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When Is the Time Right to Invest in a New Data Center? How to Make a Cost-Effective Decision

Posted by James Russell, III on Apr 21, 2017, 10:00:00 AM
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Your customers need to invest wisely and their data centers must be agile enough to manage the ever-changing technology and business landscape. As complexities increase, end users are turning to their channel partners for advice—especially when it comes to making a cost-effective decision about modernizing or consolidating their data centers. 

This creates both a consultative and revenue-generating opportunity for your business that plays to your data center expertise. By presenting the bigger picture, you’ll help them with a decision that makes the most economic sense—whether it’s absorbing the cost of updating and maintaining their legacy equipment or making an investment to modernize their data center with a newer converged or hyper-converged infrastructure.

Here are three areas to explore to arrive at the best decision for each customer.

Determine Future Business Needs and Technology Trends

Begin by understanding how your end customer plans to grow their business, near and long term, along with how this impacts their IT needs. Will they be adding remote offices, processing more data, or expecting significant growth in their mobile workforce?

According to the State of Hyperconverged Infrastructure Market Report, midmarket companies are nearly twice as likely to prioritize desktop virtualization versus smaller companies, and larger enterprises are nearly twice as likely to prioritize private cloud versus their smaller counterparts. Conversely, smaller companies are twice as likely than large enterprises to prioritize improving remote and branch office IT efficiency.1

Identify Top IT Priorities for the Next 12 to 18 Months

The top reasons customers are upgrading their data centers are, expanding data needs, improved operational efficiency, the need to consolidate, cloud integration, reduced costs, increased use of virtualization, and global management across data centers and remote offices.1

Whether it’s measuring total cost of ownership (TCO) or ROI, make sure the scope of the potential investment is measured against the capabilities of their current system and the big-picture technology priorities they identified. This way you’ll find opportunities to enhance what they already have, or you’ll have a good case for data center modernization.

Understand the Cost Impact

The savings from avoiding a capital expenditure (CapEx) can be dwarfed by the savings that result from the lower operational expenses (OpEx) of a modernized data center. This is because the returns aren’t measured by a single event like they are with a CapEx. Instead, savings take place on an ongoing basis through simplified operations and increased efficiency.1

The savings from data center consolidations are associated with reductions in:

  • power and cooling costs due to a reduced hardware footprint
  • space requirements and associated rental or leasing fees
  • ongoing maintenance fees for ancillary appliances and services that are eliminated, and
  • training and certification fees for multiple disparate platforms. 

Provide the Complete Solution

Even if the buying decision is based on TCO or ROI, your business can benefit by working with your channel partner to offer different purchasing models and financing options for leasing or buying modernized data center solutions.

And you’ll ensure your business is positioned for every opportunity by providing an assessment of your end-users’ current data center. In that way you’ll establish a channel leadership position and create a continuous revenue stream while helping your customers make a cost-effective decision that positions them for the future of IT innovation.

Tech Data is here to help you simplify the process. Contact James Russell III today.

About the Author

James Russell III, Cisco Data Center Solutions Consultant, has over 25 years of computer industry experience. He offers technological expertise in designs of cloud ready architectures  and multi-tiered high availability enterprise solutions for multiple vendors including Cisco. James is responsible for consulting on storage, server, and virtualization solutions to meet customers’ needs and requirements.

1 http://www.hyperconverged.org/wp-content/uploads/2015/05/2015-State-of-Hyperconverged-Infrastructure-Market-Report-final1.pdf. 2015 State of Hyperconverged Infrastructure Market Report, Actual Tech Media. S. Lowe. Pages 18-20.

Tags: Data Management

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