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March 22, 2010

Migration pace prompts older system value

Economic experts peg the start of the Great Recession as 2009, but it hit even earlier than that for IT managers in the 3000 community. About 2007, says the Support Group inc. founder Terry Floyd, who has watched migration projects stall out. As a result of the stall, his clients across two companies -- the allied Entsgo unit sells MANMAN ERP alternatives -- started upgrading 3000s.

The 3000 upgrades didn't start up because migration projects died or failed after implementation. However, a failure to fund an established project made newer 3000s a better value. A purchase of a 3000, more powerful but not the latest, gave his clients some time to homestead longer -- whether that is their long-term plan, or just an interim step.

Another support company which sells 3000s reports that the popular upgrades haven't been the ultimate generation of 3000 models, HP's A-Class and N-Class systems. Steve Suraci of Pivital Solutions said the A-Class servers don't make that much sense to a company using the 9x8 Series of 3000s, for example. The A's don't offer enough of a jump in performance to justify the price premium still attached to the newer model.

SINCE THE end of last summer, resellers for 3000s have seen an uptick for sales of the hardware. However, "very few of them are moving to the A's and N's," Suraci said. "If you're a low-end customer, an A isn't a great box to go to anyway. The A-Class was meant to the be the low-end in that class of servers. The performance of most of those boxes is in line with the performance of their current hardware."

David Floyd, CEO at the Support Group, noted a new value-role for the A-Class. The box that HP established as the new low-end is being treated as such. "One of our customers just bought one," he said, "for their disaster recovery and development system." Not so long ago, the community called these crash-and-burn systems, the ones which were not responsible for daily mission critical operations.

That an A-Class system could land in this value spot, or the plentiful 9x9s remain attractive as an upgrade option, shows the enduring proposition of the 3000. This situation turns out to be of benefit to the migrating customer, too.

Suraci says, "What I hear from these customers is this: 'We've been saying for so long that we're going to something else. Number 1, we're not there yet, and we're so far behind now that we have to do something [to upgrade.] We need a performance increase today.' Or they say, 'We've been saying we're going someplace else [off the 3000], but like everybody else, we still don't have a plan to do that. Three years ago we were saying we're 18-24 months away. Today, we're still saying we're 18-24 months away.' "

We chronicled another example of this earlier this year, when an IT manager at Gilbarco Veeder-Root was looking around in November for a newer 3000 to step in while the company's ERP migration was being completed. For that manager, a few more CPUs in a 9x9, or some memory, was going to bridge the migration timeline's gap.

This is not a set of reports that will inspire gusto in a company that needs migration business to remain in the 3000 marketplace. It helps if you can have two ways to engage a customer. Even though Floyd's enterprise is among the 3000 vendors that does business in both homestead and migration camps, it approaches the dual role with two badges. The Support Group inc. and Entsgo, the latter helping companies migrate complex ERP systems off 3000s. A hardware element of an Entsgo project is likely to be a ProLiant or an Integrity server.

The systems sold to a Support Group client, or one at Pivital, will be one of those better-value 3000s -- their value improved because the market now has many replacement systems, more powerful than existing 3000s, available for a price just as changed as the 3000's proposition over the last eight years. Meanwhile, the changes of migration are only now on the uptick from that recession.

11:33 AM in Homesteading, Migration | Permalink

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