have a few thoughts:
1) Intel is not the bellwether that it once was. Personal computers and servers, the primary destination for Intel's processors, are not nearly as large a percentage of tech spending as they were back in 2001.
2) Layoffs in the economy have already begun. Fewer employees, fewer PCs needed.
3) Large companies are accelerating virtualization projects. Virtualization is a fancy word for running more applications on fewer servers. It is greener (less power), simpler (fewer servers to break), and cheaper. Good for companies looking to lower capital expenditure and operating expenses in a recession, but bad for Intel.
Forrester has been predicting that the two tech segments that would be hit hardest in the recession are computing hardware (PCs and servers) and communications gear. But services and software (Intel plays in neither) would fare better. Exit polling would appear to indicate this result.