When buying up isn't always better for SMBs

Enterprise-class technology is tempting to midsized companies, especially when the prices start to drop. But experts warn that buying up isn't necessarily buying smart.

With a growing number of major vendors, such as EMC Corp. and IBM, offering scaled-down, affordable versions of their enterprise solutions, midsized firms are faced with an important decision: Do they stick with their established vendors or try the latest offerings from the industry giants?

Take a hard look at your business before making a decision, say experts. Don't buy an enterprise-class product simply because it fits the budget. Some companies may not be ready for the complexity of an enterprise solution, no matter how much a vendor has modified it for the midsized market.

"If you overbuy, you'll have to upgrade the skills of your IT staff or make some sort of arrangement with the vendor for help," said Richard Ptak, founder and senior analyst at Ptak, Noel & Associates, a New Hampsire consulting firm.

If you overbuy, you'll have to upgrade the skills of your IT staff or make some sort of arrangement with the vendor for help.
Rich Ptak
founder and senior analystPtak, Noel & Associates
On the other hand, if a growing midsized company sees its systems becoming more and more complex, then it needs to take "a more systemic view of IT, rather than buying one more server and adding it to the rack," said Charles King, principal analyst at Hayward, Calif.-based Pund-IT Research.

It's important to recognize when it's time for a new approach to IT. For instance, a CIO at a company with an IT system that has grown increasingly complex during the last three to five years should take a step back and look at the business.

"If a smaller business is getting to the point where IT is getting out of hand, where it needs to create an environment that is more easily managed, that's actually an area where enterprise-class vendors have tools that would be valuable for a small business to look at," King said.

Ptak said if a CIO is on the fence, he should just ask himself if his IT system is contributing to the success of the business.

"If they're running out of capacity, if there are slow response times, if it feels like the operation is slipping out of control, if they're spending more time trying to juggle the resources they have rather than using those resources constructively to help their business, then they know they're in trouble," Ptak said.

Midsized companies are an untapped market for enterprise vendors such as EMC and IBM, and they continue to introduce products and service that target those businesses.

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EMC announced last week two new mid-tier versions of its Celerra line of IP storage systems, the Celerra NS350 and Celerra NS704. The company also announced the release of the new EMC Smarts IP Availability Manager.

The NS350's starting price is $47,000 (beginning at 1 terabyte) and scales up to 12 terabytes. The NS704 costs $261,000 (beginning at 2.2 terabytes of capacity) and scales up to 48 terabytes.

King said many small and midsized firms with NAS solutions rely on Ethernet-based technology. But some companies with growing IT needs are looking to take advantage of more robust fiber optic-based storage solutions from EMC.

"The new solutions from EMC really leverage that particular value point," King said.

The Celerra NS350, with 10 terabytes of capacity, will even appeal to some small businesses. King said it doesn't take long for a small business with 100 PCs to generate that much data.

Smarts IP Availability Manager, with its root-cause analysis feature, will help IT managers automatically identify problems with network-attached storage systems that often require manual diagnoses and responses.

"It's okay to do that for a while, but once [a midsized business] gets more complex, [IT staff] spend all their time trying to figure out what the relationships and problems are," Ptak said.

"Most SMBs don't even have root-cause analysis," Ptak said. "What they have is a meeting of all the experts, who get together and try to eliminate what could be the cause of the problem. (Smarts IP Availability Manager) allows storage devices to be treated just like other devices on a network. If you have problems in one area that is disrupting functions in another area, this helps with the identification and understanding of the nature of the problem."

As midsized businesses contemplate whether to stick with their established vendors or to try some of the small and medium-sized business offerings from enterprise-class vendors, they should remember they have the leverage.

"Turn to the enterprise vendor and say 'Help me justifiy that.' The vendor has to be able to provide that value justification," Ptak said.

Enterprise vendors should show how their products will affect their businesses. A more expensive solution, for instance, might free up other resources and drive up revenue, Ptak said.

But CIOs must always trust their own judgment first. They should know their requirements and needs and have their own processes for evaluation.

"It's not going to be easy," Ptak said. "Nothing is going to make it a painless and obvious process. First and foremost, understand your business and what you're trying to accomplish. Prioritize your needs and understand them. Certainly listen to what the vendor has to say, but also trust your own judgment."

Let us know what you think about the story; e-mail: Shamus McGillicuddy, News Writer

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