John Katsaros

Compliance or Operational Improvement?

The RSA exhibit hall was filled with companies promoting "Compliance" as the value proposition.  While on the one hand it's easy to see how compliance is important since organizations who don't meet their compliance obligations may either be monetarily fined or prevented from doing business.  However, vendors are reaching something we're calling  compliance parity – if Vendor A makes you PCI compliant and Vendor B also makes you PCI compliant (and the same for vendors C,D and E), then hasn't compliance become a commodity at that point and don't A, B, C, D and E need something else to differentiate themselves?  When we asked vendors about this our friends at Agiliance had the best response – the difference is Operational Excellence.  Compliance in the first place is government's way of mandating IT operational improvements.  In the long run organizations must drive operational improvement and compliance is really a few steps into a much longer journey.  If a vendor does it right, their customers not only can pass a compliance audit, the quality of their IT organizations are substantially improved.

The Messaging Fabric Report

We're pleased to announce our intent to create a new research report on the role of messaging infrastructure in the quickly evolving landscape of IT. This is the infrastructure that runs between the outside world and the systems that provide mailboxes internally — all big companies have it in some form. It seems to us that with the changing demands on email (e.g., compliance, DLP) and the evolving email alternatives (e.g., malware filtering in the Cloud or even mailboxes in the Cloud) this infrastructure layer could play an even more important role in the future orchestrating all the pieces. We're going to invite vendor participation in the effort in the form of briefing us on their offerings and market participation, and, helping us contact representative customers to better learn about the usage and business value of the solutions they provide.  We'd also like to hear from organizations running large e-mail systems.  For now we're calling it "The 2010 Messaging Fabric Report" and are planning on completing it soon.  If you're interested send us a note: jkatsaros@irg-intl.com.

The Messaging Fabric Report

We're pleased to announce our intent to create a new research report on the role of messaging infrastructure in the quickly evolving landscape of IT. This is the infrastructure that runs between the outside world and the systems that provide mailboxes internally — all big companies have it in some form. It seems to us that with the changing demands on email (e.g., compliance, DLP) and the evolving email alternatives (e.g., malware filtering in the Cloud or even mailboxes in the Cloud) this infrastructure layer could play an even more important role in the future orchestrating all the pieces. We're going to invite vendor participation in the form of briefing us on their offerings and market participation, and, helping us contact representative customers to better learn about the usage and business value of the solutions they provide.  We'd also like to hear from organizations running large e-mail systems.  For now we're calling it "The 2010 Messaging Fabric Report" and are planning on completing it in July.  If you're interested send us a note: jkatsaros@irg-intl.com.

The Cloud as Supply Chain Management

In his CA keynote, Dr. Ajei S. Gopal, EVP of the Products and Technology Group, introduced the best simple way of understanding the ongoing transition to "Cloud" computing that I've heard so far. He said that IT is going through a transition very much like what manufacturing has gone through for many companies over the last decade. For example, today Cisco manufactures essentially nothing, instead using a network of contract manufacturers and logistics specialists. Ajei's point was that if you're part (say) of Cisco's Global Supply Chain Management team ("manufacturing") your mission is getting high-quality products quickly to Cisco's customers at the lowest possible cost (where "high-quality" and "quickly" are complex issues). If a company does its own manufacturing there is the risk of focusing on (say) the fact that you are best-of breed at wave soldering 21-layer PC boards, and thinking that's what counts the most, whereas the supply chain mission is pure and aligned with the business. Legacy IT shops are very much like legacy manufacturing. Moving forward, more and more options open up for outsourcing aspects or all of IT (e.g., use of SP resources, SaaS, ...). The new (and better aligned) IT mission is a direct analogy: how can you deliver high-quality, agile services and applications to the business at the lowest possible cost?

IT Infrastructure Spending 2009

If you're wondering what kind of year it's going to be for IT infrastructure companies in 2009, you've got plenty of company. As we wonder around we've been asking vendors how well their sales are keeping on pace and enterprises what they're expecting to do from an IT budgeting standpoint. The answers that we've been getting are relatively optimistic. Mostly, the infrastructure vendors that we've spoken with tell us that the fourth quarter 2008 turned out to be good (many said it was their best quarter) and that they are optimistic for this quarter as well. Several pointed out that the purchase order approval process has been slowed down largely due to more approval signatures required. Infrastructure customers agree that more approval levels are needed than before. As far as spending levels are concerned, most enterprises have told us that it's too soon to know since their 2009 budgets aren't yet approved and, while they've requested funding on par with 2008 they're not yet sure what they'll get. In any case, projects that yield better productivity (either in the workforce or in the IT staffing) are still very much in consideration. For security and compliance projects, many of these cannot be postponed or eliminated. A CEO of a security company put it simply, "Recession or no recession you still need to be compliant." Which brings us to our theory of "What's 2009 spending going to be like?" Could it be that today's enterprises are so much more dependent on IT infrastructure than they were just ten years ago that they can't easily turn off the IT spending spigot without jeopardizing their businesses and/or their market share? IT forms the load bearing walls of most companies, large and small, and requires continuous spending and investment. Maybe budget levels for data center related infrastructure in many key segments will remain on par. Then there are the macro issues —  with huge job losses and consolidation in the financial services industry and with large retailers closing down many of their stores, some sectors are shrinking (fewer companies, fewer locations, fewer workers) which ultimately reduces IT spending related to the WAN side of these businesses. So our theory on IT infrastructure spending is: Data center spending and security spending may be about the same, branch office spending down, especially in retail and financial services. That's assuming that recovery begins midyear —  if not, all bets are off. Let us know what you think —  jkatsaros@irg-intl.com.