Diminishing Budgets Drive IT Efficiency

By Greg McNevin

August 26, 2008: The Enterprise Strategy Group (ESG) has released new research showing that medium-sized businesses will be prioritising virtualisation, information management and security in 2009.

ESG’s recent Medium-Size Business Server and Storage Priorities survey found that US IT managers serving medium-size businesses can expect little or no growth in their 2009 and 2010 budgets, despite data centre information management requirements escalating rapidly.

The analysts at ESG says that those supporting firms with between 100 and 999 employees are being asked to participate in cost reduction efforts, resulting in investments increasingly focussing on improving server and storage performance and utilisation, as well as power, cooling, and space efficiency.

Overall, the report found that 16 percent of those surveyed expect their IT budgets to decrease in 2009 compared to 2008, while 29 percent believe budgets will stay flat. 29 percent said they expect budgets to increase, but at an uninspiring of 4 percent or less.

It also found that under-utilised servers, a lack of physical space, and the need to improve server availability/reliability are driving major commitments to initiatives such as server virtualisation, multi-core servers, blades, and server consolidation programs, with 42 percent of respondents deploying x86 server virtualisation, and an further 36 percent plan to do so.

“Business requirements, budget pressures, and rapid growth in corporate data volumes are forcing medium-sized organisations to take a serious look at sophisticated IT infrastructure solutions,” said ESG analyst Mary Johnston Turner. “Previous ESG research conducted in 2004 found that more than one-third (39 percent) of medium sized organisations reported corporate storage requirements of 1 terabyte (TB) of data or less, with just 13 percent reporting more than 10 TB of data.

“Today, those figures have reversed: just 9 percent say they have 1 TB of data or less, while 42 percent now report having 10 TB or more. This situation is driving strong demand for a number of information management technologies, including networked storage, digital archiving, and data reduction, not to mention increased information security,” said Turner.

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