Game Changers: Technology that Drives ROI
Lean times or not, savvy small-business IT leaders need to continually pursue strategies and invest in new technologies that improve productivity, save money and give their companies a competitive edge.
But the technology industry is constantly innovating. How do you identify the right tools for your business? Here are five game-changing technologies to consider, along with examples of small businesses that are already using them to boost their bottom lines.
In the Clouds
Cloud-based services allow small businesses to manage their technology more cost-effectively by eliminating the need to buy, install and maintain hardware and applications. Through cloud computing, businesses can rent infrastructure, such as servers and storage, as a hosted service and subscribe to hosted software, such as e-mail, office productivity applications and collaboration tools.
Proximo Spirits, a premium vodka and tequila distributor, has a small data center at its Jersey City, N.J., headquarters. But with the company’s growth fueling a need for new technologies, it’s turned to a hosting service provider to meet its increased server and storage demands.
Proximo, which distributes the Three Olives Vodka and 1800 Tequila brands, hosts its e-mail, Voice over IP system and an internal web-based document-sharing system in its data center. But with sales increasing exponentially and the staff growing almost threefold in recent years, the company has new application needs that require more data center resources.
To meet those requirements, Proximo is renting servers and storage from a hosting firm so it can deploy a new intranet, desktop virtualization and business intelligence software, says IT Manager Christian Ayala. Using a hosted service is more affordable and reliable, he explains. It also simplifies IT management because the company doesn’t have to purchase new hardware, power supplies and generators to ensure uptime.
“The return on investment is pretty fast,” Ayala continues. “We just go in there and lease their hardware, and it’s more like a utility. We don’t have to worry about upgrading servers every three years. They have the redundancy and uptime that we need. It’s all taken care of for us.”
Ayala turned to IT consulting firm Evalu8ITSolutions and Denver-based CoreSite, which operates data centers nationwide, including one in New York City. Ayala will install and manage his own applications, Evalu8IT will maintain the equipment, and CoreSite will run the data center. Initially, Ayala will use three virtual machines on the two servers he’s renting, and as needs arise, he can provision for more servers and storage space.
When choosing a service provider, it’s important to vet the company to ensure that it offers the service levels you require and that it has the disaster recovery capabilities to keep your applications running if servers go down. “If you put your mission-critical applications on the cloud, you have to trust the infrastructure behind it,” Ayala says.
In Touch with Technology
Small businesses with mobile workforces must have plenty of computing options to keep employees connected and productive while they’re in transit, including notebooks, netbooks and smartphones. But now, some small businesses are turning to Apple iPads.
The three co-owners of Roadwerx, an event consulting firm in Milford, Conn., are regularly on the road managing events and sales functions, so they recently replaced their netbooks with high-end 64-gigabyte Wi-Fi + 3G Apple iPads.
The convenience, portability and ease-of-use of the iPads are the main reasons for the switch, says Operations Manager and co-owner Jeff Moran, who handles IT for the 12-employee company. With 3G wireless connectivity, Moran and business partners Donna Morgan and Steve Dixon can access the Internet and e-mail clients and office employees while traveling. “It doesn’t matter where we are. We can get online and respond to clients 24x7,” he says.
The iPad provides the Roadwerx management team with the applications and features they need for their business. Besides e-mail, the device has calendar, contact and office-productivity applications, as well as web browsing capabilities.
The iPad’s small form factor makes it travel-friendly. Its instant-on capability is another benefit, particularly when users are giving sales presentations. “We don’t have that lull where you have to make conversation while waiting for your computer to boot up,” Moran explains.
Another positive is the gadget’s “wow” factor. The company’s clients are tech-savvy and push the envelope in their respective fields, so it’s important for Roadwerx to do the same, Moran says. “We have to stay up to date with the latest and greatest technologies because our clients require it.”
A Storage Boost
Solid-state drives (SSDs), which provide flash memory–based storage, have several advantages over traditional hard drives. They are faster and more durable (because they have no moving parts), and they use less energy. SSDs have been around for more than a decade, but only recently have prices dropped enough for small businesses to consider them a viable option.
For PC users, the durability of SSDs is a key benefit. If a user drops a notebook that stores its data on an SSD, that data is safe. In contrast, if a user drops a notebook that stores its data on a hard drive, the data is at risk because the hard drive can die from the shock. Some businesses are using SSDs for their enterprise storage because it speeds performance without requiring the purchase of additional servers.
Executives at Answers.com — a website offering consumers a question-and-answer wiki, as well as access to dictionaries and encyclopedias — turned to SSDs to speed up the site’s response time. Before the SSDs were implemented, the New York–based company’s development team found it challenging to keep the site fast and constantly up to date, says Dan Marriott, Answers.com’s director of operations.
Answers.com relies on multiple database clusters to handle website traffic. Each cluster uses a master/slave model, in which a master database is updated in real time and 20 slave databases house synchronized replicas of the data. But when servers became busy, updates from the master to the slave databases were delayed. The result: Users potentially received stale data.
Installing additional servers with bigger drive arrays would speed the site up, but it was too expensive. “We can’t afford to simply throw hardware at the problem,” Marriott says. That’s where SSDs came in. In early 2009, HP introduced the StorageWorks IO Accelerator card, which is an SSD featuring technology created by Fusion-io. The Answers.com development team plugged the accelerator cards into their HP blade servers and found they provided blazing-fast data access that solved the site’s response-time woes.
“They’re extraordinarily fast compared with hard drives,” Marriott says. “The Fusion-io product is enterprise-grade, highly reliable, very fast and easy to use.”
The company’s return on investment was immediate. Before, each database server could handle 350 requests per second. With Fusion-io’s SSD technology, each server now handles 3,500 requests per second. The overall application response time also improved by 30 percent, from 100 to 70 milliseconds, he says.
The faster speeds allowed Answers.com’s operations department to reduce the number of slave databases per cluster from 20 to five. As a result, the company reduced power and cooling costs and server and database administration expenses by 75 percent.
Although the Fusion-io cards cost about $10,000 apiece, Answers.com still saved money, Marriott says, because it was able to repurpose the remaining 15 servers in each cluster for other important IT needs and avoided having to buy more servers to support those needs.
Marriott highly recommends SSDs in the data center for businesses that have large input/output requirements, handle a lot of traffic at their database tier and are hitting performance bottlenecks. “On paper, it may look expensive,” he says, “but when you consider we replaced three servers with one card, we gained immediate ROI.”
>>For more on Fusion-io, read our interview with Steve Wozniak here.
With desktop virtualization, small businesses can replace their PCs with “virtual desktops” — an image of an operating system and applications that are sent from servers to users’ desktops. This computing model, which centralizes desktop computing and data in the data center, lowers support costs, improves security and strengthens business continuity.
of consumers say regular communication with businesses through social networking sites improves their loyalty to those businesses.
SOURCE: Yankee Group (July 2010)
Dallas-based hosting provider CyberlinkASP standardized on Citrix’s XenDesktop software to provide virtual desktops for its business customers and its own employees. The performance, look and feel of the virtual computers are exactly the same as regular PCs, saysManaging Partner Chris Lantrip.
“When you log in to Citrix, it takes over your entire screen, and it looks and feels like you’re on a local computer,” he says. “It’s not slow or grainy. There’s no performance degradation. It all works.”
The main benefits include easier IT management and improved security because all of the data and applications reside on servers, Lantrip says. Rather than patch and update every user’s computer, IT team members need to patch only a smaller number of servers. In addition, because the data is stored in the data center, employees don’t have to worry about losing important or sensitive corporate information if hard drives crash or their notebooks are stolen.
CyberlinkASP’s 25 employees use virtual desktops, which are less expensive than regular PCs, Lantrip says. They access the desktops over thin client devices, which are a fraction of the cost of regular PCs and can’t be corrupted. Another benefit to small companies is business continuity. Virtual desktops are available anywhere as long as users have Internet connectivity. For example, users can connect from home, using their PC, Mac or iPad, and access their applications, he says.
What is the most important benefit of solid-state drives compared with traditional hard disks?
36% Faster startup
28% More durable for mobile use
17% Lower chance of data loss
11% Lower power consumption
5% Don’t know
3% No defragmenting needed
SOURCE: CDW poll of 354 BizTech readers
Blogging and social networking tools and sites allow companies to market themselves to large audiences at little to no cost. Businesses that have successfully implemented social networking often post to blogs regularly, or they can develop a following on Twitter and Facebook, where they engage their customers in conversations about company news, promotions and contests — even perform customer service.
MindTouch, a 70-employee San Diego technology company that provides open-source collaboration software, has a small marketing and advertising budget, so it conducts a lot of its outreach through social media marketing, says Aaron Fulkerson, the company’s founder and CEO.
MindTouch has about 1,300 Twitter followers and about 1,900 Facebook fans. Executives blog on the company’s website, and they tweet and post Facebook updates regularly. They also post how-to videos, infographics on Flickr and informational presentations on SlideShare. To maximize exposure, the company repurposes the content that team members create and shares it among their Twitter followers, Facebook fans and blog readers.
MindTouch uses social media to promote its products, but it also uses these tools to share views about industry news, to discuss trends and to provide other resources that might interest customers.
“You can promote yourself and your products, but the key is to establish yourself as a credible expert, so people turn to you as a resource,” Fulkerson says. That way, “you become a trusted authority and provide customers value.”
Fulkerson advises businesses to use social networking tools to create a conversation with their customers and potential clients. He spends part of each day communicating with them via blog comments and tweets, and he also sets a participation quota for every department. “It’s the responsibility of everyone to be active,” he says.
To get technology projects funded in a tough economy, small-business IT managers need to prove a near-immediate return on investment, analysts say.
“You need to make a near-term payback case and say, ‘This will pay for itself in three or six months. Here’s the improvement and efficiencies that make it the right thing to invest in,’” explains Ray Boggs, IDC’s vice president of small/medium business and home office research.
IT administrators may be excited about a certain technology, but they need to look at it through the eyes of the CEO and consider how the technology will support the company’s long-term goals, Boggs adds.
“You need immediate payback, of course, but you have to make it part of the bigger picture and support the corporate objectives and long-term strategy, so it can position the company where you need to be tomorrow,” he says.
Bob Eastman, managing director of SMB Research, agrees, noting that IT managers should work with management to develop an overall IT strategy that coincides with long-term business goals. Such an approach allows IT managers to strengthen their case for new technology and increases the odds that projects will be funded. “You avoid making short-term mistakes,” he says. “Each technology business case you make complements an overarching strategy.”
Another approach is to prioritize tech projects and implement them in phases, says Miles Prescott, also a managing director at SMB Research. Implement a small portion of a bigger project, and once that’s complete and successful, implement the next part, he advises.