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Jingle All the Way? The ‘Innovation vs. Cost Optimization’ Dilemma

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“It was the best of times; it was the worst of times…”  As in Dickens’ classic, this past holiday season has been A Tale of Two Cities – and a familiar pattern for many retailers. 
To wit:

  • Total holiday sales climbed 3.5 percent over last year… but at the expense of profit margins.
  • Prospects pulled out the plastic… but purveyors ponied up piles of price cuts and promoted unprecedented extensions of store hours to prolong purchasing.
  • Online retailers fared well, particularly Amazon.com, who saw its best seasonal sales growth ever… while traffic in many brick-and-mortar locations underwhelmed.
  • In addition to earlier Black Friday hours than ever before, Macy’s and Kohl’s kept stores open 24 hours a day beginning December 20.  Bloomberg noted numerous retailers, most notably Gap, which maintained deep price cuts – up to 75 percent off – throughout much of the season.

Despite the increase in speed to the US economic recovery (4.1 percent growth in the third quarter)… retailers are not seeing commensurate growth.  

In short, companies are under unrelenting and unprecedented pressure to drive profitability.  As prices drop to stimulate demand, internal cost optimization becomes the relentless goal.

Enter the CIO.  IT leaders must face an unenviable dilemma: drive competitive advantage through innovation – while managing a pressure cooker in the corner office that screams “cut costs.”

The good news?  In what is perhaps the best kept secret at Microsoft, retailers are seeing their hardware costs slashed by 80 percent, while upgrading their infrastructure, thanks to a compelling new way to run their PCs.  Stores can now run most – if not all – their Windows desktop hardware from a single machine.  The magic is in a combination of software (Windows MultiPoint Server 2012 – an OS previously only available to education customers) and a shockingly simple, sub-$100 piece of hardware.

The device, The HUB 400 zero client, reduces enterprise hardware costs by 80 percent by replacing conventional desktops. Unlike PCs or conventional thin clients, the devices have no processor or operating system. When networked (via a standard Ethernet port) to a server, virtual server via Hyper-V, or even a standard i7 PC, enterprises can run up to 20 completely independent Windows 8 workstations per PC.                   

Microsoft and GreenBridge Computing have already deployed Windows MultiPoint Server and zero client solutions in hundreds of thousands of terminals worldwide. Until now, the solutions have focused on the K-12 space.  Now, retailers worldwide are empowered with cost savings benefits previously only enjoyed by education customers.

“The HUB 400 is a superb option for retail environments,” said Marty Ramos, Chief Technology Officer, Microsoft Retail Experience Center. “Our partnership with GreenBridge Computing is already generating tremendous response from Fortune 500 CIOs who are hungry to optimize expenses while eager to migrate to Windows 8.”

Eager to learn more?  See The HUB 400 in action at NRF 2014, in Microsoft’s booth, # 2703.  I’ll be there with my team.  We would love to learn from you, listen to your challenges, and share ideas.

Wishing you a marvelous new chapter in 2014!

David Yunger, President and CEO, GreenBridge Computing Inc.