Archive for October, 2007

Outsourcing’s Advantages

October 9, 2007

Outsourcing offers businesses the opportunity to cut costs and boost productivity — if it’s done right.

Offshore locations feature low-cost workers who can cut your labor costs by 50% or more. Tapping workers in India or China also affords the possibility of round-the-clock technical or customer support — when domestic staffers sign off in the evening, their Asian counterparts are just waking up. Companies can also transform labor costs from fixed to variable by working with an outsourcer. Need extra manpower during the holidays? A service provider can put more bodies on your account during crunch times. Finally, outsourcers can provide quick access to domain and technology experts who may be in short supply locally.

Despite these advantages, reports abound about outsourcing gone bad. Dell infamously had to repatriate some customer service operations after customers complained they couldn’t understand foreign phone reps. The bottom line: Outsourcing isn’t about blindly throwing work over the wall; it needs to be thought out and aggressively managed. Here are some pitfalls to watch for, and how to cope.

Many outsourcing projects fail because of lack of internal oversight. Forrester analyst Christine Ferussi Ross says businesses should establish formal vendor management offices staffed with professionals experienced in IT operations, contract negotiations, and procurement. Also needed is an individual with the diplomatic skills necessary to maintain vendor relationships over time. “Outsourcing implies some give and take,” says Ross.

Only 47% of 615 companies recently surveyed by Forrester reported having a centralized vendor management office.

Costs also need to be managed, or potential savings can evaporate quickly. Of concern lately for those outsourcing to India is the rising rupee, which has gained about 14% against the U.S. dollar over the past year. Businesses need to negotiate up front the extent to which their vendor is willing to insulate them from currency fluctuations. Labor costs in India are also rising — by as much as 15% per year — so companies interested in outsourcing for the first time might do well to scout out locations that haven’t been oversold, such as South America and China, and even second-tier cities in India. Not everything needs to be in Bangalore.

Deciding what to outsource is almost as critical as the decision to outsource itself. Not all IT projects or customer groups are created equally. Outsourcing the development of non-critical applications or customer service for low-revenue customers are good places to start. Dell’s mistake was offshoring service and support for its high-end business customers.

Regardless of what you outsource, the security of your company’s and your customers’ personal and business data must be a top consideration. When weighing vendors, it’s worth a trip to their facilities to inspect first-hand their security technologies and policies, even if that means a long flight. Most major offshore outsourcers, including India’s big four of Wipro, TCS, Infosys, and Satyam, have sophisticated security processes in place. Even so, it must be negotiated up front who is responsible for what if a breach occurs.

Outsourcing needn’t be fraught with peril, but it does need to be well managed.

Waqas Ahmed
http://www.teethree.com

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Global IT Spending To Reach $1.48 Trillion In 2010

October 9, 2007

Global IT spending is projected to increase at a compound annual growth rate of 6.3% to reach $1.48 trillion in 2010.

Broken down by segment, worldwide
software spending is expected to reach $327 billion in three years, reflecting a compound annual growth rate of 7.7%. The hardware market is projected to reach $562 billion by 2010, driven mainly by “robust” spending from the home business and consumer, communications, and government sectors. Specifically, more money spent on volume servers, peripherals, storage, and networking equipment worldwide.

Companies also are expected to increase spending on IT services at a compound annual growth rate of 5.8% to reach $587 billion at the end of the decade. Sectors expected to have the highest demand are government, banking, and discrete manufacturing.

The spending projections are contained in a study called Worldwide IT Spending, 2006-2010 Forecast Update by Vertical Market: North America, West Europe, Asia Pacific, and Rest of the World.

Waqas Ahmed
http://www.teethree.com

Here’s What Microsoft Could Do With Facebook

October 9, 2007

Microsoft‘s reportedly in talks to invest somewhere between $300 and $500 million for a stake in Facebook. Here’s what Microsoft could do with it.

  • Create Microsoft applications to run on Facebook’s F8 platform. Live Messenger for Facebook? Live Calendar for Facebook? The possibilities are endless, and Facebook apps for the most part are relatively simple. Microsoft’s Popfly mash-up tool already works with Facebook and Microsoft has a Facebook Developer Toolkit for Visual Studio.
  • Create interoperable ties between Facebook and Windows Live Spaces or even SharePoint. Open social networks may be the future, and Microsoft doesn’t seem to be getting much if any traction with Windows Live Spaces just yet. Why not give it a boost by opening Live Spaces users up to a huge group of people with whom to connect?
  • Secure Facebook as an advertising customer. Forever. Microsoft already has a deal to syndicate ads at Facebook through 2009. Turning Facebook into Facebo-soft should get the company some additional advertising perks, like locking in Facebook’s millions of users as advertising customers in perpetuity.
  • Keep a close eye on a potentially scrappy competitor. Facebook certainly is trendy these days, and Microsoft would clearly like a piece of that, whether the investment potential is real or not. I’m not saying Facebook is anything more than a competitive rounding error to Microsoft right now, but by moving some Redmond spies down to Facebook’s Palo Alto office, Microsoft will be better able to understand and dissect the Facebook phenomenon and stalk talent.
  • Sit on it and block other competitors. Yahoo offered Facebook $1 billion a while ago, and Google also is rumored to be a suitor. These are Microsoft’s real online competitors, and a Facebook investment could be a preemptive move by Microsoft just to keep its competitors grimy little hands off.

Anything else?

Waqas Ahmed
http://www.teethree.com

Microsoft’s Explorer Update Ditches Windows Genuine Advantage

October 9, 2007

Microsoft has released an updated version of Internet Explorer 7 that dispenses with a cumbersome security feature designed to ensure users are running the Web browser atop legitimate copies of the Windows operating system.

In a note posted Thursday on the Explorer development team blog, Microsoft programmers said the decision to drop Windows Genuine Advantage, as the security feature is known, from Explorer was made to promote the browser to a wider audience.

“We’re updating the IE 7 installation experience to make it available as broadly as possible to all Windows users,” said Explorer program manager Steve Reynolds in a
blog post.

Flaws in Windows Genuine Advantage have reportedly resulted in millions of Windows users erroneously being reported to Microsoft as software pirates. A Chinese student has gone so far as to
sue Microsoft over the issue.

The update, available as a download, also includes a number of other enhancements to Internet Explorer 7. The menu bar is now visible by default, the online help section has been enhanced, and a new tool is included to help IT administrators in large enterprises deploy the browser.

Microsoft is clearly hoping the update will boost adoption of IE 7, which debuted last year for Windows XP and was updated in January for Windows Vista. Despite the releases, Explorer’s market share has declined slightly over the past year as competition emerges from Firefox, Safari, Opera, and other alternative browsers.

Explorer’s market share fell from 81.3% of the market in October 2006 to 77.9% in September 2007, according to market watchers at Net Applications.

Waqas Ahmed
http://www.teethree.com

Microsoft Wants Red Hat Users To Pay

October 9, 2007

Microsoft CEO Steve Ballmer said his company expects payment from computer users who run Red Hat Linux because the open source operating system violates Microsoft’s intellectual property rights.

“People use Red Hat, at least with respect to our intellectual property, in a sense have an obligation to eventually compensate us,” Ballmer said at a company event last week in London.

A video of Ballmer’s speech appeared this week on a Microsoft U.K. Web site.

Microsoft has long claimed that Linux and other open source software programs violate its patents. Last year, the company
struck a deal with Linux distributor Novell under which it indemnified Novell Linux users from any legal claims. In return, Microsoft gained the right to re-sell certificates for Novell’s SUSE Linux at a mark-up.

Last week, Ballmer implied that users of Linux distributions from vendors other than those with which it has patent deals — the list also includes Xandros and Linspire — could be hearing from Microsoft. “We’ve spent a lot of money licensing patents,” Ballmer said.

Ballmer said Microsoft would like to create “an intellectual property framework” that bridges the commercial software and open source worlds so that users know where they stand with regards to using certain software programs.

He may not get much cooperation from the open source community, however. Linux advocates insist that the open source OS does not step on Microsoft’s intellectual property and have publicly challenged the company to specify exactly which patents it believes have been violated.

Microsoft has thus far declined to do so.

Waqas Ahmed
http://www.teethree.com

Google And IBM Partner To Push Cloud Computing

October 9, 2007

Google and IBM on Monday announced an initiative to advance large-scale distributed computing by providing hardware, software, and services to universities.

The two companies aim to reduce the cost of distributed computing research, thereby enabling academic institutions and their students to more easily contribute to this emerging computing paradigm.

“Google is excited to partner with IBM to provide resources which will better equip students and researchers to address today’s developing computational challenges,” said Eric Schmidt, CEO of Google, in a statement. “In order to most effectively serve the long-term interests of our users, it is imperative that students are adequately equipped to harness the potential of modern computing systems and for researchers to be able to innovate ways to address emerging problems.”

The first university to join the initiative is the University of Washington, located not far from Microsoft‘s corporate headquarters in Redmond, Wash. Carnegie-Mellon University, MIT, Stanford University, the University of California at Berkeley, and the University of Maryland are also participating in the program.

“The reason that we’re partnering with universities is that Google is an engineering firm,” said Christophe Bisciglia, a senior engineer at Google and a former University of Washington student. “We’re working with our academic partners to teach [large-scale distributed computing] to students.”

The fundamental architecture of computing is changing, Bisciglia said. Moore’s Law still applies, he said, but now more performance gains come from processor density than transistor density. “You need to design your software to that it scales horizontally,” he said, referring to the challenges of programming for many multicore processors working in parallel.

“In this age of ‘Internet-scale’ computing, the new, evolving problems faced by computer science students and researchers require a new, evolving set of skills,” Bisciglia explained in a
post to Google’s corporate blog on Monday. “It’s no longer enough to program one machine well; to tackle tomorrow’s challenges, students need to be able to program thousands of machines to manage massive amounts of data in the blink of an eye.”

“This is really going to benefit every entity that goes on to take these students,” said Bisciglia. “They’re all going to benefit from this change. They’re all going to need it sooner or later.”

Large-scale distributed computing, also known as cloud computing, has been touted as the future for years now. In a July 2003 paper, Microsoft researcher Jim Gray — who was reported missing at sea earlier this year — noted that IBM and Microsoft were pushing Internet-scale distributed computing as a new model.

Sun Microsystems has also long been an advocate of what it calls grid computing.

In a statement, Samuel J. Palmisano, chairman, president, and CEO of IBM, characterized the effort “to train tomorrow’s programmers to write software that can support a tidal wave of global Web growth and trillions of secure transactions every day.”

Whether IBM and Sun will develop an ad-based revenue stream to support large-scale distributed computing remains to be seen. Unlike Microsoft, neither company has hedged its business model by investing in Internet advertising technology.

As part of the initiative, Google and IBM are providing a cluster of several hundred computers — Google’s custom servers and IBM BladeCenter and System x servers. Over time, the companies expect the cluster to surpass 1,600 processors. The Linux-based servers will run open source software including Xen’s virtualization system and Hadoop, an open source implementation of Google’s distributed file system that’s managed by the Apache Software Foundation.

Although Hadoop was developed by Yahoo
‘s Doug Cutting and can be seen as enabling Google’s competitors, Google says it supports the effort. “We’re made very small contributions to Hadoop for this project and we obviously very strongly support the project,” said Bisciglia.

IBM’s Tivoli software will handle cluster management, monitoring, and resource provisioning.
Students working with the cluster will have access to a
Creative Commons-licensed curriculum for massively parallel computing developed by Google and the University of Washington.

Waqas Ahmed
http://www.teethree.com