It's Mess with a Salesman Week

This is it. The perfect week. Friday is December 31st.

Friday's the end of the week.
End of the month.
End of the quarter.
End of the year.

. . . and the end of a LOT of deadlines for sales people. They have quotas and bonus systems. They have goals that need to be met.

If you find the right one, they can really make some great deals this week. Historically, this week is rumored to be the best week EVER to buy a car. If you find the right sales person.

Quotas based on shear sales dollars are very common, so any sale adds to that goal. But some sales quotas are based on units sold. That means that moving product - even at a loss - can get someone a bigger bonus.

Some industries have been hard hit for a long time with no relief, such as real estate. These sales people are desperate all the time. So don't worry about getting a better deal on a house this week. They'll be just as desperate next week.

But if you know someone gets a bonus based on total sales, total units, number of contracts, or even the number of add-on items they push, then start dealing now. You will find this week to be a period of amazing honesty when it comes to the question of "Where is there flexibility?" In other words, which fees are simply bullshit intended to put more money in your pocket? Let's drop those so we can talk about the thing that gets you a bonus.

Note that these rules don't apply to all sales people. If a sales person is on strictly salary, there are no extra bargains this week. Talk to them next week.

More importantly, there are some sales people who are not "in the running" for any sales competition. They're number five or number ten. They have little motivation to be making big, stupid deals this week. Big, stupid deals are going to come from hungry sales people who might actually win a big contest and get a trip to Maui or a new car. You gotta find the really hungry sales people.

How do you find these folks? Easy: They're working this week. They'll be in the office at 5:01 PM. They'll be on the phone every time you call - but they're guaranteed to call you back ASAP. They'll be working Friday, including Friday night.

Yes. They'll be working Friday, New Year's Eve, doing whatever it takes to make one more deal and kick more butt.

Schmoes who go home at 2 PM Friday are either not sales people, or they're not hungry sales people.

So make a plan. Make a budget. And start working your sales target now. You've only got a few days to whip them into a froth so they'll take anything you offer on Friday.

What About YOUR Sales People?

There's another side to this coin.

If you employ sales people, how are they motivated this week? Are they hungry? Are they bringing in new business?

I love lots of people who call themselves sales people. But I have to say that most of them are lazy and won't be cutting any big deals this week. This is a week for excuses (everyone's out of the office, no one calls me back, no one's looking to buy right now, decision makers aren't around, etc.).

There are always good excuses. And there are more excuses than normal in the last week of the year.

But there are always buyers. And this week there are hungry buyers trying to find new solutions. You just have to find them. They aren't going to be calling YOU.

Analyze your sales this week. For the month, for the quarter, for the year. How have you set up incentives for the last week of the year? Intentionally or not, are you motivating sales people to try harder or take the week off?

Monday (January 3rd) might be a great time to talk to your sales people about what motivated them this week. (Don't bother them this week unless they're not busy. And if they're not busy, this might be a great week to fire them and look for someone who will be busy on the last week of the year.)

Ask about how the sales commission structure motivates them. Do they love it? Do they hate it? Yes, they agreed to it at some point. But if it's not working, fix it. Find out what would have motivated them and see if it makes sense.

What you do NOT want to see is that your year-end commission structure motivates sales people to make stupid sales that you can't deliver. Or worse, ones you can't make money on. If the sales people are motivated to make sales that cause you to lose money, something is very broke.

Where do you stand?

:-)

Join me on the: Intel Hyrbrid Cloud Roadshow Charlotte - January 4, 2011 Ft. Lauderdale - January 6, 2011 Portland, OR - January 11, 2011

Save 40% Right Now at SMBBooks!

I posted a big discount coupon in my weekly email. A few people requested the discount code even though they're not subscribers to the weekly email.

So . . . first off . . . The best way to not miss big sales is to subscribe to my weekly SMB-focused email at smbbooks.com.

And . . . second . . . Here's the scoop on how you can save 40% right now at SMB Books:

Merry Christmas to All of Our Readers



Save 40% Right Now at SMBBooks!

Here's the deal: Just enter the code 40FOR2010 at http://www.smbbooks.com/ checkout and you'll receive 40% Off any order of $50 or more!

That's Huge! But you need to act before the clock ticks over to 2011. So do your year-end saving right now at SMB Books!


What are you looking for?

- Network Documentation

- Sharepoint Training

- Network Migration

- Service Agreements

- Relax Focus Succeed

- SBS Training

- Audio Training

- Managed Services

- Project Management

. . . and a lot more!

Check it out and save today! Merry Christmas.

Karl Palachuk Named to SMB Nation/SMBTN's "SMB 150" List

Harry Brelsford and the gangs over at SMB Nation and SMB Technology Network have come up with a list of the 150 most influential movers and shakers in the SMB (small and medium business) consulting world. From 900 nominees, I made the top 150 list.

I am grateful to everyone who voted for me. Thank you.

There's no indication of whether I'm a mover or a shaker, or perhaps in both categories.

The whole report is available for download here: http://www.smbnation.com/Publications/Magazine/tabid/72/Default.aspx


Lists

Lists are an interesting phenomenon. Some lists you get on because you jump through the right hoops (for example certifications from Microsoft, Cisco, CompTIA, etc.). Some lists you get on because of who you are (list of CEO's, for example).

And some lists you can't really do anything about. You just go about your day and then someone decides to put you on their list. These are like presents that show up in your mailbox unexpectedly.

The latest 150 list is a bit like that. I just hang out having fun. And one day I get on a list.

Thank you to everyone in the community who nominated and voted for me.

And thanks also go to Jim Locke of SMBTN and Harry Brelsford of SMB Nation for putting this together.

I appreciate the present, the honor, and wish you all a very Merry Christmas.


:-)

Now Shipping . . . The Best NOC and Service Desk Operations Book Ever! by Erick Simpson Ships from stock right now!

Save BIG Right Now on Cloud Services Roundtable Subscription

Cloud Service Roundtable Prices Go Up January 1

We have some good news for you. I know a price increase isn't normally good news. But you have time to lock in the savings before the prices go up.

Starting January 1st, 2011, the monthly cost for the Cloud Services Roundtable membership will go to $9.95 per month. That's still a VERY Low price. But you can lock in the current pricing by subscribing to a one-year subscription.

On Jan 1st, the annual fee will go to $99.95.

But right now you can get the "old" pricing of $49.95 when you buy a one-year subscription.

After a year of providing podcasts and webinars, the Cloud Services Roundtable has more than 30 hours of recordings, plus spreadsheets, powerpoints, and other great resources. Check it out and save today at www.cloudservicesroundtable.com.

:-)

Take 60 Seconds and Learn Migration to SBS 2011

Well,  Microsoft has released the first draft of their migration documentation for SBS 2011.

Luckily for all of us, it fits on a napkin!

- - - - -

Migrating to Windows Small Business Server 2011 Standard

Published: December 7, 2010

Applies To: Windows Small Business Server 2011 Standard

This section includes information about migration to Windows SBS 2011 Standard, and provides information about how to prepare and plan for migration from Windows Small Business Server 2003, Windows Small Business Server 2008, or another version of Windows SBS 2011 Standard. The topics in this section also include information about how to move roles, services, and other components from their current locations to the server that is running Windows SBS 2011 Standard. The guides listed here address specific Windows SBS 2011 Standard migration scenarios.

Migrate to Windows Small Business Server 2011 Standard from Windows Small Business Server 2003

Migrate to Windows Small Business Server 2011 Standard from Windows Small Business Server 2008

Migrate Windows Small Business Server 2011 Standard to New Hardware

© 2010 Microsoft. All rights reserved. Terms of Use | Trademarks | Privacy Statement - - - - - Source: http://technet.microsoft.com/en-us/library/gg490796.aspx :-)

Building a Team - And Relying On Them

One of my favorite books is The E-Myth Revisited by Michael Gerber. One of the reasons it's a favorite is that it's filled with lessons I have to keep learning over and over again.

The book is written as the story of a woman who starts a new company and learns various lessons. At one point she hires someone, turns over all the unpleasant work to her, and then goes on to love her job a lot more. So life is good . . . until her assistant quits.

Her first reaction is to jump back in and do everything herself. She learned the (wrong) lesson that she couldn't rely on anyone to take the job as seriously as she did. So now she finds herself opening early, closing late, and doing every single thing . . . and hating her job more than ever.

Eventually, she learned the right lesson: If you're going to grow, you need to turn over some chores to other people. And you might need to take them back for a short period of time. But once it works to turn things over to others, you should never take them back "permanently."

And the broader lesson: You should be building your team at all times. You should do cross training. You should make sure that you know what to do when someone quits.

When.

Not if.

Someone will quit. Someone will leave you hanging. Maybe not on purpose. After all, people have lives, kids, relatives, etc. Stuff happens. People move. Life goes on.

One of the hard lessons for me - that I have to learn over and over every year - is that I can't take back the work I've passed to someone else. This is a VERY natural and strong tendency. But it's also a business killer.


Building My Team

I didn't set out to build a team. I hired a guy. Then I hired a gal. Then another guy. Then some more. And on and on.

I didn't realize I'd built a "team" until Manuel took over as President of KPEnterprises and I handed him a team to execute his directives. The team changed and morphed and matured. The personnel changed. The look and feel and culture evolved. But it was always a team after that.

Over at Great Little Book, I realized we had a team when we produced our last book (590 pages plus web site, downloadable content, etc.). That book required a process for writing, editing, graphics, layout, and so forth. With smaller books I farmed out various chores to other people/companies. With the The Network Migration Workbook we did it all in-house.

So what makes a team a team? That is, what makes it a team vs. just a bunch of people who work together? In my opinion, a team is a group of positions filled with the right people and the positions are structured in such a way that the organization can accomplish something that cannot be accomplished by an individual.

That's literally the key to success. The team can do things that an individual cannot.

There are lots of really BIG examples of things that can't be done by individuals. An individual cannot build a skyscraper or an ocean liner. An individual cannot build a highway or a modern car. And there's nothing new about this. The seven wonders of the ancient world were built by large groups of people - not by single individuals.

But you might do things on a smaller scale. So why do you need a team?

Well, let's take tech support for example. With a team, individuals can rely on each other to carry out certain jobs. Rather than having a company in which every person is an autonomous "business unit," individuals play roles and specialize.

Our team includes our business partners at Zenith Infotech. They play a specific role and work is passed back and forth between people working at our location and people working at their locations. But they are part of our team and help us to do things we could not otherwise do.

In public relations, web marketing, and customer service, teams can provide a higher level of performance than a group of individuals who are not constituted into a team.

Here are the basic characteristics of a team within a small business:

- In teams, positions exist independent of who occupies them

- In teams, people "play the roles" defined by the team, but individuals can move from role to role

- In teams, people act in such a way that they hand work back and forth with the assumption that each individual (role) is doing his job. This is the hardest piece for some small businesses to grasp.

- If a member leaves the team, it is not a crisis. A new person is hired into that position.

- With a team, the boss should not be allowed to stick her nose too far into the business of the team. The boss's job exists at the level of creating ideas, brainstorming, evaluating, motivating, . . . and pretty much everything except the low-level executing.

When you hear people debating about whether they can or should delegate, those are people who either don't have a team or are not using their team effectively. If you want your team to execute and take your business to a higher level than you could possibly do by yourself, you need to turn things over to them and not take them back.

I could imagine downsizing my companies to the point where I do all the work again. But I hope that never happens. I want to keep fine-tuning the team so we can continue to do amazing things.

For example, at GLB:

During SMB Nation, we broadcast six live podcasts. These were recorded and uploaded to our skydrive. Jerry ran around and recorded Flip videos of all kinds of people. He uploaded those to the sky drive. Monica was back in the office. She produced final videos and audio files. Then she "marketed" them on Twitter, Facebook, and LinkedIn.

In three days my team created, produced, posted, and advertised six podcasts and 39 YouTube videos. That is literally something I could not have done alone.

- - - - -

Now when I think about fine-tuning my team, I think about the whole team. I don't think about individuals and what they can do. I think about the roles I need played and how I can get the right people in the right roles. Then I think about all the amazing stuff we can do that we never could without a team.

:-)

Want to figure out how to make money with Cloud Computing? Join the Cloud Services Roudtable today and listen a great series of podcasts! http://www.cloudservicesroundtable.com/

Cloud Commercials Illuminate and Obfuscate

For some time now . . . almost two years . . . I've been saying that you need to introduce your clients to cloud computing before someone else does. What's that someone else? Well, for starters, your business partners Intel, Microsoft, IBM, and Rackspace. Well the time has definitely arrived.
Consider some of the commercials and videos out there on the internet. Let's say a client gets interested in one of those Microsoft commercials. That takes them to You Tube, which takes them to other videos. Consider what they're "learning" about cloud computing.

First the MS commercials:


That commercial is NOT geared toward your average customer. It's geared toward businesses that don't exist, don't have money, and are hoping an angel will come in and make them rich.

Which is fine. But they're probably not your current clients.

What your clients will get from this: A bit of excitement. A bit of jargon. A general sense that cloud is good.

I am reminded of very early advertising for laptop computers. The big appeal was that you could work at the beach. But the CEO making the decisions didn't want his employees working at the beach, so the message was not well received.

These Microsoft Commercials seem totally geared toward micro-sized companies who will be steered toward BPOS rather than the larger companies who need Azure.


Next up, IBM:


IBM might not be one of your key partners, but I include it here because I first saw this on an airplane with a captive audience. It is a perfect example of how one of your customers might "learn" about cloud computing while traveling for the holidays.

This commercial is an interesting mix of "workload optimized service management platform" jargon and real human speak. It's not about HOW the cloud works, but all about what you can do with the cloud.


Then there's our good friends at Intel:


What is cloud computing and how does Intel fit in? Well, this commercial claims that Cloud is just a buzzword for internet-based services. I don't think that's particularly helpful. Again, this commercial is a combination of techie speak and simple examples.

This particular video has a pretty good description of how you just call the cable company and get telephone, audio, video, and internet services delivered almost instantly. Cloud computing is just another utility service.


Another popular service your clients have heard of, is Salesforce.com. So whether users or not, they might view the Salesforce.com video:


You have big ideas . . . Streamline your business and drive sales through the roof.

This is actually a really good overall business-focused intro to cloud computing. Do you need a data center with office space for every application? No. Just use an on-demand product that is simply "there" all the time.

Again, the combination of descriptions that make sense (call technical support but they can't fix it) and enterprise jargon (solution stack). Overall, this commercial is clearly focused on the enterprise business space. They are not appealing to small business, even though they make a nod in that direction. I suspect "small" means under 250 desktops.


One more example . . .

Over at Rackspace, the approach is more technical and more down to earth:


This video is all about private vs. public clouds. It gives a very straight-forward description that your clients will understand and then immediately addresses the security questions that are so hot for some clients.

Overall, this is good stuff for you. Probably a little dry for non-techies. But your clients will understand it and get a sense that someone has actually addressed the issues they're concerned about.


Note: There are also plenty of videos about other cloud solutions, including Zenith's Cloud offerings (see You Tube or MSP TV. But your clients are not likely to stumble upon these. Here I just wanted to focus on stuff your clients might serve themselves.

- - - - -

The Bottom Line

Your clients are already hearing about the cloud. If you don't have answers for them, others do. "Others" includes AT&T, Dell, Microsoft, and 1,000 other companies who will be happy to take a credit card this afternoon.

What are your clients' impressions of cloud computing? Are they realistic?

And what are you doing to educate them?

- - - - -

:-)

Now Available: Introduction to Zero Downtime Migrations Seminar on MP3 Download

Ready for a Period of Great Productivity?

Well, if the government statistics are to be believed, we're in the early stages of an economic recovery in the U.S.

A little bit at a time. We'll have ups and downs. Over time the ups will win over the downs. (That doesn't make it fun to go through.)

If you haven't been in business through a couple of recessions, let me give you a heads up on one of the unique experiences of a recovery: Productivity will peak.

What is productivity?

There are few different ways to measure productivity. One measure of productivity is the amount of work produced per person. You want this to go up. Another is the amount of money raised per employee. You want this to go up. Another is the number of hours of labor it takes to produce a specific result. You want this number to go down.

As you - and your clients - get ready to come out of the recession, you will gradually see productivity increase. There's a simple reason for this: You will delay hiring someone as long as you can.

Since one of the key variables is the "per person" part of the equation, you increase productivity by having more work done by the same number of people.

You can measure this in your PSA system. My favorite measure is billable labor per employee. Some people primarily measure billable labor per technician. In either case, you should be measuring this now so that you can set a base.

You will see improvement in this measure until you hire someone.

NOTE: As soon as you hire someone, productivity goes down. Period. It's built into the equation.

Here's the pattern:

- Set the base so you know where you stand. For example, if you have two techs billing 20 hrs/week, that's roughly 50% bill-ability.

- Productivity will increase as you take on more work but avoid hiring. Let's say one tech stays at 20 hrs/week and the other manages to eke out 30 billable hours/week. So now you're at 62.5% bill-ability.

- Then you hire someone and productivity plummets. Let's say you have Tech 1 at 20 billable hrs/week, Tech 2 at 30 billable hrs/week, and the new tech starts with a whopping 5 billable hours/week. If everyone's working 40 hours, you're now at 45.8% bill-ability.

- Assuming the new hire gradually makes it to 10, 20, and 30 hours of billable labor, your productivity will go back up. This also assumes you have the workload.


Practical Considerations

Now that you know this, what actions should you take in order to take advantage of this change you know is coming?

1. Delay Hiring

The longer you delay hiring, the more productivity and money you'll have. While you don't want to work yourself to death, you also don't want to hire someone just because you have a big migration project coming. If you don't also have more work after that, hire someone from your local I.T. Pro user group to help you out during the crunch. That way you don't make a long term commitment and have no work.

2. Expect the Bump and Start Slow

Now that you know it's coming, put plans in place. You might see if you can hire someone part time. That way you can train them on your processes and procedures, and you can increase their hours when the work shows up consistently.

Hiring the right person at the right time is very difficult. You might have an increase in work followed by a decrease. Like all economic forecasts, you'll know the recession is over only when you look back. When you're in the middle of it, it's hard to see the end.

One of the reasons that productivity increases nationwide at the end of a recession is that millions of small businesses are in this same predicament. They are delaying hiring someone until there's enough work to guarantee the position. Or they're hiring part timers rather than full timers. In either case, millions of companies are squeezing just a little bit more out of the people they have.

3. Understand Your Clients

Your clients are going through the exact same thing. They are seeing rumblings of more work, but they don't know whether they have the money to hire another person full time. So their productivity is increasing just as yours is.

The word "understanding" is very important here. When people are squeezed to the max with work, they will be a little stressed and short tempered. They will sometimes make irrational decisions. They will do what's urgent before what's important.

So they need your patience and understanding.

Interestingly enough, the best thing you can do for clients sometimes is to let them know that you're going through the same thing. Take them to lunch and whine about how hard it is to run a small business. And how it's better to fret over a recovery than a deeper recession!

:-)

Join me on the: Intel Hyrbrid Cloud Roadshow New York - December 8, 2010 Charlotte - January 4, 2011 Ft. Lauderdale - January 6, 2011 Portland, OR - January 11, 2011

It's SBS Essentials, Not Aurora (Istanbul, Not Constantinople)

I posted some notes on the entry-level server line-up in my newsletter this morning and a few people recommended that I repost that here. Not sure why. Just subscribe to my newsletter at this link.

Anyway . . . This note covers the Microsoft Operating system options, not the hardware options available at the small end of SMB. There's quite an array of hardware options as well.

Right now in our office we are playing with Windows Home Server on HP OEM hardware, SBS 2008 on the Intel Hybrid Cloud (Lenovo hardware), Foundation server on HP OEM, and SBS on Proliants (of course). And tonight Mike tells me that we just took deliver of the new HP Micro Server. Yeee Haww! We're going to play with that for both Aurora/SBS 2011 Essentials and Foundation server.

So here's the re-broadcast of an article from today's SMB Email:
- - - - -

A few release notes . . . SBS and Other Servers for the SMB Space

I have to learn to stop calling Aurora Aurora. It's now SBS Essentials.

I'm reminded of the song "Istanbul (Not Constantinople)" . . . http://www.youtube.com/watch?v=-YPnXBWl9Tk

Here's the basic line-up of Microsoft operating systems you might select for your small clients:

Windows Home Server - We call this one "Server Light"
WHS is sold as a storage server from HP and makes a VERY handy little package. It is great for onsite backups and central file storage. It also works well with cloud-based storage (files onsite, backed up to the cloud). Be aware that this operating system is limited to TEN users and has no active directory.

Sold as OEM throught HP and others.


Windows Server 2008 R2 Foundation
This is my current favorite server. Why? That's easy. 1) It exists and I can sell it to clients, and 2) It has active directory. While limited to FIFTEEN users and one processor, this O.S. is amazing in a small business. A.D. means that migration from SBS or "regular" Windows is a breeze. It won't take Exchange, but if you have hosted Exchange, this beauty will integrate onsite storage with A.D. security AND provide terminal services for up to 15 users.

Sold as OEM through HP and others.

Love, love, love the Foundation server.


Windows Small Business Server 2011 Essentials (formerly Aurora)
Due first quarter of 2011. That means first or second quarter to you and me. I think the expected release is Q1, but the official word is first half (in case there are issues). Supports up to 25 users. Like WHS and Found, there are no CALs and you can't expand beyond the limit.

The core role of Windows Small Business Server 2011 Essentials is to manage all your small business technology from one box - including connections to hosted services like Exchange, BPOS, and CRM. Official word is that it "will be available through all current Microsoft server licensing channels." I assume that means open licensing as well as OEM but I can't guarantee that.

Estimated retail pricing is $545 US.


Windows Small Business Server 2011 Standard (formally "SBS 7")
This is basically the newest version of the "Standard" SBS you've known for two versions already. It includes a backup solution, Exchange Server, Sharepoint, etc.

Expected release is December 2010 through Open License programs. Available through OEM and System Builder programs in February 2011. Those dates are specific enough that they are probably real.

75 user limit. Estimated retail pricing is $1,096 US, with CALs approximately $72 US.


Windows Small Business Server 2011 Premium Add-on is the new incarnation of our old friend SBS Premium edition. Now, the premium content is being sold as an "add-on" to either Standard or Essential versions. That's pretty cool. Premium Add-On includes a license for Windows Server 2008 R2 Standard and SQL Server 2008 R2 for Small Business.

You can use the additional server with the CALs you have on SBS (Essentials or Standard), but you'll need Premium Add-On CALs for access to SQL Server. Due in December 2010, along with Standard SBS 2011.

75 user limit. Estimated retail pricing is $1,604 US, with CALs approximately $92 US.

(Well hidden plea to Microsoft: PLEASE rev this to Server 2012 and SQL 2012, or whatever's next, without requiring a bunch of upgrade disks. Just ship the new stuff when it's released. thanks.)


. . . And, of course, you might also consider Windows Server 2008 R2 Standard.

- - - -

Links:

- Official announcement of names and prices:
- http://blogs.technet.com/b/sbs/archive/2010/11/02/announcing-windows-small-business-server-2011.aspx

-Windows Small Business Server 2011 Standard datasheet:
- http://go.microsoft.com/?linkid=9750068

- Windows Small Business Server 2011 Essentials datasheet:
- http://go.microsoft.com/?linkid=9750069

- Windows Small Business Server Family overview brochure:
- http://go.microsoft.com/?linkid=9750070

- To download previews of Windows SBS 2011 Standard and Essentials you can visit
- https://connect.microsoft.com/SBS

:-)

A $7,000 Server for SMB

I got my feedback from my presentation at SMB Nation. Thank you. 95%. I appreciate that.

But you know how it goes. One person made a comment that stuck me in the heart. So whoever that is, I hope you'll see and consider this response.

The comment was that SBS servers don't cost $7,000 (a figure I mentioned a couple of times when comparing the expense cycle of having a server on site vs. the monthly costs for cloud services that are pay-as-you-go).

My response to this objection is very simple: HUH?

Servers cost what they cost. I don't know what everyone else puts in at their clients, but for us it looks like this:

Proliant ML 350 G6
- 2.53 GHz Processor
- 6 or 8 GB RAM
- 12MB L3 cache
- RAID Controller
- Hot plug, 500 GB hard drives (2 mirrored for O.S. and 3 Drives configured in RAID 5)
- 3-year warranty
- RDX disk backup drive w/ 4 Cartridges
- SBS 2008 Premium
- 5 additional Client Access Licences
- Diskeeper defragmentation software
- Secure Certificate for three years
- Backup Exec Backup software

Now you might strip out the backup software, secure cert, Diskeeper, SBS, and maybe go cheap on some drives. If you did that you might say the "Server" is only $3,000. But a server without an operating system is useless when making a comparison against the Cloud (or anything else.

If you sell Dell instead of HP, you might have the option to get a nice dual Celeron machine for $600. But we only put our clients on quality equipment.

We believe the equipment list above is a great little server for small business client. And it comes in right at $7,000. I think the system we installed last week was exactly as specified here and sold for about $7,150 plus tax. There are only two changes to this configuration that I would give serious consideration to:

1) Go with three drives in RAID and then create C: and D: volumes on the single RAID array. With this client, that means we'll be selling them additional drives in the next three years. The additional cost today is less than $350 so the future hassles are easily avoided.

2) Maybe go with fewer backup drives. But even at $250 each, how many would you cut? You can't leave a clean with a tiny disc rotation or you have a very fragile disaster recovery plan.

Some people will go to an inferior machine, with no warranty or something that's not business class. But you don't really save much there. The core hardware component here is $3,000. So what are you going to save? Sell them a $2,500 server that's going to give disappointing performance after two years? That doesn't make sense.

The client we migrated last week (with zero downtime, of course) has now purchased four servers from us over the last dozen years. This last one lasted more than four years because of the recession. It only lasted that long because we sold them an appropriate business machine in the first place. Performance was not spectacular at the end of that last machine's life because every other machine in the office is so much faster than the server. But it was alive and it lasted so long because it was good quality from the start.

If I had decided to "save" the client $1,000 four years ago, they would have been very unhappy with their technology -- or they would have had to do some major upgrades along the way.

Quality Matters

I know there are many ways to cut costs. And we each have to run our businesses our own way. But I encourage you to only use good equipment. It seems obvious, but it's not.

When Mike came to work for us he was amazed that our clients basically never call. Things don't break. We never EVER worry about going home at 5:00 PM or going out of town on the weekend because stuff doesn't break.

I am always uncomfortable when consultants tell me that they have some server emergency, failed drives, etc. To me this always sounds like someone sold the wrong equipment in the first place and is now charging the client for fixing stuff that should never have broken. If I had to live in fear of going home at night because my clients' equipment might fail at any minute, I'd go into a different business tomorrow.

If you think you have to sell cheap equipment, I recommend you give the client alternatives. Give them a quote for cheap server and a quote for the server listed above. Let the client choose the server! When a client looks at the bottom line, they will often spend the extra money with a very simple calculation: How much extra does it cost each year? If the "expensive" server is $1,200 more, that's only $400 per year. How many hours of your time - plus downtime - do they need to save in order to make that worthwhile?

So yes, Virginia, there is a $7,000 server in the SMB space. In fact, the world's full of them.