Reality Check | Ephraim Schwartz | December 2007

MORE ENTRIES

December 2007

December 21, 2007 | Comments: (0)

The ins and outs of outsourcing and offshoring

If we look back in order to understand what lies ahead, all signposts point to the continued expansion of outsourcing and its hand-in-glove partner, offshoring. Not only will outsourcing and offshoring continue to expand in the enterprise, they'll find their way into midsized and even small companies as well. Outsourcing, in all of its forms, will absorb more and more tactical operational IT services.

But that's not all: As IT and business align more closely, over the next several years outsourcing service providers will also be chosen for their ability to become strategic business partners.

With all the individual moves and debates over outsourcing and offshoring, it's easy to lose sight of the context. As the year draws to a close, I decided to bring together the best of Reality Check's coverage of outsourcing and offshoring. So here goes.

My Oct. 9 Reality Check, "Globalization takes on a new look," and my May 1 entry, "The truth about China," both explained the key shift now under way from a merely operational focus to a strategic one.

In the October entry, I said that the major Indian outsourcing companies were acquiring U.S.-based companies in order to "get deeper domain or industry expertise" — in other words, industry-specific business smarts.

On May 1, I pointed out that "the U.S. economy has survived at least three waves of globalization … we're now experiencing a fourth wave, with IT services and app development moving to India and China."

Application development and business process transformation, certainly two expanding strategic IT functions, will also continue to move offshore at an accelerated pace. (See "R &D sets sail for offshore," from my Sept. 11 Reality Check post.)

The fact is as outsourcers prove their worth, we will see U.S.-based companies look to outsource providers as a one-stop shop for product development that includes integrated IT operations, application infrastructure management, BPO, and applications development, rather than looking at outsourcers as discrete suppliers of services. (The April 18, 2006, Reality Check, "Is extreme outsourcing and consolidation worth it?" explores this trend further.)

Outsourcing and offshoring will grow in both depth and breadth over the next several years. To find out how, here are a few more links to outsourcing blog entries that show examples:
BPO battle heats up
The new outsourcing
Offshore attrition on the rise
Offshoring: Money talks, programmers walk
Outsourcing vs. shared services
Microsoft tech recruiter says hiring for Vancouver Development Center has worn her out
Tata's Mexico move tackles time zones

Posted by Ephraim Schwartz on December 21, 2007 03:00 AM

December 20, 2007 | Comments: (0)

Visa low down -- the alphabet soup explained

Immigration laws are an alphabet soup of visas from the A-1 for diplomatic personnel, including your every day ambassador, all the way to the proposal in Senate Bill 1348 this year to create a new class of Z visa as a solution to address the problem of the estimated 12 million illegal aliens now living and working in the U.S.

I had a talk with Bob Meltzer, CEO of VisaNow in order to see if we could sort out what each type of visa is used for, mainly in high tech.

VisaNow, for your information, is an online-only immigration application service provider.

The main goal of any company that wants to bring in foreign workers is to figure out which visa makes the best fit.

For example, Meltzer tells me if a non-U.S. based company wants to bring in someone to the States from an overseas branch the best fit is the L category.

L visas are for employees of non-U.S. firms who are brought over to work in an executive or managerial position.

If you have a Canadian or Mexican employee that you would like to bring to the States common wisdom might assume that the TN visa is the right one to apply for.

TN visas are exclusively for Canadian and Mexican professionals.

However, there is a one-year time limit and if the project is big you might want to take your chances with an H-1B instead which has a three year expiry and can be renewed.

Also, Meltzer says, moving to the Green Card is easier with the H-1B than with the TN.

"H-1Bs and Ls are the only categories that allow you to bring workers in on a temporary basis with the intention of remaining here permanently."

In all other categories you cannot have the intention of permanent residence. For example, you can’t file for a TN visa and a Green Card at the same time.

Another category no one talks about much are the E and the O visas.

The E visa was instituted way back for people that came from a country with a so-called FCN [Friendship, Commerce, Navigation] treaty with the U.S.

Now the WTO [World Trade Organization] is where all the FCNs were placed in.

Employers can use this E-2 category to bring employees in "for those who have invested a substantial amount of capital to develop and direct the operation of an enterprise in the U.S. by way of opening up a branch in another FCN country or if they are planning to invest in that country."

E-3 is a weird one. It is only for admission of temporary workers from Australia to perform services in a "specialty" occupation.

The O category is also for exceptional workers in business or science.

This one is sometimes used when H-1Bs aren’t approved.

It is a tough category says Meltzer because you have to prove someone is outstanding and it is really targeted at the CEO or CIO level, says Meltzer.

Well, that's the visa soup. I hope it took you from a murky bisque to a clear consume.

Posted by Ephraim Schwartz on December 20, 2007 12:32 PM

December 19, 2007 | Comments: (0)

iPod Touch is as doomed to oblivion as all the other handhelds

On the news that Palm Inc posted a $9.6 million loss for its second quarter ending November 30, 2007, it probably won’t come as a shock to anyone if I say that the traditional handheld is dying if not dead.

I also include in that statement the Apple iPod Touch which to me is just too similar to the far more usable iPhone.

However, I was shocked when I spoke with Ramon Llamas, IDC research analyst. All I wanted Llamas to do was to confirm my assumption that handhelds are dead but he wouldn’t do that.

"Are handhelds dead or dying?" I asked Llamas.

Neither he said and answered me with what he called a "resounding no."

But the stats appear on my side.

Shipping numbers for third quarter 07 versus third quarter 06 from IDC show a 39 percent decline in handhelds.

Shipments for second quarter 07 compared to shipments for last quarter are flat.

Here’s the numbers directly from IDC.

Worldwide shipments in Q3 2007: 725,00
Worldwide shipments in Q2 2007: 720,000
Worldwide shipments in Q3 2006: 1,200,00

US shipments in Q3 2007: 295,00; in Q2 07: 280,000; in Q3 2006: 420,000

Despite these numbers Llamas believes consumers and the enterprise are still buying plenty of handhelds and there are companies like HP still introducing new models.

"There are consumers who want the contact list and applications but don’t want to pay out a monthly fee," Llamas told me.

In addition, we have new handheld models with GPS built in that are attracting a new audience.

And while it is true that Palm hasn’t introduced a new handheld since 2005, the Treo is doing well, according to Llamas.

Yes, this furthers my contention that handhelds--except in vertical applications, especially in the supply chain for companies like FedEx and UPS--are history.

They will be replaced by smart phones in almost every instance.

So where does that leave the Apple iPod Touch?

Here, IDC was no help because they categorize the Touch as a music device not a handheld.

Nevertheless, let me go out on a limb and say the iPod Touch is a handheld--albeit limited to a few applications at the moment but a developer kit is due out along with one for the iPhone--and so it too will go the way of old technology.

One underlying reason for my belief that handhelds will fade out in favor of smart phones is because as the digital divide grows wider, we will see a world where there are those who cannot afford any electronic device on one side and those who say to themselves and friends, "for another $40, $50 or $60 per month I might as well include cellular" on the other side.

Posted by Ephraim Schwartz on December 19, 2007 11:31 AM

December 18, 2007 | Comments: (0)

Stock holders lambaste Reality Check blog post

I’ve been getting a lot of hate mail over my recent post about Patriot Scientific settling with Toshiba, Panasonic and others over a patent infringement suit against those companies for using the Moore Microprocessor Patent Portfolio owned by Patriot without a license to do so.

It seems nothing makes shareholders angrier than when you say something they perceive as negative which threatens the share price.

So, to give the other side a hearing let me publish a few of the comments. Names deleted to protect the not so innocent.

"Better get your facts straight. There are several hundred companies left that must comply with the patents held by TPL and Patriot.

"In addition Patriot has a long history of R&D involving this chip including a long list of unsuccessful attempts in their sales efforts.

"The patent is the only bright spot in a history of errors and misguided efforts by this company. A prime example of bunglers tripping over a gold nugget."

Nice.

"Hey [explicative deleted]…wad..... Get the headline right... Neither Intel nor AMD are in litigation with PTSC...

"In fact both have licensed the MMP.. in fact they were they first two. Correct your headline already. Your are on the verge of being libelous.

Actually this commenter is incorrect in several areas. The correct abbreviation is not MMP but MMPP.

When he says "your on the verge of being libelous" he should know that the word is you're, a contraction of you are.

Finally, there were two separate stories linked together by the fact that they are both about microprocessor companies and their legal imbroglios.

And, I never said that AMD and Intel just settled with Patriot Scientific. The reader needs to follow the story a bit more closely.

Finally this, "in regards to the article released today (12/08/07) entitled:
Microprocessor giants settle with Patriot Scientific.

The line below is completely in accurate and may have hurt the stock price today - I am an investor.

PLEASE release a correction article for the following:
"Few companies, if any, remain to settle with Patriot and TPL."

FACTS according to Patriot Scientific:

Patriotic Scientific has put over 485 possible infringers on notice.
Over 220 possible infringers have responded to the notice.

Now that should make those shareholders happy.

Posted by Ephraim Schwartz on December 18, 2007 04:46 PM

December 18, 2007 | Comments: (0)

We don't need another standalone mobile business application

Marketing strategies created on such assumptions as "if you build it they will come" or if there are going to be 1 billion cell phones in the world, we should have a cell phone product doesn’t always work.

Thus when Cognos announced Cognos 8 Go!, it left me wondering if the world needs or wants BI on their cell phone, even if the name has an exclamation point in it.

Yes, all the usual mobile clichés are in place. The software automatically reformats reports for various types of devices and it has "an intuitive interface."

But when senior analyst with Nucleus Research David O’Connel is quoted as saying, "basically, the more platforms you can put BI on, the more people you have adopting it," it sounds a bit over simplistic to my marketing years.

The Go! Product will be available for both Symbian and Windows Mobile 6 platforms but not yet for the iPhone.

Well, that is probably a smart move. Judging from the people I’ve met who use an iPhone BI is probably the last thing on their mind.

Of course Cognos counters the argument that BI on a mobile device is not needed with a customer, MTD Products, who says the ability to deliver such things as a daily sales and shipment information "in a convenient easily consumable format" will make this a useful product.

Yes, I suppose as Cognos says that for executives who require "mission-critical performance information delivered directly to their mobile workforce," this is a solution. They have a point but I think it is short-lived.

My guess is we are going to see something different develop on mobile platforms in the near future.

Let’s say that the average business person uses at least six or more different applications. Those bleeding edge companies that decide to put all of the mission critical stuff on mobile devices will soon discover it just doesn’t work, either from a UI proposition or from a real estate and memory usage aspect.

So, instead, what we will see develop is a single mobile environment, a single mobile window, if you will, lower case W please, in which information can be sent to or accessed from.

One window, one view, all critical information goes into that pot.

In a sense it is like the concept of unified communications but instead of a single view of all your messages, it gives you a single view of all your data.

Posted by Ephraim Schwartz on December 18, 2007 08:13 AM

December 18, 2007 | Comments: (0)

The channel makes a comeback

Resurrected by enterprise vendors discovering the midmarket, the channel delivers high strategic value -- and confusion

For a while, it seemed as if indirect sales -- aka the channel -- went away, as e-commerce enabled vendors such as Cisco, Hewlett-Packard, and others, to manage coordinate, and sell their products directly.

Of course, the channel never really disappeared; it just ceased to be top-of-mind for strategic thinkers at large hardware and software vendors.

Watching with envy as Dell came out from a dorm room to become the largest purveyor of PCs in the world by going direct probably had something to do with that.

The channel bounces back

But now there is an obvious reversal of fortune. HP, for one, used its quarterly report to Wall Street analysts as a platform for reaffirming its commitment to the channel. SAP's entire midmarket push is through the channel, especially since its acquisition of BI vendor Business Objects.

Even Dell is getting in the game, having announced it will tap the channel as well.

And then we have Information Builders, one of the few remaining stand-alone BI vendors, appointing Tom Rydz, formally of Accenture, as its new vice president of channel.

“This is a focused, dedicated position. We have had internal people who managed the channel, but it was never a dedicated role,” says Michael Corcoran, vice president of corporate strategy and chief marketing officer at Information Builders.

If there is renewed recognition of the channel, why now, and what does it mean for IT?

The answer to the first question is simple. Corcoran, for example, told me that 75 percent of Information Builders' new business is coming from the midmarket.

To some degree, this is true across major vendor sales. Everyone is waking up to the enormous opportunity in the midmarket, says Josh Greenbaum, principal at Enterprise Applications Consulting.

“This is by definition a channel play,” says Greenbaum.

Simply because there is an exponential increase in face time and hand-holding pre- and post-sale in the SMB market and it is impossible to serve those customers without the channel, Corcoran adds.

At the same time, there is an interesting change taking place among channel partners.

Information Builders' Rydz told me that rather than selling and buying technology, as was the previous case in the channel, now customers are demanding strategic business solutions.

The problem is, there are a finite number of channel partners that possess those kinds of business skills.

In search of strategic channel solutions

Enterprise Applications' Greenbaum says the market is demanding simpler products to implement, with the result that channel revenue coming from dealing with the complexity of the product goes away. So how does the channel make its money?

“Volume,” says Greeenbaum.

So we have a fundamental contraction: How does the channel offer high strategic value and yet sell its products in high volume?

The answer is that vendors now need experienced channel partners that can go to a CEO in the midmarket and talk business, industry, and strategy.

Greenbaum sees a looming war among the major ISVs to grab the best channel partners.

“If you are in enterprise software, there is no better and more mature channel than Microsoft. If you are SAP or whomever, you want those guys,” Greenbaum tells me. I can’t see him over the phone, but I think Greenbaum is smiling now.

Everybody likes a good fight.

So, if you’re the customer, how does this play out?

Well, with everybody throwing everything they have into the midmarket, you will be visited, not by the ghosts of Christmas past, but by a confusing array of smaller companies representing larger vendors all selling similar products.

SAP, for example, has three different midmarket product lines.

“In the scramble to build these effective channels, there is a high probability that executives will peak out into the waiting room and see two or three different Microsoft channel partners all vying for the same business,” says Greenbaum.

Buyers should be careful not to settle for good product alone. That is only half the battle. Finding the right partner to work with is the secret.

In other words, while the products get simpler, the buying experience gets more complex. Imagine a large menu with column A listing the services and column B listing the products. Your job will be to choose the right combination.

Happy shopping.

Posted by Ephraim Schwartz on December 18, 2007 03:00 AM

December 17, 2007 | Comments: (0)

Top 10 things I don't want to see happen in 2008

1. Bill Gates and Steve Ballmer hold a press conference with Eric Schmidt by their side to declare the war is over and they will jointly develop all new products

2. Or – Google, now YouTube's parent company, partners with Amazon and eBay to offer an opt-in video experience where a 10-second affinity ad is played before every video. In return, viewers get a 5 percent discount on anything.

The idea proves so successful Google removes the opt-in part.

3. The Federal Judiciary Conference reconsiders its recently amended Federal Rules for Civil Procedure and mandates that just in case anyone decides to sue you for any reason whatsoever, current e-discovery rules for archiving email, instant messages, voice mails, text messages, and multimedia messages aren't comprehensive enough.

As a result, we are all given digital tape recorders with enough flash memory to hold a year's worth of conversations that happen anytime, anywhere.

One presidential candidate proposes giving the digital tape recorders to illegal aliens as well, thus setting off a new national debate over whether non-citizens should have the same rights to tape record themselves as U.S. citizens.

After the polls show that no one likes the idea, the candidate who made the proposal says he [or she] misspoke.

4. The Judiciary Conference then decides even taping every conversation is not enough and we must archive every Facebook, Twitter, MySpace, and LinkedIn entry ever made.

5. A new social networking site makes all the other social networking sites look like Stone Age carvings on rocks, and I have to start entering my profile, friends, and contacts all over again.

6. Wireless carriers actually make it easy for my non-tech friends and family to send photos from their cell phone to mine.

7. WiMax proves to be an instant success, replaces Wi-Fi, and deploys nationwide practically overnight, thus rendering my current dual Wi-Fi/cell phone obsolete and, of course, forcing me to enter my contacts all over again.

8. The FCC revises its digital mandate and rules that all television broadcasts must be in 1080p digital not 720p, forcing me to replace all four of my flat-panel TVs by February 2009 and sending me into bankruptcy.

9. Apple drops the price of the iPhone by another $200, thus obligating the entire blogosphere, including me, to fill the world wide Web with millions of words of worthless commentary.

10. And finally, here's the one non-high tech event that I don't want to see or hear -- the hype leading up to yet another dull, anti-climactic Super Bowl.

Posted by Ephraim Schwartz on December 17, 2007 09:28 AM

December 14, 2007 | Comments: (0)

Electric utility providers going digital

The combined reach of the electric power utility companies and IP technology are making for some interesting services.

First, remember that the utilities have a built-in, government approved, right of way for just about every location going back in some cases almost 100 years.

The utilities also have the infrastructure, the telephone poles and the wiring so to speak to go everywhere.

What may not be widely known is the fact that many utilities also own lots of fiber, some already lit and some still dark, i.e., unused.

I spoke with Dianne Lachel, a spokesperson for Click! Networks, a division of Tacoma Power. Click, is the telecommunications arm of the power company.

Smart meters, a digital power meter with a cable modem built in, is one of those services that comes about due to the combined right of way and IP technology.

These IP-enabled electric usage meters are in place in about 9,000 homes and businesses.

For the utility smart meters obviously save them money on sending out meter readers once a month or every other month. Also they don’t have to do estimated readings as many power companies do.

The meter also allows the utility to start and stop power delivery, also a money saver for the company especially in big apartment complexes where people are moving in and out on a fairly regular basis.

To me one of the most unusual services is called Pay As You Go. Yes, just like buying a prepaid cell phone card, users can buy a prepaid amount of energy.

A home or business gets an easy to read output device so that they can manage their own power consumption and cut back or buy more power as needed.

Pay As You Go has a great many social implications and the administration of this service probably needs to be regulated closely.

What it is actually doing is making the individual or company more responsible for its own consumption, but by doing that it also gives the utility an out when they cut power to a family that doesn’t pay up.

Add this capability to one already being used by other utility companies on an opt in basis at the moment, where the utility can actually measure the individual usage of each appliance in the home, and you can end up with the following scenario when power company is called in to explain to the local governing body why they shut off power to a particular home:

"Yes, we cut off such and suches power, but we know for a fact they had the air conditioner on every night and the outside temperature did not warrant it."

Lachel tells me Click doesn’t monitor individual appliance yet but with the smart meter the capability is there.

Click and other utilities also now offer VoIP and broadband.

This is a topic that deserves a lot more coverage and I will be doing just that in 2008.

Lachel tells me Click is at the forefront of the movement and I’ll be checking back with her and others in the very near future.

Posted by Ephraim Schwartz on December 14, 2007 08:46 AM

December 12, 2007 | Comments: (0)

Honda's Asimo robot demonstrates advanced intelligence

Robotics has got to be simultaneously one of the most exciting and ignored high tech stories on the planet.

I’m not talking about robotics in manufacturing which is currently being used worldwide across many industries, especially among the automakers.

Rather the humanoid robots like the one Honda Motors is now showing off called Asimo.

Asimo takes your drink order, fetches the drink tray and delivers it.

It can also work in conjunction with a robot partner so that each doesn’t get in the way of the other and each takes on a different part of a task.

There are those short-sighted folks who think this kind of humanoid behavior is a useless pursuit and not worth the millions of dollars in R &D nor the retail price should these robots ever be sold to the public.

But think of all the things this machine has to be able to do in order to deliver a tray of drinks.

Asimo must understand—suddenly robotics renders ordinary language insufficient because the word 'understanding' is usually the domain of humans and a few high level species and implies intelligence—in order to take a person’s drink order, walk to where the drinks are located while discerning objects that might be blocking its path, work with the objects, like cups and saucers, and deliver the drink in a manner gentle enough so that not a drop is spilled.

Years ago I suggested creating a robotic bomb sniffing dog, with a chemical analyzer placed in its nose that could be sent into areas too dangerous for humans.

The U.S. Army actually has robots, they look like small tanks rather than dogs, that can disarm or at least blow itself and the bomb up before it detonates in a populated area.

There are also more peaceful uses for robots. Those that can recreate human or animal behavior might be used to serve as companions or as aides to the infirm.

Robotics was definitely one of the most underreported stories of the 20th Century. Personally I hope it will earn its rightful place as one of the great game changing technologies of the 21st Century.

Posted by Ephraim Schwartz on December 12, 2007 01:57 PM

December 11, 2007 | Comments: (0)

Are most surveys inherently biased? Could be

Tis the season to publish surveys.

It seems that the end of the year is the perfect time to come out with a survey. Typically these surveys are shall we say somewhat self-serving in that they are commissioned by companies that benefit to gain from the results, providing of course that the results indicate you had best sign up with this particular vendor or you are doomed to suffer the same fate as those losers cited in the survey.

So, in my inbox this a.m. are the results from no less than four surveys.

From Tata Consultancy Services, an outsourcing vendor, we find, according to Tata, one in three projects fail to deliver on expectations.

A full 43 percent of respondents globally suggested the Board accept IT project failure as the norm, and a whopping 77 percent of U.S. rspondents said their managers and the Board continued to provide financial support for underperforming projects.

Most common problems were overrun on time, on budget and a higher than expected maintenance costs.

The solution of course would be to go to an outside consultancy, like Tata, that in theory won’t get paid if they don’t produce.

I’m not arguing with the facts, I’m just saying a survey conducted by a company that has something to gain by the results makes me a bit leery.

Survey Number 2 by FMI, a company that does management consulting and investment banking for the construction industry, has discovered that despite the expanding use of Building Information Modeling [BMI], IT investment is still lacking in the construction industry.

However, the survey, not surprisingly, uncovered the fact that those construction companies that did use BMI were more likely to have juicy contracts to do "construction nationally or globally," and they were "likely to have 50+ projects annually."

Hey, I’m not saying that construction companies which adopt technology won’t have a better chance at succeeding, however, I would rather read these kinds of survey results from unaffiliated experts who have nothing to gain by the outcome.

Survey Number 3 from a British company, Databarracks, an online backup and recovery provider, has discovered the shocking truth that 84 percent of workers surveyed said they couldn’t do their job without the use of corporate data.

Also, more than 57 percent have lost an office laptop or handheld or USB stick in the past year. Mostly in a pub [Databarracks is a British company remember], or a bar or restaurant.

A full 63 percent of the respondents have at some point accidentally deleted data on the network.

And as you might have guessed the managing director of Databarracks finds the results of this survey, "frightening..."

"This research paints a frightening picture for the UK organizations. Almost every business, irrelevant of sector, is reliant on the information stored on its IT network to manage day-to-day operations," said Peter Groucutt, managing director.

I assume Groucutt might want you to look at Databarracks' solutions to solve these potential disasters.

Finally, a survey from AMI Partners, a more or less independent analyst firm, which does have many business clients. But then again, InfoWorld exists in large part due to advertisers as well, and I know my hands are clean so let’s give the benefit of the doubt to AMI.

The AMI press release headline reads, "SMBs in the U.S. to spend 16% more on security and storage this year."

I think the point here is really that SMBs are spending more on security than enterprise-level companies.

Another interesting result from the survey is that while Dell was replaced as number one in sales by HP in the enterprise, among the SMBs Dell still is number one.

HP took second behind Dell for desktops, notebooks and servers.
HP was of course first in printer purchases.

In software Microsoft is number one. In telecommunicatins Cisco was the favorite. And, Google is the leader as "best brand" for online services.

I’ve provided as many links as possible in case you want to look more closely at the surveys.

Maybe your company needs to do a survey, too. You can contact one of the above mentioned companies and perhaps they can tell you how to do it.

Of course, I’m still waiting for the survey from a survey company that surveys how surveys boosted sales of companies that do surveys.

http://www.ami-partners.com/ami/estore/downloadProduct.aspx?product=1618&file=free http://www.fmiresources.com/pdfs/07SOA.pdf

Posted by Ephraim Schwartz on December 11, 2007 08:06 AM

December 11, 2007 | Comments: (0)

Forecasting the future of business intelligence

Business analytics is experiencing a resurgence as enterprises seek more from BI

Business intelligence is off the charts Last week Business Objects signed a deal with SPSS to link its predictive analytics application to the Business Objects platform.

This week SAP will announce a deal with Visual Numerics Inc. (VNI) to embed its libraries of algorithms for predictive analytics and forecasting into TREX, a structured and unstructured data processing component of NetWeaver.

Last May, Teradata also struck a deal with VNI to integrate its libraries into Teradata applications and tools.

So, not only are the big guys buying up the smaller BI guys (SAP is acquiring Business Objects, and IBM snapping up Cognos), they are also enhancing their BI with BA (business analytics), aka forecasting -- once the domain of two major players, SAS and SPSS.

What do these recent events tell us?

For one, it says that it may have taken five or 10 years for the enterprise to understand the significance of BI, but once BI was adopted, the learning curve proved short, and now that enterprises have seen the light, they want more. The enterprise does not only want the ability to look back; it wants the ability to look forward.

As VNI CEO and President Phil Fraher tells me, it was only a matter of time. Companies have been busy deploying BI and installing data warehouses, and now that the hardware and the massive amounts of memory are all cheaper, they are taking it to the next level.

"The type of modeling that a Cray did 20 years ago for a few companies, slowly but surely, a broader market can now do this kind of number crunching," Fraher says.

For example, companies use forecasting for predicting inventory demand, building customized analytical applications. In financial services, forecasting can optimize portfolios for higher performance.

Does that mean we will see day traders using this stuff? Probably not, but we will see the typical day-trader apps have this kind of stuff embedded inside.

InfoWorld Contributing Editor Jeff Angus tells me that up until now companies that tapped BA from SAS and SPSS have been few and far between. In fact, most companies don't have enough trained analysts, nor are they willing to make the financial commitment in terms of applications and analysts to deploy BA, he says.

My guess is that Business Objects and SAP were driven by customers who want more from BI.

The opportunity was unmistakable, and I suppose at least SPSS, if not SAS, saw the handwriting on the wall and decided to come down from its Olympian heights and partner with Business Objects.

VNI's Fraher also sees the opportunity and has been planning for this day for a long time, moving VNI's libraries from Fortran to C and has now made libraries available for Java and C# developers.

Ultimately, Angus believes, companies using BI will get a taste of BA and will want even more, which will lead them all the way back to SPSS and SAS.

This is certainly one possible outcome. On the other hand, if we follow the traditional path of technology development, BA will spread, starting with the few and going to the many.

Recent Reality Checks on business intelligence :
• Pure-play BI vendors strike back
• IBM Cognos deal highlights a resurgence in upgrading the database
• Reading between the lines of the Oracle bid for BEA
• SAP's Business Objects acquistion: The death knell for point solutions?

Posted by Ephraim Schwartz on December 11, 2007 03:00 AM

December 10, 2007 | Comments: (0)

The demise of CompUSA: it's only the beginning

The news today that CompuUSA will close its remaining 103 stores, after selling off another 126 earlier this year certainly shows us how far high tech and computing in general has come in 25 years.

Although I’m not privy to the CompUSA books my guess is they couldn’t compete with the big box electronics retailers who have a much wider range of electronics at lower prices to offer consumers, and prosumers as well.

From digital cameras and GPS systems, to flat panel displays and high def DVDs, having a mainly computer focus is out of date and CompUSA is paying the price.

Not that I’ve ever succeeded in any kind of real business other than writing, but it does seem to me that the CompUSA executives could have been a bit more proactive in moving the company away from PCs and over to the huge market for any kind of electronics.

CompUSA came into being because the public was thirsting for knowledge about PCs and how to use them. Now, they are just another electronic commodity and are, in fact, far simpler to figure out than trying to figure out how to connect your flat panel LCD to a Comcast DVR cable box.

Isn’t it amazing that consumers will actually pay Circuit City $375 to have their flat panel installed on the family room wall and connected to the cable company?

Would anyone every pay an equivalent amount for a PC installation? I kind of doubt it.

It’s robbery but if you don’t have a friend who knows how, it’s all dead weight.

What’s next?

Obviously, as TVs and the displays go all digital and the Internet gets more like TV, YouTube and such, and more social, FaceBook and such, built in Wi-Fi and Internet access will become ubiquitous on what we used to call the tube.

If the broadcast industry thought it was having a problem with losing viewers to the Web now wait till they see what happens when everyone has these all in one boxes and flipping between TV and YouTube is a remote click away.

And with picture in a picture on every digital TV, broadcast programs will become even more peripheral.

Maybe folks will keep a small window open in the corner to see if they’re missing anything on the boob tube, which is doubtful, meanwhile the rest of the screen will be filled with the kinds of fun stuff TV just can’t seem to duplicate.

Posted by Ephraim Schwartz on December 10, 2007 12:25 PM

December 07, 2007 | Comments: (0)

IT will get the blame in the e-discovery game

Since this is the first anniversary of the Federal Rules for Civil Procedure [FRCP], I thought I would help light a fire under those companies that are still ditzing around, as we used to say in Brooklyn, about a solid ESI [Electronic Storage Information] policy.

In a survey conducted by Canvasse Opinion among in-house legal departments at 200 of the Fortune 500 companies, 18 percent of the attorneys said that IT has primary responsibility for the development of an ESI [Electronic Storage Information], aka e-discovery, strategy/policy within their organization.

Let me add that FRCP covers only litigation. Government regulations and ensuing investigations would more than likely make an even greater demand on e-discovery than the new Federal Rules, according to Kristin Nimsger, Kroll Ontrack president, the company for whom the survey was conducted.

The next statistic is even scarier. Asked who should be held responsible if their organization’s ESI policy strategy resulted in government fines, court imposed sanctions or damage to the company’s reputation, 9 percent of the in-house attorneys answered IT should be held accountable.

And what kind of dollar figures are we looking at that IT might be held responsible for costing the company?

Let’s see: $1.4 billion levied against Morgan Stanley, $253 million levied against Merck, and $29.2 million levied against UBS Warburg in litigations that required e-discovery of documents.

Yet, 76 percent of the responding attorneys believe that "inefficient ESI proce-dures" will have no financial impact or only a minimal financial impact on the organization.

A full 19 percent of the in-house attorneys from the F500 companies responding said that enforcement of ESI policies are an IT function, not a legal department function.

Nimsger makes the point that complacency on the part of IT leadership is not an option.

"IT thinks it is not their business and yet all of the data and policies that directly impact the risk are controlled by IT such as document retention, preservation, archiving and email management policies."

Add that to the fact that a lot of lawyers will be pointing their collective fingers at IT, and the message is clear.

There is a lose-lose situation waiting to happen.

If your legal department, CEO, and board of directors aren’t taking an active role in helping to define an ESI policy, the CIO and the IT department must take the leadership role in getting something done.

Whether IT and the CIO take that role or not, if something bad happens, it is going to be blamed anyway.

Posted by Ephraim Schwartz on December 7, 2007 09:42 AM

December 05, 2007 | Comments: (0)

R & D tax credit debated in Senate

As we went to press, the passage of HR 3996, “to amend the Internal Revenue Code of 1986 to extend certain expiring provisions and for other purposes” was still up in the air.

The bill includes an AMT [Alternative Minimum Tax] patch providing taxpayers tax relief from AMT by increasing the AMT exemption amount for the 2007 tax year.

But while every middleclass worker bee has his or her eyes on whether or not Congress passes H.R. 3996 there is another amendment in the bill that should be of concern to everyone in high tech.

The amendment among other things extends through next year, December 2008, tax credits for increasing research expenses for U.S.-based research.

The R &D Credit Coalition--formed in part out of the membership in the National Association of Manufacturers--in a statement said this amendment should be signed into law "in order to continue to have a positive impact on jobs and investment in the United States."

The bill passed the House in early November but is being debated today, December 5, 2007, in the Senate. At the moment there is a "cloture" motion on the Senate floor to close debate and bring the bill to a vote.

In years past the continuation of the tax credit for research and development has always been a nail biter with Congress approving the bill right before its expiration, according to Monica McGuire, senior policy director, Taxation for the National Association of Manufacturers.

However in the 1995/96 tax year, there was a 12 month period in which there was no tax credit issued for R &D.

The coalistion is asking for a multi-year tax credit to assure companies that an R&D project over three to five years will be eligible for a tax credit.

While it is not clear whether or not defeat of the tax credit for R&D would have a chilling effect on research in the U.S., it certainly would buck the worldwide trend of many nations who support R&D with far more than just a tax credit.

Posted by Ephraim Schwartz on December 5, 2007 11:10 AM

December 04, 2007 | Comments: (0)

Apple, AT&T sued over iPhone use of patented voice mail technology

Do Apple and AT&T routinely infringe on patents in the knowledge that it may take years for the case to drag through courts and in the meantime they get the benefit of a technology which is not theirs and for which they didn't pay?

Is this the way to run a legitimate business?

It all starts with Klausner Technologies, a company that holds numerous telecommunications patents. Klausner is suing both Apple and AT&T for patent infringement on its voice mail management technology.

The suit isn't the first time Klausner has brought giants in the communications industry before the bench for similar patent infringement.

In 2005 the company slapped AOL with a $200 million suit stemming from AOL's use of a visual display to retrieve voice mails, one of 25 patents Klausner's company holds in the area of remote retrieval of voice messages.

Klausner settled with AOL/Time Warner and AOL signed an agreement to pay licensing fees for use of the technology.

In 2006, Klausner was back again this time suing Vonage Holdings, asking $180 million in damages for a similar patent infringement.

Vonage also settled with Klausner for an undisclosed sum for a patent license.

In the latest suit brought by Klausner Technologies, the company is asking $360 million from Apple and AT&T.

The law suit also claims that Skype, Comcast and Cablevision Systems have also infringed on its patents, in particular US Patents 5,572,576 and 5,283,818, according to Vnunet.com, a British technology Web site.

The question that needs to be asked here is, is it possible that Apple and AT&Ts legal departments were unaware of the Klausner patents and blindly used another company's property?

I kind of doubt it. Which leads to the next question. If they did know of the Klausner patents why did they ignore them? What was to be gained?

Anyone out there with a good legal mind that might have an answer?

Posted by Ephraim Schwartz on December 4, 2007 01:00 PM

December 04, 2007 | Comments: (0)

Zero tolerance for zero retention

One year after FRCP laid down e-discovery guidelines, and the courts are clear: hammer out a retention policy posthaste

Dec. 1 marked the first anniversary of the new Federal Rules for Civil Procedure. Although it did not codify the rules for e-discovery, FRCP certainly clarified for companies what their e-discovery policies should be.

I spoke with Alan Armstrong, vice president of business development at Fortiva, an e-mail archiving company, about the FRCP milestone and asked him whether we've learned anything new in the past 12 months.

"Effectively, the court is carrying out FRCP to the fullest extent possible. There is no such thing as undiscoverable information," Armstrong responded.

Actually, we know that there were about 105 e-discovery legal opinions issued since Dec. 1, 2006, thanks to Kroll Ontrack, a company that offers computer forensics services.

The breakdown of those cases is fascinating.

Twenty-five percent of the cases -- which covered a variety of issues, including copyright infringement, fraud, and breach of fiduciary duty -- dealt with discovery requests and court motions to compel discovery.

Twenty-four percent addressed the issue of "spoliation."

Michele Lange, director of legal technologies at Kroll, says in these cases there was a court sanction for an act of document or data destruction.

With a nod to Armstrong's point about discoverability under FRCP, only 6 percent of the cases addressed the question of the admissibility of electronic evidence.

Here's a quick summary of a few of the most significant cases heard this year.

In the case of Columbia Pictures Industries v. Justin Bunnell, the suit claimed copyright infringement, and the plaintiff sought user IP addresses along with dates and times of user requests.

The defendant argued that the data was stored temporarily in RAM and therefore did not come under the new FRCP guidelines that say only ESI (electronically stored information) is discoverable.

Guess what?

The court said data held in RAM constitutes ESI.

In Peskoff v. Faber, the suit alleged fraud and breach of contract, and the plaintiff argued that the ESI produced contained "unexplained gaps."

The plaintiff therefore asked for additional discovery of e-mail. The court ruled in favor, stating that "accessible data must be produced at the cost of the producing party, unless the producing party can prove the documents are inaccessible."

The case of Qualcomm Inc. v Broadcom Corp. is especially interesting as far as the court's opinion is concerned.

In this case of patent infringement, during testimony by one of the very last witnesses for the plaintiff, the witness revealed the existence of relevant e-mails that were not discovered.

The judge characterized this as "an organized program of litigation misconduct" and asked the plaintiff attorneys why they should not be personally sanctioned.

What can we learn from these cases? While some may say there needs to be a fundamental discussion of whether retaining e-mail is an asset or a liability, I think that horse is out of the barn, so let's move on.

Assuming a company, your company, is well intentioned, the real fundamental issue is the disconnect between legal and IT, say both Armstrong and Lange.

"The most frequent complaints I hear from the IT side is that they are always looking for legal to make a decision on policy and to tell them what their requirements are," Armstrong says.

But if you know anything about lawyers, they typically hate making definitive statements. I suppose that comes from the fact that our legal system is based on case law rather than codified into inflexible statutes.

One of the solutions Armstrong suggests is to get all of the concerned parties in a company together to lobby for a truly centralized e-mail system. Say the legal department wants a two-year retention policy for e-mail. IT has storage issues to consider and may have an even shorter time frame in mind.

IT is embroiled in the never-ending nightmare of collecting Microsoft PST (Personal Storage) files that sit all over the network, created by end-users who want to save all of their e-mail as an invaluable knowledge base forever.

Armstrong believes managing e-mail centrally has benefits for IT, users, and legal departments because it addresses all of the problems of each stakeholder.

This is more than likely a better approach and should be considered part of an overall best practice for e-discovery.

As Lange says, "An enterprise needs a litigation response team that brings together all of the key players, including outside and inside counsel, IT, executives, and service providers."

One year later, we have a more sophisticated perspective on e-discovery along with a better educated bench and bar. Given that, companies need to become more sophisticated as well.

Additional FRCP coverage
New litigation rules put IT on the front lines of data access
The art of e-discovery
Court rules content of RAM memory is discoverable
Businesses slow to adopt e-discovery rules

Posted by Ephraim Schwartz on December 4, 2007 03:00 AM

Technology White Papers

InfoWorld Technology Marketplace

» Technology White Papers Library

Technology White Papers by Topic

Technology White Papers E-mail Alert