Vendor, research firm develop ROI tools

Alinean and Strategic Research have coupled-up to develop ROI tools. But how reliable are ROI tools that are developed specifically for the sales teams of major storage vendors?

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A tight economy means tight IT budgets and a heightened awareness of the bottom line. Customers need to know what type of return to expect on any investment in storage technology, and they need to know how fast they can get it. One company believes they have the solution.

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The Orlando, Fla.-based Alinean has a new set of return investment (ROI) tools that help calculate ROI models for data and storage solutions, including SANs, NAS, backup and recovery and business continuity.

Alinean has teamed up with storage industry research firm Strategic Research Corp., Santa Barbara, Calif., to refine and develop the tools based on the firm's market research data.

The company said this initiative will equip vendors with defendable ROI metrics, models and tools to help sales professionals and consultants create cost-justified business cases, effectively arming vendors with necessary numbers to seal the deal in tough selling environment.

Marc Farley, storage expert and author of "Building Storage Networks", said this sort of ROI tool has value to both customer and vendor because it will show how the ROI is calculated.

"Customers can agree or disagree with the conclusions of the report, but the report serves as a talking point. If the tool is used correctly, and driven by user interviews, there shouldn't be much to talk about at the end," said Farley.

Tom Pisello, president and CEO of Alinean, said the ROI tools crunch numbers based on three different metrics. ROI is measured in net tangible benefits; intangible benefits; and Risk adjusted ROI. A project is commonly discounted if it is deemed risky, he said.

"There's a new hurdle in place for vendors," said Pisello. "Now everyone has slowed down on their spending and has to get an ROI business case in place before any purchase is made."

As part of the partnership, Strategic Research is incorporating Alinean?s ROI technologies, including ROI Dashboard model, ROI Calculator and ROI Analyst software, with its consulting and research offerings. In return, Alinean is integrating Strategic Research?s primary customer research data on storage solutions and management into its ROI metrics database and software.

Michael Peterson, president of Strategic Research said that analyzing ROI and TCO is a tricky process, but that the impact of quality ROI methods and ROI tools should not be underestimated as a critical part of the sales process.

"I'd suggest there are two viewpoints: Customer and vendor," he said. "As a vendor, almost all bids now require a ROI analysis to close the sale. As a customer, the inverse is true. I pressure the vendor to supply this to me and it had better be good."

Peterson said every time a new product comes along a new ROI method is needed to sell it. That, he said, is where Alinean comes in.

However, he does admit that ROI analyses have a vendor-centric feel. He said roughly 90% of all ROI calculations come out positive.

"I'd suggest that the task is always to either figure how to make a positive ROI or don't do it," Peterson said. "Not all ROI analysis come out positive."

Part of Strategic Research's hand in development of the tools includes comparing ROI data from peer customers to show the prospective buyer that other companies have experienced a return on a similar purchase.

"Comparison is the comfort factor," said Peterson.

Alinean is targeting CIOs and their need to quantify hard-dollar and soft benefits, and risk mitigation in a single tool. Specific metrics and measures include lowered total cost of ownership, increased productivity and revenue, risk assessment and the value of lost data, and brand and market share protection.

ROI Dashboard extends ROI analysis to tie IT investments to bottom-line business goals. It includes a customized ROI Calculator and ROI Analyst sales tools accelerate IT spending by helping vendors and consultants develop third party-validated business cases.

Alinean has lined-up sales teams from Dell Computer Corp., Hewlett-Packard Co., and IBM Corp., to use its tools.

The company did say that it has plans to make the ROI tools directly available to customers in the future.

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