part 3
IBM VIEWED AS A 'FAVORITE' PARTNER. Our panelists generally expressed satisfaction with IBM as an 'easy' partner to do business with. One panelist said that IBM has done a good job recently in making its software offerings more homogeneous and raising the level of quality. Another noted that their business model enables them to work well both with their own offerings and third-party offerings.
DISSATISFACTION WITH ORACLE PRICING; POSITIVE ON RAC. Our panelists expressed dissatisfaction with Oracle's pricing mechanisms, which they view as strong arming tactics to extract revenues. That said, a few raised optimism about the opportunity generated from its Real Application Clustering (RAC) capabilities. In stark contrast, there was no interest in Oracle's Collaboration Suite, with CIOs already captive to Microsoft Exchange. On the Web application server front, one panelist commented that BEA Systems was still slightly ahead in this arena, but not in a 'material' way that would make a difference in deploying web-based applications vs IBM's WebSphere. On the security front, Symantec was named as a company with positive market momentum.
ON-DEMAND COMPUTING MORE BUZZ THAN BITE. Despite recent industry chatter about utility-based computing, our CIOs are not convinced. One panelist would only consider on-demand capabilities within pre-existing outsourcing contracts, and the consensus rejected the idea of outsourcing business- critical services and processes (e.g., the ASP model).
VOICE-OVER-IP IS BEING TESTED BY MOST, BUT NOT COMPELLING ENOUGH YET FOR BROAD DEPLOYMENT. Three out of our four CIOs are already testing Voice-over IP with multi-hundred user sites, generally in order to keep on top of the emerging technology. However, the consensus was that the cost/benefit is not yet compelling enough to spur enterprise-wide use.
OFFSHORE A TOP STRATEGIC INITIATIVE. For all of our CIOs, 50% or more of their IT spend is on internal staffing. Between 30% and 70% of that cost is for maintenance/production costs which can be aggressively moved offshore. The remainder is for development, some of which can be moved offshore. Consistently, CIOs indicated fairly aggressive initiatives to shift the mix of dollars away from maintenance toward development by employing an offshore strategy. More than one of our panelists estimated offshore expenses as 1/3 to 1/4 the cost of internal expenses.
MANY SARBANES-OXLEY-INSPIRED IT PROJECTS MAY PROVE TO BE UNNECESSARY. According to our panelists, the passage of the 2002 Sarbanes-Oxley Act has spawned a boutique industry of tech solutions. While the level of accountability for top-level executives has surely increased, a few panelists suggested that the regulation is too nascent for tech managers to appreciate the corresponding IT needs, which has created a gap that vendors are trying to manipulate. |
