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Forget the specs: what's in it for the business?

Beverley Head, Information Age

04/01/2008 04:01:43

Mark Carmichael is the chief information officer of PKF Chartered Accountants and Business Advisors. He's had one big issue to tackle in 2007, and he expects more of the same in 2008: compliance.

Compliance with finance, corporate and securities regulations.

It's a business not a technology issue, but a business issue which the CIO nevertheless needs to understand and solve. For PKF, technology and business have never been more closely intertwined. It's the same in every sphere of endeavour.

In the past, technology managers might have spent time poring over the technical specifications of a new piece of technology or squizzing lines of code before taking the technology plunge. But when Microsoft launched Vista this year, CIOs just wanted to know "what's in it for the business?"

Only when there is a compelling answer to such an enquiry will the technology tyre kickers take a second look.

Certainly there has been a good deal for the tyre kickers to consider in 2007 - and the promise of a whole lot more in 2008.

According to Brian Prentice, Gartner research director, some of the key technology issues which have emerged as important for Australian enterprises during the year have been the consumerisation of technology, the dawn of business-focussed social networking, and the legitimisation of Web 2.0 as a tool for bringing together the corporation and the consumer, which is starting to influence application design.

"Also, open source has been maturing and has had some big developments this year such as commercial open source models and version 3 of the GPL (The general purpose licence associated with Linux)," according to Prentice.

Meanwhile, as companies continue their hunt for more power more cheaply, virtualisation is hitting its straps Prentice claims.

Corporate IT departments should, he predicts, also expect some fallout in the future from interface innovations such as the iPhone touch screen and motion sensing devices like the Nintendo Wii which will impact user expectations.

While corporate application mashups are important Prentice thinks these will be a more realistic prospect toward the latter half of 2008 and into 2009.

Other analysts suggest 2007's headline events include software as a service having matured and they predict that by 2008 it will be viewed as a real alternative for many organisations.

Another issue which has dominated the year has been the greatly increased focus on environmental issues. Companies have started to adopt greener technologies, redesign their data centres and where possible, explore how to harness information technologies to reduce the organisation's overall carbon footprint.

For finance companies like Goldman Sachs JB Were and NAB, which have both made a public commitment to go carbon neutral, buying energy-efficient ICT and harnessing ICT applications to reduce the firms' total greenhouse gas emissions is important. But when the CIOs of both enterprises made public statements to that effect, they were announcing business decisions rather than pure technology decisions.

At PKF, the business imperative is to ensure that the information systems being used in the firm allow it to meet its compliance obligations relating to the Financial Services Reform Act and ASIC regulations. "We've had to put in contact management systems and online learning systems to keep staff up to date," says Carmichael.

And most of it's home-grown. "All the professional services firms are in the same boat. There is nothing off the shelf that helps us - we are forced to develop our own applications and that's where our effort and spending will go," says Carmichael.

PKF has also refashioned its technology platform, migrating away from a Notes based environment and onto a Microsoft platform, using SharePoint extensively. While PKF has tried blade servers, it found there were some lingering cooling challenges, so has opted to stick with rack-mounted servers to run its core applications.

The need to develop bespoke, homegrown applications can preclude firms such as PKF from buying software as a service (SaaS), but Carmichael is in fact not a fan of any form of outsourcing, confessing to being "a traditionalist" who likes to run his own IT shop. He says that there has been no pressure from the business to alter that stance.

That's not likely to be the case for all organisations according to analyst Dr Bruce McCabe, principal of S2 Intelligence, who believes that 2008 will prove a watershed year for SaaS offerings.

He said that already there were more than 30 enterprise class applications being offered as a service. "Next year the big issue for IT managers and CIOs is to think where do they want to apply this. This is business process outsourcing. If you look since the industrial revolution companies have been increasingly specialising, and this is the same.

"It will be driven by financial and economic reasoning. There is nothing religious about this, it is very much about a pragmatic decision," says McCabe.

While customer relationship management has led the charge, SaaS is on a march to the mainstream. During 2007 German software giant SAP unveiled its SaaS deal, which will cost medium-sized businesses in Australia $175 per user per month.

The entry level size for the offering is a business with 25 SaaS users, and Australian companies will have to wait until the end of 2008 to access the service. But for many organisations the arrival of the usually conservative SAP in the SaaS market legitimises the technique.

The promise of SaaS is that companies only pay for the software as they use it - they don't have to buy it, install it or maintain it. Alan Hyde, the chief executive officer of SAP Australia, believes up to 4000 Australian SMEs could make the shift to SAP SaaS over the next couple of years.

"We think this is the way software will be sold in the future," said Mr Hyde speaking at the launch of the service, adding that "SAP will look to exploit on demand delivery more and more over time."

According to McCabe, "This is the big fundamental issue that will dominate the decade. Next year IT managers should do their strategic thinking and come up with a plan about how to manage getting off their platforms and onto SaaS."

Another issue which McCabe expects to exercise IT users through the coming 12 months is the continuing journey toward virtualisation - both in terms of server and storage virtualisation.

Certainly 2008 is earmarked for a virtualisation adventure for McGuigan Simeon Wines where CIO Ryan Klose is planning a data centre consolidation onto a couple of "chunky servers" on which he plans to run VM Ware and Citrix which will allow him to save on hardware costs and also implement a disaster recovery solution.

"I think virtualisation has come of age, and the tools are more graphical and a lot easier to use," he explains.

"Throughout 2007 we have been in the middle of an ERP implementation. We put on the architect's hat and looked at how our landscape needed to change.

"In the midst of all that we were integrating WebLogic to tackle business event reporting for transaction intelligence.

"The benefit for 2008 is that we can move the organisation to use business activity monitoring at the transaction level so that we are monitoring stocks and customer orders. In 2007 we've been under the hood."

Klose also started using some blade servers in 2007 in order to try to tackle some space and temperature control issues, but believes the jury is still out on whether blade servers are superior to standard rack-based systems, and won't be using them as the platform for the virtualisation move.

Like Klose, IT provider Unisys believes that during 2008 virtualisation will emerge from test beds, and percolate into business-critical applications. The company believes that the combined pressure to reduce cost while focussing on environmentally sustainable IT strategies will lead to virtualisation's coming of age. To be successful however, organisations will need to review their approach on a range of related issues.

"To reap long term sustainable benefits from a virtualisation strategy requires a holistic view of the best way to combine the technology itself with the people, processes and governance that will support it, using a shared services model," according to Steve Parker the managing director of Unisys Australia.

It's a tall order, but an even taller order is tackling climate change and this is another area where ICT is under review now, and probably even more in coming years. A slew of studies into the environmental footprint of computing were released during 2007. Gartner alone published 50 separate reports in the last 18 months about green IT or the environmental implications of computing.

The general consensus view seems to be that while ICT manufacturers and users aren't the worst polluters of the planet, they do have a substantial carbon footprint - possibly the equivalent of that belonging to the civil aviation industry.

Companies which have already taken a public stance and declared their intent to go carbon neutral are examining how they can harness ICT to reduce the corporate footprint by implementing more telecommuting, Web-conferencing where possible to reduce air travel, and streamlining logistics in order to reduce reliance on transport.

They are also looking how to reduce the emissions associated with the computer systems themselves.

In August the ACS released its policy statement regarding green ICT. In that, it called for Australia's energy rating scheme to be extended to ICT equipment; for organisations to use new technologies that reduce power consumption and lower carbon dioxide emissions; to purchase offsets (which it claimed would cost Australian SMEs with 5-20 employees $144-$576 a year); to consider replacing traditional telephony systems with IP communications; to explore virtualisation; and to disable screen savers so that ICT equipment would shut down when not in use.

Garry Whatley, chief information officer of Corporate Express, has a major green effort underway with the redesign and building of a completely new data centre which is scheduled to go live at Easter 2008.

"We are in the process of designing a new data centre and we are building that to the greenest spec we can. That will include a lot of virtualised servers and storage," Whatley explains.

Whatley says that the organisation already runs 400 virtualised production servers and is now starting to explore virtualised storage also. It is also planning to install in-line air conditioning and uninterruptible power supplies in the data centre to further reduce the carbon footprint.

"Commercially this makes sense, and will probably save us 10 per cent of our costs each year," says Whatley, adding "it's also a socially responsible thing to do."

While server and storage virtualisation is one of the techniques being touted as a way for companies to cut their carbon footprint, Bruce McCabe believes storage virtualisation will also become increasingly important given the data deluge which companies will have to cope with. "Everyone will need a lot of storage - so buy more shares in EMC," he quips.

Estimating how data storage will grow is an inexact science, but based on research conducted at the University of California, Berkeley about 14 exabytes (14,000,000,000,000,000,000 bytes) of new information is added to computer storage systems around the world each year.

Personal USB sticks can routinely store tens of gigabytes and by 2015 the typical mobile phone handset is tipped to boast a terabyte of storage (the equivalent of 50,000 trees made into paper and printed).

At present much of the information that individuals and organisations store is document-based with a few photos or graphs. But richer multimedia content and broadband networks are likely to ramp up the amount of audio and video data which is stored by both individuals and corporations.

"One issue we are now just hitting," according to McCabe, "is that IT managers are thinking a lot more about the unstructured data in the organisation - for example the audio that comes into the call centre, and the video. There are tools now to mine that and provide more customer insight and value. You can do sentiment-mining to find out what customers think of your company."

This huge and rising tide of data means that IT managers also have to address the data lifecycle management issue according to McCabe. "Organisations are having to think holistically about what data to collect and what to delete."

And what to permit on their corporate networks.

In Australia, demand for converged consumer and communications devices (similar to the BlackBerry or devices running Windows Mobile) is racing ahead at 46 per cent year on year according to IDC Australia. In 2008 Apple's iPhone is expected to be available in Australia, and the first Google phones will arrive, spurring even more demand.

Many people who buy such devices today are professional consumers, wanting the work/life balance advantages that converged devices promise by providing anytime, anywhere access to work applications and e-mails.

The challenge for IT managers in the future will be to manage the secure integration of a plethora of consumer-owned technology into corporate networks.

Unisys' Steve Parker notes that "Consumers love their technology and the freedom it affords them. As employees we expect to apply the same approach to our working environment.

"The key to ensuring the secure protection of the corporate network is to understand the way that employees want to work, identify and embrace the best tools that will allow this, and incorporate them into the IT security policy."

This consumerisation of corporate technology is expected to accelerate as younger employees, who have grown up with mobile technologies and social networking tools enter the workplace. It's something which Microsoft is racing to tackle with its Windows Mobile development programme in the hope that it will give it the edge over other converged devices.

Pieter Knook, senior vice president of Microsoft's mobile communications business, on a recent visit to Australia said that the company had announced a server-based device management system which allows corporate IT staff to integrate Windows Mobile devices securely into a corporate IT network, and also a facility that lets users sitting at their network PC wipe data held on their converged device if it is mislaid or stolen.

There is no doubt that ICT professionals continue to live in interesting times...sometimes a little too interesting.

For IT managers and professionals who may feel a little overwhelmed by the accelerating pace of change, December 2007 also provides an opportunity for quiet reflection, as it marks the diamond anniversary of the invention of the transistor.

It was the transistor more than any other innovation which triggered the information revolution, which 60 years on, still shows no signs of slowing. ___________________________________________

Ten top tech trends

Virtualisation Software as a service Going green IT consumerisation Web 2.0 Open source Business intelligence Soaring storage Unstructured data Converged devices