GLG News by Cliff Bell

Implications: 1.  Oracle received its major revenue from Maintenance. 2.  Greater efficiencies will be gained inisde of Oracle to improve operating margins

Analysis:

Oracle has been acquiring a lot of companies over the last several years.  This has resulted in some confusion, but mostly it has resulted in lower costs to run the businesses.  Oracle has elimintated many management layers from the companies they have acquired.  The net result of this staff reduction is that the costs should be lower from the combined companies than was true when they were independent.

Oracle has also done a good job in positioning itself as providing the best products in the market for the various software segments.  And I believe that the Fusion middleware will over time address and improve integration of the various products.

I would also like to draw a parallel to Oracle and HP.  HP is only now gaining cost advantages from their purchase of Compaq.  Based on this fact alone, Oracle has the opportunity to greatly relduce its cost stucture similar to how HP is re-inventing itself.

Based on the opportunity to further reduce costs inside of Oracle and the ability of Oracle to be supported by their huge maintenance revenue stream, I feel that Oracle's future is very stable.  I am not saying that the will grow revenue's rapidly.  In fact, I think the acquisitions have slowed some of the revenue growth opportunities.

Five years from now, Oracle could again be a fast growing company.  To become that company, they will need to further reduce duplication of efforts (The current sales overlaps are significant).  The product strategy will emerge as customers provide feedback. 

The other question is will they be making more money from services similar to IBM and HP.  Currently Oracle relies on their channel to provide services, but it is possible in the future that Oracle will drive more revenue from services that will include Oracle on-demand and other services.  IT organization may be willing to outsorce ERP solutions to Oracle in the same way that many companies have outsourced their manufacturing.

Overall, I feel the outlook for Oracle is good.  They will face challenges from Redhat and SAAS vendors, but the product breadth should overcome these challenges.

Implications: 1. Using on-line apps as an experiment is possible 2. When will we see massive adoption?

Analysis: I am really looking forward to the day that online applications become as good as Yahoo and Google's mail program.  But as good as Google and Yahoo mail programs are, very few (I do not know any) corporations have abandoned exchange and switched.

Given this fact, I think it will be a long time before we see online applications take a serious bite out of Microsoft.  However, I think at some point they will be a viable solution for many.  My daughters do not use exchange (except at work) because they like the flexibility of getting their mail anywhere (they are both between 19-24).  And I am sure they would want the same solution for word processing or any application.

As a result, I still see the potential and I can see a time for the online applications, but I just can not see it now.  I am not ready to even try a pilot of the applications mostly because without the integration to email (the article states they do not integrate), I can not see the value in using online applications.

In addition, I do not yet know how companies are going to make money using online applications.  I will not want to make a move toward using these applications until I understand what this will cost me and my company over time.  Making a change like this requires training of employees and a conversion of old documents to new formats, etc...  Without understanding the costs of this software, I would not make a change.  At least with other on-demand solutions like Salesforce.com you understand the business proposition before you make the purchase.

Although security on the web has improved greatly, I am not sure what protection I have with data stored in the cloud?  Online backup companies encrypt the data and the same would be needed to make me comfortable.

The bottom line is that I am a fan of the possibility.  But I am definitely not an early adopter of this for my corporation.  I think I will wait until my daughters give it a try first.  I do not think it is even good enough to use as a negotiation tool with Microsoft.

Implications: 1. Power consumes more than the cost of the PC. 2.  Virtualization of PC's can reduce the IT budget.

Analysis: If only we could make IT organizations pay for their power usage.  Then decisions around PC's purchases would change.  I did a little research and found that a Wyse head unit uses about one tenth of the power of a desktop machine(according to their statistics).  I am not necessarily endorsing Wyse over other similar units, but rather using Wyse as the example.

Using simple back of the envelop calculations, we can assume that if you were to put Wyse devices where every desktop currently exists, you could save $200K/thousand employees.  How did I come up with this number?

Well let's assume that the average PC power costs $400/year (as compared to $700/year for a server.  Let's also assume that one server can virtualize to 5 PC's.  Therefore, the power used by 5 virtualized desktops is equal to $900 ($700 for the server + $200 for the 5 Wyse devices).  This compares to $2000/year for five desktops.  This equates to over $200/year in savings per desktop.  This equates to $200K/thousand employees.  The scarier part is that the cost will only go up every year as power costs go up.

This does not even include the savings of the Wyse device over a PC.  I feel that standardizing on laptops and Wyse thin clients can save on Microsoft licenses, capital purchasing, as well as power.

The larger point is that the CIO has the opportunity to position himself / herself as an operational leader and possibly be seen as the COO.  The kind of work that looks for business efficiencies is the kind of work that COO's look for in industry.  And it is time we look at productivity in the white collar staff the same way we have for "factory" workers.

The more we (CIO's) think like business people, the more time we will have with senior business people.  This is as much a statement for me as it is for you reading this post.

Implications: 1.  Choosing one vendor that can give you data storage 2.  Completes the picture for servers and storage as well as desktops and laptops

Analysis: As a CIO, I love to simplify my decision process and keep things simple.  I have enough complex problems to deal with.  HP's storage solution to soon include de-duplication is wonderful news.

As a mid-market CIO, I am excited to find that I can now select HP for storage, servers, desktop, and laptops.  It just makes my world a lot easier on the infrastructure front.  I do not want to have to manage two or more vendors unless I have to.  I do not want to spend my time making sure different parts of my hardware platform will work.  I would rather have one vendor manage that.  And it seems that HP can do so now.

I feel this will give HP an advantage over EMC and Netapp for the mid-market as a mid-market company is more likely to choose one vendor.  Netapp and EMC are great suppliers, but the ability to combine storage and server purchase from a single partner should reduce overall cost and simplify my environment.

The explosion of data storage continues to happen and I do not see this trend reversing.  With HP providing a single solution, I will be able to consolidate my storage with a single vendor. 

The only downside I have with this announcement is that it looks as if this solution is only available on newer storage devices.  This may cause a delay in the implementation of this solution as CIO's have to time their storage purchase.  I suspect that the HP sales team will be able to provide upgrade incentives to CIO who wish to move sooner.  And you can also justify this purchase because of the increase of storage capacity on these new devices.  It may be cheaper to upgrade that to continue with the current solution.

This is definitely a positive move for HP from an SMB perspective.  I would have been reluctant to add a third party deduplication solution at an SMB.  But HP has now made it possible to safely move to this newer technology.

Implications: 1.  Commodity computing is here and managing servers is not core to the business. 2.  Focus IT on solving business problems.

Analysis: One decision for a CIO is to determine what is core to running IT at your company and what is something that someone else could do better so you can focus your IT management on the key business challenges facing your company.  The question that the article suggests is will Google provide CIO's with another option?

Google has been doing a phenomenal job in providing advertising and other services to businesses, but has yet to make a huge impact in the IT enterprize environment.  As this article points out, this could change as more and more IT organizations look to outsource their compute farms.

Google has made some inroads into IT in the form of search engines.  But most of these solutions were only temporary and small relative to other vendors.  Google is still a small percentage of most IT budgets.

IT has had a long history of outsourcing their hardware operations.  And there are many companies who will manage your computers for you including IBM, EDS, and others.  It is conceivable that IT organizations could eventually leverage Google's global data centers.

More and more of employees are performing their work remotely and this trend will continue.  Having the data stored in the "cloud" actually makes it closer to the remote end users and would eliminate the need to train users on how to do VPN.  Security to the data could be managed by tokens which many companies employ.  So access to the data is not impossible.

Another advantage of storing the data in the cloud will be a reduction in complexity for the IT department.  Although virtualization has reduced the amount of wasted computing power, it has added an additional level of work to manage those virtualized servers.  Putting services in the cloud will reduce the amount of work on the IT team.

The challenges I see are the management of the data.  It is bad enough that we have data stored internally that no one knows if it should be kept, but in a services model, the data stored in the cloud will add costs.  Policies will have to be created to determine how the data is managed in the event of an employee leaving the company and also size limits will need to be imposed much like the in-house solutions.

What I most like about this idea is the potential to reduce some of my headaches that the business sees little value in.  I want to focus my energy getting into the key business meetings where I can improve the business and not managing my servers a little better.  Managed services have a potential to be easier to deliver to end users and let business owners choose what to purchase.  You could set up several options and charge the departments for the use of these applications or services.

This is good news that CIO's will have more choices to provide to the business.  This will give us the flexibility to provide a solution that best meets our company's needs.

Implications: 1. Paper and Pen are a natural for people when it comes to ideas and creativity 2. Simplicity is important when it comes to design

Analysis: I am now convinced that there is a coming improvement in user interface because of how my twelve year-old uses his Kindle and loves the iPhone.  My son is just as comfortable sitting in bed reading a book  (a paper version) or the kindle.  I have also found him in bed using my iphone to look up youtube videos or browsing the web.  There is something about the interface of both these devices that compel my ten year-old.  We are a three laptop family (including one tablet), but I have never found my son interested in sitting in bed at night playing with his laptop.

More evidence for my theory is that my two older children (now 19 and 22) learned to use a computer when they were under two years old.  And we can see how this generation is fully comfortable using any electronics (sometimes to our own dismay and envy).  This generation is changing how computing is used in the business world and I think my son is onto something that will be coming.

It has become clear that the next generation "display" will need to be virtual in size and not limited to the device size.  This device will also have to fit easily onto a small surface or be held in one hand (no heavy battery packs will be tolerated). 

Another key is that the applications on the device will have to be flexible to create whole new solutions.  My son uses the SIMs software to build 3-D simulation ships out of the building blocks to build a house.  My son has built a virtual ship the size of the titanic with a full three classes of service and sample characters from the SIMs to act as passengers on this ship.  New applications will not be applications that limit a person the way the current PC applications can.  I can just imagine that my son will assume that he can design his own house with a program similar to SIMs and then have a builder build his house of his dreams.

The new applications will have the ability to create reality out of dreams.  Much like the CAD-CAM programs today allow professionals to build and design products.  I believe the future applications will allow the average consumer to design individual products.

I think the Kindle will evolve into a new type of device that will be more than an electronic book.  I think the new PDA's will also play a part in creating a more productive way for people to create new ideas.  And because of their small size and long battery life they have the opportunity to increase the flow of ideas.  This is much like the creation of the PC in the 80's started the digital storage and communication of ideas.

Implications: 1.  The success of the iPhone is not its touch screen alone but rather the interface 2.  Will the interface of a touch screen work with a blackberry?

Analysis: It is hard for me to imagine the blackberry competing with an iPhone from a user experience perspective.  This is because the iPhone is more than a touch screen.  The touch screen on the iPhone enables the virtualization of the input more than anything.  You can expand and contract the size of the screen and move around the screen in a virtual way.  Although this is similar to the blackberry in the way the scroll wheel works, the scroll wheel reminds me more of a DOS scroll as compared to the iPhone feels more like a Window's environment.

I am not saying that RIM is not capable of making this kind of tool.  Clearly, Microsoft was able to move from DOS to Windows.  But I think it will be a lot harder than anticipated.  I expect to see delays in the new product launch from RIM as they discover the challenges of making their applications work with a totally new interface.  RIM will not just have to have the main screen capable of using a touch screen, but all of their applications will have to allow for touch screen entry.  This is significant and would result in two separate code bases for the RIM (one for touch and one for the Wheel).  And how will third party applications work?

It is possible that RIM will just be announcing a touch screen with the same text entry style that Apple uses.  In my mind this will not be a significant change in the platform and may actually hurt RIM.  The text entry is only a small part of using the iPhone.  This will not result in an iPhone killer.

Another challenge for RIM is to continue to distinguish their product.  They do not want to look like an iPhone clone.  RIM has created an solid platform with their own style.  They will want to continue to be unique.  They also need to make existing users of their products want to migrate to the new device.  This will require them to keep many of the features that their current users like, but will be a drag on their innovation.

I think a bigger focus for RIM will be to offer new features for business users.  The biggest risk to RIM is the iPhone 2.0's connection to corporate email.  RIM needs to counter with some improvements in how RIM connects to different services.  Improvements in their SIP protocol to make using the phone in a corporate environment better is just one idea where RIM could differentiate.  RIM has a better battery life than the iPhone, so maybe replacing your desktop phone with a blackberry.  This would give the long desired one phone number and one device to reach someone.

RIM has done the easy part by announcing the feature.  The proof will be in the actual delivery of the product.

Implications: 1.  Lawsuits are a reflection that the market competition is very intense. 2.  Craigslist needs to focus on product solutions

Analysis:

The current deal with eBay and Craigslist is just as bad as the deal that Apple Computer made with the Beatles record Label (Apple Records) where Apple Computer stated they would never get into the music business.  Of course, with the I-POD and I-Tunes, clearly Apple IS the music business.  In hindsight, we should have learned that predicting the future of your business is a dangerous situation.  And it seems that eBay did not learn from the early error of Apple.

It is clear that eBay and Craigslist are more competitors than they are investors or partners.  From my understanding of how this has evolved, I believe that eBay initially wanted to purchase Craigslist, but has now found themselves as competitors for the same market.  The challenges with this deal are that there is no clear public understanding of this relationship. 

The good news is that the business of online classifieds is growing.  Most people I know look online for things more often than they would look into a newspaper for an ad.  In fact, the main loser in this arena are the newspapers.  Most people do not want to advertise in a newspaper anymore.  They want to advertise online.  The bad news is there is enough money to fight over and it looks as if that is what is happening.

Is eBay an investor in Craigslist and for what reason?  Since eBay is a competitor with Craigslist why are they investing money in Craigslist?  There is too much confusion about what each companies perspective and purpose is with each other.  Given the confusion around the relationship, it is not surprising that eventually a lawsuit resulted.

I think it is instructive to look at the relationship between Apple and Microsoft.  Microsoft invested significantly in Apple when Steve Jobs returned to run Apple.  As a result, Microsoft office is installed on many Macintoshes.  The deal was struck to help both companies.  It was also clear what was wanted by both companies at the time.  As a result, this relationship is an example of how two competitors can also partner.

The message should be clear for investors and IT professionals.  If you can not understand why a deal is being put together in simple terms, then you need to think twice about investing in the solution you might be implementing or investing in the company if you are an investor.  My experience with Lawsuits is that there may be a winner and a loser, but mostly both sides lose.  This is particularly true when the initial partnership was meant to be positive for both.  If the terms of the deal change, then the arrangement should change.

In this case, if I were eBay, I would either do a hostile takeover of Craigslist or sell the investment in Craigslist and use the money to win the business in the marketplace.  At least then the message would be clear.

If I were Craigslist, I would review my conflict of interest rules for board members.  As a board member on two nonprofits, I am required to sign a conflict of interest clause.  My concern for Craigslist is that this lawsuit will become a distraction for them and will result in poor performance of their core business.

This is nothing more than two competitors going after each other in the courts.  It is a distraction from the real battle happening in the marketplace.  To understand who will win, ignore the impact of the lawsuit and watch the success of the businesses.

Implications: 1. Skype clarity has improved to where it is as good as cell phone 2. The feature of sharing information make it a low cost form of webex

Analysis: With the number of remote workers rising, I have been focusing my efforts to create a set of remote tools for remote workers.  At first, I selected my normal set of solutions.  Setting up VPN access, giving access to internal systems plus the use webex, VOIP clients, and cell phones.  And then I started to project some of the cost that would incur giving all of my remote workers and I found it to be substantial.

And then I ran across this article that suggests that Skype is improving the voice quality.  I have now started using Skype on my conference calls and several people have asked if I got a new cell phone because the quality was better.  I did some checking around the office and discovered that most people use their cell phone on conference calls (we have unlimited plans for most people).

I also find it easier to use some of the Skype features.  I have used the Skype video conference and it works well (as long as my kids or wife are not on another video call).   And I like having the chat section as well.  I can send chat information while on a call.  It is like having a private line while the conversation. 

I have talked to the sales team and they feel great about having private conversations while on a call.  It makes our team seem more professional as they can prepare their questions while the call is progressing.  The sales team currently all use instant messaging to do the calls, but I was realizing that they could use Skype for both.  It is sort of a single point of integrated communication at the end user level.

I was a little worried about the training required to use skype, so I mentioned it once at the dinner table.  To my supprise, my twelve year-old son already was using it with his fourteen year-old cousin.  And the last time he had visited with his grandfather, my son had installed and trained his grandfather.

If my grandfather (in Arizona), my son (in California), and my son's cousin (in Georgia) can make videos using input from their skype calls and video chats, surely we in the business world should investigate this as a tool for our ever expanding remote workforce. 

I am still worried about the secuity of such a solution, but I am also finding that many of my users are using it anyway.  I could block the application by making my virus program think it is a virus, but at the moment I am feeling that I should let the growth continue and actiually support the idea.

Implications: 1.  Getting work done also involves knowing your fellow employees outside of work 2.  Some companies are starting to use facebook as a way to connect employees

Analysis:

Many of the social aspects of work are getting harder to accomplish as today's workforce becomes geographically dispersed.  Sometimes the most important part of a project is the building the camaraderie around the team.  Traditionally, this is done with offsite planning meetings that often involve fun events.

With the advent of social networking, you can have a fun event without needing to go offsite.  Think about how often you talk with a coworker about their children or some local event.  It helps build rapoire to often do so.  With Facebook, you can learn about people who you will be working with without having to be in the same location as they are.

I know of a few companies that have instituted this feature within their company.  They have created a group that all company employees are allowed to join.  Some people were skeptical at first and many people were worried about HR issues.  The other worry was that people would spend all their day updating their facebook and not doing "real work"

The early results from this CIO were that the incidents of abuse seemed no more greater that before the introduction of facebook into the company.  In fact, the general feeling is that it has made the company a more friendly place to work.  People know each other better and it has led people to work more closely with each other even when they are separated by distance.  And most employees keep their time on facebook to a reasonable time.

The introduction of facebook into the company was driven from the CEO's office because he wanted people to feel more camaraderie.  This company had many offices and cross-functional efforts happening around the globe.  The CIO's responsibility was to setup the group that all employees could join and manage the access to the group.  All employees could join the group, but if you left the company you were removed from the group by the IT department.

Working virtually has been increasing as more and more people work from home or at remote offices.  But keeping the corporate culture intact with this change has been a challenge.  Maybe Facebook will allow for companies to bring back more of the personality from the disparate workforce.  In fact, Facebook may be just an extension of integrated commincation.  It is not just about the integration of voicemail, email, video.  It is about the integration of people into teams.

Implications: 1.  A downturn is the US alone can has less impact on web-based companies. 2.  US is the leader in the online community

Analysis:

The growth of the US internet business segment since the end of the dot.com bubble has had the effect of creating a global business model.  This model is unlike the large multinational corporation of the past that were required to have a presence in countries around the world in order to grow its business.  The internet world being virtual can grow to global proportions without the physical barriers of local presence.

The fact that global distribution companies are already in place means that products can reach the end customers anywhere in the world for most internet company.  The challenges for the internet companies is more of getting name recognition in economies around the world. 

At first you might think that this would require a local presence.  But even marketing and advertising for internet companies has largely moved online along with its business.  So the speed of business growth is a much more efficient online because of the virtual nature.

This raises the question of what can CIO's do to help their businesses move more online.  From 2001 to 2004, there had been a bit of a backlash in some areas around the internet economy at some more traditional companies.  This article raises the opportunity that it might be time to push forward again into an accelerated online capability.

One simple approach would be to forward this article to other executives (and other articles like this one).  It would also be a good opportunity to create a strategic initiatives within the company to reevaluate the business model and see if there are online opportunities that have been missed or could be expanded.

The other thing to realize is that it has gotten a lot less expensive to go online.  For example, I sit on a nonprofit board that used to spend around $5K per month on the website, email blasts, and did not have a ecommerce website.  In less that six months, I personally have setup an email blast solution, an online store, and a survey solution (in my spare time).  We spent less than $20K to have a content management solution implemented for our website.  And now, we spend roughly $300/month to do more online than we did in the past.  We also hope to generate enough revenue from our online presence to more than cover our costs.  In less than one year, The "IT" costs have gone from $60K per year to a revenue opportunity.

This could be one of those times when we in IT reevaluate the ROI of being online as more than just a technology.  It is a way to reduce the company exposure to a US downturn and a way to become more global.

Implications: 1.  The more data that can be shared, the more data we want. 2.  New types of storage increase data collection at the source.

Analysis: I kept thinking that as Applications became more integrated, we would reduce the amount of redundant data being stored and our storage needs would be reduced.  Or at least that is what I had deduced about the growth of data.

But I was wrong.  I missed one important fact.  The reduction of storage costs has led to an exponential gathering of new data.  Think about this for a little you will realize that most of interactions with people and business result in stored data.  Here is a few to make my point.

All cameras (for the most part) are now digital.  I now take thousands of pictures a year instead of hundreds.  And I do not seem to throw them away.  A one week vacation will create a gig or so of photos.

I buy most things online now.  All of my purchases are stored online.  All of my banking is stored online (including paying for everything with electronic credit cards).

I do not write letters very much anymore.  But I send hundreds of emails, text messages, and electronic analysis like this in a day.  I even have my voicemail stored online.

Ok, you say.  I made my point about the storage of almost all data about me being available digitally.  But I failed to mention one other fact that makes this new world even more storage hungry.  IT is now integrating and cross connecting all of this data in more and more ways. 

For example, if I call my phone company and open a ticket to have a problem resolved, then this data is not only recorded, but it is connected to other data about me and probably stored more than once.  It seems like many of applications that IT is asked to build are applications that integrate more and more data that is collected.  Integrated messaging, SOA, Portals, etc... are new classes of applications that do nothing more than pull together stored data and often create even more data in the process.  In fact, these classes of applications make it geometrically easier to collect and create more data.

Given all that I have written, it is easy for me to support the authors claim that data storage providers are still in a growth mode.  It seems the more we create new forms of storage devices, the more data we collect, coordinate, and redistribute.  And each new storage device is small and stores more data.  the 1 meg floppy was replaced by the 250 meg zip drive, that was replaced by CD and DVD, that is seeming to be replaced by the now 32 gig flash drive, that may be replaced by online storage of unlimited size.

IT's role to manage and support this data will bring IT closer to the business and IT will be less tied to the pure technology.  All of the tools that I have mentioned have made IT more valuable to the business because we can generate business results faster.  It is about what you can do with the data and not about how much data there is.  And the connection of IT to solutions will drive more storage and value to businesses.

Implications: 1.  Sharing of information from one service to another needs to be thought out. 2.  The viral nature of online business causes the rewriting of new rules.

Analysis: My dad could never use an ATM machine to deposit money because he said that he needed to see the money go into the bank, not a machine.  I used to tease him about it, but my dad has a point with regards to this article.  My dad wanted to make sure that his money and identity was secure.  The same is true with the person who sued Blockbuster.  They want their personal purchases to remain personal.

Most CIO's came into IT when data was always stored securely in our data vaults (the data center).  But now, the web has made this data capable of being available to the public.  While this has improved communication, it has also created exposure.  And laws are being rewritten to adjust to this new paradigm.  But the laws are behind.

What does this mean for CIO's?  On the most basic level, it means making sure we control where we send our backup tapes. 

But even more importantly, we need to recognize that the ability to integrate data with service oriented architecture and mashups means that end user data could end up being exposed on the internet.  Imagine a scenario where you share company contact information with one of your distribution partners in order to facilitate better team selling(such as a cell phone number).  But what if that information gets shared to a third party without your knowledge(even if the purpose was meant to sell more product)?  What rules do you have in place about what information can be shared?

The temptation for CIO's is to leave these kind of decisions up to the "business".  But our knowledge of how information can transformed and transferred should be leveraged to guide the business in making sure the privacy of our, people, products, intellectual property, etc... are protected.

This lesson that Blockbuster is facing highlights the changing environment that business is facing on the web.  New ways of communicating and new ideas are being generated on a regular basis.  But as this article points out, sometimes you can move too quickly.  In this case, the value and the security to the end consumer seems to not have been managed well enough.  And that is the simple lesson from this article.  Remember the wants and needs of the end consumer and be sure to protect and provide for the customer.  As they say, "the customer is always right".

Implications: 1. The Darwinism of technology continues in economic hard times. 2. Today's hot gadget is tomorrow's paperweight and CIO's should look to prune un-needed equipment.

Analysis: The need to improve communication is driving the innovation within IT and the industry.  This is because companies want to gain access to the best people at the best price anywhere in the world.  As a CIO, I get more requests for the latest PDA than I do for a new laptop and this is a change from just a few years ago.  The device that is always with you is now the most important.

The new integrated communication machines are now making it even easier.  You can now setup you office phone and your cell phone to ring at the same time.  It will only be a matter of time before you will only need one number - you cell/PDA number.

The speed of innovation does not follow the economic cycle.  In fact, innovation may move faster when economic times are harder.  When the dot.com bubble burst, there was no slowdown in innovation that made improvements and made business sense.  An economic downturn is like a house cleaning.  It is the time to stop using what you no longer need or to only use what you need.  Throw out the un-necessary and get back to basics.

So, this is a great time for CIO's to prune their budget and prepare for the making things simple.  This could mean that you re-purpose old desktop machines as Linux machines for those users that only need a browser.  Linux has become easy enough to use and almost all applications just need a browser.  No need to invest in the latest desktop anymore.  Three years ago, this might have seemed unlikely, but today might be seen as innovative.

This is also a time for partnership with the business to find better ways to economize business.  We have reached a point where we can hardly make any change in business without adjusting the technology around the change.  In an economic downturn, there is an opportunity to drive improvements in productivity. 

As a CIO at a professional services company, I am helping my company create standard solutions for our customers that can be reused across multiple customers.  It is the same thing I have done internally for years, but in this case I am doing it for the business in order to gain productivity.

There are many opportunities for CIO's in this economic climate.  It is just a matter for us to see the chance to partner and innovate.

Implications: 1.  Solid State drives are the future (not too distant) 2.  Reports of problems grab headlines, but rarely stop a trend

Analysis: The new Ipod  touch now has a 32 Gig flash drive, the new iPhone has a 16 gig flash drive and the new Dell laptops can come with a 64 Gig flash drive.  Just for fun, I checked out my laptop drive and found out I only had a 32 gig drive (computer is a couple of years old).  This is amazing in that by next Christmas probably even my phone will have more solid state memory that my current laptop hard drive.

So, why does this matter?  If you take out the battery and the hard drive from your laptop, you will find that your laptop is a lot lighter.  Given the fact that solid state drives take less power, maybe we will finally see the battery life we have all wanted from our laptops.  I would love for my laptop to work like my phone.  I can use it all day and charge it at night.  How portable is your laptop if you really have to have it plugged in for half of the day?  With solid state drives we may have laptops we can carry that truly do let us travel freely.

I also worked at a company that was a supplier to Dell.  Dell has much higher quality standard that they impose on their suppliers.  I had to set up a separate version of the Shop floor control system to meet Dell's higher pass rates.  In fact the company had a separate testing function to support the dell versions of the product.  Based on my experience, Dell is likely to be accurate in their assessment of the drive failures. 

My daughters Ipod classic has a hard drive that has failed twice in the same time that my Ipod nano (with flash) has been working just fine.  I think that the move to solid state drives will allow laptops life to be extended for more than four years of useful life.  Let's face it, we really do not need a processor faster than 2ghz for most corporate applications.  As a CIO, the extra cost will be offset by the extra year of use and the higher reliability.  We are already seeing desktops that have a useful life beyond four years and solid state drives have the potential to create the same life for laptops.

I checked online and noticed that I could buy a 8Gig replacement drive for $200.  My guess is that by Christmas 2008, that $200 will buy you a 32Gig drive.  My guess is also that by 2009 or 2010, notebooks will be shipping a large percentage of solid state drives.

This change is inevitable because laptop manufacturers will have to compete more and more with PDA's to become the end user's computing device of choice.  I already know a lot of people who carry their blackberries around and do not take a laptop with them.  I feel the trend this year and next will be to make the laptops have more and more of the PDA features concerning battery life.  And solid state drives and better LCD panels will make the most difference in that future.

Implications: 1. The ability to run Windows and macintosh software on the Macbooks creates less of a barrier for Macintosh in corporate america. 2. The iPhone as a corporate solution enhances Apple's position

Analysis: Imagine a group of CIO's standing around the bar before dinner discussing how Apple's new product could be a great addition to end user computing.  And no, this conversation is not referring to conversation in 1984.  I am referring to a conversation that happened in 2008 with a group of CIO's at a monthly gathering of CIO's.  The comments included, " the Macintosh is the fastest Windows PC out there", and "if you put Vmware on the macintosh, you can have both Windows and a Macintosh available at any moment".

Now, I do not know how accurate the technical details of the statements are, but the conversation quickly changed.  The real topic was about finally being able to have the marketing organizations and the sales teams get the computer that they have finally wanted.  And finally, CIO's won't get beat up by always having to say "NO" to Apple's laptops.

Of the twenty five or so CIO's in the room, it turns out that four of them had Macintosh laptops as part of the experiment they were doing at their companies.  And so far, the CIO's had been happy with the results.  And some of the CIO's (including me) were actually using the iPhone.  The talk was about the Enterprize iphone beta and the number of CEO's who wanted (or had in my case) an iPhone.

This was not a conversation about bashing Microsoft.  It was more of a statement about the innovation happening at Apple and what seemed to be a strong coexistence strategy.  I think Apple saw how Blackberry was able to coexist in the Microsoft world and put together a strategy to do the same.  I think we are now beginning to see that strategy unfold.

What is also driving this strategy is the blending of work and home life by the new generation of workers now entering the workplace.  The new generation is expanding the range of technology uses and they demand greater flexibility from their employers.  My daughter is only 22, but she is now the company web master.  She is not an IT person, but she has been using a computer since she was one and a half and has been on Facebook for years.  She knows how to build a creative looking website that attracts people and the tools are now available for a tech savvy user to build a cool website.

CIO's will need to adapt to this new type of user.  I was recently at a CIO conference where this was the topic at almost all of the networking sessions.  And Apple is positioned to capitalize on this trend because their products of late (I-POD, iPhone) have been targeted at the upcoming generation.  It will be interesting to see how this changes the competitive landscape of personal computing in the next five years.  But for now, it looks like the Macintosh is making a comeback.

Implications: 1. Saving money in areas where basic computing is sufficient will increase in the coming years. 2. Linux is in the server room making support a possibility.

Analysis: In a year where cost reduction is a discussion and probably a requirement, it is probably worth looking at Linux as a cost reduction strategy.  This is particularly true if you have a large group of users that just need access to a web browser and email to do there job.  An example of that is the accounting department where the only system they use is a web-browser based ERP system such as Oracle or SAP.  Or the purchasing department or shipping and receiving.

It is possible in some cases to eliminate Windows and Office from these machines, install Open office and Linux, and do not pay maintenance to Microsoft.  More importantly, you can reuse those Microsoft licenses on new PC's that you buy saving even more money. 

Even a few years ago this idea would have been something that most CIO's would not have considered.  But since that time almost all systems have migrated to a web-Browser or at least a Citrix-based solution.  This makes it possible to consider Linux desktop software for almost all applications.  This means that there is now an emergence of options open to CIO's to reduce expenditures and also interoperate with Microsoft Windows in the enterprize.

On the other hand, I would not replace Windows laptops with Linux because the cost of training knowledge workers on how to use Linux is not worth the savings the Linux brings over Windows.  But wherever commodity computing requirements exist, the temptation to eliminate the cost of Microsoft is much more compelling.

I also find that most people who work in your helpdesk area are certified on both Windows and Linux, so there should be no increase in staffing costs.  In fact, this could also provide a training ground for your future Linux server administrators.

So maybe the increase in Asus Linux machines in a sign that more people are revisiting the total cost of a computer and realizing that a multi-platform strategy makes sense in certain situation.

Implications: 1.  Microsoft is planning another operating system in a few years, so why upgrade. 2.  Microsoft seems to have lost the operating system was on mobile devices to Apple

Analysis:      This year looks like a recession year in the US.  Why not stay with Windows XP, drop you EA agreement, and wait for the next operating system?  This would save you a lot of money in the IT budget and also eliminate the training costs for the business to switch to a new OS.  Not a bad strategy in a year where budgets will be tight.

      I have so many people asking for iPhones that I will have to support them.  And I have figured out how to sync the email to exchange.   Not as elegant as Blackberry or Microsoft, but good enough.

     So what happened to Microsoft as the king of the operating system?  I really enjoyed this article for several reasons.  First, I am glad to hear that there is innovation happening at Microsoft and a willingness to abandon much of their legacy code.  Second, when I read this article I finally understood why I was no longer in a rush to upgrade to Vista.  And lastly, this article helped me to understand the difficulty Microsoft must have in keeping their legacy code and compatibility with their mobile platform.

     Granted that Vista is a better than XP and a more secure operating system.  But it is still just a better version and a new interface put on top of windows 2000.  I think technology has matured to a point that real savings and value needs exist before there is value to an upgrade.  Vista did not pass that bar from my perspective.

     The innovation that I am more happy with in the the new office and Sharepoint.  But this runs fine on XP, so it is less of a hassle to upgrade just office.

     What is also interesting is that Apple has managed to leverage their base operating system on both their phone and PC (macintosh line).  I think this in part because Apple has already migrated from the Mac OS to Tiger (and now Leopard).   

     Microsoft's Surface initiative seems to offer the same opportunity for Microsoft that Tiger offered for Apple.  The challenge is that Microsoft has a much more difficult transition because of it success in enterprize integration.

     This is an interesting time for CIO's.  We have a chance to slow our upgrade to the next release of Windows at a time when costs matter in the enterprize.  The opportunity for the CIO is to highlight this choice in a way that makes the CIO be perceived as a business driven executive.  I would much rather slow my upgrade to Vista than reduce other spending that could directly reduce business operating costs.  I cenrtainly would cut the Vista upgrade costs before I would reduce staff.

Implications: 1.  Faster bandwidth leads to more options for remote workers.  2. Support for remote workers give IT executives more flexibility.

Analysis: Why is it that the best Unix Administrators love to snowboard and live in the mountains?  Do Oracle DBA's need to live in Small towns?  And why do the best network security administrators want to live in the desert?

Ok... So I am joking a little here.  But quite frankly, I want the best talent regardless where they live.  So supporting remote workers is a must in today's world.  And with better bandwidth, I have more options.

I recently looked at my calendar and found that I had over eight hours in one week of phone meetings and / or webex sessions.  So, if I am working remotely from a significant number of my meetings, I can imagine my technical staff needing very little face time.

And the technology has definitely kept up.  Cisco has its IP communicator software that lets users have their office phone with them at all times.  Every company has a webex-like solution and Microsoft live server meets many of the remote presentation requests.  And then I realized that many younger workers today are just as comfortable using instant messaging as they are email.

What I finally realized was that I had a lot of remote communication options, but I did not have a remote workers strategy.  We in IT were addressing each request for a remote worker as a one off solution.  Or even worse, we were leaving the remote office worker to figure this out on our own.

I feel that this article has given me a wake-up call to get serious about the remote workforce.  I need to build a strategy that allows for remote workers that does not compromise security or IP retention.  Many people commute to work up to an hour, so if I could get even one hour of that time in productivity, then it would be a huge boost to the companies bottom line.  The "market" for this kind of productivity gains is huge and growing.  And I need to be ahead of this curve not behind where I am now.

The strategy is bigger than just having a plan for the remote sales person.  It can now be setup for many people within the company who want to work remote for even one day a week.  And with the costs of commication droping and the cost of office space rising, the economics favor the remote work force.

So, send me your comments.  Confessions of a CIO that fell behind the curve.

Implications: 1. Proactive strategies for cost reductions are better than reactive. 2. Communication about the current realities is critical to your staff

Analysis: The new year has arrived and CIO's are examining their current budget patterns.  I belong to a group of CIO's and the general consensus was 2008 will be flat to +2% over 2007.  But many of the CIO's were preparing for potential cuts if needed.  This is consistent with the article I have referenced.  I should remind the readers that this group does not include anyone from residential real estate or other housing related industries.

I would like to add to some of the ideas in the article in two different ways.  First, I would suggest that this year might be a good chance to look at cost saving projects,  Second, this is a good time to include your staff.

These are often years when it might be wise to look at your vendors and see if you can consolidate some of them.  Often you can give more business to fewer of your vendors and get a net savings.  This strategy is more along the lines of following a "good enough" strategy instead of a best of Breed strategy for your solutions.

This could also be a great year to renegotiate some of your contracts and move them to 3 year deals.  This has some risk in that you might miss out on future savings.  But it could also be a simple solutions to save a couple of percentage points this year given the estimates of this being a slowdown or a mild recession.

I also think this could be a year to look at a different strategy of outsourcing.  It might be time to determine what is core to IT and what is best done by others.  Small to medium business might want to outsource production support as compared to having multiple shift coverage.  I think the years of saving a ton of money with staff augmentation offshore are lessening, but strategic changes will still occur.

But by far the most important point I would like to make is to include your staff in these decisions.  Be sure to challenge them to finding good strategies.  They are closer to many of the issues and will probably do a great job.

This will also create a sense of teamwork in your organization and a sense of clear communication.  For those top people who you do not want to be nervous, bring them in to have them help you solve any budget issues.  In this way you can put your best people on this problem and probably find the best solutions with little or no impact to staffing.  And even more importantly, your staff will hear the facts from you, not from standing around the water cooler.