Selling The IT Upgrade

The challenge is all too familiar for those selling servers and other IT equipment: How do you get CIOs thinking about upgrading systems across the enterprise, particularly if the ones they have are adequate and spending remains under scrutiny?

Take The Hartford, a global investment management and insurance firm, where the policy is to keep desktops running for four years and notebooks for three years. Even when upgrades are performed, many machines are redeployed to other employees, says Neil A. Boissonneau, senior vice president in The Hartford's infrastructure solutions department.

Fortunately, though overall IT spending during 2002 and 2003 was down, customers like The Hartford have invested in centralized management and standardized on newer software, including upgrading all desktops and notebooks to Windows XP. And most enterprise customers are still upgrading their PCs more often than The Hartford--typically in staged rollouts over multiple years. The average life span of a PC in most enterprises is still three years or less among 90 percent of all companies, according to VARBusiness' State of Enterprise Spending research. In fact, 68 percent said the average age of their PCs was two years or less.

There are six reasons enterprises are refreshing their PCs across the enterprise, as noted by customers and their VARs:

1. With Microsoft planning an end to support for Windows 9x or NT, enterprises have a perceived need to upgrade those machines to Windows 2000 Professional or Windows XP on desktops, or to Windows 2000 Server or Windows Server 2003 on other machines, by the end of the year.2. Many enterprises have made it a policy to use Microsoft OS releases either at the current release level or at least no older than the immediate previous release. So they're facing migrations from Windows NT, 9x, Me and other, older platforms.

3. Especially where custom in-house or purpose-built vertical applications are in use, many enterprises that seek to exploit .Net-based applications quickly discover that such code requires .Net-capable machines.

4. To boost productivity and profitability, many enterprises seek to satisfy their workforce's mobile computing needs. That has become a huge factor driving laptop purchases and upgrades of existing equipment.

5. Numerous upgrades are under way to permit enterprises to exploit new technologies or technical capabilities. Such upgrades include linking wireless LANs to wired infrastructures and using tablet PCs for all kinds of specialized apps.

6. Enterprises are planning for or are already involved in a new upgrade cycle to replace or beef up a crop of PCs that has been in place since Y2K upgrades.Each of those needs can be a launching pad for a sales call. In addition, IBM and HP, as well as large integrators such as CDW, CompuCom and Spectrum Software, all mention the importance of standardization and imaging services among the top value-adds that enterprises want, and that VARs can and should deliver. For example, because The Hartford has standardized its hardware requirements and created standard code images for desktops and laptops, the company now expects its VARs to be able to build machines to its specifications using those images, Boissonneau says. This permits the company to ship machines directly to their intended users and saves the extra costs involved in its earlier approach, which required the machine to be initially staged in-house for imaging, then shipped to their intended users.

Relationship Building

In an era when upgrade cycles are mostly lengthening or staying the same--69 percent of enterprises kept their typical PC upgrade cycles about the same last year--VARs and vendors need to find new ways to develop relationships with enterprise customers. IBM and HP have put considerable emphasis on mobile technologies, for example, and are working with VARs to craft solutions around this technology. VARs willing to invest in skills and tools to offer enhanced delivery and management of the equipment they are selling will have an easier time showing enterprise customers why now is the best time to buy.

"The driving force is to enable VARs to create solutions for customer problems that transcend hardware and raw technology, and that offer opportunities to build custom solutions to meet enterprise customer needs for security, productivity and functionality," says Check Leyrer, vice president of marketing for the Americas in IBM's Personal Computing division.

Our discussions with VARs, enterprise buyers and PC vendors revealed three interesting trends:1. Enterprises are very interested in tablet PCs for mobile applications where small, light, compact PCs make sense. Some school systems are even piloting programs where students carry a tablet instead of a bulging knapsack full of books.

2. There is equally strong interest in ruggedized devices for both military and commercial applications. Ruggedized equipment costs more, but it's worth it for applications in which environments are hostile or wear and tear is above average.

3.Mobility is huge for sales-force automation, as is access to CRM applications, ordering (placing, tracking, pricing and so on) and enhanced security capabilities.

Ed Tittel ([email protected]) has worked in the computer industry for 20-plus years.