enterprise IT news - ReadWriteWeb

5 Big Data Center Trends For 2008

Sarah Perez — Thu, 02 Oct 2008 05:31:40 -0800

The technology landscape is shifting. With the rise of cloud computing, there has been a renewed focus on what's happening in the datacenter. But it's not just consumer-grade web apps that are driving this shift - enterprises, too, are looking to virtualize their services and move applications off the desktop in order to better manage client computers and maintain data security.

Recently, HP and research firm IDC took a look at some of the biggest trends they're seeing in the datacenter. These five hot new trends are having a big impact on computing today and the future of the cloud. But which ones are most important?

]]> According to research from IDC and HP, the following five data center trends are representative of the big shifts happening now in computing:

1) Blades

Blades will account for 29% of server sales by 2012. This market is growing quickly as customers are realizing the benefits of a bladed infrastructure: that is, space, time, cost and energy savings. Both enterprise and midsize customers are being impacted by this trend. (Source: IDC's Worldwide Quarterly Server Forecast, 2008Q1)

2) Going Green

Going green is less about being environmentally conscious and more about saving money. CIOs and IT managers are surprised to find that creating an energy-efficient, high-performance data center through power and cooling is much less expensive they they anticipated. The end result of going green is a reduction in overall costs (energy, space requirements, management, etc) which is savings businesses some serious dollars.

3) Virtualization

By 2011 more than half of customers' workloads will be deployed in virtual machines. With every new advancement in this area, like integrated hypervisors for example, the need to intelligently control the data center is strengthened. Data center managers need to know how to build a unified infrastructure combining both the virtual and physical environments. (Source: IDC Multiclient Study, Server Virtualization On the Move 2007)

4) Cloud Computing Means Scalability Is a Must

Data is growing at an exponential rate thanks to cloud computing. Large content-rich data, like streaming digital media (e.g. IPTV, video on demand, broadcast, etc.), static digital media (e.g. photo sharing, online music download, etc.), and web content hosting (e-mail, blogs, Web pages, etc.) are having the most impact. Cloud computing companies need solutions that can easily manage multi-petabyte scalability - without disruption.

5) Linux in the Enterprise

Worldwide Linux server shipments have increased by 35% since 2003. Currently, one out of every five servers runs on Linux and the adoption of Linux servers is expected to grow. The adoption rate will increase by almost 8% by 2012 (Source: IDC, Worldwide Quarterly Server Forecast, 2008 Q1)

If you want to learn more about these trends using a real world example, HP's Pentel Case Study makes for a good read. This company was able to reduce their datacenter footprint from 5 full racks to 1 by using a combination of blades, storage, and VMWare virtualization. They were also able to reduce their power and cooling needs. Those efforts led to a savings of over $200,000 in three years in reduced maintenance costs alone. Their I.T. department is more agile, Oracle performs up to 80% faster, and they can deploy a server in minutes. In other words, these trends are just about changing needs, they're also about saving money.

Out of all these trends, which ones are most important? We tend to think that scalability is going to be a big issue going forward, especially with the growth of web apps and their specific infrastructure needs. We've already seen what lack of scalability can do to a service - we almost lost Twitter, for example, as demand outpaced their ability to provide the service. Knowing the intelligent audience of readers we have here at RWW, we're interested in what trends you think are the most important.

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6 Emerging Trends CIOs Should Care About

Sarah Perez — Fri, 22 Aug 2008 03:00:00 -0800

According to Forrester Research, we're in the initial phases of a new 16-year cycle of technology innovation and growth called "IT Everywhere." This shift comes on the heels of the previous cycle which brought us networked computing technologies for our enterprise applications and the Internet. During this transitional period, CIOs need to be aware of which trends from the older cycle are still important and which of the new trends they should also be paying attention to. Forrester has summed up their findings in a recent report which focuses on these emerging trends.

]]> Still Important

During this transition, it's not "old with the old and in with the new" - several technologies from the prior period of innovation are still important. These include the following:

Service-oriented Architecture (SOA) - middleware that enables new component apps
Business Process Management (BPM) - user-driven automation of manual tasks
Mobile - beyond laptops to cell phones and PDAs
X Internet - RFID and sensors at the edge the net connects physical objects to the internet

New Trends CIO Should Care About

Keeping in mind that the above trends are not going away anytime soon, CIOs still need to be aware of the upcoming trends that will define the future of enterprise IT. In the "IT everywhere" wave, business technology (BT) is the driving factor. The control of this technology is being shifted away from IT and is increasingly under the control of the business organizations and the users themselves. Simply put, BT is the future of IT. When looking ahead to the future, Forrester recommends CIOs keep the following trends in focus:

Technology Populism: Web 2.0 and social networking in the enterprise. Workers are provisioning their own tools, especially when IT can't provide. IT had best look towards integrating Enterprise 2.0 into their organization - if they don't, the end users will simply go find their own apps to use. The risks of ignoring this trend include compromised security, comprised privacy, and poor control of intellectual property. (We discussed this concept in more detail here).
The Information Workplace: The information workplace is a term describing a next-gen platform that consists of numerous parts such as unified communications, portals, enterprise content management apps, office productivity apps, collaborative technologies, business intelligence, data warehousing, and more. However, the information workplace isn't about each of these technologies individually, but how they all seamlessly come together as a whole. Today's information workplace is role-based, individualized, and thanks to the Web 2.0 invasion, it's also often "social" and "quick," as Web 2.0 tools tend to be.
Dynamic Business Applications: These are component apps that target certain roles but change easily. Over the next five years, IT's goal is to develop enterprise software that adapts to the business and that's capable of evolving as the business grows. These apps are designed with a focus on the people who use them, but are also highly adaptable as the business changes over time.
Digital Business Architecture: This includes SOA, unified communications, and virtual computing among other things as a top-level conceptual model for planning the future of both technology and architecture. A digital business architecture means the design of your business is accurately reflected in your technology.
IT Ecosystems: By 2012, there will be a shift in the dominant form of IT delivery from buyers self-integrating technology to having outside providers assemble and manage it. Those with the strongest delivery capabilities will lead the way. This trend will also include a shift away from software investments based on ownership to those based on subscription as well as an increase in new IP sourced from open communities.
Enterprise Master Data Management: MDM focuses on delivering trusted data throughout the enterprise. Today the focus is on addressing cross-application data use and management while also considering MDM's multiyear and multiphase business capabilities. In 2008, information and knowledge management professional will work on overcoming the organizational, process, and business case challenges to bringing this data to the enterprise.

Image credit: Johnnie Walker
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11 Things Startups Should Know About Enterprise 2.0

Bernard Lunn — Thu, 21 Aug 2008 01:40:00 -0800

Yesterday we wrote about Enterprise 2.0 from the point of view of the Enterprise, the buyer. The conclusion was that the impact of social media on the Enterprise was very big, addressing the very "nature of the firm". This post looks at Enterprise 2.0 from the point of view of the vendor, specifically startups. This is a 30,000 foot view, but we aim to get past the hype to insights you can use in your startup. Further posts in our recently launched Enterprise Chanel will drill into specific market segments, companies and technologies.

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Subscriptions are the best revenue you can get. Subscription revenue is more recession proof than advertising and more predictable than traditional enterprise software licensing. As long as you don't mess up, you will have a low churn rate. Then your new subscriptions drive your revenue growth

It is much easier to get subscriptions from a business than from consumers. Sure we all love the idea of consumer subscriptions, the potential is enormous. But do this reality check. How many subscriptions do you pay for? How many current subscription costs would you love to eliminate or drastically reduce? What would your really (no, really) agree to pay for every month? We are in a serious consumer recession in the developed markets that may last a while. What was always hard, just got an awful lot harder. Selling to business is much easier, if you focus hard on the next rule.

The other 80/20 rule. 80% of enterprise IT budgets just "keep the lights on". Only 20% goes to new stuff. I learned this in the technology nuclear winter in 2002, when a 20% cut in IT budgets meant that no (zero, nada) new projects were approved. If you can show how to reduce that 80%, you get a better shot at the 20%. That 80% market is a replacement market. You need to know what cost you are replacing. The incumbents are looking at the 20% budget as well and they have the inside track. You have to attack the 80% to make it big.

"Parallel replacement" is new. The old enterprise replacement market was based on capital expenditure write offs. If the client bought a $1m license fee over 5 years ago, you had a shot at selling another license fee for something "better, faster, cheaper". In the new enterprise world of SAAS and open source, upfront license fees are the exception rather than the rule. Buyers prefer to hold onto the old stuff a bit longer until they can see either an open source or SAAS alternative. Replacement is always very risky, leaving incumbents in control and startups banging outside the door in frustration. So you need to show that you can run in parallel with the existing solution for a period until you are established enough to be a viable, safe replacement. Step 1 is run in parallel, step 2 is replace. This is what Google Apps and Zoho are doing to Microsoft office (I use both Google Apps and MS Office. Even though I use Office less frequently I own a license, so why delete it? When I get a new laptop I will decide whether I need to buy Office). To play this new parallel replacement game you need to a) offer a free entry point (the Freemium strategy) so you get traction with a low cost of sale and b) you need to show one very clear new value proposition that will tap into that 20% budget for new stuff.

Have one simple new "blue ocean" value proposition that any business user can understand. You need this to access the 20% of budget going to new stuff. Being "cloudy" is not a value proposition, it is simple]y a way to deliver your value proposition. The incumbent can always launch their SAAS equivalent. Your free entry level just gets you through the door so that you get a chance to upsell to your subscription; free is not a value proposition. You have to show how you will do something really basic such as either a) increase revenue with a low cost of sale or, b) reduce cost on an existing process or c) create strategic sustainable advantage in measurable ways. Most likely you will do this by enabling better collaboration/communication, both within the enterprise but also, more critically, outside the firewall to the "extended enterprise". For a startup, this has to be "blue ocean", a market that has not yet been defined by the incumbents. By its very nature, this means the market size will be very hard to define and there will almost certainly not be recognized external authority that has defined the market size. Smart VC understand that Blue Ocean strategy and precise market size estimates seldom go together.

SaaS ++ means that Open Source is no longer a problem. Open Source has been great for buyers but it has also taken the entry level market away in most segments and that trend shows no sign of letting up. That is bad news for a startup looking to sell traditional software with a "better, faster, cheaper plus we try harder" replacement pitch. You cannot undersell Open Source. That has forced many ventures with great software and strong teams into the dead-pool. With a "SAAS ++" offering, you can use Open Source as the base, add a bit of new code and bundle it all up with hardware and service in a monthly fee. Unless buyers really want to do all that in-house, using their dwindling internal IT staff, you have a shot at it. SAAS alone however is not a barrier to entry. Anybody can replicate it. Which means (smart) VC will/should pass. You need the "++" bit as well. That is likely to be something to do with viral, communications and network effects that create a growing user base and proprietary data coming from that base. That is the "magic sauce".

You need to become a very good financial and data modeler. You will need some old-fashioned face to face relationship selling to get large enterprises to understand your solution, so that the "powers that be" encourage adoption and do not seek to block it. But the business will grow one subscriber at a time and users convert to subscribers one click at a time. Modeling becomes a core competency. Modeling the costs of all the SaaS components (R&D, hardware, infrastructure software, software maintenance, system and data maintenance). Modeling the cost of subscriber acquisition using SEO, SEM, social networking, conversion from free to paid and inside telephone sales in a highly efficient funnel process that delivers the right $ per subscriber. Modeling the revenue growth with multiple what if variable assumptions. Modeling the ROI for your clients at various levels of adoption.

Most external market size projections do not help your business plan. Forrester Research reports that Enterprise 2.0 will be a $4.6 billion market by 2013. That is not nearly granular enough for a real business plan. You are not really in the Enterprise 2.0 market. Saying "we will get 1% of the $4.6 billion Enterprise 2.0" market is totally meaningless and will simply get you shown the door in the VC office. You are in the market of solving a specific business problem, for a specific type of customer, competing against specific incumbents and startups. That is how you need to build a market size, from the bottom up. This is particularly true for "blue ocean" strategies where the market has not been defined by an incumbent. Building the real world, bottom up market size takes real hard work and detailed market knowledge. Look for a small enough market where you can get 20% and take that to 50% share and then leverage that market to get 10% in another market. Rinse and repeat. It is an old formula, but it works.

You need VC, they need you but there is a disconnect. Since 2000, most VC have sent any business plan with the word "enterprise" straight to the trash. With good reason. During the nuclear winter, the enterprise IT market was dead as a dodo. Then the big incumbents got into the consolidation game and it looked like you would count enterprise IT vendors on the fingers of one hand. The cost of entry was high, needing expensive sales teams upfront and the revenue was lumpy and unpredictable. Yech. Better to back a few inexpensive developers building a free service that some big vendor would buy and figure out how to monetize. That was a great game for a while. Most VC now view it as in its final innings at best. There is a shortage of buyers, no IPO market, we are in a cyclical downturn for advertising and in a major funk figuring out how social media can be funded by advertising. So VC need Enterprise 2.0. But they have missed the early winners. Very few of the current Enterprise 2.0 startups are venture backed. This is a disconnect. The early players always find it easier to bootstrap than later vendors. Today you need capital to fund the ramp-up and to build distance from competitors as the Enterprise 2.0 market moves from "below the radar" to "early hype" phase, thus dragging more entrants into every category.

Vertical is not the same as Horizontal. Classic Web 2.0 services such as Delicious, YouTube and Skype are geared at mass markets. Anything that is more niche has tended to be called "vertical". That is confusing. Vertical means a specific industry such as banking, healthcare or manufacturing and sub-sets of those industries. Horizontal (applying to any industry) should mean a set of common and linked features used by a specific type of person in the company (e.g. accounts payable by Finance, CRM by Sales and so on). The general rule of thumb has been for vertical ventures to be bootstrapped and eventually rolled up into larger entities. VC tend to view vertical as too limited. Horizontal on the other hand is big enough.

Know how to deal with secrecy, structure and control needs. Social Media is about being open, loose, unstructured, informal and fun; no ties allowed. Enterprises are about secrecy, structure and control. Ties show that you are serious and fun is for after work. The ties and fun bit is just style. But secrecy, structure and control is real. If you threaten those, many forces within the enterprise will shut you out. It will be like the red blood cells attacking the foreign virus. On the other hand, if you go along with all the secrecy, structure and control rules of the enterprise you will lose the social media benefits of extended enterprise collaboration and innovation. Many people within enterprises understand this and some of them are in a policy-making position of authority. In general, the trend is towards loose, unstructured, "emergent business networks". So "make the trend your friend", but beware of the very strong forces of opposition and deal positively with their legitimate needs.

Conclusion

What is your position in the Enterprise 2.0 market. Do you work in IT in a large Enterprise? Do you work for a large incumbent Enterprise IT vendor? Do you work for a startup that is going to change the Enterprise world? Are you writing about this rapidly emerging market? Do you have unique insights or research to share? We would love to hear from you in the comments and maybe as a Guest Author. Email us if you're interested in writing for ReadWriteWeb's Enterprise Channel.

You can subscribe now to our special RSS feed for the Enterprise channel.

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Enterprise Adoption of Web 2.0: It's Happening

Sarah Perez — Sat, 31 May 2008 18:00:00 -0800

If you're a business who has been ignoring the Web 2.0 trend and the spread of social media: look out, the tide is shifting and you're about to be left behind. The rise of social media didn't happen overnight, the power of the internet to unite people, the ubiquity of broadband, the rise of Gen Y, the development of new technologies for socializing on the web - all of these things and more have led to the rise of social media. And this new force is affecting change in the way that companies do business - now and for many years to come.

]]> Web 2.0 Is Nearly Mainstream

Just recently, Business Week ran an update to their 2005 study "Beyond Blogs," saying that today the title should be "Social Media Will Change Your Business." The story highlighted the current trend of workers not just using blogs, but also social networks and other Web 2.0 applications to spread news, connect, create buzz, interact and socialize with others -both for business and for pleasure.

While this lack of control frightens upper management and causes I.T. nightmares in some cases, businesses are already becoming aware of these new trends as the next Generation, Gen Y or the "Millennials," as they are sometimes called, enters the workforce.

Even 60 Minutes recently updated their story about this new generation, 80 million strong, who are rapidly taking over the web...and the world (as we said here). Besides their seemingly alien values - everyone's a winner, me-first, work isn't everything, I'm a commodity I can sell myself to the next business who wants my talents, needing to always know why?, and more, one of the most visible changes is their interaction with technology. Born into a time when computers had always existed, Gen Y embodies the definition of a digital native and they have mastered the tools of social media and use them as easily as we check our email.

Web 2.0 Numbers Reveal The Change Underway

As companies struggle to adapt to this new trend in order to deal with both their employees as well as their customers, the business of social media consulting has gotten a boost as the consultants teach the old school execs how to navigate this brave, new world. A recent book on this Web 2.0 movement dubs the change a "groundswell," and provides tools to these companies who have found themselves needing to adapt but that did not know what to do or how.

And adapt they must because the number of companies who are already integrating Web 2.0 technologies into their businesses processes and I.T. infrastructure is on the rise. A study by Forrester on this topic points to hard numbers that back this up.

In fact, the adoption rate of Web 2.0 technologies by I.T. is actually stronger in enterprises than it is in SMBs, with 42% of enterprise businesses now utilizing Web 2.0 technologies like AJAX, Flash, Flex, etc. to 32% of SMBs. Additionally, there is growth in the areas of Web 2.0 app investing, with a number of companies investing, piloting, or considering investment in Web 2.0 technologies like RSS, podcasting, wikis, and blogs.

Getting Web 2.0 Right

Internally, the trick to getting the right mix of Web 2.0 and other technologies has to do with the speed of change and the amount of risk to the business. Where risk is lot and speed of change high - in areas like web publishing, team management, and help desk technologies, for example - Web 2.0 applications and technologies can help the business become more efficient.

Externally, Web 2.0 technologies are used to take content to the customers. RSS, social networks, web and desktop widgets, blogging, user communities, and more can help a company easily reach customers to communicate a company's message and increase brand awareness. This topic is discussed in more detail on the Employee Evolution blog in an article titled "Every Company Should Use Social Media," where the techniques for utilizing social media to improve credibility, brand, "coolness," and more are examined.

Ultimately, companies ignoring this shift will only do so their own peril. The numbers don't lie: your customers have adapted and your competition has adapted - turn a blind eye and prepare to lose marketshare. You may even just lose altogether.

The chart in this post is courtesy of a Forrester webinar sponsored by the Forrester Leadership Boards Application & Program Management Council, a role-based knowledge community for senior Application & Program Management Professionals: http://www.forrester.com/leadershipboards. Photo credit for Web 2.0 logos: shopping2null

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PopURLs is on Fire

Marshall Kirkpatrick — Fri, 04 Apr 2008 10:47:21 -0800

Single page aggregator PopURLs may be a few years old, but this side project of Austrian entrepreneur Thomas Marban just keeps getting cooler. Now Marban has partnered with Intel to create one of the most interesting ad campaigns I've seen in awhile, Blue.PopURLs.com. The site is a single page aggregator about hot enterprise IT news. Calm down, I know enterprise IT is boring - but the site is cool.

The general PopURLs service is remarkably feature rich. Users can hover over items for a preview of the feeds from a long list of social news and media sites. There's a mobile site and many other platforms, from the Wii to Facebook.

]]> The PopURLs blog (the Pophub) has recent announcements about the addition of story voting, user profiles and individualized recommendations. The whole site is beautiful.

Customization is limited but the PopURLs sites aren't intended to serve as your entire feed reader. Marban says the site compliments his full reader, he just checks in on PopURLs to see top stories throughout the day. I use Netvibes similarly because customization is important to me. I'm probably not the intended audience for any of these sites, but I sure do admire what Marban is doing. This 2006 interview with him from Folksonomy.org is a fun read.

The Intel partnership in particular is remarkable as a simple way for advertisers to deliver value to audiences in exchange for a little bit of mindshare. Next to the top enterprise software stories from around the web, you'll find links to Intel white papers and blogs. Intel is advertising the site heavily, which is interesting as it appears to be an ad campaign itself.

I'm not sure how many people in the enterprise world will find the service truly useful over time - the ability to add at least one or two other feeds from your own personal life seems pretty important. None the less, the campaign is an interesting one that could serve as a model for social media advertising in the future. It's also nice to see the PopURLs project progressing so well still.

Disclosure: The Blue ad campaign is being run through FM publishing, who also sells ads here on RWW. I just found the site through an FM ad on BoingBoing and thought it was worth writing up.

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