True Story, Best Not for BedTime: Impacts to IT Budgets from Q2 Financial Results

Remember the 1989 pop song, “Back to Life?” in which the repeated chorus was, “Back to life, back to reality.” Well, for many CIOs and IT leaders, this old song may be playing prominently in their head over the coming months. It would appear that company executives are now in the middle of Q2 financial reporting to their stakeholders. While for many industries, margins are down and layoffs were avoided, these stakeholders might argue that not enough cost-cutting strategies were deployed to maintain a reasonable margin and EBITDA. In all empathy, this pandemic left many of us “shell-shocked” and hesitant.

My Story:

I took a call this last Monday from a large healthcare client with whom we’ve built an incredible relationship the last few years. Executive management was hitting all departments with significant cost-cutting mandates AND specific budget reduction goals. FIRE DRILL! Within four hours of this executive announcement, this organization’s IT leadership had devised several strategies, divided responsibilities and were getting in contact with their most helpful product and support vendors. I was simply amazed by the depth of thought behind the requests, as well as the spreadsheets and formulas they could easily modify based on “on-the-fly” vendor solutioning. This team certainly earned my respect.

Prior to this FIRE DRILL call, we were already projecting we would be able to save them $2.1 million from their 2021 hardware operating budget (specifically, networking spend). But, these new requests will be far more impactful to the ongoing health of their business. I’m pleased they have at least one IT support vendor that’s willing to be proactive and dive into creative solutions. Yet, I’m equally honored we’ve earned their trust.

Items to Ponder from this Story:

  1. Has your industry/company been impacted financially by this pandemic?
  2. Are you as prepared as this client obviously was?
  3. Do you have a solid mix of IT vendors that will flex – even do back-flips – to help WHEN you will be asking for it? Or, will these vendors push you to believe their “smoke & mirrors” during negotiation? Can you count on these vendors for ingenuity in solutions development?

Meet XSi:

We provide independent hardware maintenance on enterprise servers and data storage hardware and are celebrating our 30th year anniversary. Our focus is solely on post-warranty, End-of-Support or End-of-Life hardware assets. Our costs generally run 60-80% less than OEM fees for the same support levels. Yet, depending on the percentage of hardware that has exceeded warranty dates, the savings we can drive often will impact your Total Annual Hardware OpEx by 20%.

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About the Author

Todd founded XS International in 1990, helping to build an independent IT support organization led by pioneering executives with proven tenures at Cisco Systems and Juniper Networks. He holds a board of director positions with the world’s two most prominent associations for independent IT support providers – Service Industry Association (SIA) and ASCDI (hardware resellers). He was a founding member of the Digital Right to Repair Coalition (now known as Repair.org, and continues to serve on their Board of Directors. As a hobby, he also co-founded VinoApp, specifically for Argentine wines. Very much a serial entrepreneur, Todd earned his Bachelor’s in Finance from Ohio State University and later completed a three-year Entrepreneurial Masters Program, given by the Entrepreneurs’ Organization & MIT Enterprise Forum. He resides in the greater Atlanta area with his family.