“This case is about the massive theft of Oracle’s software and related support materials through an illegal business model by Defendant Rimini Street and its CEO and President, Defendant Seth Ravin,” states the latest lawsuit filed by Oracle Corp.
Big bad-a** Oracle is back in court over third-party maintenance, using the same puffed-up language found in its 2007 lawsuit against SAP’s TomorrowNow, which accused the now-defunct third-party-maintenance provider of “corporate theft on a grand scale.” Get ready for Round 2 in the battle to protect the golden goose of Big Software — double-digit annual maintenance fees.
According to the lawsuit, Rimini’s “intrusions” have damaged Oracle’s support service business by causing the databases that host the software and support materials to freeze, to the detriment of Oracle customers. The phrase “massive illegal downloads” appears liberally throughout the suit.
Rimini’s Ravin has stated that the firm will fight the case. (For anyone interested in hearing Ravin in a less-scripted mode, I did an interview with him about the touchy topic of third-party software maintenance shortly after Oracle filed its lawsuit against SAP.) What I’ll be following and following up on is what the lawsuit means for the perennial third-party maintenance arguments, as well as for CIOs.
When Oracle sued SAP in 2007, I consulted lawyers and IT experts, who thought the suit carried a warning for CIOs. They advised CIOs who had moved or were considering a move to third-party maintenance to be mindful of how they transitioned from one provider to a competitor, and to review their contracts about nondisclosure restrictions. That risk to CIOs in that case was explicit.
In the 2007 case, Oracle called out Honeywell International Inc. as an example of how TomorrowNow used Honeywell’s passwords to allegedly download Oracle support materials beyond the scope of products “that Honeywell had licensed and to which it had authorized access.” Gartner also issued an advisory for CIOs.
Legal merits aside, I wonder whether we’ll see a backlash to this latest Oracle suit by customers, given the enormous pressure CIOs have been under to cut costs. I’ve talked to a number of CIOs this year who have dropped maintenance, and others, like Bill Yearous, who actually dropped Oracle after pricing went up.
I was talking to an analyst recently about how to improve IT responsiveness when the subject of cloud computing came up.
The cloud lets IT scale out servers and entire platforms pretty quickly, which to me translates into better IT response times and, in turn, increased business agility.
A standard example is a marketing team’s request for IT’s help in launching a new campaign. IT calls their cloud computing partner and, voila, all the servers and storage that campaign needs are up in a day. And the infrastructure can be torn down just as quickly when the campaign has run its course.
Then there are enterprises testing applications in the cloud to avoid building out testing infrastructures of their own and to prevent business projects from backing up in a queue.
Those scenarios seem like steps in the right direction to achieving agile IT and business processes, but something is missing.
George Spalding, executive vice president at IT management consulting firm Pink Elephant, pointed out that the cloud’s ability to help a business scale, and in turn be agile, has its limitations.
“I can add a terabyte of storage and not even make a phone call,” Spalding said. “That’s fantastic, but whether that is really agile, I’m not 100% sold on that.” As it stands now, cloud computing platforms are pretty cookie-cutter, and it is the business that has to adjust to a cloud provider’s platforms and configurations, he explained, which doesn’t exactly help with the cloud-equals-business-agility argument.
Limited platforms and a limited number of cloud providers could lead to vendor lock-in — also not exactly a boost for agile business processes or projects.
Spalding’s observation made me wonder if cloud computing providers will, over time, offer more platform choices, and if it is economically feasible for them to do so. Or maybe we’ll start to see providers that specialize by industry or introduce more configuration choices as demand grows.
But as it stands now, according to a recent IT purchasing intentions survey, cloud deployments are still far down on the list of IT investment priorities in 2010.
A few things I’m expecting our readers to continue talking about this week:
The possible end of iPhone exclusivity on AT&T. Would having your choice of service providers make you more likely to consider the iPhone as an enterprise business tool, or are you sticking with the BlackBerry no matter what? I might write more on this; I’m curious to hear your thoughts.
Apparently, in space, everybody can hear you Tweet. So, if NASA astronauts can Tweet from space, then your staff have no excuse, right? Do you use Twitter for work? I do – you can find me at @rlebeaux and @enterprisecio. I’d love to hear any IT departments’ success stories in using social media to improve workflow and efficiency.
I really liked this New York Times chart on where Google, Microsoft, Apple and Yahoo compete in areas such as mobile apps, RSS readers and business software (in case you were wondering, all four compete in that area).
Also, catch up on our latest SearchCIO.com content:
I blogged last week about password best practices and data privacy. Here’s a hint: Don’t make your password “123456.” Just…don’t.
IT salary and careers survey: CIOs expect raises, despite gloomy mood — SearchCIO.com’s annual IT salary and careers survey indicates that IT execs expect pay increases in 2010, even though pessimism and tactical concerns linger. Read our latest stories here.
The road to agile IT runs through IT services management and PPM — Agile IT can be realized with IT services management best practices and project portfolio management, but IT leaders need to clean house first.
IT budgets still uncertain as CIOs weigh 2010 technology spending — The 2010 IT budgets picture is still unclear, with consultancies offering different outlooks and CIOs juggling between keeping costs low and making necessary upgrades.
When I heard about a study on password worst practices at social network app maker RockYou (which was hacked late last year), my initial thought was a very mature “I must be smarter than their users — because who wouldn’t follow password best practices?” Who chooses passwords like 123456 or password in today’s hack-happy, data-privacy-and-protection-focused tech world? I remember Sarah Palin’s Yahoo account getting hacked soon after she was named John McCain’s vice presidential running mate back in 2008, and experts surmised that it was because she used easily obtained personal data in setting her passwords.
But we all learned from her errors, right? Savvy corporate IT users and their CIOs don’t need to worry about such password faux pas, right? Wrong. Wait, what?
Because users tend to use the same passwords on most of all of their work and personal accounts, a hacker’s ability to infiltrate one can quickly lead to unlocking the rest. In a 2009 Twitter document hack, “once the hacker broke into a single employee’s Gmail account, he was running free and eventually got access to a lot of sensitive corporate information.”
Gulp. Maybe I need to stop patting myself on the back. Just because my passwords are more difficult to guess than iloveyou (another top choice), it doesn’t mean I’m not putting my own information — or, worse, my company’s – at serious risk of an IT security breach by selecting similar passwords for various corporate sign-ons.
We research and write a lot about the technical side of data privacy and protection — but what about the human side? It surprises me that there still may be many company employee manuals that don’t include a section on data privacy that stipulates password best practices and emphasizes that duplicate passwords are a no-go. Could it be that employees are just ignoring the rules or making information too easily accessible to potential breaches? My colleague Kristen Caretta once blogged, quite correctly, that dressing up as a Post-It note with a secure password could qualify as a scary geek Halloween costume, since one-third of most passwords are still being tracked that way.
Does your company maintain rules regarding data privacy and protection with regard to passwords? Do you have a good way of enforcing these rules? And what’s your favorite password? (Kidding, kidding)
After a week or so on the phone with any CIO I could get in touch with, here’s my super-unscientific prognostication on IT budgets in 2010: IT spending and CIO priorities are all over the board.
You get the picture — it’s all over the board.
In an attempt to put some data to these impressions, I checked the most recent predictions coming out of the research houses and found them to be no help at all. What can you make of things, when Gartner is predicting a 1.3% growth in IT budgets for 2010 — so basically flat — while Forrester Research is projecting 6.6% budget growth for the IT market in 2010?
Certainly, the Gartner prediction is more in line with other surveys out there. Our own TechTarget polling shows the majority of CIOs expect IT budgets to be flat or smaller this year. Then again, Gartner got 2009 wrong, starting out by predicting roughly 3% growth in IT budgets in 2009 only to revise that number downward quarter by quarter. This week, Gartner proclaimed 2009 the worst year ever for IT budgets: down by 8.1%, wiping out four years of growth.
Meanwhile, over at Forrester, analyst Andy Bartels told me it is not surprising that CIOs are telling survey takers that budgets are flat or down next year. “Coming out of recession, they want to be cautious; they don’t want to go out on a limb,” he said. Barring the country slipping back into recession, however, he is convinced that CIOs “will get leave to spend over their budgets.”
Question of the day: Are you getting any signals from the boss that you’ll be able to spend over your official budget this year?
To our readers in the U.S., happy Martin Luther King Jr. Day! I’m guessing some of you have the day off and won’t see this post until later in the week, but I wanted to catch you up on the buzz on the Web, as well as our latest content from SearchCIO.com.
Of course, the overriding story around the globe this week was the 7.0 earthquake just off the coast of Haiti, which has devastated the small island nation, particularly its capital, Port-au-Prince. The role of technology and the Internet in sending aid Haiti’s way has been very well documented, from the role of social media such as Twitter lists in keeping the world up-to-date on the latest condition to a techie summit to discuss solutions and text messaging campaigns that have raised millions of dollars for the relief effort (although, sadly, there are questions about how quickly these funds will actually reach the victims).
A slew of IT outsourcing deals inked in the past week, including Virgin Atlantic’s five-year, multimillion-dollar IT support contract consolidating more than 40 contracts from previous suppliers, and New York, officials announced that they are streamlining IT, in part by migrating more than 40 agencies to a single email platform, which they expect to save the state at least $4 million annually.
Here on SearchCIO.com this past week, we looked at SaaS, BI, IT pessimism heading in 2010, and whether tactical concerns overwhelmed strategy for CIOs last year. Read the stories linked below and please share your thoughts on our coverage.
IT salary survey: More pessimism than optimism in IT outlook for 2010 — The IT outlook in 2010 for many enterprises is one of pessimism, although, surprisingly, some hard-hit industries report optimism in their IT shops. Get a 2010 outlook with our breakdown by industry here.
SaaS BI helps boost Welch’s efficiency, data retention — Welch’s uses business intelligence Software as a Service to retain data during an ERP implementation and gain operational efficiencies and savings. Talk about juiced-up BI!
SaaS applications help Bosley consolidate apps, cut maintenance costs — SaaS applications are helping the hair restoration provider cut maintenance costs, consolidate applications and centralize data for business intelligence.
Tactical decisions outweighed IT strategic planning for CIOs in 2009 – Talking with our enterprise CIOs, we found that many of them spent more time on tactical decisions over IT strategic planning in 2009 — which ended up being a good strategy to drive business value during the Great Recession. Read our interviews and get our survey data here.
Our SearchCIO.com IT salary and careers survey did a little probing this year around one of those fraught CIO career questions: How much time do you devote to IT strategic planning as opposed to tactical decisions? We also asked whether the recession had an impact on that ratio.
Not surprisingly, the worst financial crisis since the Great Depression made its impression. Tactical decisions outweighed IT strategic planning for CIOs in 2009 — a lot more, for some.
The Doe Run Co.’s Sharon Gietl, for example, went from spending 40% to 60% of her time on strategy to devoting 80% to 90% on tactics in 2009. Gietl said her IT strategy can be summed up as “moving the business forward.” Last year, she was figuring out whom and what to cut to help keep the company afloat.
The salient fact in my follow-up interview with Gietl, however, was that everybody else at Doe Run was doing the same. Ron Washington, CIO at Ergon, a petroleum products company, told us he met the greater demands for operational duties by working longer hours, just like — you guessed it — everybody else on his team. CIOs did what they had to do help their companies survive 2009.
CIO goal: 80% on strategy?
In my survey follow-up, I also asked analysts and career experts if the shift to tactics in 2009 signals a step backward for the CIO career. The answer, for the most part, was no. Extraordinary times call for extraordinary measures. In normal times, if there is such a thing anymore, the ratio between tactics and strategy will depend on the maturity of the company, said consultant Bruce Barnes, offering an analogy to the automobile. Steering is up front, with the driver’s focus on the future destination and the many possible impediments to reaching it. The tactical application of the energy to get you there — making the wheels turn forward — is in the back of the car. The less mature or operationally efficient an organization, the more time the CIO will have to spend on that tactical drive train, and the slower the trip to reach his or her strategic goals, Barnes said.
Of course, the elephant in the room — the fraught part of the question — is whether there is a right balance between IT strategic planning and short-term tactical decisions for those CIOs determined to drive business value.
Barnes gave it a shot: “The CIO’s goal needs to be getting to the point where about 80% of his/her time is being spent steering and watching/planning the road ahead … as well as enjoying the ride.”
I’d like to hear what you consider the ideal balance between IT strategy and tactics in your job and why — and, oh yes, if you’re enjoying the ride.
Google’s decision this week to stop cooperating with Chinese government censors — and, quite likely, pull its business efforts out of China completely — has lit up the tech sphere, with people around the world debating the human-rights and free-speech elements of the Google-in-China decision. Remember, this is a company branded with the unusual slogan, “Don’t be evil,” and some of its users saw Google’s cooperation with Chinese censors as just that.
Given my recent work covering outsourcing and offshoring plans among enterprise IT organizations, the international element of this brouhaha speaks to the idea of U.S.-based businesses investing in business operations abroad, the due diligence that takes place in assessing IT outsourcing locales, and whether the business should be prepared to accede to the mores of its new base.
Relationship building is a key aspect of outsourcing arrangements. There are often language barriers, time-zone differences and cultural variances to consider, but these are sometimes forgotten as companies draw up outsourcing SLAs and haggle over IT pricing models. Whoever in your organization oversees IT outsourcing arrangements — whether it’s the CIO, procurement or another business executive — needs to know what the company is getting into when it strikes a business deal with a foreign partner.
In the past year, I compared the pros and cons of IT outsourcing in Asia and Latin America, including some of the sociopolitical considerations to take into account. Take these as guidelines, but remember it’s your responsibility to undertake due diligence and understand the inherent risks and rewards of individual offshoring vendors, to avoid getting caught in Google’s current predicament.
I want to say one word to you. Just one word. Are you listening? (No, not plastics.)
I’ve been checking in with CIOs and analysts, following up on our annual IT salary and career survey to get the real-time read on IT budgets and IT hiring for 2010 and heard a variation on the jobless recovery theme: Elasticity.
Actually, the word came from Jack Santos, a former CIO and research fellow at Burton Group Inc. (soon to be Gartner Inc.). Santos was focused mainly on the sharpened interest from his clients in elastic computing models like cloud services for email and cloud platforms for software development. The notion of investing millions of dollars from IT budgets in up-front capital for solutions that might not show a benefit until much later — or, worse, become irrelevant in a volatile economy — doesn’t sit well with CFOs these days .
“If the company suddenly sees an increase or significant decrease in business, you’re stuck with those sunk costs,” Santos said. Better to “pay by the drink.”
But paying by the drink is not just a big theme for computing, as the Great Recession continues to grate on budgets. The topic of elasticity also came up over and over on the subject of IT hiring in 2010. Many of the CIOs I talked to — both those who had suffered deep cuts to staff and those who did not — indicated they’re using the pay-by-the drink model for humans, too. If business picks up and some of those delayed projects are put into motion, they plan to fill in with consultants or staffing services.
That doesn’t surprise Jerry Luftman, who directs the information systems program at the Howe School of Technology Management at Stevens Institute of Technology. “It looks like spending on internal staff will go down, but spending on outsourcing will go up,” he said, referring to findings from the SIM IT survey of CIOs he conducts annually for the Society for Information Management.
And, Luftman added, if companies do hire, many of them will choose the “rent-to-buy” route, offered by those IT outsourcing vendors, rather than go out and recruit people on their own.
Is your enterprise organization incorporating elasticity into its IT hiring or budgeting?
IT and business alignment is a challenge with which CIOs struggle daily, and it’s bound to remain that way, with recent data showing that IT managers are predicting smaller budgets for 2010.
So what do you do when business department heads demand to know why IT requests made several months before are not in place by now?
You could take a page out of CIO Chris Brady’s playbook. All IT requests from business departments at Dealer Services Corp., a Carmel, Ind.-based financer of car dealerships, are funneled to Brady, who in turn enters them in a weekly report that is shared companywide. The requests are rated by IT and business managers, with those deemed more critical to the business placed higher in the queue, she said.
This process allows department heads and users to see where their requests stand and how the requests rank in comparison with others made that week. Department heads meet with IT weekly to discuss, or argue, about why their particular requests are lower or higher than others on the list.
“IT always suffers from the perception that requests go into this giant black hole, that there isn’t a firm timeline for projects and response times aren’t good enough,” Brady said. “We faced that more so this past year than others [because of the economy], but the report shows the departments that we have 2,300 [IT] requests right now, and here’s where your five stand.”
A weekly report is also sent out, listing all requests that have been resolved and added compared with the previous week.
Of course, this comes from a CIO who encourages all employees to email her directly with suggestions on any matter, and what it comes down to is a belief in transparency. Perhaps until IT shares information — such as how many requests it gets per week or a timeline of when it thinks staff will get to a given project — the business may continue to view IT as a black hole.
Email me at firstname.lastname@example.org to let me know if you’re trying to make IT more transparent or other ways you are tackling IT and business alignment.