Wednesday, January 14, 2009

Opportunities in '09

Whatever else happens, 2009 is unlikely to be "business as usual" for anyone. Some industries are struggling, some regions are struggling, and pretty much every small business is taking a hard look at their expense sheet to figure out where they need to "get lean". Downsizing is rampant, prices are falling, and people in general are just anxious about the overall state of the economy.

For the most part small business IT consulting has not been as directly affected by the downturn as other industries. For me personally I started my computer consulting business during the recession of 1991, grew pretty strongly during the recession of 2001, and the feedback I'm getting from our franchisees is that for the most part things are going well for them in 2008/2009. But there are some challenges, and some opportunities too, so I wanted to take a minute to outline some of the major ones:
  • Challenge: Downsizing Everywhere
  • Opportunity: New Hiring Opportunities! Many small business technology firms are historically reluctant to hire, especially in areas like sales, marketing, and business management. Most firms, including most Computer Troubleshooters, are started by someone with a technical background who may not feel comfortable managing additional people, particularly in areas that aren't directly income-producing like Sales & Marketing. But there are a LOT of highly qualified people looking for work right now with backgrounds in sales, marketing, management, and accounting, and they're often highly motivated to look at more flexible salary structures (perhaps wholly or partly commission-based) than they may have considered in the past. Why not help them out and let them help you grow your business?

  • Challenge: Reduced Business Spending
  • Opportunity #1: Higher demand for maintenance, repair, and upgrades! While many businesses, even the ones who are doing well financially, are reluctant to invest in significant new capital projects right now because of an overall lack of confidence in the economy, their businesses still depend on technology. And while spending $4000 on a new server project may be put on hold, spending $500 to upgrade an existing server can be an attractive short-term alternative. Truthfully as a service provider we'll earn just as much for our time performing an upgrade as we would on a new install, so these sorts of short-term alternatives are a win-win for both sides: the customer gets better performance without a huge initial expense, and the service provider gets continued business and income.
  • Opportunity #2: SaaS Solutions!
    Another similar opportunity is the shift to SaaS or cloud-computing solutions. For a small business who can benefit from new services, for example Microsoft Exchange or calendar & project sharing via Sharepoint or Webex's Web Office, spending $50/month on a cloud-based solution can be much more attractive in the short term than paying $1000 or more to have the same solution configured and installed locally.
    The value proposition to shift existing services to "the cloud" is also strong but harder to quantify on a short-term basis: for example shifting a 10-user office to Hosted Exchange would cost maybe $150 per month, and that same solution if already installed and working is essentially costing nothing - right now. But a typical Exchange implementation will cost $2000 every 3-5 years in new software, $1000 every 2-4 years in new hardware, plus on average $1250 per year in maintenance and service costs. Over 5 years the locally hosted solution cost between $9000 and $12,000 or more, plus bandwidth, power, and backup costs, while the SaaS solution is a nicely predictable $9000.
    (BTW, Computer Troubleshooter's SaaS portal with 15 cloud-based solutions is launching in February!)
  • Opportunity #3: HaaS & Leasing Solutions! While businesses want to hold on to their cash, they still need new technology. That's where having a strong financing or leasing program is a huge help - during times like this a small business may balk at a new infrastructure project for $10k, but give them all those same benefits for just $300/month and it's great for everyone. That's why CT is happy to have some great financing partners like our HaaS partners MSP On Demand and our traditional lease partners Popular Equipment Leasing and Wirth Business Credit.

  • Challenge: Downsizing puts more demands on remaining staff.
  • Opportunity: Technology Solutions that provide REAL Productivity Enhancement. Businesses who must downsize will look to get more work done with fewer people, and the way to accomplish that usually involves technology. Computer Troubleshooters is ramping up support for the productivity solutions we see as being key to this: CRM, VoIP, Search Engine Marketing (more effective and less expensive than traditional marketing if done right), electronic document management, telecommuting, managed service plans, and collaboration tools.

  • Challenge: People are cutting back expenditures on restaurants, vacations, and new cars.
  • Opportunity: Since they're spending more time at home people are looking for Better Home Technology. This is the classic "nesting" behavior we've seen in past recessions, and it's in full force today too. And it helps that today's recession is coinciding with some really exciting new home technologies, like Windows Home Server, Apple TV, Roku, Amazon Video-On-Demand, and more. Look for the launch of next month to show off our capabilities in these areas. But even basic tech, like setting up a media PC connected to the family big-screen so they can watch YouTube and videos from the couch is something we're seeing a lot of demand from these days.
As you might expect Computer Troubleshooters is tracking and monitoring all the challenges and opportunities we see in today's environment so that we can continue providing the best support to our franchisees and their customers. What other challenges and opportunities do you see in 2009?