By: Bob Tarzey, Service Director, Quocirca Posted: 12th April 2013 Copyright Quocirca © 2013

Naming a company you founded after yourself can be problematic. OK, no one tries to place the blame for HP’s recent woes on Bill Hewlett or Dave Packard (anyway, according to HP’s current management a big turnaround in fortune is underway http://www.hpnext.com). However, the ups and downs of Dell are still closely associated with its eponymous founder Michael Dell, especially as he bids to take the company private again, a battle The Economist believes he may lose. For McAfee the recent antics of its founder, John McAfee, were mainly embarrassing (went into hiding after being linked to murder enquiry).

So, it was a brave decision back in 1997 when Eugene and Natalya Kaspersky named the anti-virus company they founded, Kaspersky Lab, after themselves. The name sounds, and is, Russian and although the company now operates as a UK legal entity, it originates from Russia and many of its functions are still based there. Russia is perceived as a hotbed of organised crime and cybercrime, so why would you trust one of its companies with your online security?

In fact, compared to the examples listed in the first paragraph, Kaspersky is not widely known outside IT security circles (except in Russia itself, where it is a well-known consumer brand). There are two reasons for this. First, although its revenues, in excess of £600M, put it in the top 10 IT security companies, only the biggest are that well known, namely Symantec and McAfee (which is why the recent story about John was so widely covered).

Second is the way Kaspersky goes to market (outside of Russia). It has created a widespread network of OEMs (original equipment manufacturers) and ISVs (independent software vendors) that embed its anti-virus in their own products to provide that particular capability for their own offerings. OEMs and ISVs do not always reveal what is under the bonnet unless asked, however a long list of technology partners on Kaspersky’s web site includes; IBM, Alcatel-Lucent, Cisco, Juniper, Blue Coat, Check Point and D-Link.

Such prestigious partners have underlined the pedigree of Kaspersky’s anti-malware products and convinced many others to place their trust in the vendor; worldwide there are now over 400 million end-points under Kaspersky’s protection. Technology partners now account for just 20% of its business with a further 30% coming from businesses across Europe and beyond via 5,000 plus resellers. The balance comes from consumers.

If Kaspersky relied on just selling anti-malware its long term future would be in doubt. As two recent free Quocirca research reports have shown, traditional IT security is no longer good enough on its own to defend against the growing numbers of targeted attacks and other emerging threats (see these links The trouble heading for your business; Advanced cyber-security intelligence). All IT security vendors have had to adapt and Kaspersky has done so with a number of additions and modifications to its product set over the years.

Bringing it all together is the Kaspersky Security Network, a global network that gathers data from over 60 million end-points from contributing Kaspersky customers, providing rapid protection by keeping all users’ devices up to date with the latest information about malware and dangerous network links. However, such a capability is table-stakes for any IT security vendor and does not in itself defend against previously unseen (zero-day) threats.

So, the latest release of Kaspersky End-point Security for Business (KESB) includes a set of features designed to counter zero-day attacks. These include sandboxing, virtual keyboards, whitelisting, blacklisting, behavioural and heuristic analysis etc. The range of end-points protected has been extending to include tablets, smartphones and virtual devices. There is also an an overall device management tool to manage patching, usage policy etc.

In addition, Kaspersky System Watcher introduces a context-aware security capability by combining information from Kaspersky’s firewall, behaviour analyser and cloud-based reputation server to provide a broader overall risk assessment of suspected malware.

Kaspersky admits it is often not first to market but says this is to the long term benefit of its users as all of its technology is built in-house and therefore tightly integrated. Customers might not agree if they get caught out by some new threat whilst Kaspersky’s innovations are still in its Lab. That said, many may be unaffected if, as is often the case, Kaspersky is used alongside other security technology.

Kaspersky is an important player in the IT security industry and with its continuing innovation it seems set to remain so. It is likely protecting your organisation against various security threats somewhere, even if you do not know it. It is one of the few Russian software companies with a global footprint and has achieved a level of trust many western business would envy; a jewel indeed.

By: Clive Longbottom, Head of Research, Quocirca Posted: 8th February 2013 Copyright Quocirca © 2013

At the end of 2012, Quocirca carried out research for BNP Paribas Leasing Solutions into the perceptions around IT and communications financing amongst UK small and medium businesses (SMBs). For the research, SMBS are defined as organisations having revenues of between £5m and £50m per annum. The results show that there are marked differences in buying habits within these SMBs—and that there is a lack of strategic thinking that could impact their capabilities to compete in the market. 

The research indicates that although the value added reseller is the most used strategic channel for the strategic buying IT and communications equipment, there is also a lot of tactical buying of equipment directly from the web. Although this happens particularly at the smaller end of the market, where the buying decision was mainly down to the owner/manager, it is still seen amongst the larger organisations where there was a dedicated purchasing function in place. 

This tends to indicate 'reactive' buying, where equipment is sourced as and when required, for example where a piece of equipment breaks or where a new project requires new hardware. However, by buying reactively, the underlying platform can become less strategic—standardisation and homogeneity can be reduced, while asset lifecycles are difficult to monitor and maintain as no real controls are in place.

It also militates against the way that modern IT is going—virtualisation and cloud computing work best where there is a more standardised and lifecycle managed set of equipment underpinning them.

However, for an SMB, putting in place this sort of rigour may be difficult. Consider an organisation that has a total IT budget per year of, say, £500,000—this falls someway along the middle of the range of SMBs that are covered in the research. According to standard metrics, between 60 and 70% of this will be spent on maintaining the existing platform—what is known as “keeping the lights on”. This will leave, at the low end, £150,000 for new IT investments.

This is not a lot when it comes to trying to implement a new technology platform—and many SMBs find themselves in the position of wanting to carry out more strategic projects, but cannot as the required money is not within their grasp.

However, the use of structured financing could help SMBs make far more of their available money by aggregating planned spend over three years into a single pool of resource that can be used as needed. Taking the same example as above, that £500,000 IT budget could be aggregated over a three year agreement to give £1,500,000—and, through a suitable finance agreement, all that money can be made available as of day one to the SMB for use against IT spend.

Obviously, the SMB will still need to plan for keeping the lights on over the three year period. However, it should be able to put in place better processes around purchasing ITC equipment; it may be able to negotiate better deals on pricing; a more standardised and modern platform should lead to savings in managing the platform and in its energy usage.

Assuming that making changes to how ITC is purchased and managed drives down the 'keep the lights on' costs to 60%, then £600,000 is now available for ITC project investment—an increase that could make all the difference between an SMB managing by struggling along and reacting to ITC events and an SMB that is more optimally supported by its ITC platform and is better suited to compete in today’s market conditions.

ITC financing can make a massive difference to organisations that are looking to gain better control over future spend and also in controlling its ITC platforms. The key is to make sure that the partner chosen to provide the financing agreement has a track record in this kind of work—banks will often require a legal financial hold against business assets, which could include the business premises and other assets, whereas a good ITC finance organisation will only have a hold against the equipment purchased through the agreement.

Quocirca has written a report on the subject that is freely downloadable here.

By: Louella Fernandes, Principal Analyst, Quocirca Posted: 3rd December 2012 Copyright Quocirca © 2012

HP held its Fall printing event in Barcelona last week, where it announced the largest upgrade to its commercial printer line in almost a decade. HP’s print division (previously called IPG) is now merged with its PC group to create a new Printing and Personal Systems Group (PPSG). Printing remains a somewhat bright spot in the struggling company, generating close to a fifth of its total revenue and around two thirds of HP’s annual profit. However, for the full fiscal year 2012, HP’s printing revenue of $24,487m was down 6% from the previous year.

The market for printing is undoubtedly shrinking and characterised by intense competition and falling margins. This is compounded by growing user mobility, with the proliferation of mobile devices such as tablets, set to accelerate a decline in the printed page in favour of the electronic page.  Consequently many vendors are turning to services to minimise the damage, offering a wider document workflow portfolio that supports the general move from paper to digital business processes.

HP’s expanded portfolio of hardware and software certainly help address this new print environment. HP’s new range of HP Officejet Pro and HP LaserJet printers and multifunction printers (MFPs) provide new workflow and content management capabilities with some of the new inkjet models featuring a new print head designed to achieve higher printing speeds. 

Expanded business inkjet portfolio
Since 2005, HP has sold 10 million inkjet products, with a CAGR of 30%. HP is now expanding its office portfolio with the launch of its Officejet Pro X series. Set to rival laser printers, this new class of devices feature HP PageWide Technology, based on HP Scalable Printing Technology, using new pigmented inks and a print head unit that spans the width of a page.

With more than 40 thousand tiny nozzles on a stationary print head that spans the width of a page, PageWide technology delivers four colours of HP pigment ink onto a moving sheet of paper. According to HP, as the paper moves and the print head does not, its new HP Officejet Pro X Series printers are quiet and offer laser-fast print speeds and a rapid first page out.

HP is targeting the new HP Officejet X Pro series at unmanaged small businesses with 5–49 employees, as well as managed small and medium-sized businesses (SMB). HP claims that its Officejet Pro X Series inkjet desktop printers and multifunction printers (MFPs) deliver up to twice the speed at half the printing cost compared with color laser printers in the same class. According to HP, their PageWide Technology offers users the performance traditionally associated with lasers while outperforming low- and mid-range colour laser printers in cost, speed, and energy efficiency.

Although HP’s PageWide technology could certainly appeal to SMBs, this sector has traditionally been dominated by laser-based technology as customers are often reluctant to consider inkjet printing technology due to concerns related to ink costs, device speed, and paper handling capabilities. With a monthly duty cycle of 75,000 pages, the X-series would need to evolve to offer more enterprise-focused features, advanced finishing options and higher monthly duty cycle before it can compete with the Laserjet range in the enterprise.

So given a vast range of laser-based printers and MFPs, why is HP now focusing on extending its business inkjet offerings? Certainly the margins are higher for inkjet products, particularly as HP owns the intellectual property and development of its inkjet technology, whereas it sources toner and LaserJet technology from Canon. However, HP is not the only vendor with page-wide inkjet products—it also faces competition from Memjet who are licensing their technology to other OEMs. Xerox also offers solid ink printers and MFPs targeted at the same market sector.

The workflow optimised MFP—handling big data
Although HP is dominant in the single function laser printer market, it has a much lower share of the MFP market, overshadowed by Xerox, Canon and Ricoh. HP’s new workflow optimised MFPs aim to change this, increasing collaboration and productivity by easily capturing, indexing, storing, searching and retrieving documents. Devices feature advanced document processing, a range of security management features, two sided scanning and a pull-out keyboard for fast and accurate data entry. These devices are designed to meet the needs of the 'Big-data' challenge for many businesses—as much of this data still resides on paper.

The HP workflow MFPs can be integrated with HP’s new Flow CM Professional content management capability based on software from its 2011 Autonomy acquisition, which can run either on-premise or in the cloud. HP Flow CM Professional enables enterprises to access information in paper/electronic documents, audio, video, email, and web pages.

HP’s MFP portfolio has long been due an overhaul, and HP is recognising that with print volumes on the decline, MFPs need to be more fully utilised as tools for document capture, routing and archival.  Nevertheless, HP is not first to market with these capabilities. Some competitors are already actively offering document workflow integrated MFPs—for instance Lexmark has recently announced a range of MFPs that integrate with its Perceptive ECM software portfolio. HP’s workflow MFPs certainly offer a comprehensive and sophisticated set of capabilities. For now it remains to be seen what, if any, impact the saga currently raging at HP with regard to the Autonomy acquisition will have on this product portfolio.

Conclusion
HP has had a turbulent 2012, and is operating in a market with mixed fortunes. HP still has some work to do to increase the penetration of business inkjets and helping businesses overcome the negative perceptions that they have about inkjet technology in the office. In the enterprise, MFPs are becoming more widespread and HP’s competitors are already working with existing customers to leverage their existing MFP investments and deploy document workflow.

HP clearly intends to hold its ground and revive its once lucrative jewel in the crown. The competitive landscape is only set to intensify, but HP’s IT reputation, breadth and depth of products and vast distribution network will be key to it driving innovation in its product portfolio that accommodates the new trends of big data, cloud and mobility. 

By: Bob Tarzey, Service Director, Quocirca Posted: 23rd October 2012 Copyright Quocirca © 2012

Resellers charged with making sure their customers’ use of IT is secure face an on-going challenge; is the security in place good enough to counter today’s threats and, if not, can the customer be convinced to invest more? Research commissioned by LogRhythm and included in a recent Quocirca report entitled “Advanced cyber-security intelligence” underlines the scale of the problem; only 19% of the organisations surveyed said security spending was increasing as proportion of overall IT spending.

However, the number of threats is increasing and their nature is changing from being generic and random to tailored and targeted. The approach taken to IT security needs to change in line with this and in many cases this will have to be achieved without huge new investment. A starting point is to review what is in place already and gauge its effectiveness.

Traditionally IT security has been deployed as series of point products; firewalls to keep out intruders, desktop anti-virus to protect the end user environment, spam filters to clean email, web filters to police use of the internet etc. Whilst all such products have their place, mainly when it comes to countering old-style generic security threats, they are often not enough to protect against more targeted threats, detecting and mitigating these requires a broader approach to be taken.

A good example is the Flame malware that was first reported and named earlier in 2012. The early instances of the malware were not known to anti-virus products that relied on signatures, so it had to be detected in other ways, for example by monitoring for unusual activity.

Flame worked by contacting as many other devices on a network as it could and then seeking out interesting data and sending it back to a command and control server. A server that was accessing a wide range of other devices on a given network and sending reports back to a suspicious IP address could be detected by monitoring both firewall and server activity logs in real time and recognising the unusual behaviour of Flame. Spotting attacks in this is what Quocirca has called in its recent report “advanced cyber-security intelligence”.

The good news is that many organisations already have the base technology for doing this in place. The early iterations of such products were for log management; the collecting and archiving of log data for long term compliance reporting. These evolved in to what became termed SIEM (security information and event management), which involved the collection of a broader range of data. Next generation SIEM (another term for advanced cyber-security intelligence) describes souped-up versions of such tools that can use such data in real time to protect against targeted threats.

On the whole organisation are reasonably optimistic about protecting themselves against IT security with “the right technology in place” (Figure 2). However, they must also recognise that the “right technology” is changing. This is not to say point security products should all be ditched, but their effectiveness should certainly be reviewed and rationalisation which should free up some funds.

Furthermore, most organisations already have some form of log management capability in place (Figure 3). It is just that they are not benefiting from using this in real time. Again the current investment can be reviewed and more advanced capabilities recommended. LogRhythm, the sponsor of Quocirca’ recent report in once such provider, others include IBM (via its Q1 Labs acquisition), McAfee (via its NitroSecurity acquisition) and HP (via its ArcSight acquisition).

Resellers need to make sure they have an understanding of next generation SIEM, the products and their capabilities. Many of their customers may already have the base technology in place, but not be using to full effect to improve their protection against a range of increasingly sophisticate threats.

This article first appeared in the Computer Reseller News (CRN) UK print edition and on http://www.channelweb.co.uk

Quocirca’s report “Advanced cyber security intelligence” is free to ITD readers here: http://ecrm.logrhythm.com/WebQuocircaAdvancedCyberSecurity7-2012.html

By: Clive Longbottom, Head of Research, Quocirca Posted: 13th July 2012 Copyright Quocirca © 2012

Many are the tales of the public sector getting poor deals in IT (well, in many areas of procurement, actually). Finally, however, it looks as if someone is getting a handle on what public sector procurement could—and should—be like.

From the outside, it often seems that public sector procurement has either suffered from a lack of negotiators who have the capability to stand up to IT vendors, or who have a lack of understanding as to the purchasing power of the public sector. Nearly 6 million people work directly in the public sector, or close to 20% of the total working population. However, this does not include all the quasi-autonomous non-governmental organisations (Quangos) and outsourced jobs that are 100% dependent on the public sector—all of this drives the true public sector employment level account for around one quarter of all jobs across the UK. This makes any deal that covers a large part of the public sector a real crown jewel for the vendor.

Recently, the government announced that it had renegotiated its agreements with Microsoft and SAP, which would lead to savings of around £70m, with these growing to a possible £150m by 2015. The new agreements are not just based on managing to negotiate better licencing deals, however: there are also other aspects that show that the public sector is waking up to the power it can wield.

Sure, for Microsoft, it is looking at a large proportion of those 6 million workers needing to use Microsoft software. For some time, the government has been talking about the possibility of moving to an open source model—and this seems to have worked as a bargaining chip. Whereas previously, it looked doubtful that the public sector would move from tools such as Microsoft Office to something like OpenOffice, suddenly this looked as if it could happen—Microsoft stood the chance of losing up to 6 million desktops.

This could have led to further problems—these 6 million people also have home devices, and once they get used to using an alternative, they could move to it themselves—particularly if it is free to them. The further knock-on effect could be that those organisations that deal directly with the public sector could find that the fidelity of transactions is better for them if they move from a commercial off the shelf system (COSS) to a free open source software (FOSS) model. Microsoft must have felt significant pressure—and has not only agreed to lower its licencing costs, but also to hold the prices when it ups costs across the board to its commercial customers, and to its public sector customers in other countries.

On top of this, maintenance and support charges have also been controlled—and this is where the SAP agreement also scores well. Over the past couple of years, SAP has been trying to increase the amount of maintenance revenue it can gain from customers—however, the government has managed to secure a longer-term contract in place that makes the SAP environment far more cost efficient through beneficial maintenance terms. With around 125,000 SAP users in the public sector, this is one of SAP’s largest accounts—and so it found that it had to respond positively when faced with real negotiation over the whole contract.

A major aspect of the negotiation that just couldn’t have been used even a year ago is the use of the G-Cloud. Previously, procurement was relatively piecemeal with different departments and each local authority dealing with their own areas—and so appearing to IT suppliers as individual SMBs or relatively low-end enterprises. Now, as the G-Cloud begins to take shape as a procurement gateway, the public sector can present itself as this super-enterprise of 6 million employees, with massive dependencies between itself and the rest of its value chain of suppliers and citizens.

Quocirca believes that the Microsoft and SAP contract negotiations are just the thin end of the wedge. Previously, the government had also renegotiated its existing agreements with Oracle and with CapGemini. Each negotiation has taken between 4 and 9 months—these are in-depth negotiations unlike those the government has entered into before, and show that the procurement officers and lawyers are now stepping up to the mark and demonstrating the same negotiation skills as the professionals from the vendors they are up against. We expect to see further large savings against standard IT contracts as they come up for review.

However, this still leaves the IT component of some of the private finance initiative (PFI) projects and other large, but poorly defined, IT projects where procurement is carried out outside of the G-Cloud/new procurement capabilities. These areas are where the biggest savings are to be made—and Quocirca is waiting with bated breath to see how the government approaches these problems.

By: Bob Tarzey, Service Director, Quocirca Posted: 28th May 2012 Copyright Quocirca © 2012

Resellers will always be on the lookout for what is hot-to-trot with their customers. A recent Quocirca research report provides some pointers. Towards the end of 2011 Quocirca looked at what the priorities would be for senior IT managers in 2012. The research included 500 respondents from UK, Germany, France and USA. On many of the main issues there was little difference in the views expressed across these four markets.

In one question, which was central to the survey, we asked respondents to rank their top five out of 15 hot topics (see graph 1). The list included cloud computing, mobility, virtual desktop infrastructure (VDI), business transaction metrics (BTM) and application performance management (APM). Using a weighting system described in the report, each issue was assigned a percentage based on how well it scored against the highest possible score. By a long chalk, the highest priority issue for 2012 was APM.

Really this should come as no surprise and the sponsors of the report, Compuware’s dynaTrace division, were confident that this would be the finding from the start. After all, what is the point of IT if it is not about delivering applications? And all businesses are more and more dependent on these IT-driven applications to underpin business processes.

To this can be added the increasing demands of users; almost 70% of respondents said users would expect better performance, such as faster page loads, for applications in 2012. This figure rose to over 80% amongst CIOs, which were 20% of the sample. Only a couple out of 500 respondents said they would expect less (graph 2).

For many businesses these users are no longer just employees sitting at desks but customers and partners accessing applications online from a wide range of devices. Half the respondents were from the financial services and retail sectors, both of which increasingly deploy on-demand applications for handling customer transactions.

Because of this increasingly complex transactional environment, the respondents to the survey agree that it was ever more important to be able to tie application performance to business goals, for example looking at complaint resolution times and transaction conversion rates. To do this they need a unified view of application performance through a single integrated console.

The research showed that most businesses do not currently have adequate tools to this. Whilst the majority do have APM tools, about half had multiple tools for measuring different aspects of application performance and in many cases these would not be integrated.

The good news is that there was a clear willingness to spend (graph 3). About 40% had made investments recently but planned to spend more. In addition to this, over 10% confirmed they would be spending in the next 12 months. The figure for the UK was nearer 20%; few said there was an alternative to APM tools for addressing the issue.

For resellers there are two approaches. First they can turn to the suppliers of APM tools such as Compuware, CA, IBM and Ipanema and look to resell their products. The other opportunity is to invest in such tools for their own use and put in place managed services for APM, providing the added value that customers look to resellers for.

Quocirca’s research covered the mid-market and enterprises. Smaller companies with less than 500 employees were the most likely to be investing in APM over the next 12 months. This is prime territory for managed services. Smaller businesses will not have the resources in-house to deploy and use such technology, but they are as dependent on applications as larger businesses.

Resellers can scale the investments required across multiple customers and provide enterprise level services to small and mid-sized businesses. Even in tight economic times, the case for optimising the performance of the applications that drive core business processes can be made to any organisation that is worried about maintaining its competitive edge.

Quocirca’s report “2012 – The year of Application Performance Management (APM)” is freely available here: http://applicationperformance.dynatrace.com/2012_Application_Performance_Management_Outlook_Survey.html

By: Louella Fernandes, Principal Analyst, Quocirca Posted: 29th September 2011 Copyright Quocirca © 2011

The overarching message of Xerox's recent analyst briefing was about being  "services-led, technology-driven". Xerox is certainly a company in the midst of  transformation. Its total revenue has grown from $15.2bn in 2009 to  approximately $23bn in 2011.

Services now represent about half its business, up from 25 per cent two years  ago. Already an established player in the document management/processing  outsourcing market, its acquisition of ACS last year, a BPO firm, means it is  now a leading player in the services market, with an estimated value of $500bn  that combines document outsourcing, business process outsourcing (BPO) and IT  outsourcing.

While the ACS integration promises to expand Xerox's penetration into the  enterprise, it is also actively pushing its managed print services (MPS) capabilities to the SMB and mid-market sectors. Globally, Xerox is working to  accelerate the transition of its global partner network to a services-led  model.

Xerox now has more than 2,500 partners offering some form of MPS. In addition  to its traditional channel partners, its global MPS partner network also  includes a range of managed IT services, technology and software partners,  including Cisco and Computacenter.

In an increasingly commoditised hardware market, MPS is a reseller opportunity  to increase revenue through providing customers with a contractual approach to  purchasing or leasing hardware together with service and supplies.

Central to Xerox's channel MPS initiative is Xerox Partner Print Services,  which sits between its basic equipment service packages, such as eClick and  PagePack, and its direct enterprise MPS offerings.

Xerox XPPS is a cloud-based platform hosted by Xerox and offers a range of  standardised components to support a multivendor environment, such as assessment  and optimisation, device discovery and monitoring, sales contract management,  business intelligence (BI) reporting, service management and delivery, and a  customer service portal. Its recent acquisition of NewField IT and its AssetDB technology has been key  to partner enablement providing the backbone for assessment and proposal  generation architecture for XPPS, as well as an ongoing optimisation of customer  contracts.

Xerox has built a comprehensive certification and accreditation process for  XPPS salespeople and partners to support their MPS sales efforts. Accredited  XPPS partners must be able to demonstrate successful delivery for a client's  managed print service. In Europe, Xerox has approximately 170 XPPS partners,  having grown from 90 at the end of 2010. Almost 80 per cent of these partners  are fully accredited XPPS partners. One of the key strengths of Xerox's  XPPS offering is its multivendor device support, which will appeal to multibrand  resellers and also offers opportunities for Xerox's concessionaires.

In particular, the managed IT services market represents an opportunity for  multivendor MPS platforms such as XPPS, as it enables managed service providers  (MSPs) to integrate MPS with their existing managed service platforms. Although so far printing is not typically an integrated  component of managed IT services, Quocirca believes MSPs will be the next  development in expanding the opportunity for MPS among SMB and midmarket  businesses.

Xerox has certainly set a stake in the channel MPS ground, and many of its  competitors are seeking to emulate its actions. The vendor has already  successfully remodelled its Enterprise MPS tools and technologies for the SMB  and midmarket. And, as such, Xerox is positioned well to support its partners'  transition from box-shifting to a services-led approach.

Its XPPS offering appeals to a wide range of resellers, in our view particularly those strategically focused on MPS. Xerox, of course, recognises that not all its resellers will transition to  XPPS. There will always be some that are reluctant to use a vendor-hosted  infrastructure to manage their multibrand base, which may have concerns about  where and how their customer data is hosted. It should be noted, though, that Xerox has extensive ISO 27,001 security  standardisation and proper contractual terms in place to mitigate such concerns.  In such cases, resellers may consider independent third-party management tools backed up by their own networks of service engineers.

Nevertheless, for those resellers ready to develop their MPS capabilities,  using a flexible and robust hosted platform such as XPPS is a viable approach,  for both Xerox-only and multibrand resellers. Not only does this limit the risk when investing in building a MPS platform,  it also gives resellers access to Xerox global supply chain and delivery  centres. This should appeal particularly to resellers that want to expand their MPS  delivery across regions.

For now Xerox is ahead of the game when it comes to its channel MPS  initiatives, but competitors are following fast and competition will not only  come from its traditional competitors but also from those in the managed IT  services market with which Xerox, wisely, has already engaged.

By: Louella Fernandes, Principal Analyst, Quocirca Posted: 30th May 2011 Copyright Quocirca © 2011

Xerox’s acquisition of NewField IT, a UK based print consultancy and software solution provider follows hot on the heels of HP’s acquisition of Printelligent, a US-based managed print services (MPS) provider. With both HP and Xerox looking to expand the penetration of MPS to SMBs and midmarket organisations, the acquisition of these companies provides the additional capabilities that both companies need to ensure higher penetration rates. This market remains a largely untapped opportunity for channel partners to capture on-going service revenue opportunities in an increasingly commoditised hardware market – the acquisitions enable both vendors to approach SMBs via the channel with a services-led model that provides distinct business value to the customer.

Xerox and NewField IT

Xerox’s acquisition of NewField IT cements a long-established relationship between the two companies. NewField’s flagship AssetDB technology already underpins the assessment and optimisation capabilities for the Xerox Partner Print Services (XPPS) platform. NewField’s pedigree as a print assessment provider is well recognised across the industry with most printer and copier vendors having used Asset DB in varying degrees to support assessment of print environments and optimised MPS designs. Asset DB covers the complete gamut from graphical floor-plan based data collection to future state design of an optimised print environment.  Although Xerox’s purchase of NewField IT could be dismissed as a small acquisition, it certainly has the potential to make a significant impact of Xerox’s channel-led MPS revenue.

Xerox is keen to replicate its success in the enterprise MPS market across the SMB and midmarket, which currently has a relatively low penetration of MPS. However, success in these channel-led markets is highly reliant on resellers’ resources and skills to sell and deliver MPS quickly and effectively. The Xerox Print Partner Services (XPPS) hosted MPS infrastructure was developed over a year ago to provide channel partners with a set of tools to manage every element of an MPS contract – including sales pursuit, device discovery, optimisation and service delivery. Quocirca believes that the acquisition of Newfield IT will enhance Xerox’s credentials to deliver a comprehensive set of MPS tools for multivendor resellers far beyond the basic MPS packages currently on offer from its competitors.

While the technology benefits of the acquisition for Xerox are clear, less clear is how NewField IT will continue to operate as a vendor-neutral provider of software and services. Its existing relationship as an assessment provider for HP and Ricoh, for instance, must surely be at risk – and even more so given HP’s acquisition of Printelligent. Meanwhile, NewField IT intends to continue providing independent consultancy services to end-users, abiding by its established code of conduct which states that it will remain objective and not supply or promote the products of those hardware vendors that license its technology. Vendor-agnostic assessments are a critical part of any MPS engagement and NewField IT has long been offering these as an independent provider. However, it remains to be seen how effectively it can continue to preserve its independence when delivering vendor-neutral recommendations for MPS device optimisation.

HP and Printelligent

HP’s almost simultaneous announcement to acquire Printelligent has levelled the playing field between the two vendors. Although XPPS had recently been the only cloud MPS platform available to multi-brand resellers enabling them to manage a multivendor environment, HP’s latest acquisition of Printelligent will now provide HP channel partners a wealth of scalable multivendor MPS capabilities.

With Printelligent, HP has acquired an established MPS provider which has been offering MPS since 1993 through a network of MPS channel partners across the US. Printelligent assets will enhance HP’s assessment and optimisation capabilities and its MPS sales and services expertise infrastructure, along with HP’s cloud-based InCommand platform will enable HP to now deliver a set of differentiated MPS solutions and services via the channel.  Whilst the acquisition of Printelligent will certainly bolster HP’s channel MPS capabilities in the US, it may take some time to provide a similar set of services to its European channel, particularly given Xerox’s strong MPS presence in this region.

Market outlook

The majority of SMBs and midmarket organisations currently purchase printer hardware and consumables on a transactional basis which creates a huge opportunity for hardware vendors to encourage customers to adopt a contractual approach to buying “printing” rather than “printers”.  Consequently the market for MPS in the SMB and midmarket is moving beyond the simple single brand, basic service which essentially wraps hardware with supplies, maintenance and support. Whilst HP and Xerox will continue to offer these basic services for businesses that need it, the real cost saving – both financial and environmental – comes from a detailed assessment and optimisaton of the printer environment – from both a hardware and workflow perspective. Channel partners therefore need simple and flexible tools and an infrastructure that they can tap into to sell, deliver and manage MPS on an on-going basis. 

The market to sell MPS to SMBs and midmarket organisations is still wide open and vendors must provide their channel with a simple and effective MPS cloud platform that can deliver remote monitoring, consolidated billing, supplies and service and reporting across a multi-vendor environment. For now SMBs are most likely to be more receptive to basic services, whilst the midmarket organisations stand to benefit most from more complex and value-based MPS propositions.

Although Xerox had a head start in providing an MPS infrastructure for its channel partners, HP has made a smart acquisition which will help it catch up and strengthen its presence in this market, particularly as it can exploit its strong relationship with the IT channel. Now that both vendors have the infrastructure and tools to provide their channel partners, success will ultimately be linked to how well these vendors engage and train their channel to deliver MPS to their customers.

By: Bob Tarzey, Service Director, Quocirca Posted: 28th April 2011 Copyright Quocirca © 2011

Back in December 2010 Microsoft released its Forefront Endpoint Protection 2010 (FEP) suite that provides protection from malware and other threats. Used in conjunction with Microsoft System Center Configuration Manager 2007 (MSCCM), Windows BitLocker for encryption and  the Windows Firewall, businesses can make sure their Windows desktops and laptops are up to date and secure, something most businesses value (Figure 1). Microsoft now has a comprehensive capability to protect and manage Windows PC end-points.

Microsoft hopes that with a big channel drive, 2011 could be the breakthrough year for FEP and that it will prove to be an effective challenge to Trend Micro Worry-Free Business Security, Symantec Endpoint Protection V12 (released in Feb 2011), the McAfee Endpoint Protection Suite and other products from security specialists.

This hope is bolstered by the expected acceleration of the take-up of Windows 7. Although Quocirca research conducted in 2010 show that Windows 7 was quite widely used amongst SMBs (Figure 2), conversations with resellers and service providers suggests this is rarely an across-the-board commitment, especially amongst larger businesses. However, some Microsoft large account resellers say they expect many more enterprises to make the move in 2011.

When businesses do move to Windows 7, they tell Quocirca they will review their Windows end-point security at the same time and the Microsoft will be on the list. So is Microsoft set to take the end-point security market by storm? In Quocirca’s view probably not; it has three problems.

Businesses now have more end-points to worry about than just PCs and, beyond the PC, Microsoft is currently an “also ran”. Its market share of the smartphone market languishes below 5% (Figure 3). Microsoft hopes its new partnership with Nokia will reverse its fortunes, but that would take time. Furthermore, the use of tablets/slates is increasing in businesses. Gartner predicts 55M unit sales of Apple’s iPad in 2011, and the market will be further boosted by other hardware vendors that have entered the market, many using the Google Android operating system.

Whilst vendors that specialise in end-point security and management struggle to keep up with this diversity, Microsoft is not even trying. Worse still, Microsoft does not even support old versions of its own products—FEP 2010 is only available for Windows XP and later and but BitLocker is only in Windows 7 and Vista. And there is no FEP or BitLocker for Windows Mobile.

Microsoft’s second problem is that IT security is about much more than user end-points. It is about servers, data centres, networks and the increasing use of on-demand computing services. The revamped Forefront range includes offerings in these areas; Forefront Server Security, Forefront Threat Management Gateway and Forefront Unified Access Gateway. But, where businesses can no longer rely on the user end-point devices being purely Microsoft, few have ever had such homogeneity at the backend. Most of those wanting a single vendor to cater for the majority of their security needs must look beyond Microsoft to the specialists.

The third problem Microsoft faces is the channel. Some of its existing distributors are keen to join a new value-added distributed programme for Forefront. However, many of the resellers they must win over are not convinced, with some saying that, in evaluations, Microsoft Forefront still fails to come out on top. They also complain that there is little margin for them in Microsoft security products and they have to fall back on services, which at least there is a requirement for, as some find Microsoft’s products more complicated to deploy than those from other vendors. Furthermore, resellers have existing relationships with security vendors whose products they have rolled out to their customers; Microsoft must overcome this double incumbency.

One final groan from resellers actually works in Microsoft’s favour. They complain that because Enterprise Agreements and Enterprise CALs (client access licences)—two ways larger businesses can licence Microsoft technology—now include many Forefront products; their customers already have paid for the right to use them. When this is the case, there is no incremental product revenue for the reseller. End users must work out for themselves if they have such rights and if the Microsoft security products provide the protection they need—many resellers seem unlikely to highlight it for them.

Microsoft Forefront will become more widely used in 2011, but there will be few organisations that will be able to rely solely on Microsoft for their IT security needs. There is plenty of opportunity left for the specialist security vendors and most resellers seem unlikely to jump ship from them to Forefront in 2011.

 This article first appeared on http://www.channelweb.co.uk and in the print edition of Computer Reseller News (CRN)

By: Bob Tarzey, Service Director, Quocirca Posted: 28th March 2011 Copyright Quocirca © 2011

The IT distribution channel has always been considered a major influence on the adoption of new products, services and ideas by end-user organisations. So as the IT industry seems set on moving relentlessly forwards with the message that the cloud is the future, how important is the channel in helping the delivery of that technology?

The relationship between IT vendors and the resellers that ultimately shift many of their products has always been like that between the proverbial chicken and egg. Resellers need products to sell and vendors need resellers to sell their products, at least at high volume with a low cost of sale. But does the cloud change this?

At one level, it has the potential to do so. Some vendors, such as Microsoft, that have been stalwart supporters of the channel in the past have wavered. Microsoft now offers some of its cloud-based products for sales direct to customers as well as via partners—for example, Microsoft Office 365, or BPOS as it was previously known.

Furthermore, the further up the cloud stack a customer buys, the less there is for a reseller to offer. For example, an infrastructure-as-a-service offering still needs some systems and application software licences to make it functional, whereas software as a service includes all that, and so just needs user-access devices and connectivity.

However, a reseller that maintains strong relationships with its customers may not have too much to worry about for two reasons. First, no vendor, not even Microsoft, can offer a full range of cloud services and second, cloud-based services will never be the be-all and end-all. IT delivery will always be an appropriate mix of on-premise and on-demand services for a given organisation.

Resellers need to help their customers strike a balance between on-premise delivery and on-demand services and, in doing so, maintain their value-add. To achieve this balance, they must identify appropriate cloud offerings to add to their portfolio so they can offer these to customers alongside on-premise alternatives.

Requirements can be reviewed case by case, with the reseller being impartial and suggesting the most suitable approach for each customer.

A customer that is growing fast might need rapid access to more processing power. Is this best provided by buying more servers and renting the datacentre space to deploy them or buying commodity virtual servers from a managed hosting provider? Is content security best deployed at the network edge or in the cloud? A range of factors will provide the answers to these questions and help the reseller make its recommendation.

When a cloud-based service seems to be the best option, it still needs to be integrated with on-premise infrastructure. Some would argue smaller organisations could source all their IT needs from the cloud but that can never be true if you look at all the IT infrastructure requirements.

There will always be a need for user end-points—PCs, laptops and smartphones—as well as routers and printers. A true value-added reseller with strong client relationships must operate at this level, providing services to manage and secure IT across this entire infrastructure, integrating cloud-based services as appropriate.

At this stage, it is worth mentioning another aspect of the cloud that resellers should remind their customers about. Making sure the use of IT is secure and compliant is not just about selecting when best to use cloud services, it is also recognising that end users will make use of such services anyway.

Whether it is social networking for business or personal use, collaboration tools, online office tools or even on-demand server-storage utility services, users can choose to invoke these directly for themselves. Resellers need to help their customers control or monitor the use of such services.

How does a reseller go about assembling an on-demand portfolio? Some providers of on-demand services are more channel-friendly than others—some are indifferent. Amazon may not have much of a reseller program for Amazon Web Services but this does not stop a reseller from building EC2 servers or S3 storage into their propositions.

However, it may make more sense to work with a provider such as Rackspace, which has an active partner programme and prides itself on support, as this choice will allow a reseller to back its own service guarantees with those from its supplier. Salesforce.com has always seen the channel as a second to direct sales whereas for NetSuite it is seen as the primary route to market. That attitude is reflected in the way both organisations incentivise partners.

All that said, selecting cloud services is just one of the challenges. Making sure they appear as unified, coherent and seamless set offerings, with a single billing and an integrated management portal is too much to ask of most resellers. There is help at hand from some distributors, who also have to work out how to exploit the cloud and stay in the game.

For example, COMPUTERLINKS has recently launched a range of cloud services under a new brand name called Alvea. This brand includes on-demand servers and storage, data backup, security and collaboration services. Unified billing and management are built into the offerings and resellers can white-label the whole thing to appear as their own.

Being a well-established distributor, COMPUTERLINKS knows a thing or two about incentivising resellers and, for the same reasons, has chosen to work with channel-friendly suppliers, plugging gaps with its own offerings as appropriate.

Ingram Micro assembled a set of cloud services branded Seismic, perhaps an indication the Earth really is shifting under the channel or at least the clouds above it. Certain other distributors look ready to follow the lead of COMPUTERLINKS and Ingram Micro and build out cloud-service portfolios of their own.

Cloud-based services will continue to grow as a proportion of overall IT spending for the foreseeable future. Resellers and distributors that fail to recognise this fact and extend their portfolios accordingly will be failing their customers and themselves.

By: Bob Tarzey, Service Director, Quocirca Posted: 16th March 2011 Copyright Quocirca © 2011

The relentless increase in the use of cloud-based services presents both an opportunity and a challenge for resellers of IT products and services. It's an opportunity because they have the chance to help their customers adapt to the new landscape and identify when a cloud-based service is the best option for delivering a particular requirement. The challenge they face, though, is how to create a portfolio of cloud-based offerings—from reseller friendly suppliers—that sits alongside traditional on-premise products, so they can offer their customers a choice.

The problem is identifying such services and doing due diligence on suppliers takes time. Even harder is integrating services together to provide a federated look and feel. Here distributors are starting to take a lead. Quocirca recently spoke at the launch of COMPUTERLINKS's Alvea platform. (The presentation can be viewed here.) 

Alvea is a range of cloud-based security services including on-demand servers and storage, data backup, security and collaboration services. Unified billing and management are built in to the offerings and resellers can white-label the whole thing to appear as their own. Being a well-established distributor, COMPUTERLINKS has chosen to work with channel-friendly suppliers, plugging gaps with its own offerings as appropriate.

Ingram Micro, meanwhile, has assembled a set of cloud services it has branded 'Seismic'—perhaps an indication the earth really is shifting under the channel, or at least the clouds above it! Certain other distributors, for example Avnet, look set to follow the lead of COMPUTERLINKS and Ingram Micro and build cloud service portfolios of their own.

Cloud-based services will continue to grow as a proportion of overall IT spending for the foreseeable future. Resellers and distributors that fail to recognise this and extend their portfolios accordingly will be failing both their customers and themselves.

By: Bob Tarzey, Service Director, Quocirca Posted: 1st February 2011 Copyright Quocirca © 2011

Back in December, Microsoft released Forefront Endpoint Protection 2010 (FEP), a suite that provides protection for Windows PCs from malware etc. Used in conjunction with Microsoft System Center Configuration Manager 2007 (MSCCM) businesses can make sure their Windows PC user end points are up to date and secure. In conjunction with BitLocker, Microsoft’s full disk encryption capability, and other security features that come with Windows, such as the Windows firewall, Microsoft now has a comprehensive capability to protect and manage Windows PC end points.

A further worry for its competitors is that business take-up of Windows 7 since its launch in October 2009 has been fairly slow, but this is expected to accelerate rapidly during 2011. A Microsoft large account reseller (LAR), which provides end point management services, told Quocirca that many of its customers are asking to upgrade in the next 12 months. One thing seems certain; when they do this they will review their Windows end point security in light of the offerings from Microsoft. For example, one CISO Quocirca spoke to stated:

“When we move to Windows 7 we will include an evaluation of Forefront and BitLocker alongside existing end point security”

So is Microsoft set to take the end point security market by storm and see off the security specialists that dominate at present such as Symantec, Trend Micro, McAfee and Sophos? In Quocirca’s view probably not; Microsoft has three problems.

First, although Windows 7 is expected to do well in 2011, it is no longer true that Windows-based PCs are the only end point most businesses have to worry about. Microsoft has failed to make much of an inroad into the smartphone market; its market share languishes at below 5%. Nokia/Symbian, Apple/iOS, Google Android and RIM are much more widely used and look set to remain so. 

Furthermore, more tablet computers are increasingly being used to access business IT resources. Gartner predicts 55 million unit sales of Apple’s iPad in 2011 and other hardware vendors are entering the market, many using the Google Android operating system. A CISO from a diehard Microsoft shop, that was an adopter of the forerunner to FEP, Forefront Client Security, told Quocirca that even they now have a “few iPhones and iPads” to worry about.

Vendors that specialise in end point security and management struggle to keep up with this diversity, and Microsoft is not even trying. Worse still, Microsoft does not even support old versions of its own products; FEP is only available for Windows XP and later (not too bad) but BitLocker is only in Windows 7 and Vista (few businesses adopted the later). As for Windows Mobile, don’t even bother—no FEP or BitLocker there. So if you are looking for a common security suite across all end points, Microsoft does not have the answer and it probably never will.

Microsoft’s second problem is that IT security is about much more than user end points. It is about servers, datacentres, networks and the increasing use of on-demand computing services. The revamped Forefront range includes offerings in these areas; Forefront Server Security (for Windows Server SharePoint, Exchange, Lync), Forefront Threat Management Gateway 2010 (was ISA Server) and Forefront Unified Access Gateway 2010 (was Intelligent Application Gateway). But, where businesses can no longer rely on the user end point devices being purely Microsoft, few have ever had such homogeneity at the backend. Most of those wanting a single vendor to cater for the majority of their security needs must look beyond Microsoft.

The third problem Microsoft faces is the channel. It is rolling out Forefront via a new value added distributor (VAD) programme. Its existing distributors are keen to join and capitalise on the Forefront opportunity. However, the resellers they must win over for this to succeed are less convinced. One told Quocirca:

“We always include Microsoft [security products] in a review but it has never come out on top”

Other resellers complain that there is little margin for them in Microsoft security products and they have to fall back on services, which at least there is a requirement for, as some find Microsoft’s products more complicated to deploy than those from other vendors. Furthermore, resellers have their existing relationships with security vendors whose products they have rolled out to their customers; Microsoft must overcome this double incumbency.

One final groan from resellers actually works in Microsoft’s favour. They complain that because Enterprise Agreements and Enterprise CALs (client access licences)—two ways larger businesses can license Microsoft technology—now include many Forefront products; their customers already have paid for the right to use them. When this is the case, there is no incremental product revenue for the reseller. End users must work out for themselves if they have such rights and if the Microsoft security products provide the protection they need—many resellers seem unlikely to highlight it for them.

Microsoft Forefront security will become more widely used in 2011, but there will be few organisations that will be able to rely solely on Microsoft for their IT security needs. There is plenty of opportunity left for the specialist security vendors.

By: Bob Tarzey, Service Director, Quocirca Posted: 27th January 2011 Copyright Quocirca © 2011

More and more of us are working remotely, for at least some of the time, enabled by an increasingly diverse range of mobile devices. For businesses this has many benefits whether it is making field based employees more responsive, improving workflow or enabling flexible working practices. But many studies show that the biggest perceived down side is security; for resellers this is an opportunity.

Remote devices themselves, be they smartphones, netbooks, tablets or laptops, provide only small margins for resellers, as do the network connectivity services that link them to back office applications. But mobile device management (MDM), software and services to manage and secure these growing fleets of devices, are more attractive.

Controlling what employees can get up to and ensuring that their use of IT is safe is far easier when they are constrained behind a firewall than when they are ‘at large’ with mobile devices. There are three basic problems to solve: protecting the device from malware, protecting the data generated and stored on the device and securing and authenticating the connection.

With the larger form factor devices (laptop, netbooks and some tablets – mobile PCs from hereon) it is possible to protect the device and the user by forcing access back via the corporate network. They are then subject to internal security controls. There are three basic ways of doing this: 

1. Enforce the use of virtual private networks – a controlled work space can be created on the mobile PC with access to a given set of backend applications, user productivity applications (word processors etc.) are still usually installed locally
2. Use virtual desktops infrastructure (VDI) – this means all applications are run inside the firewall including user productivity applications
3. Force all network traffic back via a firewall – user productivity applications are run locally, but everything going to or from the PC is subject to internal controls

Securing the use of smartphones has thrown up some new challenges and, as yet, it is not really possible to take a unified approach to managing all mobile devices. For a start it is harder to force smartphone users back on to the corporate network, due to the convenience of making direct internet connections via mobile network operators (MNO), second VDI is hard to adapt to their smaller screens, third there are different device based security products for the different types of devices and finally, the range of operating systems for smartphones is much more diverse.

There is one measure that can be taken centrally to protect all remote users; email filtering. Most organisations today will have this in place to catch spam and email-born malware and also to check what is being sent via corporate email. However, the target of many malware writers and an increasing source of data leaks is web traffic. It is possible to use proxies to force web access for mobile PC users via a central web traffic filter, but, for the reasons outlined above, this is less easy to enforce for smartphone users.

So, as smartphones increasingly become target for data theft and they are, by their very nature, easier to lose, it is necessary to make sure the device itself is secure. This also applies to any mobile PC for which internet access is allowed independent of the corporate network and, unless device based security blocks the use of low cost of 3G dongles, this is almost inevitable.

A few years ago, given the range of mobile operating systems, it seemed obvious to select a corporate standard smartphone and impose it. But the increasing overlap between work and personal lives means most employees prefer to use the device of their choice. This consumerisation of IT may look like a headache for IT managers, but it has one big advantage; if the device an employee uses for work is also their favourite toy – they will take more care of it – step one to mobile security – user love of their device!

But that is not enough; there are a number of other steps that need to be taken:

• Password protection – basic but obvious – making sure the device cannot easily be used when it falls in to the wrong hands.
• Malware protection – now offered by many of the security vendors for mobile PCs and smartphones. Smartphones are now a target as they are being used more and more to access sensitive data.
• Device firewall – these are now becoming available for mobile devices, allowing the customised filtering of web traffic on the device itself
• Encryption – if any amount of sensitive information or intellectual property is to be stored on a device then that data, or probably all data, should be encrypted. Recent rulings by regulators make this clear. Remember, contact list with telephone number and note may constitute sensitive data.
• Remote disablement and wipe, should a device be compromised making sure the services available to it are discontinued and that data is wiped (less of a concern if the data is encrypted).
• Advanced security features including SIM recognition and geolocation using GPS

Ensuring all this protection is in place and remains so, that device software and security is up to date, and that action can be taken when a problem arises requires MDM tools. Such tools can also enable the auditing of device ownership and use, for example logging phone calls made, SMS content and photos.

For many businesses, especially mid-market and smaller ones, these will be new and unprecedented challenges. The number of threats and the range of options for mitigating them will seem daunting and the in-house skills will not be available. Resellers that provide tools and services for managing mobile device security and safe remote IT access will be relieving their customers of a headache and enabling their businesses for the future.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 23rd November 2010 Copyright Interarbor Solutions © 2010

Three megatrends are shaping the next generation of successful businesses and governments. We're talking about pervasive mobile applications, highly responsive cloud-computing models, and knowledge-adept social collaboration.

Indeed, by the year 2020, The Economist newspaper predicts there will be two trillion devices connected to the Internet. And taking a look at where we are right now, McKinsey Quarterly reported in August that in 2010 some four billion people have cell phones, and 450 million have access to a full web experience.

Moreover, Jupiter Research reports that by 2014 there will be 130 million enterprise users involved with mobile cloud activities. Not only is access pervasive, but the amount of information available is also exploding. The Economist again reports that in 2005 mankind created 150 exabytes of digital data … and in 2010 we will create fully eight times more data.

These changes are at a pace they’ve never seen before as they address them and try to drive these into their business or government environments.

As these trends literally rearrange business ecosystems, a gap will surely emerge between the companies that master change -- and exploit enabling technologies -- and those that fall ever further behind.

For those that do step up to the challenge -- expect a relentless emphasis on rapidly recurring innovation to meet dynamic customer and citizen demands.

Our latest BriefingsDirect podcast therefore focuses on how these trends -- and rapidly evolving customer, citizen, and user expectations -- are newly impacting the enterprise. We also examine how technology advancements are making it possible to drive innovation to meet these new demands for instant gratification.

Please join HP executive Dave Shirk, Senior Vice President of Worldwide Marketing at HP Enterprise Business, as we explore how HP is working to make headway, so that the next few years bring about a generational opportunity -- and not a downward complexity spiral. The discussion is moderated by BriefingsDirect's Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Shirk: We're seeing a lot of shift going on in the marketplace right now. When we look at where consumers are driving business or where citizens are driving government, it's fundamentally changing the way they operate. We've seen three core things come out.

The business models are all starting to change the way in which people approach markets across the globe. That's having to really rethink the ways in which they've approached them versus traditional methods.

The second thing we see is this whole shift in mobile computing meeting cloud computing and the enterprise trying to figure out exactly how to take best advantage of that to create this competitive advantage. Then, the overall demographic piece weighs into that.

We've seen the rise of the millennials, as they're being referred to. All of these things are forcing business and government to stop and say, "You know what, if we're going to grow or we're going to create a service differentiation, we're really going to need to do things differently and we're going to have to do it way faster than we've ever done it before."

According to the Society for Engineers, you now have over 800,000 graduates in China, over 300,000 graduates in India, 100,000 some in Japan, etc. It's over the last 10 to 12 years that each of those graduation rates has occurred. They are part of the workforce now.

When they went through that process, they were always connected and they always were involved in a social network-based environment. They have a level of their lifestyle that is all tied to this always-connected environment. When you think about the ubiquitous computing that that has brought to them, as they enter the workforce, they are looking at things a lot differently than ever before.

They bring new ideas. They bring new ways to that. They're looking for businesses that will support that kind of methodology and structure. ... So, when we think about that Gen X group that's out there, we see them driving an enormous part of this change.

The last statistic I saw was that they are now over 50 percent of the workforce. The analogy that's always used is that, to them, being connected and always involved in some type of networking-based collaboration or information sharing of some sort is about the same as it is for you and me to pick up our remote controls and turn on our television sets. That's already having a very profound effect on how business and government are changing and the expectations that are out there in the marketplace.

It's this [demand for] immediate or instant gratification: "If I can't get what I want in the following way, I’ll find the business or government environment where I can." While the government piece maybe a bit harder to change, the business piece isn't, and so the competitive pressure to serve this audience, both as the consumer and also as employees, is a big part of that shift.

We see technology as the cornerstone to being able to solve some of these trends and some of these challenges.

We call that the "Now Problem." They want this, they want it done now, and they want it to work a certain way. We see technology as the cornerstone to being able to solve some of these trends and some of these challenges.

These changes are at a pace they’ve never seen before as they address them and try to drive these into their business or government environments.

This is probably best represented in the words of Professor Gary Hamel, who is the foremost business visionary person out there in the marketplace. In his book, Future of Management, he described it as "whiplash change."

That's very much the case when I speak with our clients both on the business side and the government side. That's exactly what they're sitting there and thinking and working through right now.

Role of technology

We look at the technology piece of [the change] and say that you really can't [react] any other way -- the pace of it, the speed of it, and some of the complexity associated with it. For a long time, business has tried to use labor as an arbitrage to try to work their way through this and just throw bodies at it. That's quickly dissipating. The speed and the connectedness that we see, and the confidence level that all of these types of services require make it no longer possible to go through that.

What we see is IT completely embedded in the business. Over the next couple of years, that's going to continue to be the trend and the strategy that will play out in the way in which business and government work this. Ultimately, that's going to be the differentiator that drives an ability not only to serve these constituencies but to out-serve them, and that's going to be the name of the game.

[The solution] starts with a desire to change and to drive innovation in a different way. We sit and we think about the fundamental change in this. We talked for years that the business was focused on business processes and business process reengineering. While that’s still very important, it isn't going to go away any time soon.

It's becoming obvious that the bigger driver and the more significant trend is the information process, understanding the segments of business or government that need to be addressed. What their needs are, what they want, what they want to talk about, the ways in which they want to interact is all part of this change that’s taking place.

Closing the gap

So, as we start to pull back and step back from this, we look at that and we look at this vision that we have for the Instant-On Enterprise and how we’re enabling end-users to become a part of that, how we’re enabling businesses and governments to provide that type of capability. It really is about closing the gap between what IT can provide and what the business needs to be able to serve each of those audiences.

What we’ve launched with this vision is to put the foundations in place to make that possible and take a journey with our clients both from the business side and government side and help them move down that particular path, find ways to navigate these challenges and these trends, and to out-serve and to over-serve all the audiences that they need to meet the needs of.

[This change] is inevitable. Different businesses and governments will have, at different times, one of these four elements be more important or more significant to them at different points. All of them share the innovation requirement. We see that in all things.

Our view is that the innovation has to take place throughout that information process. It doesn’t matter whether it happens back at the data center or at every touch point. Innovation has to take place throughout for the business to meet the needs of those segments I’ve referred to earlier -- how it services it, how it conducts itself, and ultimately how it meets our needs or exceeds the needs of the audiences.

Agility really is about instant expectations, and can we turn things on and off, instead of just setting them up for a rainy day and hoping that they will be used.

Agility, optimization, and risk all vary in and out with innovation in terms of their need and their level of importance.

Agility really is about instant expectations, and can we turn things on and off, instead of just setting them up for a rainy day and hoping that they will be used. A big part of technology’s trouble in the past was that we created all of these things and we never had a plan for ending their lifecycle or turning them down slightly, so that we could turn up other activities or other possibilities in an instant-on environment and an instant-on enterprise. A core part of the vision that we see is being able to drive that agility to meet those changing business needs.

When HP looks at the Instant-On Enterprise, the enablement of that is really a journey, and we’ve got to figure out what pieces make the most sense. There are some things that are much easier to focus on first and then, over time, to gain more and more of an Instant-On nature.

Critical success factors

Flexibility, security, speed, automation, and insight, those absolutely are attributes that we look for. We see them as the critical success factors in the way in which every part of the environment that IT leverages, drives, and embeds in the business has to come forward.

And yet, everybody is stuck in this mode of an enormous legacy that they have to deal with, and that gets in the way of being able to provide some of these new capabilities.

We’ve spent a lot of time and gotten a lot of expertise over the years trying to figure out the best ways to address these albatrosses that are keeping IT from being able to deal with the needs of the business. In the Instant-On Enterprise journey, that's a big part of the set of steps that we have to work through and work with our clients to make sure that they understand where to prioritize.

In the first few months that I have been here, one of the things that I've learned is that HP, as a company, has this incredible breath and depth of portfolio.

Our view is that we work with our clients and figure out ways that they can, as we say, shift that equation. How do you shift from 70 percent of that equation being focused on operational management, and 30 percent, if you are lucky, being spent on new and innovation-based capabilities to help or assist the business and its growth versus shifting it the other way? How do you get to 30 percent operational mode, and move forward with 70 percent focused on the business?

Changing business models

When I spend time with clients and listen to them, a big part of what they're asking for is, "We’ve got these pressures. We're seeing the business models change and we're experimenting with some things. We're seeing the mobile and the cloud computing pieces coming at us like a freight train. At the same time, we're seeing the demographic shift both on the end-user consumer side and on our employee side. We need strategic partners to help us with this. How do we navigate this? What is the way in which we should do that? HP, do you have a point of view?"

We're in a unique position, because we're the only company in the marketplace that has a full suite of consumer products, and yet we stretch all the way back through to the data center. All the capability, all the offerings, that are in between, all the services that are necessary to address each of those pieces, are contained inside the portfolio capability that HP has of hardware, software, and services.

We looked at this and said, "How do we take the best combination of that breadth of portfolio and bring those together in a set of solutions to best address what we are hearing over-and-over from some of the research that we’ve done and listening that we’ve done with our clients?"

They need to figure out how to modernize their applications. We want to make sure that we are there and we’ve got a set of solutions for that. They’ve got huge data-center issues in terms of how they're going to transform their data centers and deal with more virtualization-based techniques and capabilities and bring networking and storage and compute power together in some fashion.

They’ve got this issue of enterprise security. They need to figure out how to secure the enterprise. I don’t mean desktops, but all points, all touch points of the enterprise -- how they build applications, how this information is accessed inside and outside of the organization, and then fundamentally optimizing that information, the ways in which you store it, the way in which you deliver it, the way in which you print it for that matter, all those pieces.

Hybrid delivery for us is our answer to the multiple ways in which a customer or client has to go through the process of building or delivering on these various technology services to their enterprise or their government.

Then, they need to underpin that by the best way to figure out how to deliver it. Do we do it for them? Do they build it themselves with our architecture, and our capability set, and our consulting expertise? What combination of ways makes the most sense to set that up?

... We help our clients work their way through that with a series of workshops that we do to get in and investigate. We ask a series of questions, do a series of exploratory-based activities that help prioritize where we think the quickest return on investment is, because all these require some level of return to feed the next one and then the next one.

Hybrid delivery for us is our answer to the multiple ways in which a customer or client has to go through the process of building or delivering on these various technology services to their enterprise or their government.

There’s an enormous amount of talk about cloud in the marketplace today. HP has been at the forefront of that, but we have a little different position. We think it’s unique and we think we're the only ones out there that are really positioned to do this, which is the concept of hybrid IT, where you’ve got a mix. You’ve got a mix of traditional on-premises-based capabilities, but then you figure out what private cloud or public cloud-based capabilities best serve your business on a global basis.

HP comes in and, unlike other companies that try to force you into a one-size-fits-all structure, we sit down with the client. Our unique IP in this area is that we have an incredible depth of intellectual capital in this particular area, which is helping the clients figure out the best balance or mix of the delivery methods.

We can help them build it. They can host it or we can host it for them. We can provide those services from our public cloud-based capabilities or from our private cloud based capabilities. We really don’t care, if that blend changes over time. That’s the beauty to the journey to this Instant-On Enterprise.

Starting small

Our data says that most customers still start with a small private cloud implementation to really understand the value of the cloud and demystify it. We’ve said that there is going to be something after cloud. We don’t know what that level or that style of computing is going to be, but our architecture is built such that we’ll be ready for that. For our clients, we’ll help navigate them through each of these pieces, and that’s the important thing for us.

We have our new HP Hybrid Delivery Strategy Service, which is a place for a client to start, get a basic orientation, sit down and understand kind of where we think they might consider beginning that journey. So that, along with a number of other capabilities that we have to help them through these various workshops, I think is really the best place for them to start.

There are a whole series of workshops globally that our teams are set up to do, everything from a small couple-of-hour based interaction to a full suite of in-depth analysis and consulting engagements to work with a client. ... We ask a series of questions, do a series of exploratory-based activities that help prioritize where we think the quickest return on investment is, because all these require some level of return to feed the next one and then the next one.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Learn more. Sponsor: HP.

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By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 17th November 2010 Copyright Interarbor Solutions © 2010

The rapidly changing and fast-growing opportunity for more businesses to reach their customers and deliver their services via mobile applications is at a crossroads.

Over just the past two years, the demand for mobile applications on more capable classes of devices, such as smartphones and tablets, has skyrocketed. Now businesses need to figure out how they can get into the action.

Small and medium-size businesses (SMBs) especially need to reevaluate their application development and end-user access strategies to be able to deliver low-cost yet impactful applications to these newer devices. This goes for reaching employees, as well as partners, users, and customers.

Hopefully, there's a shift in the skills required to put these applications on these devices and distribute them. The emphasis on capabilities is moving from hardcore coders -- with mastery of embedded platforms and tools -- to more mainstream graphical and scripting-skilled workers, more power-users than developers.

This sponsored podcast explores how mobile application development and the market opportunity are shifting, and how more businesses can quickly get into the mobile applications game and build out new revenue, share more data, and provide better direct customer access in the process.

Our panel consists of Roger Entner, Senior Vice President and Head of Research and Insights in the Telecom Practice at the Nielsen Co., and Wayne Parrott, Vice President for Product Development at Genuitec. The discussion is moderated by BriefingsDirect's Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Entner: About 50 percent of all devices being sold in the US right now are smartphones. We expect smartphone penetration to be at about 50 percent by the end of next year. Almost 60 percent of smartphone owners are actually using applications. That’s a huge percentage.

We're now at that sweet spot where it makes a lot of sense for businesses to have applications both for their consumers and their employees alike, because there is enough of an addressable base there.

We just launched our second edition of our Mobile Apps Playbook. But to quote numbers from there, year-over-year second quarter '09 to second quarter '10, smartphone penetration in the US went from 16 percent to 25 percent.

Now, we have 3- and 4-inch screens that are actually readable. We're not just merely replicating a desktop experience, but actually tailoring it to the device and working with the strengths of the device rather than with the weaknesses.

The devices that we call now smartphones are little computers that today are as powerful as laptops a few years ago. I always say that this little thing you have in your hands, a smartphone, has far more computing power than was used by NASA to put men safely on the moon and bring them back alive.

Applications becoming easier

And now Apple, Google, Microsoft, and the others, have software development kits (SDKs) out there that make app development a lot easier than it has ever been.

If you have a talented developer or a talented person in your department, he might be able to build that internally. Or, there are now myriad development shops out there that have the capabilities to build applications and charge only a few thousand dollars -- and that's single digit thousand dollars -- to have a capable, usable application.

There are a lot more people who know how to program these things, and have good ideas of applications. There is a really good market out there to put the two together.

Parrott: We’re seeing a big move toward interest in mobile at the development side. What are the factors that’s really led to the explosion of mobile apps? It's not only the smartphones and their capabilities, but we also look at the social changes in terms of behavior.

People more and more have a higher reliance on their smartphone and how they run their lives, whether they are at work or on the move. The idea is that they are always connected. They can always get to the data that they need.

Basically, we're taking their lifestyle away from their desktop and putting it in their pocket as they move around. More and more, we see companies wanting to reach out and provide a mobile presence for their own workforce and for their customers.

The question they ask is, "How do we do that? We already have a web presence. People have learned about our brand, but they can't access this through their smartphones, or the experience is inferior to what they’ve come to expect on the smartphone."

We're seeing a big growth of interest in terms of just getting on to the mobile -- having a mobile presence for the SMBs.

Still a great deal of complexity

If you take a look at the current state of native mobile app development, it's really not much better than it was five years ago. You still see a strong fragmented programming model base, different operating systems, and different hardware capability. It's still a mess. You pretty much have to pick a subset of devices that you want to focus on.

Entner: If we take one little step back, one of the genius things that Apple has done is turn the bookmarks into an application. About 60-70 percent of all applications on the iPhone or an Android are actually glorified HTML ports. So, it's not that difficult or that demanding on the application side.

One new trend is HTML5, which is slowly but surely approaching. There has been no finalized HTML5 standard [from the W3C], but a lot of web browsers, and even mobile web browsers, have now some HTML5 capabilities. And, it will really help in the development cycle for basic applications.

Where HTML5 will not to be able to help us, at least right now, is when we try to take advantage of location-based services because there is no standard yet. They're still arguing about this one, and especially high performance graphics. But, on the standard application, HTML5 will take us miles forward and diminish the difference between the desktop and the mobile environment.

... At the same time, all of the SDKs are getting more powerful and more user-friendly. So, it's moving toward a more harmonized and more rapid development environment.

Parrott: Prior to HTML5 talking about mobile web was pretty much a joke. Mobile web was an afterthought in the phone market. You had these small, dinky displays. Most of them couldn't even render most standard HTML. What's new?

You still see a strong fragmented programming model base, different operating systems, and different hardware capability. It's still a mess. With the advent of the smartphone what you really saw was pretty much the Internet, as you experience it on your desktop, now on to your smartphone, but with even more capability.

Part of it is because HTML5 has stepped back and looked at what the future needed to be for a web programming model. To become more of a common run-time, they had to address some of the key gaps between native hardware, APIs, and web. Much of those have really centered on one of the biggest digs that mobile web had in the old days, when you were doing something, were connected, and then you lost your connectivity.

Out of the box

HTML5, right out of the box, has a specification for how to operate in an online, offline, or disconnected type mode. Another thing was a rendering model, beyond just what you see on your desktop, that actually provides a high-end graphics type capability -- 2D, 3D types of programming. These are things that more advanced programs can take advantage of, but you can build very rich desktop type of experiences on the laptop.

Then, they went beyond what you're used to seeing on your desktop and took advantage of some of the sensors that these phones have now -- accelerometers, location capability, or geolocation. APIs are now emerging as a companion to HTML5, which is a spec that will span across your desktop to the mobile phone. It's a very capable specification.

In addition, there is the movement in terms of the standards body, especially the W3C, to address mobile device API. You will eventually program in a standard way and talk to your contacts list, your cameras, video, recording devices, and things like that. That will soon be available to us in a web programming model.

What used to be exclusively the demand of the hardware API guys to do really low level, high performance bit twiddling is now going to be available to the general web programming masses. That opens up the future for a lot more innovation than what we’ve seen in past.

There is enough HTML5 core already emerging that we could start to program to a subset of that spec and treat it as kind of a common run-time that you would program across pretty much all of the new emerging smartphones as we look forward.

Entner: It's only a matter of when ... HTML5 will come. Apple and Google are at the forefront and are already launching websites and services in it. You can get HTML5 YouTube, HTML5 Google, and even Yahoo mail access. You can have the Apple website in HTML5. It just depends on what is fully supported right now.

Some browsers support it, and some don't yet. On the mobile side, it also fully depends on what is supported. If you have the WebKit engine at the core of the browser that your device is using, HTML5 is pretty widely supported.

Parrott: As we've talked to more-and-more of our SMBs, one thing that stands out is that they don't have a lot of resources. They don't have a huge web department. Their personnel wear a number of hats. Web development is just one of n things that one of the individuals may do in one of these organizations.

At Genuitec, we developed a product called MobiOne Studio. The target user is anyone who has an idea or an vision for a mobile web application or website. MobiOne is geared to provide a whole new intuitive type of experience, in which you just draw what you want. If you can develop PowerPoint presentations, you can create a mobile web application using MobiOne.

You lay out your screens, you pane them all up, and then you wire them together with different types of transitions. From there, you can then immediately generate mobile web code and begin to test it either in the MobiOne test environment, that's an emulated type of HTML5 environment, or you can immediately deploy it through MobiOne to your phone and test it directly on a real device.

If you can develop PowerPoint presentations, you can create a mobile web application using MobiOne.

With MobiOne Studio we recognized that the first thing that most companies want to do is just mobilize, just get a mobile presence, mobilize their websites, and have that capability. As Roger said a while ago, a lot of the apps you see out there are really glorified mobile websites and are packaged up in a binary format.

Second Studio phase

In MobiOne Studio's second phase, once you design and you like what you have, you have a progressive step that you can go from a very portable form to compile it down -- or cross-compile -- from HTML5 to whatever the native requirements are of that particular target app store. So, Google will have their app store, and Apple and RIM each has their own model. They are all fairly different models.

But with HTML5, you can go directly to your customers now. You can market to them directly. It depends on your way of interacting with your customers, but we have seen a number of novel approaches already from some of our customers. When any customer is in your store, you make it very easy for them to access your site, to make them aware of your mobile capabilities, lure them in, and get them connected that way.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Read a full transcript or download a copy. Sponsor: Genuitec. Learn more.

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By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 16th November 2010 Copyright Interarbor Solutions © 2010

The lives of IT admins in Windows environments should get a little easier with the launch of rPath's rBuilder 5.8 for "push-button" deployment of Windows Server instances.

The Raleigh, N.C. company's rBuilder 5.8 introduces release automation to the world of Windows Server applications. With the new software, rBuilder 5.8 earns bragging rights as a first commercial solution to address deployment automation for Windows instances and apps. [Disclosure: rPath is a sponsor of BriefingsDirect podcasts.]

The deployment challenge

For most IT organizations, deploying Windows apps into production is complex, cumbersome, and time-consuming. That complexity can lead to long delays in full deployments that leave a dark cloud hanging over service levels and business agility.

The rise of public cloud services such as Amazon EC2 has further motivated IT to become more responsive to business lines.

With its automation approach, rBuilder 5.8 is wrestling that challenge to the ground with what it calls “push-button deployment” of Windows apps. This software helps to automatically resolve dependencies to virtually eliminate deployment-time failures, automatically generate standard MSI packages that are ready to deploy, apply version control to all packaged elements, and eliminate drift between dev, test, and production release stages, says rPath.

rBuilder 5.8 also generates image output on demand for rapid deployment or retargeting between physical, virtual, and cloud environments, makes way for targeted changes for low-overhead, conflict-free maintenance, and provides a single enterprise solution for automated deployment of any application, running any platform, deployed to any execution environment -- physical, virtual, or cloud, said rPath.

There are some more resources available on the capabilities and new release: Attend a free, live webinar Nov. 16; watch a short video; read a whitepaper, and learn more.

The need for deployment speed

Deployment dysfunction is a primary source of delay in delivering IT services in response to business demand. The rPath solution also works to complement Microsoft development and operating environments, including Team Foundation Server and System Center Configuration Manager.

With some 70 to 80 percent of IT spending due to operating expenses, nearly half is attributable to deployment-related tasks. This is particularly true for Microsoft Windows environments, which constitute 74 percent of the data-center server market. If rBuilder 5.8 lives up to its promises, it could find a home in many Windows-based IT departments. And it lends a hand in migration and hybrid deployments, too.

rPath has also joined the Microsoft System Center Alliance, a partner community in support of the System Center ecosystem. The System Center Alliance provides an online community that aims to help partners collaborate on the creation of solutions for the System Center and deliver an information resource about these new solutions for customers and sales channel partners.

BriefingsDirect contributor Jennifer LeClaire provided editorial assistance and research on this post. She can be reached at http://www.linkedin.com/in/jleclaire and http://www.jenniferleclaire.com.

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By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 12th November 2010 Copyright Interarbor Solutions © 2010

Businesses are increasingly using cloud and e-commerce to improve how they do sales, marketing, and online transactions.

One smaller company, Tampa-based MarkMaster, has quickly moved to nearly all-paperless sales transactions, found new customers via online networks, and increased the amount of product it sells to its existing clients. This was accomplished without a lot of additional IT or business-process spending by using cloud-based collaborative business commerce solutions.

To learn more about how MarkMaster is conducting its business better, BriefingsDirect's Dana Gardner, Principal Analyst at Interarbor Solutions, recently interviewed Kevin Govin, the CEO at MarkMaster.

Here are some excerpts:

Govin: E-commerce has definitely changed our reach, which is national and international. We have a plant in Birmingham, England, that we fulfill from as well for our American-based companies. We service nine of the top 10 banks in United States. We do eight of the top 10 insurance companies. Without cloud computing, there's just no way we would have even considered doing that. ... This all has been just a godsend for us.

It's totally changed our business. I laughed a little bit at your intro, when you talked about going "paperless." One of our main product lines is rubber stamps, and it seems counter-productive to go paperless with what we do.

Yet we have changed a lot. Now, 95 percent of our orders come electronically. We have one location in the United States that services all of the US and Europe. How could we do that without some kind of cloud transacting? It just makes the most sense. Over the last 10 years, I think 99 percent of our new customers have been coming through those kinds of systems.

Most of our products are considered office supplies. So, I have to look like the big Office Maxes, Office Depots, and that kind of thing. That’s how we present ourselves. Even though we're the biggest in our industry, we're still a small company.

We deal mostly with Fortune 500 companies. We sell rubber stamps, name badges, name plates, and interior/exterior signage. It's a unique field, kind of a niche market, as rubber stamps are a mature market. But, we seem to be gaining market share, so that’s been great for us.

Top-line, our sales are growing at least 10 to 15 percent a year for the last 10 years, and that’s the same time-frame that we’ve been on e-commerce and now cloud computing. So we have to believe that that’s a lot of it. Our industry is shrinking as well. There were 1,200 rubber stamp makers, now there are 400.

Quick turnaround from cloud
We definitely use the cloud-computing models to go out and sell. There is nothing jazzy about a rubber stamp. Name badges are pretty much specified by the customers. So, we are not out there selling anything new or exciting as far as that’s concerned.

But we have changed our model, and our salespeople don’t travel with the product. They travel with the computer and they show what we can do online and what kinds of services we can provide.

The investment in hardware has actually come down over time, but we do like to keep up today with the current technologies.

We can turn around on a customer in two days, because it's just all uploading something. There are no ports to connect or anything highly technical at all.

Because both on the buyer and the supplier supply side we are having hosted solutions or in the cloud it makes it a lot easier. There used to be a real reluctance from the customers to want to put us on board, because I might only be $100,000 year in spend, and they were going to outlay a lot of IT to connect me.

Now, with cloud solutions, there is very little IT on either end. I'd imagine that it's even easier now than it was with the paper system before, because we can communicate to their end-users that we’re out here, and we’re ready to be bought from.

We work heavily within the Ariba network, and because of that, now we are an Ariba Silver supplier. So, there's a lot of pluses that go with that, and we use a lot of banner ads and things like that.

We’re posted out on Ariba’s Discovery area, so they can find us very easily, and when they look at that, they see number of connections, and we get instant credibility on top of that. Then, of course, we even use the Ariba LIVE event. That’s huge for us, because it puts us in front of all those users that are looking for somebody like us.

One of the larger banks that we deal with, when we originally started with them, weren’t even considering us as a supplier, but they found us on the Ariba Discovery network. They called us and said, "Can you really do all of this. You're a small supplier?"

We showed them our list of what we have, where we’d already made Silver. So they knew we were vetted already by the supplier and we ended up with the business. It wasn't necessarily in a RFQ kind of environment either. It was "Wow. You can do this, and you’re the supplier we want and, in our case, you’re a minority supplier." So, it was just having that all together.

Can't always be there
But, they found us on Ariba. We didn’t solicit them. I mean, we had been soliciting them, and they knew of us, but we can't always be there when the customers need these products now. It's just too hard, because our products are needed everyday. So, that came out very well for us.

Bottom-line, we have had year-over-year growth, and our customer service department has not grown, or added anybody to that staff. How does that work, because we've grown exponentially? The reality is online systems.

We proactively give them the information as to the status of their order, and they can actually see it go through our plan step-by-step. Does everybody need that information? No, but it does keep them from calling customer service. So it’s definitely changed.

Now, 10 years ago, we were 95 percent paper, and it's just totally flipped. So, you can count on your hand the overhead that this gets rid of.

We’re always talking about transacting in the cloud and getting orders and billing. The billing part is where we want our customers to go next, because it seems like the front-end integration is great, but on the back end there are 100,000 different ways that people want us to bill them and get paid—EDIs or ACH or whatever.

We see it coming. People are migrating to the pay element, so that everything is integrated, and that’s great for us. It turns money faster. I don’t deal with credit cards as much, all of which cost me a lot of overhead.

Remember, my products are $5 or $6. People buy one at a time. So, handling invoices is just a nightmare. I get 20,000 invoices every day. We need to upload them, link them, and know the bill is okay.

My clients are not the kind of clients that aren’t paying me because they don’t have the money. They're the kind of clients that aren’t paying because I didn’t do the paperwork correctly. So having that end-to-end order-to-pay integration is where we see it's coming next for us in integrating the whole cycle. Some of my larger banks have definitely gotten on-board with that and it's great, and for a small company, it changed my cash-flow as well.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 10th November 2010 Copyright Interarbor Solutions © 2010

WSO2 recently announced the debut of WSO2 Carbon Studio, an Eclipse-based integrated developer environment (IDE) for WSO2 Carbon.

The new offering allows users to build service-oriented architecture (SOA) and composite applications based on WSO2 Carbon. [Disclaimer: WSO2 is a sponsor of BriefingsDirect podcasts.]

Highlights of WSO2 Carbon Studio include the ability to:

• Organize artifacts that span the multiple runtimes common to composite applications into a single project—a Carbon Application (CApp).
• Develop applications using tools designed for WSO2 Carbon-based products including the WSO2 ESB, WSO2 Web Services Application Server (WSO2 WSAS), WSO2 Business Process Server (BPS), WSO2 Governance Registry, and more.
• Test and debug WSO2 Carbon-based applications directly within the IDE.
• Export Carbon Applications in the new Carbon Archive format.

“We have found that many of our customers are developing sophisticated applications that span the WSO2 Carbon product family, and they are taking advantage of the unique strengths of our platform when used as a whole,” said Dr. Sanjiva Weerawarana, founder and CEO of WSO2. “We’re now revving up our tooling support with WSO2 Carbon Studio—helping developers to organize, develop, test, and deploy these composite applications with greater ease than ever before.”

Middleware platform
The WSO2 Carbon Studio IDE is designed to take advantage of the open source WSO2 Carbon middleware platform. The Eclipse-based offering includes graphical editors for XML configuration files, an enhanced Eclipse BPEL editor, and easy integration of Carbon-based applications with the WSO2 Governance Registry. Additionally, Carbon Studio offers a rich set of third-party Eclipse plug-ins, including Maven and the OpenSocial Gadget Editor.

Carbon Studio supports SOA projects that often combine multiple application types into a single composite application or service. Developers also have single-click function for testing Java-based applications and services—without leaving the IDE. Debugging tools support Axis2-based services, Apache Synapse mediators, registry handlers, and data validators.

Tools to support SOA development include Apache Axis2 and JAX-WS, Data Service, BPEL, ESB, and ESB Tooling, as well as a gadget editor.

WSO2 Carbon Studio, available now as a set of Eclipse plug-ins, is a fully open-source solution released under Eclipse and Apache Licenses and does not carry any licensing fees. WSO2 offers a range of service and support options for Carbon Studio, including development support and production support.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 4th November 2010 Copyright Interarbor Solutions © 2010

The rapidly evolving landscape for global business—and the consequent need for IT to relate differently to businesses so they together serve their customers in innovative ways—has to mean more than business as usual from technology suppliers.

While a majority of vendors seem to be hunkering down around an entrenched set of core products and aging IT approaches, HP this week shared a different vision, what it calls the “Instant-On Enterprise." [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

The Instant-On Enterprise, as HP defines it, is a data-driven organization that leverages technology for everything—but specifically to better address the ever-evolving needs of end-users. As users' expectations and experience change, so too must the ways enterprises relate to them, are perceived by them.

The next several years will form a culmination of now-clear mega trends that have only just begun to roil conventional business practices. We're talking about pervasive mobile applications use, highly responsive cloud computing models, and knowledge-adept social collaboration. More than just these shifts, there also needs to be an increasingly automated, secure, and harmonizing management capability that combines and reinforces them.

As these trends literally re-arrange business ecosystems and re-established the service delivery order, a gap will surely grow between the companies that master change and exploit enabling technologies—and those that fall ever further behind.

With that in mind, HP has rolled out new solutions that aim to help both business and government create their own Instant-On Enterprise. Not surprisingly, the driver of the Instant-On Enterprise is everything becoming connected and immediate, people expect responses regardless of sourcing and/or partner ecosystems—and within seconds instead of days.

“It takes a special kind of enterprise to close the expectation gap between what customers and citizens expect and what the enterprise can deliver,” says Tom Hogan, executive vice president of Enterprise Sales, Marketing and Strategy at HP. “The Instant-On Enterprise delivers differentiated competitive advantage, serving customers, employees, partners and citizens with whatever they want and need, instantly…"

Embedding Tech
New HP research reveals that the role of IT is shifting from chiefly being the administrator of the enterprise to becoming one and the same with the enterprise. This means enabling rapid, recurring business process improvements to meet dynamic customer demands, as well as gaining near-instant insights into shifting markets.

Coleman Parkes research conducted for HP in October reveals that 86 percent of senior business and government executives believe they must rapidly adapt the enterprise to meet changes in consumer expectations. The research also indicates that 78 percent believe technology is the key to business and government innovation, and 85 percent indicated that in order to be successful, technology needs to be embedded in the business or government service

HP’s new solutions work to help enterprises and government leverage technology in ways that will meet those goals. HP sees it as a reinvention of how technology is used to deliver innovation at every point in the value chain. That covers the services that are delivered, the mobile devices that provide the access, and the global data centers required to power the Instant-On Enterprise.

Instant-On Puzzle Pieces
There are several components to HP’s Instant-On Enterprise: HP Application Transformation, HP Converged Infrastructure, HP Enterprise Security, and HP Information Optimization:

• HP Application Transformation solutions work to help enterprises gain control over aging applications and inflexible processes that challenge innovation and agility by governing their responsiveness and pace of change.
• HP Converged Infrastructure solutions are engineered to drive out costs and provide the foundation for agile service delivery. HP promises this solution delivers the data center of the future.
• HP Enterprise Security solutions secures the IT infrastructure by people, processes, technology and content. These solutions aim to aligns security to meet business and government demands without losing flexibility.
• HP Information Optimization solutions deal with how information is gathered, stored and used. The idea is to harness the power of information and ensure its integrity and protection while delivering it in the context of the enterprise.

Realizing that there is no one single delivery model that meets every end-user need, HP also introduced two new Hybrid Delivery services. HP Hybrid Delivery Strategy Service offers a patent-pending, model-driven framework to introduce hybrid delivery concepts into their existing environments.

HP Hybrid Delivery Workload Analysis Service offers experts that gather service usage and demand profile data, and then develop a set of recommendations on how to best characterize and combine workloads in hybrid environments.

BriefingsDirect contributor Jennifer LeClaire provided editorial assistance and research on this post. She can be reached at http://www.linkedin.com/in/jleclaire and http://www.jenniferleclaire.com.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 28th October 2010 Copyright Interarbor Solutions © 2010

Businesses are looking to cloud-computing models to foster agility and improve time-to-market for new services. Yet attaining cloud benefits can founder without higher levels of unified server, data, network, storage, and applications management.

These typically disparate forms of management must now come together in new ways to mutually support a variety of different cloud approaches -- public, private, and hybrid. Without adoption of such Business Service Automation (BSA) capabilities, those deploying applications on private and hybrid clouds will almost certainly encounter increased complexity, higher risk, and stubborn cost structures.

This latest BriefingsDirect discussion therefore focuses on finding low-risk, high-reward paths to cloud computing by using increased automation and proven reference models for cloud management—and by breaking down traditional IT management silos. In doing so, the progression toward cloud benefits will come more quickly, at lower total cost, and with an ability to rapidly scale to even more applications and data.

We're here with two executives from HP Software & Solutions to learn more about what BSA is and why it's proving essential to managed and productive cloud computing adoption: Mark Shoemaker, Executive Program Manager for Cloud Computing in the Software & Solutions Group at HP, and Venkat Devraj, Chief Technology Officer for Application Automation, also in HP’s Software & Solutions Group. The discussion is moderated by BriefingsDirect's Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Shoemaker: There is hardly a place we go that we don’t end up talking to our customers about cloud. Most of the enterprise customers we talk to are looking at private cloud, the internal cloud solution that they own, that they then provide to their business partners, whether that’s the development teams or other elements in their business. Most of them are looking to build on the virtualization work that they've already done.

They want to improve their productivity, definitely get better utilization out of what they have already got. They want IT to be your better partner in the business. What that means is to shorten the time that the business has to wait for the services.

Devraj: There is also an interesting micro trend that’s occurring. A lot of the application teams, end-user business teams, are getting increasingly sophisticated. They're learning about private cloud implementations. Consequently, they're demanding levels of service from IT that are difficult to provide without a private cloud.

For example, because of things like agile development methodologies, application teams are doing a lot more application deployments and code releases than ever before. It's not uncommon to see dozens of application releases for different applications happening during the same day.

IT operations are just bombarded with these requirements and requests, and they are just unable to keep up based on yesterday’s processes, which are relatively static. These application teams and business unit teams are quite influential.

They're even willing to fund specific initiatives to allow their teams to work in self-service mode, and IT ops are finding themselves in reactive mode. They have to support them, make their internal processes more fluid and dynamic, and leveraging technology that allows that kind of dynamism.

... The third-party companies, the cloud providers, the pure-play server enablers, have an unfair advantage. Because they were started relatively recently, in the last few years, they have the advantage of standardized platforms and delivery units.

They can say, "Okay, I'm going to deliver only Linux-based platforms, Windows-based platforms, or certain applications." When you look at the typical enterprise today, however, IT has a lot more to deliver.

There is a lot of prevailing heterogeneity in terms of multiple software platforms and versions. There is a lack of standardization. It's very difficult to talk about cloud and delivery within the enterprise in the same breath, when you look at these kinds of technical challenges.

As a result, IT is undergoing a lot of pressure—but they have to deliver given the kind of challenges that they face. That’s going to require a lot of education and access to the right kind of technology, training, and guidance.

Shoemaker: Just to add to Venkat’s comment, we're seeing the business driving IT and demanding that agility and that flexibility. We talk to a lot of our customers, where their own coworkers have taken corporate credit cards and gone out into the public cloud, procured space, and have begun developing outside of them. IT really has to get in front of this. They have to manage all this.

... The one thing that’s different about cloud is that it really is a supply chain. It’s the supply chain of IT technology that the business consumes. If you think about what a supply chain is, it’s something that’s got to be repeatable. It has to be governed, and it provides a baseline or foundation and building blocks to build those services that you can then customize on top of the business.

So, the farther up that you can go with your standard building blocks, the less difficult it is to manage and focus on the custom business-facing functions on the front-end.

To do this, cloud has helped us out in a lot of ways. One of the challenges IT has always had is to get the business to consume standards. Because of a lot of hype in the market, the business absolutely is convinced that they get it, and they want the business benefits that cloud offers.

Even if the business decides to go to a public cloud, they still have to consume those elements in a standard fashion. There's no way out of that.

Devraj: And yet, the software used by these enterprises tends to be disparate, heterogeneous, and requires a lot of domain knowledge to be able to manage, resulting in significant delays and bottlenecks associated with service delivery. Those processes just don’t scale in the cloud.

At Stratavia we had built a patented technology to manage and control varied software stacks, such as databases, web servers, application servers, and even well-known packaged applications, including Microsoft Exchange, Oracle E-Business Suite, and SAP.

The content that I talk about becomes an abstraction layer, where the customer, the end user, the people who consume the services, see a very easy to understand service catalog. They can click on it. They can choose some menu options, some values from a drop-down box, and then specify exactly what they need, and have the response come back in minutes and in hours, rather than days and weeks, as is traditionally the case.

For example, just at the database layer, within the enterprise, it's very common to see four or five different platforms in use, such as DB2, SQL Server, Oracle, and so on. By automating the operations management lifecycle around these layers, Stratavia has made it possible for the enterprise to deliver and manage these assets as a service within the context of the cloud.

As more and more of HP’s and Stratavia’s joint customers started seeing value in that capability, HP brought Stratavia into its BSA/Business Technology Optimization umbrella.

There's a big gap in IT today, which is IT/Ops Engineering or IT/Ops Architecture. That’s a big missing silo within IT/Ops. And a lot of the operators today that rely on scripts, command-line stuff, and point-and-click tools need to evolve themselves to more of an architect approach. They need more of taking stock of the big picture, and taking the tribal knowledge that they have in their heads and looking at the out-of-the-box content that HP provides and selecting the right content that corresponds to their tribal knowledge.

When they go into the cloud, the underlying management, things like compliance and governance, are not out of whack. They're able to successfully take that knowledge, put it in there, and then, in their new role as architects or engineering folks, they're able to watch, measure, and make modifications as appropriate.

So, the role that people play, that key subject matter experts play, is very crucial as part of walking before running with automation.

Gardner: Now that you have mentioned Stratavia, and for the benefit of our listeners and readers, HP has acquired Stratavia, and there was also quite a bit of related product and service news on Sept. 15 around BSA as the acquisition was unveiled.

Shoemaker: Obviously, the Stratavia acquisition was a huge, huge win for us, and puts us in a great position to help our customers transform their infrastructure. ... And several other things have happened in the last 60 days. We had VMworld, and we presented a cohesive strategy for infrastructure and even PaaS built on the BladeSystem Matrix hardware platform that we have, Converged Infrastructure. We've combined that with two other pieces and a piece of Cloud Service Automation (CSA) software.

CloudStart is a consulting and a professional services-led engagement capability where we come in and work with the customer to get that transformation process nailed, so we can quickly get them moving into the cloud benefits.

On the back end of that, there is another piece that we announced called Cloud Maps, which is really more knowledge, but in a different capacity, in that it offers downloadable templates, preconfigured applications, and best practices for sizing.

We see the Stratavia acquisition fueling this fire, because in the end, cloud is a solution, and a solution needs content, and content wins. Content is what the customer is able to consume and use day one, when the solution is in. So it's important. And we've done a lot there.

We now have a best-in-class content provider in Stratavia that’s come on board to help round out the capabilities and add more into what the customer can get out of our solutions in very quick order.

All that sits on a recently refreshed BSA portfolio, with significant enhancements and new capabilities across network, automations, servers, and storage, that really makes all this happen.

... Let's face it, a lot of the CIOs are looking at a data center that’s packed full of applications that they probably don’t feel as if they have got a good handle on. Now, cloud is coming into the picture, and they've got two things to do here.

Number one, they need to start applying those new business methodologies to IT around providing cloud and the things that go with that, but also they have got a transformation piece to go along. And that can be very daunting.

What we've done is looked at the experience of helping previous customers do that work and we have applied that into the CloudStart and Cloud Maps, CloudStart being the planning and the upfront work that you need to get done.

So, we're right there with you. You don’t have to read chapter one of the book.

Then, as we put the infrastructure in with CSA for Matrix in the frame, we're embedding some of the CSA software inside of the Blade Matrix frame. So you have a way to build infrastructure as a service (IaaS) and manage it through the platform throughout the lifecycle.

Then, on the back end of that, we have the preconfigured application templates. If I need a SQL Server image to put into the system, I can pull that from Cloud Maps, build it into a framework and offer that very quickly. I don’t have to go and figure out how to size for this piece or what golden template looks like for this application.

It's really about obtaining a running start into the cloud, and one that’s not going to leave you wanting in a year or two. You have to be careful. Cloud is a great enablement technology and a lot of people are looking at IaaS, but that’s the starting point for it, and then you have to manage everything that you put inside of that as well.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 26th October 2010 Copyright Interarbor Solutions © 2010

The FUSE family of software is now under the FuseSource name and has today gained new autonomy from Progress Software with its own corporate identity.

Part of the IONA Technologies acquisition by Progress Software in 2008, FuseSource has now become its own company, owned by Progress, but now more independent, to aggressively pursue its open source business model and to leverage the community development process strengths.

In anticipation of today's news, our discussion here targets the rapid growth, increased relevance, and new market direction for major open source middleware and integration software under the Apache license.

We'll also look at where FuseSource projects are headed in the near future. [NOTE: Larry Alston also recently joined FuseSource as president.]

Even as the IT mega vendors are consolidating more elements of IT infrastructure, and in some cases, buying up open-source projects and companies, the role and power of open source for enterprise and service providers alike has never been more popular or successful. Virtualization, cloud computing, mobile computing, and services orientation are all supporting more interest and increased mainstream use of open-source infrastructure.

Here now to discuss how FuseSource is therefore evolving we're joined by Debbie Moynihan, Director of Marketing for FuseSource, and Rob Davies, Director of Engineering for FuseSource. The discussion is moderated by BriefingsDirect's Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

Moynihan: Over the past couple of years, there has been a lot of focus on cost reduction, and that resulted in a lot of people looking at open source who maybe wouldn’t have looked at it in the past.

The other thing that’s really happened with open source is that some of the early adopters who started out with a single project have now standardized on FuseSource products across the entire organization. So there are many more proof-points of large global organizations rolling out open source in mission-critical production environments. Those two factors have driven a lot of people to think about open source, and to start adopting open source.

Then, the whole cloud trend came along. When you think about scaling in the cloud, open source is perfect for that. You don’t have to think about the licensing cost as you scale up. So, there are a lot of trends that have been happening and that have really been really helpful. We're very happy about them helping push open source into the mainstream.

From a FuseSource perspective, we've been seeing over 100 percent growth each year in our business, and that’s part of the reason for some of the things we're going to talk about today.

Davies: We've been around in this space for a while, but the earlier adopters who were just trying out in distinct groups are now rolling this out into broader production. Because of that, there is this snowball effect. People see that larger organizations are actually using open source for their infrastructure and their integration. That gives them more confidence to do the same.

I recently spoke to a large customer of ours in the telco space. They had this remit. Any open source that came in, they wouldn’t put into mission-critical situations, until they kicked the tires for a good while — at least a couple of years.

But because there has been this push for more open source projects following open standards, people are now more willing to have a go using open source software.

In fact, if you look at the numbers of some of our larger customers, they are using Apache ServiceMix and Apache ActiveMQ to support many thousands of business transactions, and this is business-critical stuff. That alone is enough to give people more confidence that open source is the right way to go.

When you look at cloud, there are different issues you have to overcome. There is the issue about deploying into the cloud. How do you do that? If you're using a public cloud, there are different mechanisms for deploying stuff. And there are open source projects already in existence to make that easier to do.

This is something we have found internally as well. We deploy a lot of internal software when we are doing our big scale testing. We make choices about which particular vendors we're going to use. So, we have to abstract the way we are doing things. We did that as an open source project, which we have been using internally.

When you get to the point of deploying, it’s how do you actually interface with these things? There is always going to be this continuing trend towards standards for integration. How are you going to integrate? Are you going to use SOAP? Are you going to use RESTful services? Would you like to use messaging, for example, to actually interface into an integration structure?

You have to have choice. You can’t really dictate to use it this way or the other way. You've got to have a whole menu of different options for connecting. This is what we try to provide in our software.

We always try to be agnostic to the technology, as much as how you connect to the infrastructure that we provide. But, we also tend to be as open as we can about the different ways of hooking these disparate systems together. That’s the only way you can really be successful in providing something like integration as a service and a cloud-like environment. You have to be completely open.

Moynihan: Progress is launching a new company called FuseSource that will be completely focused on the open source business model. We're really excited as a team. The FuseSource team has been an independent business unit since IONA was acquired by Progress Software. We have been fairly independent within the company, but separated as our own company we'll be able to be completely independent in terms of how we do our marketing, sales, support, services, and engineering.

When you're part of a large organization, there are certain processes that everyone is supposed to follow. Within Progress, we are doing things slightly differently (or very differently depending on the area) because the needs of the open source market are different. So being our own company we'll have that independence to do everything that makes sense for the open-source users, and I'm pretty excited about that.

From a practical perspective, the business model is very different. In traditional enterprise software sales, there is a license fee which is typically a large upfront license cost relative to the entire cost over the lifetime of that software. Then, you have your annual maintenance charges and your services, training, and things like that.

From an open source perspective, typically upfront, there is no license cost. Our model is that there is no license cost. It’s a subscription support model, where there is a monthly fee, but the way that it is accounted for and the way that it works with the customer is very different. That's one of the reasons we split out our business. The way that we work with the customers and the way they consume the software are very different. It’s a month-to-month subscription support charge, but no license charge.

That’s also the reason people like cloud. You pay as you go. You scale as you go. And you don’t have that upfront capital expenditure cost. For new projects, it can be really hard to get money right now. All these benefits are why we're seeing so much growth in FuseSource.

While we do have some level of product management for open source, a lot of it is based around packaging, delivery, licensing, and these types of things, because our engineers are hearing directly from customers on a moment-by-moment basis. They're seeing the feedback in the community, getting out there, and partnering with our customers. So, from an economic perspective, the model is different.

Now, being backed by Progress Software provides us the benefit that customers can have that assurance that we're backed by a large organization. But, having FuseSource as standalone company, as you said, gives us that independence around decision making and really being like a startup.

We'll be able to have our own processes in any functional area that we need to best meet the needs of the open source users.

Davies: From a technical perspective, it’s really good for us. The shackles are off. There’s a lot of sudden reinvigorating that seems to move forward. We've got a lot of really good ideas that we want to push out and roll out over the coming year, particularly enhancing of the products we already have, but also moving onto new areas.

There's a big excitement, like you would expect when you have got a startup. It just feels like a startup mentality. People are very passionate about what they're doing inside FuseSource.

It's even more so, now that we have become autonomous of Progress. Not that working inside Progress was a bad thing, but we were constrained by some of the rigors and procedures that you have to go through when you are part of a larger organization. Because those shackles have been taken away, it means that we can actually start innovating more in the direction we really want to drive our software too. It’s really good.

Moynihan: From a customer perspective, this change will have a small but significant impact. We are continuing to do everything that we have been doing, but we will be able to have even more independence in the way that we do things. So it will all be beneficial to customers.

We have also launched a new community site at FuseSource.com, which we're pretty excited about. We were planning to do that and we've been working on that for several months. That just provides some additional usability and ability to find things on the site.

Overall, it will be really good for our customers. We've talked with them, and they're pretty excited about it.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research Posted: 7th October 2010 Copyright Bloor Research © 2010

The process associated with securing a commercial lease or loan, commonly referred to as asset finance originations, is getting more and more complex and therefore the need to automate has grown. Leasing capital assets is just one way companies are moving expenditures from CAPEX to OPEX budgets. Leasing is a process by which a firm can obtain the use of a certain fixed asset for which it must pay a series of contractual, periodic, tax deductible payments. Other companies opt to secure commercial loans in order to meet their operational and cash flow needs. The asset finance organisations who handle these lease or loan applications are operating in a cut-throat market and are finding they need to differentiate themselves. Yet, until recently, they were limited in their ability to perform risk assessments because of internal technology hurdles. They often support multiple back-office processing systems which could not share customer information, needed a great deal of individual customised programming, and often required expensive upgrades to maintain over time. But this situation is changing. Rapport360 from International Decision Systems is the first front-office asset finance solution Bloor has come across to provide seamless integration with multiple back-office processing systems. In doing so, decision-makers get full visibility into customer risk across system platforms so they can make better credit decisions and gain a competitive advantage.

International Decision Systems (IDS) was founded in 1974 and is headquartered in Minneapolis, MN with sales offices in the UK, Australia and Singapore and a development centre in Bangalore, India. The company specialises in the asset finance software market, providing solutions which support the full lifecycle covering both front and back office operations (see Figure 1 below). For back office portfolio management, IDS provides:

• InfoLease, which provides support for leasing operations, covering functionality for loans, reporting and regulatory compliance; and
• ProFinia, which manages lease and loan portfolios along with their underlying assets and collateral.

For the front office, IDS provides:

• InfoAnalysis, which is a solution for transaction quoting including tracking of critical sales data for salespeople; and
• Rapport, which enables contract origination including credit applications, product pricing, partner relations and booking.

Figure 1: Full Asset Finance Management Lifecycle

IDS has over 250 customers in 34 countries including Wells Fargo, Bank of America, GE Capitol, John Deere, Dell, RBS Asset Finance, Olympus, Xerox, CAT, Volvo and Daimler.

Terry Welty, Chief Marketing Officer at IDS, explains “The main challenges in managing the current asset financing process are high cost, low productivity, and limited visibility of customer risk data. Often there is a large amount of re-keying which results in poor data quality and a lack of synchronisation between back-office applications. This process also slows response time and potentially results in lost sales. Perhaps one of the biggest problems, however, is that because different back-office systems do not share information, decision makers are unable to see the “big picture” of customer risk across different business units and geographic locations which can lead to difficult decision-making.”

October 2010 sees the launch of a new version of the IDS Rapport solution called Rapport 360™. Rapport has always provided support for the management of workflow, screens and rules to enable organisations to provide best practices. It contains a pricing engine that supports matrix, rate card pricing, as well as asset and risk-based scenarios. Information from CRM systems, credit bureaus, and other financial and asset information resources is able to be incorporated into the system to provide a single view. Rapport supports the creation, distribution, and management of origination documents as well as bid, quote, and proposal letters.

Figure 2: Rapport 360 Coverage

So what is different about this release? Katie Emmel, Director of Product Management at IDS, told me that IDS has now added the ability to support simultaneous integration with multiple back office servicing systems through a feature called Smart Synchronization. Emmel said, “Customer records can now be updated instantly in all applicable systems. Rapport 360 provides a single, consolidated view of customer risk by capturing delinquency and exposure information.” The other key differential I identified was that administrators in user organisations are able to manage workflow, screens and rules to regulate and establish best practices across an organisation without having to use IT resources or the vendor. Rapport 360 provides support for the complete origination process from quotation through decisioning to final booking.

But what does this mean to you? The support for multiple back-office and smart synchronisation means that costs can be lowered and valuable staff resources can be refocused. Customers also gain by receiving faster response time. One of the biggest improvements, however, is that, by seeing the complete picture associated with customer exposure, finance companies can make better decisions, reduce risk and therefore improve profitability and ROA.    

Bloor recommends any organisation involved in leasing to take a serious look at this new product from IDS. From what we have seen, it fills in many of the gaps that were previously missing from solutions in this marketplace.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 6th October 2010 Copyright Interarbor Solutions © 2010

The trend toward converged infrastructure—a whole greater than sum of the traditional IT hardware, software, networking and storage parts—is going both downstream and upstream.

HP today announced how combining and simplifying the parts of IT infrastructure makes the solution value far higher on either end of the applications distribution equation: At branch offices and the next-generation of compact and mobile all-in-one data center containers.

Called the HP Branch Office Networking Solution, the idea is that engineering the fuller IT and communications infrastructure solution, rather then leaving the IT staff and—even worse—the branch office managers to do the integrating, not only saves money, it allows the business to focus just on the applications and processes. This focus, by the way, on applications and processes—not the systems integration, VOIP, updates and maintenance—is driving the broad interest in cloud computing, SaaS and outsourcing. [Disclosure: HP is a sponsor of BriefingsDirect podcasts.]

HP's announcements today in Barcelona are also marked by an emphasis on an ecosystem of partners approach, especially the branch office solution, which packages 14 brand-name apps, appliances and networking elements to make smaller sub-organizations an integrated part of the larger enterprise IT effort. The partner applications include WAN acceleration, security, unified communications and service delivery management.

Appliances need integration too
You could think of it as a kitchen counter approach to appliances, which work well alone but don't exactly bake the whole cake. Organizing, attaching and managing the appliances—with an emphasis on security and centralized control for the whole set-up—has clearly been missing in branch offices. The E5400 series switch accomplishes the convergence of the discrete network appliances. The HP E5400 switch with new HP Advanced Services ZL module is available worldwide today with pricing starting at $8,294.

Today's HP news also follows a slew of product announcements last month that targeted the SMB market, and the "parts is parts" side of building out IT solutions.

To automate the branch office IT needs, HP is bringing together elements of the branch IT equation from the likes of Citrix, Avaya, Microsoft, and Riverbed. They match these up with routers, switches and management of the appliances into a solution. Security and access control across the branches and the integrated systems are being addressed via HP TippingPoint security services. These provide granular control of application access, with the ability to block access to entire websites—or features—across the enterprise and its branches.

Worried about too much Twitter usage at those branches? The new HP Application Digital Vaccine (AppDV) service delivers specifically-designed filters to the HP TippingPoint Intrusion Prevention System (IPS), which easily control access to, or dictate usage of, non-business applications.

The branch automation approach also support a variety of network types, which opens the branch offices to be able to exploit more types of applications delivery: from terminal serving apps, to desktop virtualization, to wireless and mobile. The all-WiFi office might soon only need a single, remotely and centrally managed locked-down rack in a lights-out closet, with untethered smartphones, tablets and notebooks as the worker nodes. Neat.

When you think of it, the new optimized branch office (say 25 seats and up) should be the leader in cloud adoption, not a laggard. The HP Branch Office Networking Solution—with these market-leading technology partners—might just allow the branches to demonstrate a few productivity tricks to the rest of the enterprise.

Indeed, we might just think of many more "branch offices" as myriad nodes within and across the global enterprises, where geography becomes essentially irrelevant. Moreover, the branch office is the SMB, supported by any number and types of service providers, internal and external, public and private, SaaS and cloud.

Data centers get legs
Which brings us to the other end of the HP spectrum for today's news. The same "service providers" that must support these automated branch offices—in all their flavors and across the org chart vagaries and far-flung global locations—must also re-engineer their data centers for the new kinds of workloads, wavy demand curves, and energy- and cost-stingy operational requirements.

So HP has built a sprawling complex in Houston—the POD Works—to build an adaptable family of modular data centers—the HP Performance Optimized Datacenter (POD)—in the shape of 20- and 40-foot tractor-trailer-like containers. As we've seen from some other vendors, these mobile data centers in a box demand only that you drive the things up, lock the brake and hook up electricity, water and a high-speed network. I suppose you also drop them on the roof with a helicopter, but you get the point.

But in today's economy, the efficiency data rules the roost. The HP PODs deliver 37 percent more efficiency and cost 45 percent less than a traditional brick-and-mortar data centers, says HP.

Inside, the custom-designed container is stuffed with highly engineered racks and the cooling, optimized networks and storage, as well as the server horsepower—in this case HP ProLiant SL6500 Scalable Systems, from 1 to 1,000 nodes. While HP is targeting these at the high performance computing and service provider needs—those that are delivering high-scale and/or high transactional power—the adaptability and data center-level design may well become more the norm than the exception.

The PODs are flexible at supporting the converged infrastructure engines for energy efficiency, flexibility and serviceability, said HP. And the management is converged too, via Integrated Lights-Out Advanced (ILO 3), part of HP Insight Control.

The POD parts to be managed are essentially as many as eight servers, or up to four servers with 12 graphic processing units (GPU), in single four-rack unit enclosures. The solution further includes the HP ProLiant s6500 chassis, the HP ProLiant SL390s G7 server and the HP ProLiant SL170s G6 servers. These guts can be flexibly upped to accommodate flexible POD designs, for a wide variety and scale of data-center-level performance and applications support requirements.

Built-in energy consciousness
You may not want to paint the containers green, but you might as well. The first release features optimized energy efficiency with HP ProLiant SL Advanced Power Manager and HP Intelligent Power Discovery to improve power management, as well as power supplies designed with 94 percent greater energy efficiently, said HP.

Start saving energy with delivering more than a teraFLOP per unit of rack space to increase compute power for scientific rendering and modeling applications. Other uses may well make themselves apparent.

Have data center POD, will travel? At least the wait for a POD is more reasonable. With HP POD-Works, PODs can be assembled, tested and shipped in as little as six weeks, compared with one year or longer, to build a traditional brick-and-mortar data center, said HP.

Hey, come to think of it, for those not blocking it with the TippingPoint IPS, I wish Twitter had a few of these on those PODs on the bird strings instead of that fail whale. Twitter should also know that multiple PODs or a POD farm can support large hosting operations and web-based or compute-intensive applications, in case they want to buy Google or Facebook.

Indeed, as cloud computing grains traction, data centers may be located (and co-located) based on more than whale tails. Compliance to local laws, for business continuity and to best serve all those thousands of automated branch offices might also spur demand for flexible and efficient mobile data centers.

Converged infrastructure may have found a converged IT market, even one that spans the globe.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 4th October 2010 Copyright Interarbor Solutions © 2010

Look for a sharp uptick in cloud computing from financial services firms over the next two years, along with similar increases in cluster and grid technologies. This increased interest comes from a concern over the current data explosion and the firms' lack of scalable environments, insufficient capacity to run complex analytics, and contention for computing resources.

These findings come from a recent survey conducted by Wall Street & Technology in conjunction with Platform Computing, SAS, and the TABB Group. [Disclosure: Platform Computing is a sponsor of BriefingsDirect podcasts.]

Completed in July, the survey found noteworthy differences in the challenges being faced by both buy- and sell-side firms, with sell-side institutions more likely to report a lack of a scalable environment, insufficient capacity to run complex analytics, and contention for computing resources as significant challenges.

According to the survey, data proliferation and the need to better manage it are at the root of many of the challenges being faced by financial institutions of all sizes. Two-thirds (66 percent) of buy-side firms and more than half (56 percent) of sell-side firms are grappling with siloed data sources. The silo problem is being exacerbated by organizational constraints, including policies prohibiting data sharing and access, network bandwidth issues and input/output (I/O) bottlenecks.

Too much data
Ever-increasing data growth is also cause for concern, with firms reporting that they are dealing with too much market data. Sixty-six percent of respondents didn't think their analytics infrastructures would be able to keep pace with demand over time.

Both buy- and sell-side firms plan to increase their focus on liquidity and counterparty risk in the next 12 months. Counterparty risk management was ranked as the highest priority for the sell side (45 percent) with liquidity risk following at 43 percent. Liquidity risk and counterparty risk scored high for the buy side with 36 percent and 33 percent, respectively.

The financial institutions plan to turn to a combination of technologies including cloud computing and grid technologies. Within the next two years, 51 percent of all respondents are considering or likely to invest in cluster technology, 53 percent are considering or likely to buy grid technology, and 57 percent are considering or likely to purchase cloud technology.

The report, “The State of Business Analytics in Financial Services: Examining Current Preparedness for Future Demands,” is available for download at http://www.grid-analytics.wallstreetandtech.com. (Registration required.) Wall Street & Technology, in conjunction with the survey sponsors, will host a webinar to discuss in-depth key findings of the survey on October 7 at 12 pm ET/9 am PT. For more information, visit: http://tinyurl.com/2ulcesm.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 30th September 2010 Copyright Interarbor Solutions © 2010

Management and governance are the arbiters of success or failure when we look across a cloud services ecosystem and the full lifecycle of those applications. That's why governance is so important in the budding era of cloud computing.

As cloud-delivered services become the coin of the productivity realm, how those services are managed as they are developed, deployed, and used—across a services lifecycle—increasingly determines their true value.

And yet governance is still too often fractured, poorly extended across the development-and-deployment continuum, and often not able to satisfy the new complexity inherent in cloud models.

One key bellwether for future service environments and for defining the role and requirements for automated cloud governance is in applications development, which, due to the popularity of platform as a service (PaaS), is already largely a services ecosystem.

Here to help us explain why baked-in visibility across services creation and deployment is essential please join Jeff Papows, President and CEO of WebLayers and the author of Glitch: The Hidden Impact of Faulty Software, and John McDonald, CEO of CloudOne Corp. The discussion is moderated by BriefingsDirect's Dana Gardner, Principal Analyst at Interarbor Solutions.

Here are some excerpts:

McDonald: Cloud, from a technology perspective, is more about some very sophisticated tools that are used to virtualize the workloads and the data and move them live from one bank of servers to another, and from one whole data center to another, without the user really being aware of it. But, fundamentally, cloud computing is about getting access to a data center that's my data center on-demand.

Fundamentally, the easiest way to remember it is that cloud is to hardware as software as a service (SaaS) is to software. Basically, for CloudOne, we're providing IBM Rational Development tools both through cloud computing and SaaS.

... There's a myth that development is something that we ought to be tooling up for, like providing power to a building or water service. In reality, that’s not how it works at all.

There are people who come and go with different roles throughout the development process. The front-end business analysts play a big role in gathering requirements. Then, quite often, architects take over and design the application software or whatever we are building from those requirements. Then, the people doing the coding—developers—take over. That rolls into testing and that rolls into deployment. And, as this lifecycle moves through, these roles wax and wane.

But the traditional model of getting development tools doesn’t really work that way at all. You usually buy all of the tools that you will ever need up front, usually with a large purchase, put them on servers, and let them sit there, until the people who are going to use them log in and use them. But, while they are sitting there, taking up space and your capital expense budget, and not being used, that’s waste.

The cloud model allows you to spin up and spin down the appropriate amount of software and hardware to support the realities of the software development lifecycle. The money that you save by doing that is the reason you can open any trade magazine and the first seven pages are all going to be about cloud.

It's allowing customers of CloudOne and IBM Rational to use that money in new, creative, interesting ways to provide tools they couldn't afford before, to start pilots of different, more sophisticated technologies that they wouldn't have been able to gather the resources to do before. So, it's not only a cost-savings statement, it's also ease of use, ease of start-up, and an ability to get more for your dollar from the development process. That's a pretty cool thing all the way around.

Papows: A lot of about what’s going on in cloud computing it’s not a particularly new thing. What we used to think of was hosting or outsourcing. What’s happening now is the world is becoming more mobile, as 20 percent of our IT capacity is focused on new application development.

We have to get more creative and more distributed about the talent that contributes to those critical application development and projects. ... Design time governance is the next logical thing in that continuum, so that all of the inherent risk mitigation associated with governance and then IT contacts can be applied to application development in a hybrid model that’s both geographically and organizationally distributed.

When you try to add some linear structure and predictability to those hybrid models, the constant that can provide some order and some efficiency is not purely technology-based. It's not just the virtualization, the added virtual machine capacity, or even the middleware to include companies like WebLayers or tools like Rational. It's the process that goes along with it. One of the really important things about design-time governance is the review process.

Governance is a big part of the technology toolset that institutionalizes that review process and adds that order to what otherwise can quickly become a bit chaotic.

McDonald: The challenge of tools in the old days was that they were largely created during a time where all the people and the development project were sitting on the same floor with each other in a bunch of cubes in offices.

As the challenges of development have caused companies to look at outsourcing and off-shoring, but even more simplistically the merger of my bank and your bank. Then we have groups of developers in two different cities, or we bought a packaged application, and the best skill to help us integrate it is actually from a third-party partner which is in a completely different city or country. Those tools have shown their weaknesses, even in just getting your hands on them.

How do I punch a hole through the firewall to give you a way to check in your code problems? The cloud allows us to create a dedicated new data center that sits on the Internet and is accessible to all, wherever they are, and in whatever time zone they are working, and whatever relationship they have to my company.

That frees things up to be collaborative across company boundaries. But with that freedom comes a great challenge in unifying a process across all of those different people, and getting a collaborative engine to work across all those people.

It’s almost a requirement to keep the wheels on the bus and to have some degree of ability to manage the process in the compliance with regulations and the information about how decisions were made in such distributed ways that they are traceable and reviewable. It’s really not possible to achieve such a distributed development environment without that governance guidance.

Papows: We're dealing with some challenges for the first time that require out-of-the-box thinking. I talk about this in "Glitch." We have reached a point where there a trillion connected devices on the Internet as the February of this year. There are a billion embedded transistors for every human being on the planet.

You’ve read about or heard about or experienced first hand the disasters that can happen in production environments, where you have some market-facing application, where service is lost, where there is even brand damage or economic consequences.

... Everybody intellectually buys into governance, but nobody individually wants to be governed. Unless you automate it, unless you provide the right stack of tools and codify the best practices and libraries that can be reusable, it simply won’t happen. People are people, and without the automation to make it natural, unnatural things get applied some percentage of the time, and governance can’t work that way.

McDonald: Developers view themselves quite often as artists. They may not articulate it that way, but they often see themselves as artists and their palette is code.

As such, they immediately rankle at any notion that, as artists, they should be governed. Yet, as we’ve already established, that guidance for them around the processes, methods, regulations, and so on is absolutely critical for success, really in any size organization, but beyond the pale in a distributed development environment. So, how do you deal with that issue?

Well, you embed it into their entire environment from the very first stage. In most companies, this is trying to decide what projects we should undertake, which in a lot of companies is a mainly over-glorified email argument.

Governance has to be embedded at every step of that way, gently nudging, and sometimes shuttling all these players back into the right line, when it comes to ensuring that the result of their effort is compliant with whatever it is that I needed to be compliant to.

In short, you’ve got to make it be a part of and embedded into every stage of the development process, so that it largely disappears, and becomes something that becomes such a natural extension of the tool so that you don’t have anyone along the way realizing that they are being governed

WebLayers was the very first partner that we reached out to say, "Can you go down this journey with us together, as we begin developing these workbenches, these integrated toolsets, and delivering them through the cloud on-demand?" We already know and see that embedding governance in every layer is something we have to be able to do out of the gate.

The team at WebLayers was phenomenal in responding to that request and we were able to take several based instances of various Rational tools, embed into them WebLayers technology, and based on how the cloud works, archive those, put them up in our library to be able to be pulled down off-the-shelf, cloned, and made an instance of for the various customers that we have coming to our pipeline who want to experience this technology in what we are doing.

... The avoidance of things going badly is unfortunately very difficult to measure. That is something that everyone who attempts to do a cloud-delivered development environment and does the right thing by embedding in it the right governance guidance should know coming out of the gate. The best thing that’s going to happen is you are not going to have a catastrophe.

That said, one of the neat things about having a common workbench, and having the kinds of reporting in metrics that it can measure, meaning the IBM Jazz, along with the WebLayers technology, is that I can get a very detailed view of what’s going on in my software factory at every turn of the crank and where things are coming off the rails a little bit.

Papows: There's an age-old expression that you're so close to the forest you can't see the trees. Well, I think in the IT business we’re sometime so deeply embedded in the bark we can't see anything.

We've been developing, expanding, deploying, and reinventing on a massive scale so rapidly for the last 30 years that we've reached a breaking point where, as I said earlier, between the complexity curves, between the lack of elasticity and human capital, between the explosion and the amount of mobile computing devices and their propensity for accessing all of this back-end infrastructure and applications, where something fundamentally has to change. It's a problem on a scale that can't be overwhelmed by simply throwing more bodies at it.

Secondly, in the current economy, very few CIOs have elastic budgets. We have to do as an industry what we've done from the very beginning, which is to automate, innovate, and find creative solutions to combat the convergence of all of those digital elements to what would otherwise be a perfect storm.

So SaaS, cloud computing, automated governance, forms of artificial intelligence, Rational tooling, consistent workbench methodologies, all of these things are the instruments of getting ourselves out of the corner that we have otherwise painted ourselves in.

I don't want to seem like an alarmist or try to paint too big a storm cloud on the horizon, but this is simply not something that's going to happen or be resolved in a business-as-usual usual fashion.

That, in fact, is where companies like CloudOne are able to expand and leap productivity equations for companies in certain segments of the market. That's where automation, whether it's Rational, WebLayers, or another piece of technology, has got to be part of the recipe of getting off this limb before we saw it off behind us.

McDonald: If you have any inclination at all to see what it is that Jeff and I are telling you, give it a whirl, because it's very simple.

That's one of the coolest things of all about this whole model, in my mind. There there is simply no barrier for anyone to give this a try. In the old model, if you wanted to give the technology a try, you had better start with your calculator. And you had better get the names and addresses of your board of directors, because you're going there eventually to get the capital approval and so on to even get a pilot project started in many cases with some of these very sophisticated tools.

This is just not the case anymore. With the CloudOne environment you can sign on this afternoon with a web-based form to get a instance of let's say, Team Concert set up for you with WebLayers technology embedded in it, in about 20 minutes from when you push "submit," and it's absolutely free for the first model. From there, you grow only as you need them, user-by-user. It's really quite simple to give this concept a try and it's really very easy.

Listen to the podcast. Find it on iTunes/iPod. Read a transcript or download a copy.

By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research Posted: 29th September 2010 Copyright Bloor Research © 2010

If ERP is all about managing and controlling resources, Sales and Operations Planning is the brains behind the process and can be the difference between profit and loss.

 Andrew Kinder, Solutions Director at Infor told me, “As Europe moves out of recession, many business leaders are reflecting on the lessons they have learnt. Thankfully the phrase: ‘if only we had known how the credit crunch was going to hit us’ has been joined by ‘what can we do to make sure this never happens again?’. Businesses are now examining the systems and processes that offer not just growth but protection and resilience.”

At the top of this list of options is S&OP. In a recent Supply Chain Management survey for Infor conducted by AMR Research, 88% of respondents said they are already using or planning to deploy an S&OP solution in the next 12 months. The report also found that the number one area of S&OP businesses want more support in, is in its ability to provide “what-if” simulation capability—such simulation is a critical tool in dealing with the volatility present in today’s businesses. But has S&OP changed with the times and is it applicable in today’s global agile world? Does it apply to both large and small organisations? These and a number of other questions are key to success in today’s collaborative world.

So what is it?
S&OP is a business planning process that aligns the traditional demand/supply view of the world, with the financial and business goals of the organization. S&OP is a response to the accusation that the operational plan and the business plan are often seriously mis-aligned.

Supporting this cross-functional business process is information. And that means integrating a number of different pieces of planning data around sales, production, inventory, finance and HR to provide the executive with focus, alignment and synchronisation about the company. Plan frequency and planning horizon depend on the specifics of the industry. A properly implemented S&OP process routinely reviews customer demand and supply resources and “re-plans” quantitatively across an agreed rolling horizon. The re-planning process focuses on changes from the previously agreed sales and operations plan.

Figure 1: Putting S&OP into Context (Source: Hitachi Consulting[1])

As John Dougherty[2] said, “Its ultimate goal is to always keep the detailed sales, manufacturing, purchasing and capacity planning systems in synchronization with the latest high level plans of management (the business plan).” Or you might prefer Chuck Poirier’s view[3], “it’s about balancing supply and demand in a way that overcomes the deficiencies of weak forecasting and results in more optimum performance—from the initial suppliers to the satisfied customers.” Kinder explained that there are many different definitions that have evolved over time. At Infor, they defined S&OP for the purposes of driving their new product design as “enabling decision makers to achieve consensus on a single operating plan that profitably matches supply and demand.”

The Association for Operations Management (APICS) defines S&OP as the "function of setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned levels of sales (sales plan and/or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc., as expressed in the overall business plan. One of its primary purposes is to establish production rates that will achieve management’s objective of maintaining, raising, or lowering inventories or backlogs, while usually attempting to keep the workforce relatively stable. It must extend through a planning horizon sufficient to plan the labor, equipment, facilities, material, and finances required to accomplish the production plan. As this plan affects many company functions, it is normally prepared with information from marketing, manufacturing, engineering, finance, materials, etc."

What is involved?
The S&OP process brings together many areas of the business to determine anticipated demand volume and how the company plans to supply product to meet that demand and best serve the customer within the financial goals of the company. The S&OP processes is characterized by:

• A top-down and bottoms up approach, linking the company’s business plan with the current demand and supply plans
• A cross-functional, collaborative process that focuses on improving business performance
• A structured, formal set of consensus business processes based on a set time period, usually a month

Figure 2: The Sales and Operational Planning Process (Source: Chuck Poirier, CSC)

The process starts with gathering the projected demand information and compiling it in a common format. From this information, a demand forecast is generated, typically beginning with the sales forecast originally used for planning purposes, but augmented with inputs from key customers and amended by knowledge of current operating and market conditions. The next step is to match the demand forecast against any known or anticipated manufacturing and logistics constraints. Any issues identified are then resolved; this often includes looking at alternative strategies. The final step is to monitor progress versus the altered demand and supply plans.

So what we have is different functions or business processes operating with different buckets of information granularity. Information flows both bottom up (sales, customer, VMI and co-managed programs, POS data, supply chain capacities) and top down (budget, business plan, category or customer plans, market share objectives, NPI plans). It is the reconciliation of these information flows to provide actionable planning that is the key to successful S&OP. The planning component and iterative feedback loops require common business language.

Figure 3: Sales and Operations Planning Benefits (Source: Hitachi Consulting0

So what had changed?
Hitachi Consulting [4] sees the following as the key changes that have occurred that affect S&OP:

• Globalization: Diverse and distant supply base for components and finished goods assembly increases complexity and supply lead times. There is a need for accurate, longer forecasting horizons and reduced near term flexibility.
• Contract Manufacturing (CM): While the approaches can vary from full turn key to consignment CM, the common requirement is cross organizational communication for lead time and supply commitment. This means there is a need for better planning to collaborate with CMs and longer forecast (5–9 months) horizons.
• Technology and Market Evolution: Changing consumer tastes and evolving technology mean there is a need for integrated, holistic decision-making to plan, adjust, and adapt while maintaining profitable operations.
• S&OP Supporting Technologies: Workflows can now model both decision making and optimization processes while integrating with disparate functional systems, breaking the demand planning, supply planning, BI technology silos. Therefore there is a requirement for the ability to reduce organizational effort and time needed to develop robust S&OP processes.
• Customer and Channel Focus: Conflict among direct, indirect and key customer channels means there is a need for coordinated channel and profitability management.
• Mergers: 43% of companies note M&A activity has resulted in need to connect merged operations and manage business plan impacts. S&OP therefore needs to support established, robust planning to assist in assimilation.
• Changing Operating Constraints and Costs: new product introductions, changing supply base, new customers, and fluctuating supply chain costs, all mean that there is a need for adaptive S&OP processes.
• Trial and Error: 15+ years of siloed S&OP attempts, Demand Planning and APS implementations, and ERP initiatives have led to “silo optimized” plans or led to domination by one functional group. Enterprise data is more available but not intelligently used for planning. So there is an increased desire for decision making transparency and cohesive planning.

What is happening next?
What we have is an evolution of what we expect from S&OP. Initially it was simply matching demand and supply; balancing supply with the best expectation of demand. This is the coordination of an inventory, production and procurement plan to meet demand, balancing supply with demand at the stock keeping unit (SKU) level. This remains an essential component of any planning process, but lacks a financial view of the plan. Does the plan meet with the financial goals of the business in terms of matching forecast to sales revenue expectations? Is the supply plan affordable in a way that delivers the expected margins of the business?

The next evolution was to allow the user to manipulate both demand and supply. It also included the ability to incorporate events such as new product introduction and product changes. This evolution is sometimes called scenario management. Kinder sees that this is where most organisations are, or strive to be, in their S&OP maturity curve. Planning is more strategic—12–24 months out—and operational plans are expressed in financial terms: revenue, costs and margins.

The latest evolution is to make the planning process even more agile and flexible as well as robust. Kinder explained that practitioners at this level sometimes prefer to use the term “Integrated Business Planning”—elevating the process to a higher level than “sales and operations”. The goal is an executive planning process that seeks to define the total strategic plan for the business and completely align strategy with execution. Kinder gave this example, “For example, a business may incorporate product portfolio planning into their S&OP processes, scrutinising when products are retired and when new ones are brought on-stream. Other considerations will include pricing options, channels to market, expansion and consolidation plans, mergers and acquisitions, and network design changes.”

Who is involved?
As S&OP is a major part of a manufacturing planning process, then, as you would expect, all the major ERP packages would provide modules in their ERP solution that support S&OP. Yet, this is not always the case and an Aberdeen survey revealed 85% of organizations resorting to spreadsheets to support their S&OP processes. However, the usual players such as SAP, Oracle, Sage, Infor, Microsoft Dynamics, Epicor, IFS claim to provide solutions.

The specialist supply chain management solutions such as I2 Technologies, ICON-SCM, Kinaxis, Logility and TXT e-solutions, similarly provide support but their solutions are very supply chain focused, as one would expect, and don’t support the complete picture that many organisations now need.

IBM position Cognos as a solution for S&OP. Cognos is well-known and well-used business intelligence product and therefore to use for S&OP one would need to configure the product to do the job. However IBM provide for their customers—free of charge—a set of frameworks called the IBM Cognos Performance Blueprints which provide a set of preconfigured solutions. However, the BI family of products do not provide detailed demand planning or constrained supply planning that is an important aspect of simulation within the S&OP process.

There are also a number of specialist niche players such as:

• Demand Solutions S&OP is fully integrated with Demand Solutions Forecast Management and Demand Solutions Requirements Planning and imports data through the Forecast Management database. The user-defined Import/Export utility within Demand Solutions products makes it easy to interface with other business systems.
• JDA’s Executive S&OP Workbench has been developed to take account of the Integrated Business Planning concepts I have described earlier. It utilizes key-metric graphs and charts to visually present the aggregated state of your business for informed decision making.
• Steelwedge’s Sales Planning & Performance Management (SPPM) suite leverages four modules (executive, sales, operations and collaborative) and S&OP platform that incorporate best-practice S&OP collaborative technologies with business workflows and performance management capabilities that help companies take enterprise-wide top-down (and bottom-up, middle-out) control over the revenue planning process.

Conclusions
So what does such a successful implementation of S&OP actually deliver to the business? According to research from Aberdeen Group, S&OP leaders report healthier financial results in terms of customer service levels, forecast accuracy, profitability and cash-to-cash cycle times—key measures for any business.

Simon Pollard, VP Manufacturing Operations and Execution for SAP EMEA, in a recent discussion with me gave me this scenario, “Most companies do S&OP on a weekly or monthly basis. Once the plan is done the ‘Real World’ takes over, destabilising the plan. If you join plant floors to ERP you can monitor those operations up from the shop floor to business goals. However the problem now is that currently the information at the lower levels can only be picked up quarterly and only key stakeholders are involved.”

In a recently published IDC report[5], it states, “Inaccurate forecasts can make planning and allocation of resources and servicing new projects very challenging and it can make adequately servicing customers difficult if orders come in all at once. With strained economic conditions in 2009 and 2010, planning was harder as previous year’s revenues provide little indication of future sales.” IDC concludes by recommending discrete manufacturers to adopt S&OP which synchronizes the demand forecasting process with production and customer fulfilment planning.

Kinder feels that, “S&OP has become an essential business process in de-risking the supply chain. The reality is that in any operational planning process there are multiple ways to meet customer demand. But which is the best plan? Best for customers? Best for the business? S&OP—and the modern technologies that support it—deliver confidence that a business has explored the alternatives and hit upon that elusive best plan.”

So it would seem that although S&OP is such a key element in manufacturing today, it means different things to different people depending on where they are on the evolutionary road. But if you want to move to the nirvana of Integrated Business Planning, then you are looking at joining on one side the shop floor data from Manufacturing Execution Systems (MES) with data from your supply chain partners (certainly for your Tier 1’s if not your Tier 2’s) with your HR data, Capacity data and Sales data to produce a plan which may now need to be refined more often than monthly. So we are talking about integration and collaboration not only at a technical level but also at a business process level.

[1] Trends in Sales and Operations Planning, Hitachi Consulting

[2] Getting Started With Sales & Operations Planning, John R. Dougherty

[3] Sales and Operations Planning – A Key Element of Supply Chain Success, Chuck Poirier, CSC

[4] Hitachi Consulting, AMR Research 2005 S&OP Study, Aberdeen Group 2006 Study

[5] Beating complexity, achieving operational excellence, IDC Manufacturing Insight, Pierfrancesco Manenti and Megan Dahlgren, July 2010

By: Rob Bamforth, Principal Analyst, Quocirca Posted: 27th September 2010 Copyright Quocirca © 2010

Technology innovation is often hard to demonstrate to those in senior decision-making roles in most organisations, and generally for very straightforward reasons. Many vendors pitch their products or services as being full of benefits, but often these are simply features dressed up with a few marketing buzzwords ending in ‘ability’. The answer to the question ‘what will it do?’ is generally ‘anything’ as those flogging the idea, either from outside or with the help of internal IT champions typically ignore the unspoken part of the question ‘...for me, our company, against the competition, etc’.

It is an issue of putting the innovation into specific context.

In October 1993 the then Anderson Consulting created a dramatic way of doing this for their retail prospects in Europe, through a ‘blue sky thinking’ experience called ‘Smart Store’, built at its office in Windsor, which aimed to transport senior retail executives into the distant future of 2010. The multi-room showcased the impact of technology in a context that would grab and sometimes shock retail executives into action. Many of the concepts, such as self scanning, logistics tagging and tracking, are now pretty much the norm, so it must have been a successful, if rather expensive investment.

While Smart Store showcased other company’s technology innovation to help Anderson Consulting sell services, other centres of innovation and executive briefing centres have been built by technology companies keen to show off their thought leadership. Both IBM and Sun Microsystems developed these sorts of facilities and have tried as hard as possible to justify the generally hidden back end ‘big tin’ with applications and services set in the context of real business.

Although the theatrics rarely meet the impressive standards of Anderson Consulting, some effort still goes into filling the demonstrations with props. It might seem trivial, but there is merit in demonstrating real world examples and doing some sort of scene setting. After all, how many business leaders or managers seeking solutions to specific business problems want to be faced simply by banks of (expensive) IBM and Sun servers?

From a recent visit to Motorola’s innovation centre in Basingstoke it is clear that money had not been frittered away on superfluous theatrics. The markets being targeted and applications shown address down-to-earth everyday business needs, not blue sky concepts. The main room is filled with many diverse communications devices from simple two way radios to smart consoles for forklift trucks; all great examples of Motorola’s innovation and technical prowess, but how do they connect to business?

Rather than looking for props or theatrics, the clues come from Motorola’s recent changes in corporate structure, in particular the decision to spin off the phones division earlier in 2010 and the acquisition of Symbol in 2006.

As the spinoff of the consumer oriented mobile phone part of the company concludes in 2011, what remains is business and public sector organisation focused, covering wireless LAN, drop in cellular networks and mobile devices. Rather than having the generic devices that might be picked up as consumer friendly phones by the average office worker, the new Motorola has large ranges of more specialised devices, some offering voice communications, some mobile data, others converging both. Why? It allows Motorola to provide different devices to target the specific working needs of different groups of workers, with tools that are sometimes rugged, often just robust, but always designed and dedicated to do a particular job—hence the reason there are so many in the innovation centre.

That is all well and good and, to be honest, what you might expect from a large technically driven company with over seventy years of innovation, but while the hiving off is bringing much needed focus, it is the acquisition and subsequent slow absorption of Symbol that turns that focus into revenue. Symbol not only brought smart small IT devices to the radio company, it also introduced an ecosystem of applications, application developers and channel partners.

This has become the driver for much activity and is where the business innovation is happening; developing a mobile application to meet the business process need of an individual worker, blending small robust hardware with the right interface options to fit their role and adding the spice of well engineered radio technology.

If Motorola can stay partner friendly and avoid the arrogance that so often surrounds long term industry players who think they can do it all themselves, this sounds like a recipe for success for all parties involved.

Mobile applications that address business needs rather than massage egos or satisfy gadget lovers will appeal to the business decision makers. That should put Motorola’s mobile innovation into context, and while its innovation centre is not overly theatrical in its presentation, this is not an issue for the practical business needs being addressed.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 24th September 2010 Copyright Interarbor Solutions © 2010

An often-overlooked aspect of data center transformation (DCT) is what to do with the older assets as newer systems come online. Much of the retiring IT equipment can possess sensitive data, may be sources of significant economic return, or at least need to be recycled according to various regulations.

Improperly disposing of data and other IT assets can cause embarrassing security breaches, increase costs, and pose the risk of regulatory penalties. Indeed, many IT organizations are largely unaware of the hazards and risks of selling older systems into auction sites, secondary markets or via untested suppliers.

Compliance and recycling issues, as well as data security concerns and proper software disposition, should therefore be top of mind early in the DCT process, not as an after-thought.

In a recent podcast discussion, I tapped two HP executives on how to best manages productive transitions of data center assets—from security and environmental impact, to recycling and resale, and even to rental of transitional systems during a managed upgrade process. I spoke with Helen Tang, Worldwide Data Center Transformation Lead for HP Enterprise Business, and Jim O'Grady, Director of Global Life Cycle Asset Management Services with HP Financial Services.

Here are some excerpts:

Helen Tang: Today there are the new things coming about that everybody is really excited about, such as virtualization, and private cloud. ... This time around, enterprises don’t want to repeat past mistakes, in terms of buying just piles of stuff that are disconnected. Instead, they want a bigger strategy that is able to modernize their assets and tie into a strategic growth enablement asset for the entire business.

Yet throughout the entire DCT process, there's a lot to think about when you look at existing hardware and software assets that are probably aged, and won’t really meet today’s demands for supporting modern applications.

How to dispose of those assets? Most people don’t really think about it nor understand all of the risks involved. ... Even experienced IT professionals, who have been in the business for maybe 10, 20 years, don’t quite have the skills and understanding to grasp all of this.

We're starting to see this  sort of IT hybrid role called the IT controller, that typically reports to the CIO, but also dot-lines into the CFO, so that the two organizations can work together from the very beginning of a data center project to understand how best to optimize both the technology, as well as the financial aspects.

Jim O'Grady: We see that a lot of companies try to manage this themselves, and they don’t have the internal expertise to do it. Often, it’s done in a very disconnected way in the company. Because it’s disconnected and done in many different ways, it leads to more risks than people think.

You are putting your company’s brand at stake, through improper environmental recycling compliance, or exposing your clients, customers, or patients’ data to a security breach. This is definitely one of those areas you don’t want to read about in a newspaper to figure out what went wrong.

One of the most common areas where our clients are caught unaware of is the complexity of the data security, and the e-waste legislation requirements that are out there, and especially the pace of its change.

We suggest that they have a well thought-out plan for destroying or clearing data prior to the asset decommissioning and/or prior to the asset leaving the physical premise of the site. Use your outsource partner, if you have one, as a final validation for data security. So, do it on site, as well as do it off site.

Have a well-established plan and budget up-front, one that’s sponsored by a corporate officer, to handle all of the end-of-use assets well before the end-of-use period comes.

E-waste legislation resides at the state, local, national, and regional levels, and they all differ. There's some conflict, but some are in line with each other. So it's very difficult to understand what your legislative requirements are and how to comply. Your best bet is to deal with a highest standard and pick someone that knows and has experience in meeting these legislative requirements.

There are tremendous amounts of global complexities that customers are trying to overcome, especially when they try to do data center consolidation and transformation, throughout their enterprise across different geographies and country borders.

You're talking about a variety of regulatory practices and directives, especially in the EU, that are emerging and restrict how you move used and non-working product across borders. There are a variety of different data-security practices and environmental waste laws that you need to be aware of.

A lot of our clients choose to outsource this work to a partner. But they need to keep in mind that they are sharing risk with whomever they partner with. So they have to be very cautious and be extremely picky about who they select as a partner.

This may sound a bit self-serving, but I always suggest for enterprises to resist smaller local vendors. ... If you don’t kick the tires with your partner and you don’t find out that the partner consists of a man, a dog, and a pickup truck, you just may have a hard time defending yourself as to why you selected that partner.

Also, develop a very strong vendor audit qualification and ongoing inspection process. Visit that vendor prior to the selection and know where your waste stream is going to end up. Whatever they do with the waste stream, it’s your waste stream. You are a part of the chain of custody, so you are responsible for what happens to that waste stream, no matter what that vendor does with it.

You need to create rigorous documented end-to-end controls and audit processes to provide audit trails for any future legal issues. And finally, select a partner with a brand name and reputation for trust and integrity. Essentially, share the risk.

Enterprises should well consider how they retire and recover value for their entire end-of-use IT equipment, whether it's a PDA or supercomputer, HP or non-HP product. Most data center transformations and consolidations typically end with a lot of excess or end-of-use product.

We can help educate customers on the hidden risk and dispositioning that end-of-use equipment into the secondary market. This is a strength of HP Financial Services (HPFS).

Typically, what we find with companies trying to recover value for product is that they give it to their facilities guys or the local business units. These guys love to put it on eBay and try to advertise for the best price. But, that’s not always the best way to recover the best value for your data center equipment.

Your best bet is to work with a disposition provider that has a very, very strong re-marketing reach into the global markets, and especially a strong demonstrative recovery process.

We're now seeing it migrate into the procurement arm. These guys typically put it out for bid and select the highest bid from a lot of the open market brokers. A better strategy to recover value, but not the best.

Your best bet is to work with a disposition provider that has a very, very strong re-marketing reach into the global markets, and especially a strong demonstrative recovery process.

From a financial asset ownership model, HPFS has the ability to come in and work with a client, understand their asset management strategy, and help them to personalize the financial asset ownership model that makes sense for them.

For example, if you look at a leasing organization, when you lease a product, it's going to come back. A key strength in terms of managing your residual is to recover the value for the product as it comes back, and we do that on a worldwide basis.

We have the ability to reach emerging markets or find the market of highest recovery to be able to recover the value for that product. As we work with clients and they give us their equipment to remarket on their behalf, we bring it into the same process.

When you think about it, an asset recovery program is really the same thing as a lease return. It's really a lot of reverse logistics—bring it into a technical center, where it's audited, the data is wiped, the product is tested, there’s some level of refurbishment done, especially if we can enhance the market value. Then, we bring it into our global markets to recover value for that product.

We have skilled product traders within our product families who know how to hold product, and wait for the right time to release it into the secondary market. If you take a lot of product and sell it in one day, you increase the supply, and all of the recovery rates for the brokers drop overnight. So, you have to be pretty smart. You have to know when to release product in small lot sizes to maximize that recovery value for the client.

We're seeing a big uptake in the need to support legacy product, especially in DCT. We're able to provide highly customized pre-owned authentic legacy HP product solutions, sometimes going back 20 years or more. The need for temporary equipment just scaling out legacy data center hardware platform capacity that’s legacy locked is an increasing need that we see from our clients.

Clients also need to ensure their product is legally licensed and they do not encounter intellectual property right infringements. Lastly, they want to trust that the vendor has the right technical skills to deal with the legacy configuration and compatibility issues.

Our short-term rental program covers new or legacy products. Again, many customers need access to temporary product to prove out some concepts, or just to test some software application on compatibility issues. Or, if you're in the midst of a transformation, you may need access to temporary swing gear to enable the move.

We also help clients understand strategies to recover the best value for decommissioned assets, as well as how to evaluate and how to put in place a good data-security plan.

We help them understand whether data security should be done on-site versus off-site, or is it worth the cost to do it on-site and off-site. We also help them understand the complexities of data wiping enterprise product, versus just the plain PC.

The one thing we help customers understand, and it’s the real hidden complexity is how to set up an effective reverse logistic strategy.

Most of the local vendors and providers out there are skilled in wiping data for PCs, but when you get into enterprise products, it can get really complex. You need to make sure that you understand those complexities, so you can secure the data properly.

Lastly, the one thing we help customers understand, and it’s the real hidden complexity, is how to set up an effective reverse logistic strategy, especially on a global basis. How do you get the timing down for all the products coming back on a return basis?

Tang: We reach out to our customers in various interactions to talk them through the whole process from beginning to end.

One of the great starting points we recommend is something we called the Data Center Transformation Experience Workshop, where we actually bring together your financial side, your operations people, and your CIOs, so all the key stakeholders in the same room, and walk through these common issues that you may or may not have thought about to begin with. You can walk out of that room with consensus, with a shared vision, as well as a roadmap that’s customized for your success.

Listen to the podcast. Find it on iTunes/iPod. Read a full transcript or download a copy.

By: Dana Gardner, Principal Analyst, Interarbor Solutions Posted: 23rd September 2010 Copyright Interarbor Solutions © 2010

IBM is snapping up yet another business analytics player. After purchasing OpenPages last week, Big Blue is now laying down $1.7 billion in an all-cash deal to acquire Netezza.

Netezza provides high-performance analytics in a data warehousing appliance that claims to handle complex analytic queries 10 to 100 times faster than traditional systems. Netezza appliances puts analytics into the hands of business users in sales, marketing, product development, human resources and other departments that need to actionable insights to drive decision-making.

With its latest business analytics acquisition, Steve Mills, senior vice president and group executive of IBM Software and Systems, says the company is bringing analytics to the masses.

“We continue to evolve our capabilities for systems integration, bringing together optimized hardware and software, in response to increasing demand for technology that delivers true business value,” Mills says. “Netezza is a perfect example of this approach.”

Big Blue’s long haul
Netezza fits in with IBM’s maturing business analytics strategy. Big Blue has long put an emphasis on data analysis and business intelligence (BI) as key drivers of IT infrastructure needs. The company has demonstrated a clear understanding that data analysis and BI can also be easily applied to business issues.

IBM’s relationship database, DB2, also fits into the big picture. Over the years, IBM has built a strong family of database-driven products around DB2. Essentially, IBM has successfully worked to tie the data equation together with the needs of enterprises and the strength of their IT departments.

While DB2 reaches into the past and supports the data needs of legacy and distributed systems and applications, new architectures around in-memory and optimized platforms for persistence-driven tasks are in vogue. While Neteeza's strengths are in analytics, this architecture has other uses, ones we'll be seeing more of.

Fast-forward to the Netezza acquisition. The $1.7 billion grab shows that IBM is well aware that big data sets don’t lend themselves to traditional architecture for crunching data. IBM, along with its competitors, have been developing or acquiring new architectures that focus more on in-memory solutions.

Rather than moving the entire database or large caches around on disk or tape, then, new architectures have emerged where the data and logic reside closer together—and the data is accessed from high-performing persistence.

For example, with Netezza appliances, NYSE Euronext has slashed the time it takes to load and extract massive amounts of historical data so it can run analytic queries more securely and efficiently, while reducing run times from hours to seconds. Virgin Media, a UK provider of TV, broadband, phone and mobile services with millions of subscribers, uses Netezza across its product marketing, revenue assurance and credit services departments to proactively plan, forecast, and respond to the effect of pricing and tariff changes enabling them to quickly respond with competitive offerings.

Business analytics consolidation
With the Netezza acquisition, the business analytics market is seeing consolidation as major players begin preparing to tap into a growing big data opportunity. Much the same as the BI market saw consolidation a few years ago—IBM acquired Cognos, Oracle bought Hyperion, and SAP snapped up Business Objects—vendors are now seeing big data analytics as an area that should be embedded into the total infrastructure of solutions. That requires a different architecture.

The competition is heating up. EMC purchased Greenplum, an enabler of big data clouds and self-service analytics, in July. Both companies are planning to sell the hardware and software together in appliances. The vendors tune and optimize the hardware and software to offer the benefits of big data crunching, taking advantage of in memory architecture and high performance hardware.

Expect to see more consolidation, although there aren’t too many players left in the Netezza space. Acquisition candidates include data management and analysis software company Aster Data Systems and Teradata with its enterprise analytics technologies, among others. [Disclosure: Aster Data is a sponsor of BriefingsDirect podcasts.]

Meanwhile, Oracle this week at OpenWorld is pushing against the market with its new Exadata product. The battle is on. My take is that these purchases are for more than the engines that drive analytics—they are for the engines that drive SaaS, cloud, mobile, web and what we might call the more modern work loads ... data intensive, high-scaling, fast-changing and services-oriented.

BriefingsDirect contributor Jennifer LeClaire provided editorial assistance and research on this post. She can be reached at http://www.linkedin.com/in/jleclaire and http://www.jenniferleclaire.com.

By: Philip Howard, Research Director - Data Management, Bloor Research Posted: 23rd September 2010 Copyright Bloor Research © 2010

My immediate reaction when I hear any important news is to immediately write a relevant article. In this case, circumstances meant that I have been unable to. In this case, I am glad that I didn’t, firstly because I have had time to reflect on the implications of this acquisition and, secondly, in light of Bob Evans’ piece in Information Week (thanks for the reference Bob) suggesting that Oracle may yet come in with a higher bid. This article is therefore written on the assumption that that doesn’t happen.

My immediate reaction on hearing the news was that IBM has negotiated a much better deal than Microsoft did when it bought DATAllegro. $1.78bn compared to $275m but around 100 times as many customers and a system that runs on IBM platforms (x series) as opposed to one that didn’t run on either Windows or SQL Server. Anyway, that’s an aside.

Most commentators will write about how Netezza TwinFin fits into IBM’s workload optimised systems strategy but I want to drill a little deeper and discuss the synergies, opportunities and issues that this acquisition raises, especially those that may be less obvious (i.e. I am not going to discuss synergies between warehousing and data integration or data quality, these being obvious).

The biggest issue will be strategic: positioning Netezza versus the IBM Smart Analytics System. This shouldn’t be too difficult. I imagine that the latter will be positioned as the company’s general-purpose enterprise data warehouse and the former for specific analytic functions, data marts and edge environments.

The other two issues will arise around Netezza’s lesser known capabilities: Netezza Mantra on the one hand, and its data mining/advanced analytics arm that it gained when it acquired NuTech technologies on the other. The expertise in the latter group will no doubt be used to augment what IBM already has in this area, with respect both to its own capabilities and those of SPSS, so I don’t see this as much of a problem either.

However, Mantra may be more tricky as it is a direct competitor to Guardium, which IBM acquired earlier this year. While Guardium is a much bigger beast within the database activity monitoring (DAM) world, Netezza has a rather different spin on this particular market: notably that simply monitoring activity is one thing but that what you really want to do is to be able to perform predictive analytics against monitored data so that you can recognise patterns of potential threatening behaviour. This, of course, requires storing historic data and then performing analytics against that information, which is precisely why Mantra runs on the Netezza platform. The market has not yet really woken up to this possibility yet but I believe that it should do so, and will do so in due course. Ultimately, what this may mean is that the front capabilities of Guardium and Mantra may get merged with both running on TwinFin at the back-end.

Which brings me onto the first opportunity that IBM/Netezza brings, which is with respect to Tivoli SIEM (security information and event management). I have been arguing for some time that SIEM products are largely built on antiquated architectures: they are processing large volumes of events but don’t generally use event processing to recognise patterns of events in real-time, and they typically store historic data for forensic purposes in file systems or merchant databases, which are not best suited to doing serious fraud analysis. Again, this is partly because relatively few companies are doing that sort of analysis but, similarly, I expect it to become a growing requirement. So, there is an opportunity for Tivoli to embed Netezza as its database (as opposed to the file system it currently uses) at the back-end and, as an aside to the subject of this article, either InfoSphere Streams or WebSphere Business Events (previously AptSoft) at the front-end.

There is also direct synergy between Netezza and these event processing products in capital markets (especially hedge funds, which like to be able to combine analysis of historic data with current stock tick information) and other environments, including the government sector.

The one other significant advantage that Netezza brings to the table is Netezza Spatial. Historically, this market has been dominated by Oracle, but Netezza offers a real competitor to Oracle in this area and, as this is an area that IBM has never been particularly strong in, this adds significantly to its portfolio. Which brings me onto Oracle itself.

In an article such as this I usually comment on winners and losers but in the case of the latter I will confine myself to Oracle. I see this acquisition as a big threat to Oracle, which is why Bob Evans’ suggestion of a competitive bid is plausible. Assuming the IBM acquisition goes ahead, this is going to be very difficult to compete with: Netezza already takes business away from Oracle and with IBM’s branding behind it can take significantly more. Note that, just as there is an almost fully automated facility for migrating from Oracle to DB2, there is also a similar capability offered by Netezza. The only possible fly in the ointment will be if the Netezza sales team concentrate too much on selling into the IBM user base as opposed to competitive and Greenfield implementations: IBM will need to get its incentive structure right.

Finally, I should comment on Netezza’s partners. Most of these should not be affected by this and, indeed, many can expect extended sales opportunities. However, Composite Software is a special case. Composite Software has a solution for data virtualisation (query federation) that has been specifically developed for Netezza appliances (it takes advantage of specific Netezza features). I rate this company as the leading vendor in its field and while IBM has its own technology in this area it has languished somewhat compared to Composite over the last few years. If I was Composite I would extend its Netezza specific offering to cover DB2 (which it already supports) and I think it could do very well out of this acquisition and it offers a real opportunity for the company. Indeed, I can see it becoming an IBM acquisition target in its own right.

Of course, all of this discussion will be blown out of the water if Bob Evans is right. Do I think he is? I have no idea: who can fathom the mind of a man who wants to race the America’s Cup using wing-sailed catamarans? Assuming Bob is wrong there is a lot going for this acquisition and that’s precisely why he might just be right.