The IT Beacon

Tech Sector Review: Buyback, Juniper, EU Disappointed

I’m Bullish about the Market
IBM must be pretty confident in the IT industry’s future. It has added another $5bn to its share buy-back plan. This is added to the $4.2bn left in the pot from the last wave of buy-backs. A more cautious view on market conditions caused the IT giant to come off the gas in terms of buy backs earlier this year. Other major players including Cisco and Microsoft are similarly in buy-back mode. Possibly they all recognize that even if the poor economic conditions continue, businesses will eventually wake up to the fact that an increase in IT spend that will enable them to get their costs in line with their decreasing revenues.

Data centre war heats up
PC maker and data center aspirant Dell has signed a deal with Juniper Networks to provide network products such as routers and switches. This looks to be part of a power struggle for data centre dominance. Cisco has recently put noses out of joint by entering the server market, albeit in a niche capacity. Dell may be redressing this by going with Cisco’s rival. In any case, in the corporate IT market, the battle for dominance is being played out in the data centre. And Dell like the others knows that it has to be there.

Oracle disappoints EU
Software giant Oracle’s attempts to acquire Sun Microsystems took a blow when the European Commission expressed disappointment with the lack of evidence provided to demonstrate that the deal would not be anti-competitive. The US Department of Justice has already given the takeover the green light. Concerns are focused on the future of MySQL, a database solution acquired by Sun for $1bn not so long ago. It would be very tempting to think that Oracle may not have the MySQL user community’s best interests at heart, given that it is a competitor to Oracle’s own database offering. Given that Sun is apparently leaking $100m per month, it would be helpful if the EC could conclude on this at the earliest opportunity in order for Sun to revert to Plan C (Plan A – The IBM acquisition didn’t work out).

Tech Sector Review: 7, Cloudy and the Roman Empire

Touch me - Windows 7
Microsoft’s ‘save the IT industry’ operating system Windows 7 has set sail. The timing is good as it should give the PC market a Christmas boost. After the ‘Vista mistake’, Microsoft’s reputation hinges on the robustness and usability of the new desktop operating system. By all accounts it is making a positive impression. Quick boot up time and low memory requirements make it ideal for low spec user devices, young and old. People will now be able to squeeze more life out of their decommissioned desktops and laptops. Its capacity to drive touch-sensitive devices will expand its reach beyond the office environment.

Outlook for Los Angeles – Cloudy
The Los Angeles City Council has opted to embrace the Cloud computing model by choosing Google over Microsoft.  Google has an ever expanding portfolio of applications that address the needs of corporations. By delivering the service via the Cloud (the web), it saves the users from having to invest in technology infrastructure. It’s a compelling picture. However Google doesn’t have a 100 per cent record when it comes to availability. This should have been a cause for concern for the second biggest city in the US.  Using the Los Angeles Police Department as a ‘test’ environment strikes me as somewhat reckless.

Internet expands beyond Roman Empire
The Internet regulator ICANN announced that it will shortly enable the use of non-Latin based character sets.  This will allow countries like Japan, India and Russia to use their own characters in their web addresses. Amazingly, perhaps, more than half the Internet users worldwide use non-Latin character sets. This feels like a slight power shift eastwards given the Internet’s US-centricity.

Chief Catastrophe Officer?

Nassim Nicholas Taleb in his 2007 book The Black Swan points out that almost all major discoveries were both unpredicted and undirected, eg. the PC and the Internet. The same applies to many major historic events. Black Swan events are typically deemed impossible prior to their occurrence and when they occur tend to be of very high impact.

A Black Swan event may prove to be a disaster for one player (Lehman Brothers) and an opportunity for another (Barclays). The question is whether your organisation is braced to handle the Black Swan making its way through your revolving doors?

The CIO is in theory least the person most capable of dealing with the bird. IT can provide the organisation with the market sensors needed to spot such events whilst they are still on the horizon. IT can also provide a sufficiently agile technology platform that allows the organisation to tactically capitalise on or sidestep the Black Swan.

Thus such events are brand boosting opportunities for the IT function. Unfortunately the most recent Black Swan (the Credit Crunch) saw very little by way of IT-led response. Possibly IT leaders need to reposition themselves as the Chief Catastrophe Officer?

Such rebranding will need to be handled with care. Some disenchanted users may regard this as a more accurate title for the CIO’s current activities than a reference to their new responsibilities.

The Future of the IT Faculty

IT as we know it is sliding down the value chain. Hardware and software are increasingly becoming commodities. So where does this leave IT degrees and the IT faculties of higher educational establishments?

My view is that IT faculties will have their place. But their role will be to churn out operatives for the IT service firms that manage the technology boiler rooms. However what we also need is an e-Business degree that focuses on what IT can do to strategically impact organizations. On top of that we need an Innovation degree; one that is focused on business innovation, which more often that not will be powered by IT.

I think the e-Business and Innovation degrees will sit better in the Business School Faculty. My reasoning is that IT faculties seem too preoccupied with the academic aspects of IT and have broadly failed to respond to market needs.

I am not sure that this will appeal to either faculty. But the sooner we compartmentalise operational IT, the sooner we can capitalise on the good stuff.

CIOmpliance

I have just been involved in a series of events sponsored by PWC in respect of e-discovery.  For those unaware of the concept, which included me up until a few months ago, e-discovery relates to electronic records and documents, often in respect of their retrieval for litigation and compliance purposes.

High cost reputation damaging litigation or compliance failure impacts both lawyers and the IT function. It would appear that many organisations struggle with the communication barriers that exist between legal professionals and the IT function. This in turn has led to an intermediary function evolving to bridge the communications chasm.

The IT function really needs to ask itself why such intermediaries are required. This is a common problem across all functions that engage with IT.  Given that the IT function is supposed to be providing a service, why is there a need for the user community to construct service-interfaces in order to get what they need?

This reflects poorly on the IT function and the IT industry as a whole. CIOs who want to remain CIOs might see this as an opportunity and seize responsibility for compliance and e-discovery.  The opportunities to drive down the associated (and substantial) costs and support the organisation’s reputation management will certainly capture the boardroom’s attention more so than monologues on virtualization and the Cloud.

Tech Sector Review: Chrome, Worms and Word

Internet Explorer available in Chrome?
Google is on the verge of making its Wave emailing platform available publicly in preview form. From what I have seen it is highly impressive. Coupled with that, Google has developed an Internet Explorer plug-in that turn’s Microsoft’s browser into Google’s Chrome browser. How clever is that? Probably more to the point, Google recognizes that IE dominates and for Google Wave to work it needs a browser that is more technically advanced than IE. Hence the helping hand from Google.

Twitter can give you worms
Hackers are using Twitter to harvest user login details, knowing that people often use the same login details for different accounts, including their online banks. This is impressive given there are only 140 characters to play with. Basically the user receives a message from a compromised account that directs them to a video clip, which in turn encourages the victim to submit their account details into a Twitter-like login page.

Word Up
The jury is in as Microsoft defends its Word processor against a claim that it infringes a patent, (relating to document formatting technology) belonging to Toronto based i4i (ominous!). The legalities commenced in 2007. In August a US judge banned Microsoft from selling Word in the US. In early September Microsoft was granted a stay of execution. Microsoft is facing a $290m fine and a possible reengineering of Word.  The court case has deeper implications on the future of open document standards. This is important to both Microsoft and the market, but for differing reasons.

Tech Sector Review: Twitter and Malvertising

Micro-blogging Macro-funding
Despite the fact that Twitter has yet to earn any significant revenues it is likely to secure a $1bn valuation as a result of the $100m it recently raised in new funding. This is impressive even by dotcom madness standards. The real-time nature of it certainly has appeal. And no doubt hearing what celebrities and wannabe celebrities have for breakfast is an emerging trend. My concern for the high-kill low interpersonal skill video game generation is that having 140 characters in which to express themselves may in fact be too overwhelming.

Beware of malvertisments
Microsoft has taken steps to address the growing trend of malvertising, whereby individuals use pay per click adverts to distribute malware. Microsoft has filed five suits against individuals who are alleged to have used its advertising service to post malicious software or redirect curious clickers through to rogue website. Addressing this is critical for Microsoft as it tries to position its Bing search engine/advertising platform as a serious alternative to Google’s more established offering.

Tech Sector Review: Dell and Oracle

Dell Services
PC maker Dell has made a bid for IT services firm Perot Systems valuing it at almost $4bn. This seems a natural part of the IT industry end game; manufacturers buying their entry tickets into the service industry. Perot Systems was founded by Ross Perot founder of the mighty EDS. Perot Systems never quite made it into the EDS league. However it gives Dell a leg up into the healthcare industry. Some of Dell’s PC customer may struggle to make the link between Dell and service.

Oracle keen to close
Software giant Oracle is keen to close the deal on acquiring Sun Microsystems. Founder Larry Ellison is growing impatient with the European Competition Commission claiming they are dragging their heels in reaching a conclusion. His argument is that the US authorities have already waved this through. Add to that the fact that Sun’s revenues dropped by a third in the most recent quarter. Plus the owner of the MySQL database is allegedly hemorrhaging $100m per month. Thus it would appear Mr. Ellison has a point. That said there is a genuine concern around what Oracle will do with MySQL, which is a rival product to its flagship database. Possibly the ECC will bless the deal on the proviso that Oracle sells Sun’s open source database business.

In the C-Suite: Waiting for Google

In my FT column I recently wrote a piece on how some of the major online players are plummeting to new depths in respect of customer service.

Click here to read my FT piece.

What do you think?

e-Skills: Fit for culture

Traditional IT talent acquisition focuses primarily on the person being fit for purpose. Do they have experience of Oracle 10G? Have they worked in equity derivatives? With that approach you can distil IT recruitment down to buzzword matching, hence the development of online recruitment.

But what about cultural fit? Putting an aggressive candidate into a collegiate organisation will cause friction and an erosion of the talent investment.  As will the converse.

This is often overlooked. Few recruitment consultants meet with the real customer (within the IT function). Typically they deal with the talent procurement function (within HR). Or worse still they work through an outsourced recruitment function that liases with an internal recruitment function that liases with the IT function.

Similarly there is typically very little contact between the recruitment agency and the candidate.

This presents an opportunity for recruiters that move beyond selling purely on fitness for purpose. The associated time investment is significant, but the rewards are high.