Tech Investment Gets More Serious

 
 
By Eric Lundquist  |  Posted 2005-09-26 Email Print this article Print
 
 
 
 
 
 
 

Opinion: Current events cast new light on revenue and cost scenarios.

Maybe someday all contact will be via e-mail, videoconferencing or seminars, but not yet. There remains a level of information that can be achieved only through face-to-face meetings and in-person discussions. Road trips are really bad for things such as diets and decisions about exercise and working more instead of hitting the hotel bar, but theyre great for getting closer to what is really happening in business.

After spending much of the last few weeks attending focus groups and vendor meetings on both coasts, along with having too many late dinners and early flights, I can draw a picture of what the technology landscape will look like next year. Ill call it the new era of serious computing.

The reasons for making technology investments still fall into two areas. You are either investing in tech to accelerate a revenue opportunity, or you are investing to decelerate your costs. Even the hot-button issues such as security and application integration fall into those two camps.

Investors are regaining their faith in open source. Click here to read more. If you cant develop a security structure that affords identity and confidentiality in commerce, you are not going to be able to accelerate your revenues through new e-commerce opportunities. If you cant integrate your existing business applications, you will never find the cost savings associated with a unified computing infrastructure.

Id say that vendors are about halfway through the job of collectively offering a revenue acceleration portfolio. The rise, boom and bust of the dot-com economy in the late 1990s and early 2000s provided the outline for what products and services were required. Those early pioneers (with arrows in their backs) jump-started the drive to new revenue opportunities.

Traditional vendors were caught flat-footed by this opportunity and have been playing catch-up ever since. Customers will have the budgets next year to pursue these largely e-commerce opportunities but are still waiting for a product set that is flexible, scalable and secure.

The cost-cutting campaign continues and is most visible in the area of application and platform integration. Id say that, as a whole, vendors have gone about a third of the way toward providing a comprehensive, workable integration approach.

Solutions that address this requirement include Salesforce.coms plan to offer IT services somewhat like a combination of Amazons book ratings and eBays auctions, as well as Oracle CEO Larry Ellisons plans to make integration easy by buying all his companys major competitors; in Ellisons scenario, he would achieve integration by fusing the various product lines into one whole. So far, most of these integration schemes remain at the PowerPoint presentation level rather than at the actual-product level.

The era of serious computing originated with the need for revenue acceleration and cost cutting; those requirements have been intensified by current events. The cost of oil and utilities, the destruction caused by Hurricane Katrina, an uncertain economy, and an ongoing war are all overshadowing the traditional process of business planning. The current business budget cycle is one of the most difficult witnessed by many participants.

Ive stated before that energy costs have highlighted an area where tech vendors have only lightly tread in the past. Those systems have rarely been considered part of the reporting structure included in technology computing architectures. Companies that have mastery of minute vagaries in their accounting systems often have little idea of how much it costs to heat and power a server room.

The devastation of Katrina is forcing corporations to think about disaster recovery in a new way, one that is measured in months or years rather than in hours or weeks. While existing projects continue to move forward, these new issues are the ones drawing the most attention. At least on this road trip, there is a general feeling that vendors are not providing a lot of help in the areas of energy costs and long-term disaster recovery. Those topics are serious issues that deserve a serious response.

eWEEK magazine editor in chief Eric Lundquist can be reached at eric_lundquist@ziffdavis.com.

Check out eWEEK.coms for the latest news, reviews and analysis on IT management from CIOInsight.com.
 
 
 
 
Since 1996, Eric Lundquist has been Editor in Chief of eWEEK, which includes domestic, international and online editions. As eWEEK's EIC, Lundquist oversees a staff of nearly 40 editors, reporters and Labs analysts covering product, services and companies in the high-technology community. He is a frequent speaker at industry gatherings and user events and sits on numerous advisory boards. Eric writes the popular weekly column, 'Up Front,' and he is a confidant of eWEEK's Spencer F. Katt gossip columnist.
 
 
 
 
 
 
 

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