Dell Inc. continues its acquisition spree by acquiring mainframe rehosting company Clerity Solutions Inc. and application modernization tool provider Make Technologies Inc. In the course of the past month Dell has also acquired network security and data protection provider SonicWALL Inc. and Wyse Technology Inc., a thin client solutions vendor. 

•  Dell announced it has acquired Clerity, a leading provider of applications modernization and re-hosting solutions and services. Dell claims the addition of Clerity's capabilities will enable Dell Services to help customers reduce the cost of transitioning business-critical applications and data from legacy computing systems and onto more modern architectures, including the cloud. 

•  Dell's second acquisition just weeks ago was the purchase of Make Technologies, whose tools are aimed at modernizing mainframe and midrange applications. The Make Technologies acquisition gives Dell a tool that can examine the structure of mainframe and midrange applications, generally written in COBOL or RPG. 

•  In March Dell purchased SonicWALL, a privately held provider of data security measures for businesses. The purchase price was undisclosed but according to the New York Times, Dell paid about $1.25 billion, including the assumption of SonicWALL's debt. The new acquisition gives Dell a provider of high-grade networking security services, which include next generation network firewalls, e-mail protection, backup and recovery, and policy, management and reporting offerings. 

Experton Group believes Dell is aggressively pursuing its transformation into a full-service commercial IT products and services provider and should make the transition successfully. Dell recognized that its personal PC business would not continue to provide it with the growth required once Apple Inc. started to dominate the market with its smartphone and tablet products and services. Management realized the success it was having with its Data Center Solutions unit, which had grown to be a $1 billion business and is the largest provider of densely-optimized servers.

IT executives that view Dell as a strategic partner should meet with Dell executives to understand the strategy and roadmap to ensure that Dell's direction and timing is compatible with corporate goals and requirements. In companies where Dell is not a strategic partner but a supplier, IT executives should continue to keep Dell on the short list to help ensure the company is getting the best deals possible from its full-service competitors.

 According to a recent article published in eWeek, the following are data integration and cloud computing trends that could potentially affect how the cloud will be used in the near future.

•  Enterprise Application Integration & Integration Platform as a Service – there is movement on many fronts to simplify application integration not only from one vendor, but many vendors. Standardization of cloud application interfaces at a higher level than APIs will help promote cloud usage. It is generally recognized that in order for “new-comers” to introduce and gain acceptance of their applications, they need to interface with generally accepted social media tools like Facebook, Twitter, etc. 

•  B2C will Drive B2B Agility – it is clear that the consumer market is driving a lot of what is being developed and used in the corporate market. In other words, the consumer is driving the cloud market.

•  Data as a Service – as more and more information from multiple sources becomes available, there are manufacturers and service providers that have recognized the need for data management, which includes filtering, curation, etc. See iFlow.com.

•  Master Data Management – building on data as a service, the management of data and integration with existing enterprise data will develop significantly in the near term.

•  Data Governance/Security – as more consumer data becomes more prevalent and service providers offer management and integration services, the protection of private information becomes even more paramount

•  Business Process Modeling & Activity Monitoring – as the capabilities of the cloud mature and enterprises take advantage of cloud-sourcing, sophisticated tasks like process modeling and business activity monitoring will move into the cloud.

•  Cloud Service Brokerage – it makes sense that while multiple cloud services become available and cloud service integration platforms develop, that there will be a need for knowledgeable service providers to offer brokerage and service integration services.

A lot of what is presented above is based on traditional business development. If we were to go one step further, it is expected that there will be a lot (more) of service merger and acquisition – new leaders will emerge that will offer a wide range of cloud services and threaten traditional service providers like Amazon, SalesForce, etc.. IT Executives should make sure that they keep abreast of market developments before making significant investments and commitments.

 The mobile enterprise market has been evolving for a decade and SAP made a decisive move two years ago when it acquired Sybase. That was a seminal purchase and the German giant has now outlined the broader strategy it will build on its unit‟s mobile strengths. It has acquired another firm, mobile apps player Syclo; gathered partners for a wide development framework; and will infuse mobile capabilities through its whole offering, including its David and Goliath challenge to Oracle in databases. As large companies move towards cloud services and BYOD, the market is changing and gathering pace, and the year ahead will be a critical one for big software players like SAP, Oracle and IBM.

In Oracle‟s most recent earnings call, CEO Larry Ellison said German rival SAP “must be on drugs” to think it could compete in databases. SAP, which outlined its new roadmap this week, has certainly stepped up its activities in that market with its HANA platform. But its real threat to Oracle lies in its better understanding of the mobile enterprise sector, which after years of gradual evolution is now at a tipping point – driven by two key trends. These are BYOD (bring your own device), which is breaking down the old norms of mobile management and applications; and the accelerating shift towards cloud-based enterprise apps accessed from all kinds of gadgets.

All the major corporate software houses are seeking a role in those related trends, but SAP made an early and decisive move when it acquired Sybase two years ago. Although that firm brought some assets to SAP‟s database challenge, the longtime Oracle follower had really carved out its own role as an early mobile enterprise provider and SAP has been building on that foundation ever since. Sybase really broke into the mobile market early in the last decade when it acquired iAnywhere, a product that briefly toppled RIM from the top spot in corporate mobile email in 2003. In 2004 it unveiled its Unwired Enterprise strategy and its ultra-low footprint mobile database has consistently enjoyed a strong position too.

Now SAP plans to lose the Sybase brand soon as it infuses mobility through its whole operation under the „Unwired‟ label. This week it outlined the next stage of its corporate mobility push, starting with another acquisition – of Syclo, the king of mobile asset management, and a big player in other areas such as field services, inventory management and approvals/workflow.

 Experton Group believes enterprises have been living with poorly optimized storage systems for too long and need to take advantage of the optimization alternatives available so that the storage cost curve can be driven down. IT executives should be able to cut their storage costs in half while simultaneously doubling storage capacity. Moreover, much of the expansion could be self-funded (i.e., payback in less than 12 months). IT executives should perform a cost/benefits analysis to see if and where implementation of new storage methodologies should be applied and then build the appropriate approaches into each new storage expansion/refresh initiative.

The following 12 approaches provide ways to reduce the cost of storing data:

1. Better content management.  While enterprises are getting better, in most companies 60 percent of existing storage space is either not used or not well used. Unsurprisingly, the inappropriately used, orphaned, and over allocated space – 30 percent of all storage space – is never detected or found. 

2. Compression. There are multiple compression technologies and some of them result in data loss, which can call the integrity of the data into question. Data and records that must be legally retained should only be compressed using lossless techniques. ZIP file formats are lossless as are PNG and GIF images. 

3. Clouds and pools. In some environments it is possible to use cloud storage to reduce the amount of storage space needed in house. Some of the best examples of this are for development and test systems and backup. Storage pools also enable the sharing of storage capacity across multiple applications.

4. Deduplication. Deduplication eliminates redundant data. In areas where it can be successfully applied, it can achieve up to a 22:1 savings. There are four different deduplication methodologies:  inline, post-process, source, and target deduplication. 

5. Golden Records. With the shift to distributed computing, which uses a shared-nothing storage architecture, enterprises ended up creating multiple copies of databases. It is not uncommon for companies to have anywhere between seven and 50 copies of commonly used databases. 

6. Leasing/shorter refresh cycle. Storage technology is rapidly changing. Over the past five years there has been a 2.5 times improvement in density and a power reduction in excess of 90 percent. IT executives will find shorter storage refresh rates are more cost effective in many ways.

7. Mainframe as database server. Unlike the distributed shared-nothing storage architecture, mainframe servers utilize a shared storage architecture. This architecture allows enterprises to keep a single copy of each of their databases. This could reduce total capacity demand by up to 80 percent. 

8. Newer storage management solutions. Traditional storage platforms fail to provide advanced storage management tools, which means that as storage capacity grows the number of administrators grows proportionally. The newer platforms offer automated management capabilities improving this ratio.

9. Snapshots. Use of snapshot copies for backup, data protection, and testing can reduce the overall storage capacity required by up to 80 percent. It can be especially useful for testing with live data without the creation of multiple production sized database for test purposes. 

10. Tape. Most retrievals of data are within the first 30 to 90 days of creation. The older the data is the less likely it will be retrieved. The cost of tape is less than 1/10th the cost of disk (about $0.02/GB) and consumes less than 1/100th the power and cooling costs of disk. 

11. Thin provisioning. Thin provisioning of shared storage pools allows for gradual capacity growth of storage through on-demand allocation of blocks of data. This method reduces most storage whitespace, thereby avoiding poor utilization rates that occur in the traditional storage allocation method. 

12. Tiering and SSD. Some storage platforms provide automatic tiering of storage. As a rule of thumb the price differential between tiers is 2:1. This approach can be enhanced by also employing flash or solid state drives (SSDs). Storage tiering and at least three tiers of storage can reduce storage costs significantly.

Summary: Each of the above alternatives can dramatically cut the cost of storage. In fact, some companies have been able to reduce their storage costs by half while more than doubling storage capacity. Thus, IT executives should be able to self-fund in excess of one year's future capacity demands through more efficient use of storage utilization. Given the current push to reduce operational costs, IT executives should look at storage efficiencies and utilization as one place for resource optimization.  

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Experton Group believes mobile business apps, especially business analytics apps, will be the next disruptive technology to impact business users and IT departments. Business apps will improve effectiveness, loyalty, productivity, and profitability. Business analytics apps will disintermediate IT as the apps allow business users to obtain the answers they seek without waiting for IT departments to process their requests for change. IT executives should understand that these apps are a business "game changer" and find ways to incorporate business apps into the workflow.

Business Imperatives

• The advent of mobility has led to the creation of business apps. Basic business apps have been with us for more than a decade now, ever since users began relying on Research In Motion, Ltd. (RIM) BlackBerries to handle emails, stock quotes, and other information in 1999. But the introduction of Apple Inc. iPads and the various smartphones have resulted in the development of advanced apps that enable users to perform a myriad of business tasks. Now business users are more untethered than before, which improves productivity and job satisfaction. IT executives should take advantage of the tools software vendors are offering to app-enable their applications to the supported app devices and form factors.
• The next wave of business apps will be turnkey business analytics apps. These advanced apps allow mobile users to make more knowledgeable decisions in real-time regardless of where they are, time of day, or dependency upon the hidden army of IT application designers and programmers. This will unleash new levels of productivity, which will generate more revenues, reduce operational costs, improve efficiencies, and/or increase margins. IT executives should pilot test these new apps with select users, analyze the impacts and cost/benefits, and then work with line of business executives to implement those business analytic apps, where appropriate.
• The shift to inexpensive, ala carte, self-service business analytics apps that users can activate and execute as and when they see fit – without any IT involvement – will be the first step in the disintermediation of IT from business analytics and financial reporting life cycles. In that IT organizations are pursuing automation and optimization strategies for infrastructure and platforms, this is a timely addition to the mix. IT executives should understand how the use of business analytics apps will improve their operation and increase user satisfaction with technology. IT executives should also make sure that mobile business apps and process flows are included in the application requirements and specifications cycle and vendor platforms.  

Experton Group believes IT executives still have a number of major initiatives available to them for cutting capital expenses and operational costs in 2012 that together can trim the overall IT budget by forty percent or more. There are still monies to be saved in technology shifts as well as in process and management changes. There are gains to be made from workforce alignments, including outsourcing, as well. IT executives should examine these initiatives and advocate those that could gain management buy-in and yield the best results.

Business Imperatives

• The battle for IT talent is getting more intense, as the number of shortages in key areas is increasing. This is putting pressure on IT executives to create and execute a workforce diversity plan that includes hiring new talent, retention and retraining strategies, succession strategies, contingent workforce allocations, and outsourcing. IT executives should align their skill requirements with utilization needs so that execution of a workforce diversity plan can reduce overall personnel expenditures.
• Process improvements can offer the biggest gains for the IT organization. IT continues to spend monies in areas that are not yielding the desired results. Gains can be made by addressing non-value-added projects, IT financial management, or non-optimized procurement processes. IT executives should undertake a study of these items and fold the quick hits into their 2012 budget planning process.
• Most IT executives are familiar with many of the technology savings but surprisingly, executives are not aggressively pursuing them. While some of the technology initiatives are long-term, there are a number of short-term quick hits that IT executives could attack and therefore achieve savings in the 2012 budget cycle. IT executives should re-examine the array of technological cost saving options to find those whose implementation would yield decent operating cost savings in fiscal 2012.

Source: Experton Group

The Bottom Line: Experton Group believes now is an opportune time for executives to re-evaluate IT's workforce allocations and diversity, process improvement plans, and data center operations initiatives and to adjust them to achieve greater savings. Some of the items will require IT executives to go beyond their usual domains and display creativity and thought leadership and seek buy-in from peer and senior executives. IT is in the midst of another tectonic shift, which makes the timing good. IT executives should seize the initiative and work with line of business, finance, procurement, and other senior executives to develop strategies that can help their enterprises achieve their short- and long-term goals and strategies.

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In the past few months, a Saudi hacking group was able to launch an attack against a financial institution in Israel and managed to capture 16,000 credit cards information and published them on the internet.  Some weeks ago, a Palestinian hacker attacked the Israeli’s stock market exchange; and succeeded in causing major service disruption for “El Al” airlines. Similarly, there have been counter attacks launched by Israeli hackers shortly after.

These activities are indicative of the uprising IT security threats in the region.  This trend may very well lead to domestic attacks due to various reasons beyond politics.

We encourage all of our clients specifically in the banking, telecommunications, airlines and public service organizations to increase their IT security measures and controls.

Short term, we recommend that you should:

1.    Focus on capturing suspect IT security alerts for ICT networks and applications

2.    Have the crisis management & Forensics team on the alert state

3.    Ensure current firmware and patches installed on all of your security devices

4.    Update your anti-virus components

5.    Perform an attack & penetration testing against your external perimeters

6.    Safeguard the information (records) of your employees, customers, partners, and retires

Long term, we recommend that you should:

1.    Re-think your strategy regarding the investment in information security for the upcoming two years

2.    Increase the competency level of your IT security staff through planned training

3.    Ramp up your incident management and forensics capabilities quickly

4.    Ensure that your risk assessment processes are in place and performed regularly

This trend should be taken seriously to avoid potential service disruption and reputation damage.

Salesforce.com achieved record revenues while its net income went into the red for both the fourth quarter and fiscal 2012.

Salesforce.com's meteoric growth rates continued as the company rounded out its fourth quarter and fiscal 2012 year. Revenues reached $632 million for the quarter and $2.27 billion for the year, up 38 percent and 37 percent, respectively. Subscription and support revenues advances were in the upper 30 percent range while professional services and other revenues lagged a bit behind in the lower 30 percent range. As a result of its banner year and market conditions, the company is raising its guidance for both the first quarter and fiscal 2013, which it expects to complete with approximately $2.92 billion to $2.95 billion in sales. Net income, however, did not fare as well as last year. The company lost $4.08 million in the fourth quarter compared with a $10.9 million net income in 2011. Net income guidance for 2013 is also expected to generate losses.

Salesforce's record sales are the result of both the cloud-computing frenzy and the solidity of the company's software as a service (SaaS) products and supporting cloud offerings but its continued losses are troubling. Salesforce.com is proving the cost to sell cloud services is no less expensive than traditional IT products and services. This is a negative for a business model whose revenues are weighted to the out years and cannot be accrued early on. However, the revenue growth successes of Salesforce.com and SAP AG continue to raise the red flag on Oracle Corp.'s current business model. One should not count Oracle out; instead, look for CEO Larry Ellison to find a way to tweak the model to extract more monies from customers. IT executives should view all this churn as a sign that they can push aggressively for deeper discounts and/or more bundled products and/or services at no extra charge.

Microsoft has talked up the inherent mobility in its upcoming Windows 8 operating system, though that raises further doubts over the future role of WP7. The company said the new platform - its first to span ARM and x86 architectures as well as touch and conventional interfaces - was designed "with mobility in mind".

Focal Points:

• It has put more flesh behind that claim, claiming Windows 8 tablets, notebooks and other devices will make it far easier to manage Wi-Fi and cellular connections. "We looked at the fundamentals of wireless connectivity and re-engineered Windows 8 for a mobile and wireless future, going beyond incremental improvements," wrote group program manager Billy Anders in a company blog post.
• There is a far greater emphasis on embedded 3G/4G connectivity than in previous mainstream Windows releases. "We knew that if we were to give you true mobility, that Wi-Fi alone would not be enough. Therefore, for Windows 8, we fully developed and integrated mobile broadband as a first class connectivity experience within Windows, right alongside Wi-Fi," added Anders in the blog, as spotted by IDG
• He promises higher levels of automation and a simplified management interface, unlike Windows 7, which requires users to search for and install their own drivers and software. W8, by contrast, comes with a universal mobile broadband driver which will support a wide range of devices and modems, and will be updated automatically via Windows Update
• W8 will also support native management of all mobile broadband devices within one console, rather than with a separate app for each gadget. "Prior to Windows 8, you needed these applications to compensate for functionality not provided natively in Windows. This additional software confused and frustrated users by conflicting with the Windows connection manager, showing different networks, network status, and a separate user interface," Anders conceded
• Wi-Fi and Bluetooth functions can also be managed centrally, and users can set criteria, such as which connection type the PC should default to, according to signal strength, air interface, cost or data cap. This should help speed up connection, with W8 promising to reconnect in about a second after returning from standby mode. "You do not have to do anything special for this. Windows just learns which networks you prefer and manages everything for you. This work was a major part of the architectural work we did in the networking stack and with our hardware partners," the blog post continues.

However, the more mobile-friendly W8 becomes, the more WP7 appears to be squeezed into a narrow role on the handset, which will have declining appeal for major OEMs. Some partners have already expressed frustration that WP7 is barred from large-screen devices like tablets, limiting the higher margin product segments which can be addressed and preventing vendors from offering a single platform from smartphone to tablet, Apple-style. If W8-on-ARM performs well, it is conceivable that it will evolve to become the smartphone system too, relegating WP7 to the midrange.

Experton Group believes 2012 has the likelihood of being a constrained growth year globally, forcing executives to pick and choose their initiatives. From a technology standpoint, it will be a year of change for most corporations but for the leading-edge enterprises it will be part of a transformational journey. Most enterprises will attack the technology fronts from many angles even though funding is flat or possibly slightly changed from last year. Energy and commodity prices will rise again, putting pressure on executives to transform data centers into more efficient users of energy. Consolidation and virtualization efforts remain major initiatives in 2012 but energy efficiency will not become prioritized until energy expenses begin to hurt. Nonetheless, the overall average IT spending on "keeping the lights on" as a percent of IT operational expenditures will stay above the 70 percent level for most organizations. New platforms built upon ARM Holdings Plc and Intel Corp. architected technologies (Atom and Ultrabook) will have some executives and employees rethinking their targeted client and server platforms. On the server side, some companies will experiment with the new technologies but most will stick with blades, enterprise servers and mainframes as processors of choice. However, on the client side, the client devices market will undergo further shakeups.

IPads and other tablets, thin computing, smartphones, Ultrabooks, and virtual desktops will gain ground in the architecture of client systems. Tablets – predominantly iPads in the business world – will be hot devices in 2012 and will overshadow Ultrabooks and PCs. Enterprises will seek ways to reduce the cost of acquisition, connection, maintenance, support, and disposal of these devices as well as improve the privacy and security of information. Microsoft Corp.'s Windows Phone 7 smartphones will struggle to move beyond its fourth place, although Research in Motion Ltd.'s (RIM's) downward spiral might cost it enough market share to allow Windows Phone 7 to move up a notch. RIM will lose its long-held dominance in the enterprise market to Google Inc. Android smartphones and Apple Inc.’s proprietary iPhone.

10 GB Ethernet penetration in data center networks gains speed. However, fabric advances will occur that will better enable VM-aware data centers and are optimized for intelligent geographical spans between centers. Vendors will deliver more next generation firewall solutions in response to the demand for greater security safeguards.

Advances in enterprise applications, especially in the areas of end-to-end processing, globalization, and standardization, will make minor gains. Instead, the big movers will be big data and business analytics, mobility, and social business applications. Enterprises "app stores" will start gaining momentum and some very innovative approaches to business applications using low-cost apps will appear. Leading-edge firms and cloud providers will use apps, mashups, social business, widgets and other creative ways to drive business and transform enterprise applications.

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