Productivity driving the IT purchase cycle

Yesterday I read an article in the Dec/Jan issue of Fast Company about the change in Cisco’s corporate culture to embrace social media and collaboration. According to the article, Cisco has taken a strong step to leverage Web 2.0 technologies through acquisition and internally developed Web 2.0 tools. One interesting point made in the article is how the general user community, in this case made up of employees, are empowered to develop and adopt new technologies that result in greater communcation and productivity. Furthermore, once the tool or application gets to a point where data integrity and application availablity become important, the application is handed over to IT to manage and scale. This is exactly the way I think internal groups should collaborate with IT to encourage productivity.

Productivity driving growth

Blackberry Storm

Productivity is an important driver behind innovation. For example, look at the Blackerry smartphone. There is not doubt that the success of the Blackberry in the business world is due to the integration of e-mail for the mobile worker. It freed executives from having to constantly sit at their desks to check mail and  enabled sales reps to communicate with customers, forward support issues and take sales orders without needing a laptop. In the later case, you can quantify the increased revenue as a result of better productivity. Eventually the adoption of Blackberries by sales teams and executives drove these devices to become supported by the IT departments becuase the productivity could be tied to revenue. Once in the hands of IT, action items like Exchange integration and server backup became a priority.

The success of Blackberry in gaining wide adoption within the business community started a wave that Palm, Nokia and Microsoft were never able to achieve previously. It also showed that if you can bring tangible productivity benefits, consumers will follow. If you can show revenue impact then IT will adopt. 

My belief is that productivity applications are an indicator to growth of general IT spending in networking and security. Going back to the Blackberry secnario above, there were many new requirements on the cellular networks to support the Blackberry service. To gain the bandwidth and GPRS coveragefor mobile e-mail, telecos and service providers needed to upgrade infrastructure. While this alone was not the main driving factor for infrastructure upgrades, it is a much easier business case to make when you have customers needing bandwidth for real application versus potential future business opportunities that need greater bandwidth.

Another example is the adoption of wireless LANs within businesses. I can remember when employees would sneak rogue Linksys and Netgear access points into the corporate network so they can move around the building with their laptops. Pretty soon a strong business case for wireless LANs could be made showing the increased productivity from being able to connect from conference rooms, during meetings and presentations. Once that tipping point from ‘nice to have’ to ‘must have’ occurred, the IT department was tasked with supporting wireless LANs and building a scalable, reliable and secure solution. All of these are factors driving the growth of wireless LAN products from companies like Aruba Networks and Cisco.

You can make a similar case for  businesses Internet access driving infrastructure upgrades as well as security purchases. Is there a responsible business out there that does not have a firewall hanging off of their Internet connection?

Telepresence, the next productivity driver?

Telepresence is a new technology area being pushed because of significant productivity benefits and cost savings. Video conferencing is one application of telepresence that has been around. New applications leverage HD technology and have virtual attendees beamed into meetings as 3D images. Whether or not this takes off in the way that mobile e-mail has will depend less on cost savings and more on the productivity benefits it can provide. How many more sales opportunities can close using video conferencing or other telepresence technology? At what point will the sales team demand it because they have shown significant growth and shorter sales cycles? Those are questions that will get telepresence technology more widely adopted and supported by IT.

What it means for IT spending

Cisco learned a valuable lesson after the dotcom bubble that unless there are real applications driving the need for more bandwidth, they will not be selling many network infrastructure products. As a result, their message has evolved to one of productivity benefits of adopting new technologies like Web 2.0 tools and other collaboration media like telepresence that coincidentally also require faster, more reliable networks with larger storage capabilities. Cisco went a step further by acquiring companies like WebEx that deliver productivity increasing applications. Now Cisco is driving the adoption of these applications thus setting themselves up for growth in infrastructure sales and controlling their own destiny. Pretty smart.

With a looming collapse of IT spending on the horizon, will telepresence be an area upon which IT spending will increase? What other producivity applications will drive IT spending in the coming years? Start asking the sales team what will help grow more revenue and shorten the sales cycle ain order identify the next growth areas.

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