Posted by: Chuck Bessant
I lived and survived the Dot Com Depression, and was a stronger person after the recovery. What can we learn that worked during the Dot Com bubble burst in 2000, and how can we be strong on defense? Companies that survived had good fundamentals, communicated openly and honestly with investors and had cash to weather the correction. Sure, stocks plummeted over several years, like Cisco from $84 to $7, and never fully recovered to their 2000 valuations, but they survived. Companies “down-sized” and realigned their businesses. Hardest hit were middle managers. Those positions were consolidated with other groups. Operations consolidation required engineers to do more than just one technology; they had to be “an inch thick and a mile wide”. Design engineers had to handle the work of 2 or more; the not so good engineers were laid-off. Managers were a dime a dozen, and without technical skills, work was hard to impossible to find. Those managers with skills found work, but not at the same salary they once had, but they were making money.
What can you do? You need to ask yourself honestly: Is my company solvent, and can it handle a long, slow recovery? Do I have the skill set to continue to be a valuable contributor? What can I do to make myself more valuable to the company? Is the work I’m doing of core importance to the company, or can the company move forward without the work I and my department do? Should I look for work someplace else that has good financial fundamentals? Should I just hope for the best? (This never works.)
What can your company do? Focus on core projects that have a fast ROI like less than one year. Investing in more efficient processes may cost $1-million but over the course of the year savings may be $2-million, and I don’t mean just layoffs; your best investment over the years has been in staff gaining the wisdom of how your company functions. If downsizing is necessary, care must be taken to ensure talent isn’t be sent to the competition. Expanding services may not be the best bet at this time or rolling out new products unless they can help other companies improve their efficiency. Retooling existing platforms and adjusting server and network architectures may be in order. Running more efficiently and cost effectively may be the best investments to be made at this time. Replacing aging servers with new servers that are less likely to fail (increased MTBF), use less energy (cost savings) and can handle more capacity will save money in the long run. In a data center that has standardized on a few server models and has 500+ servers, maybe self hardware maintenance is the way to go. Dropping expensive hardware contracts and buying replacement parts and full platforms will reduce OpEx costs. For every 10 servers, have a spare platform as a replacement. For every 10 server NICs in use, have a spare NIC; same for disks, memory and CPUs. As more servers are needed, pull them from the stock pile, and replace the stock room with new ones so spares remain fresh and ready for use.
You’ll need a good CMDB to keep track of inventory being used and available for use. This is not so bad, you’ll be better organized at the end of the day. This type of self-hardware maintenance will require new processes and procedures, and good logistics people and engineers who can perform the work. Vendors who get 17% on maintenance contracts won’t be happy, but business is business.
Aging PBX systems - maybe it is time to move to VoIP if the network infrastructure can support QoS and VoIP. Vendors will be hot to make sales with deep discounts. PBX maintenance contracts on old systems are expensive. While it appears that holding onto what you have is temping, now may be the best time to buy. If you’ve stayed current with your network architecture, you’ll have the components and proper wiring in-place that you’ll need to make this happen. If your architecture needs work, now is the time to review and update. It takes time to update architectures, sometimes several years to implement and phase in a new architecture. I do architecture for three to five years out, with tweaks along the way. This way I can plan and change as needed. The economy will grow again, and I’d use this time to shore-up so I’d be ready and able to adapt when the time is right.
Updating architecture doesn’t mean buying new switches and servers. It means planning and preparing before the need to buy new hardware becomes a requirement. Preparation and ground work. Lock and load, and ready to move when demand is on the upswing.
While the Great Tech Depression 2.0 will be difficult, make the best of it by preparing for better times ahead. This is not a time to chant, “Bring out your dead – CLANK! Bring out your dead – CLANK!” It is a time to prepare, plan, organize, get lean with cost saving moves with fast ROIs, become more effective with your processes and be ready to outdo your competition while they belly-moan and layoff staff they’ll wish they had in the future when the credit Phoenix rises from the ashes.
- Chuck
Comments