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IT budget planning turns to virtualization, deduplication

Storage managers faced with hiring freezes, limited funding and growing capacity turn to virtualization and deduplication as part of their overall cost-saving strategy.

As economic news worsens, storage professionals at shops of all sizes are carefully scrutinizing their existing IT budget plans, leaving some jobs vacant, and searching for even more savings as they head into Q2 and the rest of 2009. Technologies such as virtualization and deduplication are getting special attention for their long-term cost saving potential, according to several storage pros on the front lines.

The Rockville, Md.-based law firm of Shulman, Rogers, Gandal, Pordy & Ecker, P.A., has been fortunate enough to avoid cuts in their 2009 IT budget, said network administrator Tim Smith. But when an IT staff member left recently, no one was hired to fill the position, said Smith.

The law firm also has the added budget pressure of preparing for a move, and the focus is now on emphasizing more cost-effective storage solutions.

"This past year, in 2008, we went with virtualization. The law firm as an entity is joining the green bandwagon," Smith said. "Virtualization has been a major effort in terms of cost cutting."

Virtualization has also been an important project for IT manager Harvey Hecht and his team at Service Employees International Union Local 1021 in northern California. Other than that, Hecht said, his shop is in maintenance mode.

"Our storage priorities for the year are to just keep things going right now," Hecht said. "The only thing extra we were given was to fix up our remote site backups."

"What we do know is that storage is a little bit like [breathing] oxygen. You can't ask people to stop."
David Reinsel,
group vice president, storage and semiconductorIDC

Though this may seem simple, the storage buying decision process has been complicated. "We keep on going back and forth about what we want to do this year and next year. But the problem is that it keeps on changing and we've been getting estimates for new directions, but they're afraid of spending."

The bad news and how to handle it

At RiskMetrics Group Inc., a New York City-based provider of risk management and corporate governance products and services, storage architect Ed Delgado faces the same IT budget planning challenge. "Our budget is actually the same as in 2008, although we've been asked to be mindful when requesting purchases," Delgado said. "There's just an understanding that you have to justify you purchase."

RiskMetrics has taken on some projects to make their storage more cost-efficient. "Instead of just buying additional disk and increasing our storage amount, we're going to look at the technology out there that can make us more efficient," Delgado said. More specifically, this means deduplication for the backup environment and different replication solutions.

David Reinsel, group vice president, storage and semiconductor at Framingham, Mass.-based IDC, also sees money-saving potential in deduplication. "We'll definitely see upticks in dedupe and thin provisioning and the like," he said.

But IT budget planning for Q2 and 2009 looks grim. "There's no doubt that it's going to be down. Right now, for the year, our focus is slightly negative from last year," Reinsel said. "I think when you look at this quarter it's definitely going to show the weakness that we all expected."

On the other hand, he said, "What we do know is that storage is a little bit like [breathing] oxygen. You can't ask people to stop."

One big question is how President Obama's stimulus package is going to play into all of this. Right now, Reinsel said, there's no way to be certain. "I think there are certain verticals that are going to benefit more than others," he said. This will most likely mean the government, health and education sectors, he added.

But this doesn't encourage Reinsel. "It seems like each and every week and month that our projections are downward," he said. "Right now, we're projecting anywhere from one and a half to three percent down from a revenue perspective."

His advice is to "use 2009 to service your existing base" and look into new technologies that involve compliance and efficiency. "I think people need to take 2009 as a year of investment," he said.

The good news

Some companies are lucky enough to avoid economic hard times. "We deal mainly in food service and that's fairly recession-proof," said Jeff McMorran, director of IT at New Market Group (NMG). "But we still have to be responsible to our members and chair owners."

McMorran said NMG's location in Newmarket, Ontario, also works in their favor. But this doesn't mean they don't have reason to worry and be cost-conscious. "Whatever happens does have certain ramifications in Canada," he said.

"We are looking a lot into different technologies like deduplication and better ways to manage it," McMorran said. "We do a lot in host development and we have a lot of systems that are being reengineered. It will make better use of server capacities and that type of thing."

For now, NMG remains among the lucky organizations. "We're going to keep the status quo," McMorran said. "We're still going to look at hiring co-op students and that sort of thing. We've anticipated growth for the next five years."

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