Good morning! Here are the latest stories from SearchCIO.com:
- IT embraces customer-facing video, social connectivity – Online retailers can court customers and increase their Web-based profits by customizing shopping experiences, enhancing videos and embracing social connectivity.
- Survey: Economy puts nonessential IT projects on back burner – A survey finds nearly half of respondents don’t expect information technology budgets to increase in 2009 and have put nonessential projects on the back burner as economic conditions worsen.
- Data center virtualization quiz for enterprise CIOs – Do you know the benefits of data center virtualization for your enterprise organization? Take the following quiz and find out whether you’re a virtualization expert.
- Shifting IT business models in time of economic crisis – For CIOs who already budget lean, here are four more places to save. You can stop some projects, reduce service levels, increase levels of risk and, yeah, move to the cloud.
On the trip down to the annual SIMposium conference in Orlando this week, I leafed through Time magazine’s commemorative issue on the presidential election (great photos from both campaigns) and was struck by the number of advertisements plugging green IT.
Right now, the inconvenient truth that human beings have something to do with the degradation of our environment is a commonplace idea. Everybody is talking it up — well, almost everybody. Companies that are getting on the green IT bandwagon are getting brownie points for showing their awareness of the issue. CIOs are being urged to look beyond energy efficiency in the data center and the IT realm for ways to help their companies reduce their carbon footprints.
It’s not just companies. The National Association of State Chief Information Officers (NASCIO), in its recent paper on green IT, points out that state governors are among the strongest advocates for green technology and suggests CIOs can essentially earn some career brownie points of their own by taking the lead on green issues.
Here’s an obnoxious caveat you might want to think about — actually, I’ll give you three caveats on the rush to go green:
Caveat No. 1: Heavy-metal footprint
Forget about the carbon footprint we hear so much about; consider what I would call IT’s heavy-metal footprint. This relates, of course, to the disposal of IT assets. Think of this like the benefits of nuclear power and the tremendous environmental problems generated by the spent nuclear fuel.
Although the heavy metals found in electrical devices and computers (including computer screens) — lead, cadmium mercury, chromium plus organic compounds related in part to flame retardants — are not radioactive, they are highly toxic to wildlife and children, in particular to developing brains. Think lead paint. Tons of equipment is dumped daily.
At the moment, if the pictures are to be believed, a considerable portion of this IT waste is ending up being disassembled by children in Third World countries, where few or no environmental protections are in force. While regulations are increasing, particularly in Europe, in the U.S. the best practices for disposing of much of this waste are still voluntary.
If money is an object in 2009, as most agree it will be, the least expensive ways of disposing of this waste will likely be associated with unscrupulous agents. The effect will be that poor regions of the world will be contaminated.
To put it another way, as your companies brag about reducing their carbon footprint with energy-efficient data centers and telepresence, it is at least worth keeping in mind that your heavy-metal footprint could have as bad or even worse consequences, like turning a child’s brain green!
There are companies that already get this. Pepsi Bottling is a good example. CIO Neal Bronzo faced the issue head on when he needed to replace 20,000 handheld devices used by delivery drivers. It was discovered that a Pepsi logo could not be removed without destroying the device, and the last thing Pepsi wanted was to see its brand piled atop a smoking heap of electronic waste in a poor Chinese town. Bronzo found a recycling company, Redemtech, which has put a stake in the ground against exporting IT waste.
Caveat No. 2: RoHs and other legislation is coming
Going green is very soon going to require buying electronic parts that don’t have the heavy metals. RoHs (I have no idea how to pronounce this) stands for the “Directive on the Restriction of the use of Certain Hazardous Substances in Electrical and Electronic Equipment.” It is already in effect in the European Union and is headed this way. Companies like Toshiba and Zeiss and others are already starting to sell electronic devices that are compliant with these new legislative initiatives. And given the focus of the president-elect on environmental issues, it would not be surprising to me to see legislation enacted. And that will come with a cost.
My very obnoxious caveat No. 3
Pretty soon the extra credit for going green is going to go away. When green IT becomes the norm rather than the exception, there will be no more brownie points, just like there are no brownie points for complying with Sarbanes-Oxley. If you don’t comply, you go to jail. When that happens, going green will no longer be a bonus point but a cost. And sooner or later, doing the right thing, I hate to tell you, is going to be headache.
Correct me if I’m wrong, but I imagine neither you nor I will be working for President-elect Barack Obama’s administration in any high-ranking official position (that is, unless any of you intend to pursue the Chief Technology Officer job we’ve heard so much about).
But that shouldn’t stop us from gawking at the seven-page questionnaire one must fill out to apply for a top job in the Obama administration, according to a New York Times report. It also raises an interesting question for CIOs: To what extent do you keep track of your employees’ outside-of-work online presence?
The Obama questionnaire asks whether the applicant and his/her spouse or immediate family members have been affiliated with Fannie Mae, Freddie Mac, American International Group, Washington Mutual or any other institutions receiving a government bailout, the Times reports. It questions the immigration status of applicants’ housekeepers, nannies, chauffeurs and yard-workers, and whether the applicant has paid the required taxes for household employees. It even asks about diary entries that could be potentially harmful to Obama if they were to get out.
And here’s the tech angle: Applicants must include any email “that might embarrass the president-elect,” along with any blog posts and links to their Facebook pages. The application also asks people to “please list all aliases or ‘handles’ you have used to communicate on the Internet.”
It’s a good thing I don’t plan on joining Obama’s cabinet any time soon, because I don’t even know where to start. Sure, Obama, you can view my Facebook page, but don’t ask me to be responsible for some of the acronyms my friends might leave on my “Wall.” All of my online “handles”? I know I often use derivations of my first name, last name and favorite numbers, but I couldn’t list them all for you. Embarrassing emails? Define embarrassing. I think we all correspond with friends over things that could be personally embarrassing to us if they got out, but does Obama care that I’m embarrassed that I ate all of my dinner and half of my friend’s meal too?
Yes, I’m being a bit facetious here. Like many people, I try to stay on top of my online “image” through Google searches and Facebook-page culling. And I haven’t documented any criminal activity in blogs or emails, as far as I’m aware. But it does raise the question of what red flags the Obama campaign will be searching for.
The Times article rightly points out that applications for high-ranking government posts always evolve over time and adjust to new technologies. But I think this degree of thoroughness is specific not only to the times, but also to Obama, whose tech-savvy campaign should now be considered a bellwether. He appears to understand not only the positive attributes of the Internet – the way it can bring people together and build communities – but also the why-did-I-write-that? faux pas it documents and preserves.
There’s a lot of good information in Linda Tucci’s report from the SIMposium 08 conference in Orlando this week, including an interview with Sunoco Inc. CIO and incoming Society for Information Management president Peter Whatnell discussing his company’s approach to budgeting in this recession. Sunoco prepared three budgets for next year: what IT would have proposed had the recession not occurred; what happens if the budget stays flat; and what a 20% reduction in budget would look like.
Here’s one part, toward the end of the story, that jumped out at me:
“One game changer [Whatnell is] pushing is using providers like Google Inc. and Yahoo Inc. for email service. The move to cloud providers for email would eliminate the need for disaster recovery for email, since that is baked into the service. If the tradeoff is 90% of the service for one-tenth of the cost, this is an option CIOs must consider.”
Especially in a recession, CIOs and their technology departments are looking to cut costs. So why isn’t this option being discussed more often? Are companies just so used to Outlook and the like that they don’t consider alternatives? Is it because business addresses including @yahoo.com and @gmail.com would appear unprofessional?
If it’s because of some of the well-known scares associated with using cloud email for business purposes, I fully understand. Remember when Sarah Palin’s Yahoo email account was hacked? Nobody wants sensitive company information floating around channels that are not secure. Before overhauling one’s email-server approach, a CIO and his staff would need to methodically review and implement email policies aimed at protecting passwords and other personal information.
Welcome back! We know last week was a busy one, with the U.S. election and all, so we can understand that you might have missed some of our stories from SearchCIO.com. Here’s an easy way to catch up!
- Outsourcing contracts drop sharply in third quarter – Outsourcing fell off a cliff in the third quarter, as both the number and total value of outsourcing contracts decreased by double digits compared with the prior quarter, according to global advisory firm TPI. The lesson for CIOs? Think Priceline Negotiator.
- Forrester: How IT rides out the recession – Forrester says in recession times, CIOs should look for smaller projects with faster paybacks. Tight alignment with business strategy is more important.
- Outsourcing contracts need tightening in poor economy – In slow economic times, organizations in the past have turned to outsourcers to cut costs. But that model may no longer hold true as IT leaders are asked to cut deep — way deep.
- CIO Briefing: Disaster recovery and business continuity guide for enterprise CIOs – Recover from disaster and keep your business on track with the advice in this guide.
Interesting interview from Time magazine this week with Intel president and CEO Paul Otellini, discussing to what extent technology will suffer in this economic downturn. I liked it for its broad assessment of technology from both an enterprise and consumer perspective. Some highlights:
Otellini: “Whether it’s for work or entertainment or resume creation, computers have become an indispensable tool in the daily lives of over a billion people, and there are another billion people who are going to buy them in the next few years, so that’s a different dynamic than we had in the past.”
This came during a discussion of whether people will stop buying computers during bad financial times. The reporter pointed out that he has a BlackBerry (presumably indicating that he could access the Internet without a desktop or laptop), but Otellini laughed and wished him luck on writing a full story using a BlackBerry. He has a point. I love my iPhone and will often use it to check my email and read news online even when another computer is available. But type a full story on it, or take full notes on it while attending a conference? Forget it. (Hint, hint, Apple: A copy-and-paste function would be much appreciated.)
But how will the economic downturn affect the financial services sector, a huge consumer of technology? You’d think the financial crisis would have an impact but, apparently, Otellini doesn’t think so:
Otellini: “Financial services, before the meltdown, represented about 15% of our server business; servers represent about 20% of our [total] business — so it’s not significant overall. And it won’t go to zero — everything I’m reading points to more, not less, regulation. That stuff is going to require tracking software. Sarbanes-Oxley led to significantly more IT spending.”
Otellini makes a good point. Although many companies are laying off employees — or shutting down entirely — those that continue to do business must be even more diligent about adhering to local and federal compliance guidelines. Nothing says bad PR — and the loss of vital customers — like facing a good old-fashioned data breach or being publicly cited and slapped with a fine for noncompliance.
Now, for a bright spot, from Otellini’s perspective:
Otellini: “The big growth driver over the last couple of years has been notebooks, and that’s not changing. There’s a shift from desktops to notebooks, and a shift within notebooks to come down in price as volume expands. Both of those trends are very good for us. We have entered a new class of notebook machines called netbooks, which are small machines with 10-inch screens. You don’t use them for content creation, but they are great for simple things like surfing the Net and email. And they’re taking off. They’re at great price points, so you see this situation where people that couldn’t afford computers before are buying them — and as prices come down, that’s just going to continue.”
Yesterday, I read this Boston Globe article on netbooks; for those really feeling the credit crunch, but who don’t have the money for a souped-up new computer, they sound like an excellent option. Now, is the netbook something a CIO is going to consider deploying to his or her staff? Probably not — business needs dictate the power associated with higher-price models. But it’s always important to be aware of consumer buying trends and consider how those patterns affect how you do business. And, while you’re looking into it, it might not be a bad idea to invest in a few netbooks and keep them handy for yourself and your staff, for trips out of the office when you won’t need to use all the features on your larger, bulkier laptop.
The Express Scripts data breach comes with an alarming twist.
Yesterday, the St. Louis-based pharmacy benefits manager revealed that it received an anonymous letter in early October demanding that it pay up or risk exposure of the records of millions of patient members on the Internet. Express Scripts did not say if the extortion letter specified an amount of money. The anonymous letter included the personal information of 75 members, including their names, dates of birth, Social Security numbers and, in some cases, their prescription information, the company said.
In its announcement yesterday, the company said it turned over the letter immediately to the FBI, which is investigating the threat, and hired outside experts to help in its own investigation of the data breach. The company said the 75 members singled out in the letter have been notified, and that it is unaware at this time “of any actual misuse of the information.”
A company website on the data breach and extortion letter states that Express Scripts staff members believe they “have identified where the data involved in this situation was stored in our systems and have instituted enhanced controls.”
One of the largest pharmacy benefit management companies in the country, Express Scripts provides prescription benefits to about 50 million people. The website said the company deploys a variety of security systems designed to protect members’ personal information from unauthorized access.
“However, as security experts know, no data system is completely invulnerable,” said George Paz, chairman and CEO.
“We have been conducting a thorough investigation since we received this threat, and we are taking it very seriously,” Paz said. “We are cooperating with the FBI and are committed to doing what we can to protect our members’ personal information and to track down the person or persons responsible for this criminal act.”
The New York Times said the company has not ruled out the possibility that the data breach was an inside job.
A Wall Street Journal blog says this is not the first extortion attempt involving health records.
“Just last month, the FBI announced the arrest of some guy who allegedly stole a computer server from the Indianapolis office of Medical Excess LLC, a subsidiary of AIG, that contained “personally identifying and health care sensitive information” of more than 900,000 people. The man is also accused of trying to extort AIG for $208,000 under a threat to release the data on the Internet, the FBI said. A spokesman for AIG told us that to the best of the company’s knowledge, no personal information was disclosed.”
I know I’m not alone in believing that it’s been fascinating to watch this year’s presidential election from a technology perspective. I have to keep up on Web-based advances as part of my job, but the Internet, obviously, is becoming very integral to the way my generation interacts with and learns about the world. When we at SearchCIO.com talk to CIOs about the power of Web 2.0 (and even Web 3.0), the Obama campaign should now be considered a bellwether for the movement.
As The New York Times pointed out, “the Obama campaign sought to understand and harness the Internet (and other forms of so-called new media) to organize supporters and to reach voters who no longer rely primarily on information from newspapers and television. The platforms included YouTube, which did not exist in 2004, and the cell phone text messages that the campaign was sending out to supporters on Monday to remind them to vote.”
And, according to Newsweek, “the Obama campaign’s New Media experts created a computer program that would allow a “flusher” – the term for a volunteer who rounds up nonvoters on Election Day – to know exactly who had, and had not, voted in real time. They dubbed it Project Houdini, because of the way names disappear off the list instantly once people are identified as they wait in line at their local polling station.”
I know I’m convinced by what I witnessed Tuesday. On Facebook, nearly everybody I know had status updates alluding to the election, many of them proclaiming proudly that they had already voted. Facebook had a running app throughout the day tallying the number of Facebookers who said they voted, and it reached more than 5 million. It was even pointed out to me that some election-day freebies many people jumped on, such as free coffee at Starbucks and free ice cream at Ben & Jerry’s, were by and large promoted electronically.
This emphasis on democracy via technology continued throughout the day. I received several texts and emails from friends encouraging me to vote. When Obama’s victory was announced around 11 p.m. EST, another round of text messages streamed in.
The Obama campaign really seized on the modes of communication that will propel Americans – and particularly young voters – into the future. According to The Guardian out of England, Facebook is more popular than the BBC’s network of sites. I couldn’t find a similar survey in America comparing Facebook with, say, CNN.com, but I wouldn’t be surprised to see similar results.
As the AP points out, there were only a few hundred websites in existence when Bill Clinton assumed the presidency in 1993, and hardly any blogs when George W. Bush became president in 2001. The world has changed, and with it, the electorate has, too. Never again can a viable presidential candidate ignore the power of the Internet in an election.
And, thankfully, we’ve got at least a couple of years before any of them will have to start thinking about it again.
I hope everybody had a great Halloween weekend! Here’s what we worked on last week at SearchCIO.com:
- Adjusting your budget in a volatile economy — Most CIOs are still using traditional financial models that are not well-suited to a volatile business environment, let alone a global recession.
Also, while you’re reading this story, don’t forget to take these Gartner quizzes on managing growth and setting priorities for 2009.
- Scottrade reinvents PMO for speed and volume — Scottrade Inc. CIO Ian Patterson discusses the transformation of the company’s program management office from creaky to competitive.
- Tips on how to dodge the scariest of IT worst-case scenarios - We couldn’t let Halloween pass by without some sort of acknowledgment. Scare yourself silly with these IT horror stories, and learn how enterprise CIOs can exorcise past mistakes.
For all the YouTube addicts out there (myself included), there’s an interesting blog post on NYTimes.com this week about online-video attention spans. According to Saul Hansell, who attended a roundtable this week dedicated to online video, people are watching longer and longer video clips on their computers.
YouTube really kicked things off a couple of years ago. Hulu, which just celebrated its first birthday, served 142 million steams, including full television episodes and shorter clips, to 6.3 million users in September. And on Blip.tv, which aggregates semiprofessional and professional videos, the average length of a program has increased from three to five minutes a year ago to five to seven minutes now, said Mike Hudack, its chief executive.
The possibilities for online video continue to ramp up. I was introduced this week to Gaudi, Google’s experimental audio-indexing site. Gaudi allows users to search for specific phrases in video and presents search results listing the number of times that those words appear in the video. When you click on a video, you’ll even see time stamps noting where, exactly, the word is uttered. Wow. So far, this works with only election-related coverage, but it’s sure to branch out once Google works out any kinks.
So, what does all of this mean to the CIO? For starters, it means taking a fresh look at your company’s online strategy with regard to video. Conventional wisdom has dictated keeping video clips short and snappy so visitors don’t lose interest. However, as Hansell points out, online visitors have the option of perusing sites much like they would a newspaper, skipping items that don’t interest them and poring over those that do.
Is there a product your company would like to promote that is better conveyed through visuals and audio than .jpgs and text? Don’t be afraid to dedicate a good five or 10 minutes to that puppy (provided it’s well-produced), showing off its attributes, showing customers talking about it and demonstrating its uses in action. Yes, you might lose some eyeballs after the first minute or two, but the people who stick around for the full presentation? Probably more likely to be your real customers, anyway.
And when you script these videos, make sure you’re including the keyword phrases for which customers might be searching — it’s good practice and will mean you’re ahead of the game when this audio-indexing thing really takes off.