http://www.experton-group.com/ These are the international weekly ICT news from Experton Group. en http://www.experton-group.com/typo3conf/ext/tt_news/ext_icon.gif http://www.experton-group.com/ 18 16 These are the international weekly ICT news from Experton Group. TYPO3 - get.content.right http://blogs.law.harvard.edu/tech/rss Sat, 03 Nov 2012 13:19:00 +0100 http://www.experton-group.com/research/ict-news-international/news/article/tech-titans-tumble.html Advanced Micro Devices Inc. (AMD), EMC Corp., IBM Corp., Intel Corp. and VMware Inc. reported disappointing third quarter 2012 financials. Meanwhile, Microsoft Corp. posted similar substandard... Advanced Micro Devices Inc. (AMD), EMC Corp., IBM Corp., Intel Corp. and VMware Inc. reported disappointing third quarter 2012 financials. Meanwhile, Microsoft Corp. posted similar substandard results for its first quarter 2013. Focal Points:

• IBM released its third quarter 2012 financials, which fell short of expectations across most of its product lines. The company reported revenues of $24.7 billion, down five percent from the year-ago quarter. On a GAAP basis net income from operations was virtually flat at $4.2 billion. While the top line numbers looked good, some of the segment information was pretty dismal. Year-over-year on the hardware side System z revenues fell 20 percent while Power Systems dropped two percent, System x five percent and storage 10 percent. The WebSphere, Information Management and Tivoli revenues were flat or had small single digit growth while Lotus and Rational software experienced double digit drops in revenues year-over-year. Global Technology Services saw four percent shrinkage in revenues while Global Business Services had a six percent drop from the previous year's quarter. IBM stated its geography segments experienced a decline in North America, stabilized in Japan, saw double-digit growth in the BRIC (Brazil, Russian, India, and China) countries, and little change in Europe. IBM pointed to strong performance in its Smarter Planet, Business Analytics and Cloud initiatives.
• Intel reported flat third quarter revenues of $13.5 billion versus the same period last year while on a GAAP basis net income of $3.0 billion was up 5.1 percent from the previous year's quarter. PC client revenues were down eight percent year-over-year while Data Center Group revenues grew six percent over the same period. Intel's CEO Paul Otellini stated the third quarter results reflected a continuing tough economic environment. He also pointed out "the world of computing is in the midst of a period of breakthrough innovation and creativity. As we look to the fourth quarter, we're pleased with the continued progress in Ultrabooks and phones and excited about the range of Intel-based tablets coming to market." Meanwhile, AMD experienced a worse quarter than originally expected. The company posted a revenue drop of 25 percent year-over-year to $1.27 billion and a loss of $157 million, whereas in the previous year's quarter AMD earned $97 million. The company gave a cautionary outlook for the fourth quarter.
• Microsoft announced quarterly revenues of $16.0 billion for its first fiscal 2013 quarter, a decline of eight percent from the previous year's quarter. Net income on a GAAP basis was $4.47 billion, a slide of 22 percent year-over-year. The Server & Tools business reported an eight percent increase from the prior year period, driven by double-digit revenue growth in SQL Server and more than 20 percent growth in System Center revenues while the business division saw revenues decline slightly. The Windows & Windows Live Division posted a 33 percent decrease in revenues over the same period in anticipation of Windows 8, even though volume licensing grew in double digits. Online Services division saw a nine percent increase while the Entertainment and Devices division was basically flat.
• EMC for the first time in a long time reported third quarter consolidated revenue that did not grow in double digits. The company had revenues of $5.28 billion, an increase of only six percent compared with the year-ago quarter. On a GAAP basis net income increased three percent year-over-year to $626 million. Nonetheless, company executives stated EMC’s third-quarter business grew faster than overall IT spending growth and it gained market share in what turned out to be a more cautionary environment. The vendor's high-end and mid-tier storage platform products grew two percent year-over-year.  Revenues from its Symmetrix storage product portfolio increased five percent compared with the year-ago quarter while revenues from mid-tier storage products were flat. Revenues from its RSA Information Security business gained six percentage points year-over-year. Meanwhile, VMware reported revenues of $1.13 billion, a 20 percent jump year-over-year, whereas net income on a GAAP basis was down 11.7 percent to $156.8 million. The company posted a 29 percent increase in services revenues although license revenues only grew by 11 percent.

Experton Group POV: The overall decline in revenues at the technology titans is a leading indicator of the slowing economies globally, which means IT executives can expect budget tightening to occur at most organizations. Although IBM claims many of its large deals did not close but slid into fourth quarter and new System z and Power Systems are just out or will be soon, the company shows signs of preparing for a business slowdown. Similarly, Intel blames the hit on a loss of PC sales to Apple Inc. products and the tough economic environment while Microsoft sees segments with strong gains but overall market weakness. Even EMC and VMware, which have been immune to market conditions, is experiencing a slower growth and lower profits. The annuities businesses for these firms are doing well, as expected, but the transactional businesses – where buyers have the ability to defer purchases – is proving to be the point of friction for the vendors. Over the next 12 months it is likely that deals will continue to be slow to close and discounts will increase in order to affect the deal. IT executives should continue to look at the technology markets as stressed and therefore examine ways to drive better deals, defer purchases, and utilize alternate funding sources such as leasing and self-funding initiatives. ]]> Sat, 03 Nov 2012 13:19:00 +0100 http://www.experton-group.com/research/ict-news-international/news/article/double-digit-gains-and-losses.html Netsuite Inc., SAP AG, Tata Consulting Services Ltd. (TCS), and UNIT4 NV posted double digit gains for their latest quarterly financial results. On the other hand, Nokia Corp. posted a double digit... Netsuite Inc., SAP AG, Tata Consulting Services Ltd. (TCS), and UNIT4 NV posted double digit gains for their latest quarterly financial results. On the other hand, Nokia Corp. posted a double digit drop in revenues and continued operating losses for its third quarter 2012. Focal Points:

• SAP its eleventh consecutive double digit revenue growth as revenues expanded 16 percent year-over-year to $5.1 billion while on a GAAP basis third quarter net income was virtually flat at $4.2 billion. The company's cloud business, SAP HANA and mobile division outperformed the rest by recording triple digit revenue growth. The Software and Software-Related Service unit's revenues increased 19 percent over the same period while HANA revenues leapt 244 percent. The company had a strong performance in the Americas and solid double digit growth in Asia Pacific and Japan. The vendor also reported that cloud momentum continued in the quarter and 12 months new and up-sell subscription billings increased fourteen-fold. However, on the down side, SAP customers are struggling to keep up with the software charges and want a break. An EU-based SAP users' group poll found that 95 percent believe the rules for SAP licensing are out of control and that it is harder to track license usage. A similar percentage (97 percent) wants SAP to allow them to "park" unused licenses to allow for instances where the software is no longer used because of layoffs or corporate restructuring. 88 percent called for SAP to make its list prices public while 78 percent responded that SAP should introduce concurrent user pricing to permit external use of the software or data by external users. SAP responded only to state it is actively discussing ways to make its licensing easier to understand.
• Netsuite, which provides CRM and ERP software as a service (SaaS) solutions, reported revenues for the third quarter of 2012 of $79.8 million, a 31 percent leap over the same period in the prior year. On a GAAP basis, net loss for the third quarter was $8.0 million as compared to a net loss of $6.9 million in the third quarter of 2011. For the full fiscal year Netsuite projects its revenues will increase between 27.2 and 30.5 percent. In a similar vein, UNIT4 announced its third quarter revenues of €110.7 million, an increase of 11 percent compared to the year ago quarter. Demand for its cloud-based solutions continued to gain momentum with increasing interest; nonetheless, license revenues expanded in the quarter by more than 25 percent.
• TCS reported second quarter revenues of $2.9 billion, a year-over-year growth of 13 percent, and IFRS net income of $643 million, an increase of 22 percent over the same period. Utilization rate, excluding trainees, is at a very respectable 81.6 percent while its overall attrition rate is 11.4 percent. While the overall attrition rate is reasonable, the company's BPO unit has a troublesome attrition rate of 20.9 percent.  Meanwhile, Nokia experienced another horrible quarter with revenues down 19 percent year-on-year to €7.2 billion. Third quarter operating loss was €576 million but the company managed to keep its war chest of net cash unchanged. Sales of smartphones fell from 16.8 million in the same quarter a year ago, to 6.3 million. Devices revenues fell particularly in China, where the abandonment of Symbian caused sales to free fall 78 percent. Overall devices and services sales were down 34 percent year-over-year. Microsoft pumped another $250 million into its key phone partner.

Experton Group POV: Netsuite, SAP, and UNIT4 demonstrated that when a strategy is executed well the software annuity business can remain profitable and grow handsomely. The only fly in the ointment is SAP's handling of its licensing, which still follows the "old school" approach to locking customers in and no transparency. SAP will need to shift its strategy to match those being offered by competitors, especially SaaS providers, if it wants to keep its customers happy. Unfortunately, history shows that Oracle Corp. and SAP have been able to keep the licensing pressure on its customers successfully over the years without a high level of attrition. This does not bode well for change. With the global economies suffering and companies being forced to restructure and downsize, vendors should become more user friendly and provide relief for licenses no longer needed. Similarly on the outsourcing front, TCS shows that outsourcers can grow their businesses profitably in tough times. The only troubling statistic is its BPO attrition rate. This is high and can portend execution problems for customers using these services. Nokia sales and prospects remain disconcerting, as negative operating margins are expected to continue as part of the product transitions. When Nokia market share movements are compared to key competitors, the prospects for maintaining share (never mind growth) remain bleak. Nokia will need a few major successes if the company is to achieve a turnaround. IT executives should be transforming their operations into private clouds wherever possible so that they can be more agile and innovative at a lower cost. Hence, IT executives should be looking to software and services providers that have cloud experience that they can bring to the table to assist in this transformation. Vendors that fail to support the new direction should be notified they will be phased out as soon as possible. While not a guarantee, software and service providers do respond to the potential of loss of annuities and future revenues thereby yielding negotiation possibilities. ]]> Sat, 03 Nov 2012 13:14:00 +0100 http://www.experton-group.com/research/ict-news-international/news/article/banks-suffer-from-cyber-attacks-more-to-come.html Starting on Sept. 18, 2012 eight major U.S. banks -- Bank of America, Capital One, JP Morgan Chase, Wells Fargo, PNC Bank, Regions Financial Corp., SunTrust Banks, and U.S. Bancorp. – were bombarded... Akamai Technologies Inc., the rate of incoming traffic was the equivalent of about 65 gigabytes per second. At the peak of the Anonymous attacks the incoming traffic came from 7,000 or 8,000 people reached approximately one gigabyte per second. In addition to greater volumes the attacks themselves were more sophisticated and were not the usual botnet attacks. The attackers used content management servers to wage these attacks. This combination of vectors and certain attack signatures led U.S. officials to claim the hackers are Iranian and are backed by the Iranian government. While it is clear the hacktivists succeeded in creating service outages, it is unclear if they created other security breaches. The attacks were multi-dimensional with large scale brute force DDoS attacks pounding on the servers as well as smaller DDoS attacks launched at the same time. Additionally, some believe the smaller attacks may have been directed at the domain naming server (DNS). Warding off a DNS reflector attack is much different than just fighting an attack based solely on traffic volume. Furthermore, these attacks could be a precursor for or done in concert with fraud or theft attacks. It is possible that the more dangerous fraud or theft attacks, if they occurred, may have not been detected because of the visibility of the DDoS outages and need for communications with government agencies, customers, cyber security firms other institutions, and regulators. This is yet to be determined. According to U.S. Defense Secretary Leon Panetta, attackers "are targeting the computer control systems that operate chemical, electricity and water plants, and those that guide transportation throughout the country." The Secretary stated that even more alarming than the DDoS attacks at the banks were the attack two months ago in which a sophisticated virus called Shamoon infected computers at the Saudi Arabian Oil Co., also known as Saudi Aramco, and then Ras Gas of Qatar. Shamoon includes a routine called "wiper" that self-executes, replaces critical system files and overwrites real data with garbage data. More than 30,000 Aramco computers were rendered useless, and had to be replaced, he said. Hence, the bank attacks are only a slice of the cyber attacks that U.S. companies can expect to see over the upcoming months and years. He also stated there are new rules and regulations being written by the current administration that will address cyber security and the responsibilities of the government in cyber defense. Experton Group POV: Organizations in advanced nations everywhere are being threatened by the escalation in cyber attacks by rogue groups and nations. This is not just an IT problem. It is a fiduciary responsibility of corporate executives and the Boards of Directors to address. Unfortunately, the majority of Boards and senior executives have relinquished their responsibilities to IT executives. If this is to be addressed appropriately, Boards and corporate executives will need to become more involved and work with cloud providers, government agencies and regulators, cyber security firms, ISPs, Telcos, and peer executives to find new approaches, predictive warning systems, protections and solutions. Executives will also need to lobby the administration and Congress to effect cyber security laws that are business friendly, do not usurp control of private networks, and allow for cyber information sharing. IT executives need to escalate the cyber challenges and issues to upper management and Boards and push for them to provide leadership, meet their fiduciary responsibilities, and fund and support the efforts needed to reduce the risk exposures and protect the organizations.]]> Sat, 20 Oct 2012 13:12:00 +0200 http://www.experton-group.com/research/ict-news-international/news/article/survey-good-news-and-bad.html A new report from Navint Partners LLC finds large enterprises are seeing mostly positive results from their cloud computing efforts while an InformationWeek study on how business perceives IT reveals... Navint Partners LLC finds large enterprises are seeing mostly positive results from their cloud computing efforts while an InformationWeek study on how business perceives IT reveals most non-IT people do consider IT integral to the business today but that technology must become so. Meanwhile, SearchSecurity.com released the results of its 2012 enterprise mobile security survey. Focal Points:

• According to a report from Navint Partners Fortune 500 CIOs are mostly positive about their cloud computing efforts. While the survey only covered 20 CIOs from Fortune 500 companies, 90 percent of the respondents said they achieved the results they expected from their cloud computing projects. In addition, 80 percent said their cloud efforts helped their organizations achieve some sort of competitive advantage, and two-thirds claimed cloud computing has helped their organization's efficiency and effectiveness. However, most think it will take up to five years to fully realize the tangible benefits of cloud implementations. A majority of the cloud budgets are discretionary according to the respondents and more money is being used for private clouds than public. About half will increase their private cloud budgets by 20 percent. CIOs and other executives still regard security guarantees and redundancy policies with guarded pessimism according to the report. However, one concern mentioned was the lack of a pay-as-you-go option from most vendors to handle seasonal spikes. Contracts usually require a standard payment over the course of a year with vendors allowing for some spikes as a percentage of the base volumes but not major seasonal demand spikes such as the holiday shopping season and tax time.
• An InformationWeek survey of 382 business professionals – IT and non-IT – finds only 43 percent of the non-IT people consider IT teams integral to the business while 54 percent consider IT a maintenance or support organization and not an innovator. However, 59 percent believe technology is becoming critical to the business. On the other hand, 60 percent of the surveyed IT professionals consider IT integral to the business while only 39 percent consider IT a maintenance or support organization. Furthermore, only 18 percent of the non-IT respondents were completely or very satisfied with IT projects based on costs, quality and timeliness. Another 32 percent were moderately satisfied. From the IT perspective the numbers were 29 and 39 percent, respectively. Approximately three-fourths of all respondents viewed IT as not demonstrating innovation leadership. Sadly only 19 percent of respondents viewed their organizations as actively helping their IT professionals develop the business or "soft" skills needed to stay current and aid innovation.
• A survey by SearchSecurity.com of 487 individuals finds the top five enterprise mobile security concerns are device loss, application security, device data leakage, malware attacks and device theft. 83 percent of the respondents stated that their organizations provided them with mobile devices while 53 percent of companies allow personal devices to access corporate data and networks. As to mobile security policies, 64 percent of the companies have a written mobile device security policy and 81 percent of those require users to read and sign the policy. 36 percent of respondents stated their companies required users to sign a legal document giving their company some control over their personal devices. Furthermore, 52 percent of respondents said they could download apps freely from app stores. The top mobile security initiatives were authentication (53 percent), data loss (51 percent), access control (50 percent), encryption (45 percent) and remote wipe (41 percent). 

Experton Group POV: While the Navint Partners survey is more anecdotal than statistically accurate, enterprises are satisfied enough with their cloud projects to commit more of their budgets to them. Companies should be able to reduce operating expenses and/or improve delivery performance to the business through use of cloud computing options. In that the cloud services market is still immature, IT executives need to ensure their cloud providers are meeting their security requirements, as the enterprise remains accountable for breaches regardless of where they occur. Executives should also be aggressive in getting vendor contracts to satisfy business needs rather than accept terms and conditions that are presented to them. The InformationWeek study is another in a long line of surveys that shows IT executives and professionals rate their units higher than the business side does. Hence, IT is less aligned with the business than IT believes – and this gap should be addressed. The 2012 IBM Corp. CEO survey showed similar results when looking at technology being critical to the business. 71 percent of the CEO study respondents for the first time found technology factors to be the most important external force impacting their organizations. In that almost 75 percent of business people think IT is not providing innovation leadership and even more feel IT professionals lack the skills to do so, IT executives need to change this perception and invest in correcting the problem. IT executives have a chance to "sit at the table" with their business peers but if they cannot address the business and innovation issues, they will be shunted aside. Risk exposures and security should be top of mind for business and IT executives, especially with the latest round of cyber attacks that have been in the news (see this week's blog). However, enterprises are not taking sufficient steps to ensure security gaps do not exist in their support of mobile devices. This problem will get worse before it gets better, especially since more and more companies are allowing individuals to bring their own devices (BYOD) and are not preventing access to sites that might be security risks. Business and IT executives should understand the risk exposures of BYOD and implement policies, procedures and controls to ensure compliance and reduce the probability of security breaches. ]]> Mon, 15 Oct 2012 13:10:00 +0200 http://www.experton-group.com/research/ict-news-international/news/article/hps-strategy-and-struggles.html Earlier this month Hewlett-Packard Co. CEO Meg Whitman disappointed financial analysts when she revealed her plan to turn the company around was on track but that the restructuring will not be... Hewlett-Packard Co. CEO Meg Whitman disappointed financial analysts when she revealed her plan to turn the company around was on track but that the restructuring will not be complete before 2016 and in the interim earnings will shrink.  Meanwhile, Gartner ranked HP number two in PC vendor unit shipments for the third quarter with Lenovo Group garnering first place. HP contests the findings and hints its soon-to-be-released PC offerings will change the current volume vector. Focal Points:

• HP CEO Meg Whitman shared with financial analysts her view that the trend in shrinking earnings will continue over the next couple of years. She did not comment on revenues but she alluded to revenues not growing faster than costs before fiscal year 2015. Whitman stated the company lacked competitive focus and had spread its business across too many products, services, and regions. She also declared it had seriously underinvested in IT and in R&D, and to turn the company around would require changes across all of its businesses. Enterprise services executives said "poor contracting practices" had caused HP to make "excessive pricing concessions," leading to "resource management challenges." The new plan is for the unit to grow its revenue by three to five percent annually from $25 billion today. Longer term, it wants about 80 percent of revenues to come from its core applications, business-process outsourcing and data center businesses, with the other 20 percent coming from higher-margin services such as cloud computing, data analytics, mobility, and security.
• The Printing and Personal Systems division ($62 billion) plans to cut costs by consolidating and slimming down its product lines. It will reduce the number of printer models by 30 percent by the end of 2014 and slice the number of PC platforms by 25 percent in the same timeframe. It will also add "sexy designs" to its products. Meanwhile, the printer group will push more inkjet products, expand penetration in the low-end customers markets globally and launch an "Ink in the Office" initiative to obtain more business customers. According to the group VP, HP's share of the ink market is already up more than 15 percent since last year and he expects double-digit revenue growth in fiscal 2013. The Enterprise Group ($32 billion) will focus on the three major data center trends: cloud computing, infrastructure convergence, and software-defined data centers. HP executives stated it brought in $4 billion in cloud revenue in 2012 and that the figure will grow to $8.4 billion by 2015.The division also expects to see its Project Moonshoot initiative, which will be delivering servers based upon low-power ARM and Atom chips, to account for 15 percent of the global market by 2015. Lastly, the HP Software Group ($4 billion) will be working to integrate the various software acquisitions.
• Gartner released its preliminary third quarter report on worldwide PC sales, which included news that HP slipped from the number one provider to second place. The report stated shipments dropped 16.4 percent to 13.6 million while Lenovo's grew 9.8 percent to 13.8 million. However, IDC also released its preliminary third quarter worldwide PC shipments report which showed HP still as number one with shipments of 13.9 million while Lenovo came in with 13.8 million. However, both reports showed HP shipments shrank 16.4 percent. Overall PC shipments shrank 8.6 percent compared to the same period last year. One of HP's executives stated upcoming Microsoft Corp. Windows 8 products enable sales growth. He also shared that HP has been talking to IT executives and users about product designs and that the company is about to unleash new products – PCs and tablets – with sexy designs that will appeal to both markets.

Experton Group POV: The HP executive team claims it is well positioned to regain industry leadership, growth and earnings by year-end fiscal 2016 but doing so will be a major accomplishment given the external and internal headwinds. Furthermore, the strategy is centered on operational excellence and innovation – not low cost – which may leave the company with limited maneuverability. HP has performed poorly in the overall services market – even before it acquired EDS – and now there is another new leadership team in place. Improving margins and revenues in this slow-growth economy will make the turnaround even more difficult to achieve. The Printing and Personal Systems group consists of low-growth commodity businesses that will be tough to excel in, even though HP holds significant market share. The PC market itself is shrinking – with no expected end in sight, as users move to other platforms in which HP does not currently play. One key metric will be how well HP links the PC and printing businesses with its Enterprise Group businesses. If HP cannot leverage the piece parts, these volume businesses will have limited value for the company overall. HP is experiencing mixed results in the Enterprise systems and cloud markets. Now that HP won the Oracle Corp. lawsuit the Integrity business should stabilize and potentially grow. However, HP can certainly expect aggressive competition from its usual competitors, which will keep growth and profits contained. Lastly, the software group may be able to deliver better margins but it has a long way to go before it is integrated into the HP environment and begins to deliver on its potential. If CEO Whitman is able to hang on long enough to see her plan through, HP could survive and thrive. With HP's recent CEO history her chance of survival is at best "fair." IT executives should view HP as a survivor over the next five years but its position is in jeopardy. Therefore, IT executives should keep HP on their short list of vendors but should challenge the vendor with competitive solutions to ensure they get the best prices, service levels, and terms and conditions. ]]> Mon, 15 Oct 2012 13:09:00 +0200 http://www.experton-group.com/research/ict-news-international/news/article/mainframe-survey-future-is-bright.html According to the 2012 BMC Software Inc. survey of mainframe users, the mainframe continues to be their platform of choice due to its superior availability, security, centralized data serving and... BMC Software Inc. survey of mainframe users, the mainframe continues to be their platform of choice due to its superior availability, security, centralized data serving and performance capabilities. It will continue to be a critical business tool that will grow driven by the velocity, volume, and variety of applications and data. Focal Points:

• According to 90 percent of the 1,243 survey respondents the mainframe is considered to be a long-term solution, and 50 percent of all respondents agreed it will attract new workloads. Asia-Pacific users reported the strongest outlook, as 57 percent expect to rely on the mainframe for new workloads. The top three IT priorities for respondents were keeping IT costs down, disaster recovery, and application modernization.  The top priority, keeping costs down, was identified by 69 percent of those surveyed, up from 60 percent from 2011. Disaster recovery was unchanged at 34 percent while application modernization was selected by 30 percent, virtually unchanged as well. Although availability is considered a top benefit of the mainframe, 39 percent of respondents reported an unplanned outage; however, only 10 percent of organizations stated they experienced any impact from an outage. The primary causes of outages were hardware failures (31 percent), system software failure (30 percent), in-house application failure (28 percent), and change process failure (22 percent).
• 59 percent of respondents expect MIPS capacity to grow as they modernize and add applications to address business needs. The top four factors for continued investment in the mainframe were platform availability advantage (74 percent), security strengths (7o percent), superior centralized data server (68 percent), and transaction throughput requirements best suited to a mainframe (65 percent). Only 29 percent felt that the costs of migration were too high or use of alternative solutions did not have a reasonable return on investment (ROI), up from 26 percent the previous two years.
• There remains a continued concern about the shortage of skilled mainframe staff. Only about a third of respondents were very concerned about the skills issues, although at least 75 percent of those surveyed expressed some level of concern. The top methods being used to address the skills shortage are training internally (53 percent), hire experienced staff (40 percent), outsource (37 percent) and automation (29 percent). Additionally, more than half of the respondents stated the mainframe must be incorporated into the enterprise management processes. Enterprises are recognizing the growing complexity of the hybrid data center and the need for simple, cross-platform solutions.

Experton Group POV: Some things never change – mainframes still are predominant in certain sectors and will continue to be so over the visible horizon, and yet the staffing challenges linger. 20 years after mainframes were declared dinosaurs they remain valuable platforms and growing. In fact, mainframes can be the best choice for certain applications and data serving, as they effectively and efficiently deal with the variety, velocity, veracity, volume, and vulnerability of applications and data while reducing complexity and cost. Experton Group's latest study on System z as the lowest cost database server (http://lnkd.in/ajiUrY ) shows the use of the mainframe can cut the costs of IT operations around 50 percent. However, with Baby Boomers becoming eligible for retirement, there is a greater concern and need for IT executives to utilize more automated, self-learning software and implement better recruitment, training and outsourcing programs. IT executives should evaluate mainframes as the target server platform for clouds, secure data serving, and other environments where zEnterprise's heterogeneous server ecosystem can be used to share data from a single source, and optimize capacity and performance at a low-cost. ]]> Sat, 29 Sep 2012 12:10:00 +0200 http://www.experton-group.com/research/ict-news-international/news/article/california-gone-too-far-again.html California Governor Jerry Brown signed into laws Assembly Bill (AB) 1844, which restricts employers' access to employees' social media accounts, and Senate Bill (SB) 1349, which restricts schools'... Focal Points:

• Although both laws expressly claim they are only regulating "social media," the definitions used in the laws goes well beyond true social media over the Internet. The statutes use the following definition: "social media" means an electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations. In effect, the law governs all digital content and activity – whether it is over the Internet and/or stored in local storage devices on in-house systems.
• Additionally, AB 1844, which covers employer-employee relationships, restricts employers' access to "personal social media" while allowing business-related access. However, the law does not define what comprises business or personal social media. It assumes that these classifications are mutually exclusive, which is not always the case. There have been multiple lawsuits over the years that have resulted from disagreements between the parties as to the classification of certain emails, files, and other social media.
• Many organizations inform employees that email and social media activity performed while using the organization's computer systems is open to access and review by the company. Furthermore, some entities have employees sign an annual agreement to such rights. However, the law makes it illegal for employers to ask for login credentials to "personal" accounts and the statute does not allow access to mixed accounts, which supposedly do not exist.

Experton Group POV: The new California statutes are reminiscent of CA Senate Bill 1386 (SB 1386), which requires any state agency or entity that holds personal information of customers living in the state to divulge any infringement of databases that include personal information, regardless of the business' geographic location. The new laws do more harm than good and allow potential class action civil suits in addition to individual suits. This will make it more difficult for organizations to protect the entity, its image, enterprise data and client/student relationships, and ensure appropriate conduct guidelines and privacy requirements are being met. In addition, the ambiguities in the wording of the laws leave them open to interpretation, which in turn will eventually lead to lawsuits. Business and IT executives can expect these new laws to extend beyond the borders of the state of California, as did SB 1386. IT executives should review the legislation, discuss with legal advisors all elements of the laws, including the definitions, and explore ways to be proactive with their governance, guidelines and processes to prevent worst case scenarios from occurring. ]]> Sat, 29 Sep 2012 12:09:00 +0200 http://www.experton-group.com/research/ict-news-international/news/article/vmware-gets-a-new-boss-paul-maritz-turns-over-job-to-emc-coo-pat-gelsinger.html Summary In a recent “symbolic” on-stage move, Paul Maritz turned over the job of VMware CEO to EMC’s COO Pat Gelsinger at VMworld. The many challenges that Gelsinger will deal with are: Strategic... Summary In a recent “symbolic” on-stage move, Paul Maritz turned over the job of VMware CEO to EMC’s COO Pat Gelsinger at VMworld. The many challenges that Gelsinger will deal with are:

• Strategic approach to competitor Cisco - EMC and VMware will compete with more with Cisco now that it is in the business of software-defined networking. This is in large part why we hear so much talk about the “software defined data center,” from VMware. Nicira will provide ways for the companies to create more capabilities to manage multiple clouds. But with that networking capability it will mean deeper competition for a host of new startups.
• Open Source Community - Addressing VMware’s position with the open source community - lead the evolution of VMware’s Cloud Foundry and recent acquisitions such as DynamicOps and Nicira, the $1.26 billion acquisition that closed last month. VMware did announce its support for OpenStack as a gold member last month;
• Controlled Growth - Ultimately, how to keep the pace of innovation while still maintaining its vast legacy business. VMware will have to look at new revenue streams since virtual machine revenue is leveling off.  In addition, EMC faces its own battles with up and coming flash storage providers such as Fusion-io, now a publicly traded company and startups such as Nutanix, which just raised $25 million for its converged systems.

EMC/VMware see more interest in differentiating as a platform provider. As Rishidot analyst Krishnan Subramanian explains — this means VMware can sell support for the great majority of companies that have VMware technology installed in their data centers; Maritz, one of the great technologists of our time, stood on stage and said we are coming to the end of 50 year journey to automate the paper based processes. Today, business is dependent on providing an experience to customers. Maritz said there will need to be innovation in taking multiple data streams to create new experiences. We will see an equal pace in the change of IT over the next four years as we did in the past four years (p5c5). According to Maritz, the greatest change will be in our data centers, applications and new forms of data fabrics (p4c5). Results will get presented to people in a post-PC multiple device world. Editor Comments The changes within EMC and VMware are not surprising. Today, service providers and manufacturers are competing vigorously and this results in changes in corporate direction and organizational shifts. There are a number of important points within this article. The combination of existing competitor service portfolio expansion and startups threatening to take market share means that EMC/VMware needs to move quicker than its competition in setting direction and opening up new revenue streams. Innovation is key and addressing the opportunities in this expanding service market is critical to long-term survival. Call to Action The changes in EMC/VMware’s executives indicate potential change within EMC/VMware. The key is to determine if these changes will impact your organization. In the short/medium run, there should not be any impact at all. However, in the long run, EMC projects that the data center, application and data fabrics will change significantly. It is the responsibility of senior IT executives to determine what impact that will have on their organization and take appropriate steps to protect potentially risky situations. References Original Article http://techcrunch.com/2012/08/27/vmware-gets-a-new-boss-paul-maritz-turns-over-job-to-emc-coo-pat-gelsinger/ ]]> Sat, 15 Sep 2012 12:07:00 +0200 http://www.experton-group.com/research/ict-news-international/news/article/the-state-of-linux-how-even-apple-is-going-open-source.html Summary This article addresses the evolution of Linux and the indirect adaptation of open source. Jim Zemlin, executive director of the Linux Foundation opened with the keynote in San Diego for... Summary This article addresses the evolution of Linux and the indirect adaptation of open source. Jim Zemlin, executive director of the Linux Foundation opened with the keynote in San Diego for the first CloudOpen, making the point that everything is becoming a service. Those services are moving to the forefront of the enterprise and they are built on open source (p1c5). According to Zemlin a number of companies including Google, IBM, Intel, Microsoft, VMware, and Apple, Inc. have invested in open source. Apple recently purchased the copyright to the Common Unix Printing System (CUPS), which now is on every Linux and Apple system. VMware applied to join the OpenStack community. The future of IT is software. That innovation will come from engineers who build open cloud environments. The reality is that open is many things to different people. Running on multiple clouds is not easy. It should not just be about the code but the systems, too. The challenge for the open source cloud movement is how it can help tie the pieces together to make the cloud truly federated (p4c4). Editor Comments I am not a fan of open source. The reason is very simple – control and consistency. By its very nature, open source environments are not controlled. Yes bugs are corrected when discovered, but the difference between closed or proprietary software and open source is who is tasked with testing, discovering and fixing additions to software. If you look at the Open Source Initiative (OSI) definition for open source, there is nothing in it that addresses testing (see below). It is more focused on making sure that the development and access is “open” and that the licensing structure conforms to certain guidelines. To be fair, there are certain code specifications, but nothing on governance beyond that. In the past, open source projects were totally unstructured. This is changing and varies from project to project. One view (Wikipedia) breaks down Open Source into four different categories:

1. Independent – these are unconnected, self contained, stand alone applications - Linux kernel and the Firefox web browser;
2. Distributions – represent portfolios of software that are built for a specific purpose – Linux, and Perl;
3. Operating System and Related Programs – contain a version control system supporting OS and all of its related components – BSD;
4. Document – these are documentation libraries for open source projects.

Call To Action While we might agree that open source is becoming prevalent and there might be parts of open source where we would least expect, any company that uses open source is very much aware of the challenges and would therefore impose their own testing and due diligence processes. In other words, just because a company like Apple, Inc. has decided to use open source, it doesn’t mean that they have taken the code as is and inserted it into their products. From a development resource perspective, in many cases, it is much more efficient to modify existing code than to create from scratch. So why wouldn’t a software development company occasionally take open source and use it? From an IT executive’s perspective this should not be of major concern. What would be of concern is if open source code was taken as is and used to support critical processes within the enterprise without sufficient internal testing. In addition, the application of upgrades and newer versions of open source code must be accompanied by a robust testing process to eliminate risks and to fully understand what the impact of the new code will be from risk and performance perspectives. References Original Article http://techcrunch.com/2012/08/29/the-state-of-linux-how-even-apple-is-going-open-source/ Open Source Initiative – Definition http://opensource.org/osd.html ]]> Sat, 15 Sep 2012 12:05:00 +0200 http://www.experton-group.com/research/ict-news-international/news/article/cio-ceiling-social-success-and-exposures.html According to a Gartner Inc. survey, CIOs are not valued as much as other senior executives and most will have hit a glass ceiling. Meanwhile a Spredfast Inc. social engagement index benchmark report... Gartner Inc. survey, CIOs are not valued as much as other senior executives and most will have hit a glass ceiling. Meanwhile a Spredfast Inc. social engagement index benchmark report finds a brand’s level of social engagement is more influenced by its commitment to social business than its size. In other news, a New York judge forced Twitter Inc. to turn over tweets from one of its users. Focal Points:

• Recent Gartner research of more than 200 CEOs globally finds CIOs have a great opportunity to lead innovation in their organization, but they are not valued as strategic advisors by their CEOs, most of whom think they will leave the enterprise. Only five percent of CEOs rated their CIOs as a close strategic advisor while CFOs scored a 60 percent rating and COOs achieved a 40 percent rating. When it comes to innovation, CIOs fared little better – with five percent of CEOs saying IT executives were responsible for managing innovation. Gartner also asked the survey participants where they thought their CIO's future career would lead. Only 18 percent of respondents said they could see them as a future business leader within the organization, while around 40 percent replied that they would stay in the same industry, but at a different firm.
• Spredfest gathered data from 154 companies and developed a social engagement index benchmark report that highlights key social media trends across the brand and assesses the success of social media programs against their peers. The vendor categorized companies into three distinct segments with similar levels of internal and external engagement: Activating, Expanding, and Proliferating. Amongst the findings was that a brand's level of social engagement is more influenced by its commitment to social business than its size. Social media is also no longer one person's job but averages about 29 people participating in social programs across 11 business groups and 51 social accounts. Publishing is heavier on Twitter but engagement is higher on Facebook, Inc. but what works best for a brand does depend on industry and audience. Another key point was that corporate social programs are multi-channel, requiring employees to participate in multiple roles. Additionally, users expect more high-quality content and segmented groups. One shortfall the company pointed out was that companies use social media as an opportunity for brand awareness and reputation but miss the opportunity to convert the exchange into subsequent actions and business.
• Under protest Twitter surrendered the tweets of an Occupy Wall Street protester, Malcolm Harris, to a Manhattan judge rather than face contempt of court. The case became a media sensation after Twitter notified Harris about prosecutors' demands for his account. Mr. Harris challenged the demand but the judge ruled that he had no standing because the tweets did not belong to him. While the tweets are public statements, Mr. Harris had deleted them. Twitter asserts that users own their tweets and that the ruling is in error. Twitter claims there are two open questions with the ruling: are tweets public documents and who owns them. Twitter is appealing.

Experton Group POV: For the most part CIOs and senior IT executives have yet to bridge the gap from technologist to strategist and business advisor. One implication here is that IT executives still are unable to understand the business so that IT efforts are aligned with the business and corporate needs. To quote an ex-CIO at Kellogg's when asked what his role is said, "I sell cereal." Most IT executives do not think that way but need to. Until they do, they will not become strategic advisors, gain a seat at the table or have an opportunity to move up and beyond IT.  The Spredfest report shows that using social media has matured and requires attention like any other corporate function. Moreover, to get it to have a decent payback companies have to dedicate resources to keeping the content current and of high quality and to getting users to interact with the company. Thus, social media is no longer just an add-on but must be integrated with business plans and processes. IT executives should play a role in getting users to understand how to utilize social media tools and collaboration so that the enterprise optimizes its returns. The Twitter tale is enlightening in that information posted publically may not be recalled (if the ruling holds) and can be used in court. Experton Group has personal experience with that. Years ago, in a dispute with WorldCom, Experton Group claimed the rates published on its Web site were valid at the time published. The telecom vendor claimed its new posting were applicable and had removed the older rates. When Experton Group was able to produce the original rate postings, WorldCom backed down. IT executives are finding a number of vendors are writing contracts with terms not written in the contract but posted online. This is an advantage to the vendors and a moving target for users. IT executives should negotiate contracts that have terms and conditions locked in and not changeable at the whim of the vendor. Additionally, enterprises should train staff on how to be careful about is posted in external social media. It can cost people their jobs as well as damage the company's financials and reputation. ]]> Sat, 15 Sep 2012 12:04:00 +0200