February 12, 2010  3:51 PM

Silicon Valley economy: Recession hitting IT hard at its epicenter

Rachel Lebeaux Rachel Lebeaux Profile: Rachel Lebeaux

A few weeks ago, over a delicious dinner of Thai food with my uncle visiting from the Palo Alto area, I went on and on about my job here at and about all the various social media platforms on which my work now relies, including Twitter, LinkedIn and, of course, this blog.

As I slurped down the last of my to-die-for pad see ew noodles, I apologized for spending so much of our time together blabbing about this aspect of my work. My uncle just laughed.

“You’d be very popular in Silicon Valley,” he said. “This qualifies as a very normal conversation where I live.”

As home to the Googleplex and the launch pad of the dot-com boom in the late 1990s, Silicon Valley has long been reputed as a sort of Mecca for technology-minded businessmen and -women and the innovative IT pros that support them — and the Silicon Valley economy has thrived on these industries. But this economic recession is causing some to wonder: How long will Silicon Valley tech companies remain the top dogs in IT?

In fact, Silicon Valley tech could be losing its edge, according to the 2010 Index of Silicon Valley report. The area lost 90,000 jobs from the second quarter of 2008 to the second quarter of 2009, and unemployment in Silicon Valley is higher than national levels, even worse than in 2005, when technology companies were still recovering from the dot-com bust of the early 2000s, reports The New York Times.

When these Silicon Valley tech companies do hire, they usually employ some brand of IT outsourcing, whether domestic or offshore. As we have reported on, companies are looking to run as lean as possible in 2010, with the aim of boosting profits while keeping expenditures relatively stable.

Although I haven’t heard of any heir apparent to Silicon Valley, I do wonder what will happen if the region doesn’t see a turnaround soon. There are fears that a prolonged downturn in Silicon Valley could cause a real brain drain. Already there is evidence that immigration to the region has declined, and questions about whether up-and-coming tech enthusiasts will be willing to pay inflated real estate prices — especially if their salaries aren’t keeping up and layoffs loom as venture capital financing sinks.

The story’s final quote, from Judy Estrin, former CTO of Cisco Systems Inc., was perhaps the most telling:

“Silicon Valley is both a barometer of the rest of the country and a spark for the rest of the country, and if we don’t protect that innovation culture here, it’s going to be hard to sustain an innovation culture in the country.”

I’ll be keeping an eye on the Silicon Valley economy’s continued struggles not only via Thai food fests with my uncle, but thanks to contact with our CIO readers as well. To be sure, these are troubling times for IT, even at the industry’s epicenter.

February 10, 2010  9:24 PM

Beware the dark side of the IT PMO

Linda Tucci Linda Tucci Profile: Linda Tucci

Ten minutes after filing a story on the virtues of an enterprise project management office, I got a call from a CIO I’d gotten to know over the years informing me that he had been fired. On a Friday afternoon. No explanations given, except that his position was being eliminated. The company in question is a well-known brand name. From what I heard, 2010 promises to be as challenging for this company as 2009, if not more so. IT is viewed as cost center; costs had to be cut. The powers that be went after the biggest salary.

One of the hallmarks of this CIO’s five-year tenure was his setting up a project management office (PMO), with the laudable aim of bringing order, transparency and business participation to IT projects. Given his starting point — IT run amok — it was a hard slog. By the time I profiled his work, however, a formal process — rather than the squeaky wheel — determined which IT projects got done and when.

I don’t know why the CIO got axed (not sure he does either), but his situation got me thinking about whether there is a dark side to PMOs.

If a CIO goes to the trouble of embedding IT in the business so that IT is no longer the mysterious dark art many business people see it as, is he engineering himself out of a job?

“Of course you are,” was the immediate response of the first employed CIO I asked, the head of IT for a big city government. But that is as it should be, he said. As cloud computing becomes the norm, a CIO’s main job will be to plot strategy and manage the various vendors. “There is no reason we should be building any of this stuff.”

His gloss on the matter? “The PMO does one thing very well, and it depends on your organization whether that is detrimental or positive: It exposes you. Everybody who has anything to do with the strategy of the company is in it. That means there are reports and documents, failures and recasts of projects, costs analyses. The thing about transparency is that it can either be a boon or a bust for you.”

February 9, 2010  5:45 PM

IT staff motivation: HR, tech leaders out of sync

Christina Torode Christina Torode Profile: Christina Torode

Sure, there are many IT professionals out there who are happy to just have a job; but as we move into 2010 and enterprises begin to dust off delayed projects, is your IT staff motivated enough to stay?

I ask because I just read the Dice Report for February, which shows that corporate HR and technology leaders are clearly out of sync when it comes to IT staff motivation.

When asked about the biggest blockade to motivating their IT staff, the No. 1 answer from HR was, “None, our technology team is motivated.”

Tech leaders polled in the same survey said salary freezes and smaller raises were the biggest impediments to IT staff motivation.

I’m not hearing much about pay raises yet from IT folks. In fact, our IT salary and career survey for 2009 showed that salaries decreased from 2008 to 2009, but 458 of the 952 IT executives and managers we surveyed do expect a pay raise of about 4.7% this year.

Where does this leave CIOs? If companies aren’t acknowledging pay raises as a key motivator, what else can they do to raise the mood in their IT departments?

Training and defining a career path for your IT staff come to mind. Your IT staff needs to keep pace with an ever-changing landscape; and the cost of training could be justified as not only a motivational tool, but ultimately as a revenue generator for the business.

In the same vein, our CIO columnist Niel Nickolaisen points to the importance of providing IT staff with meaningful work when salary increases are not an option.

So, if salary increases and possibly training are out of the budget for now, what are you doing to motivate your staff? Let me know at

February 8, 2010  4:51 PM

CIO weekly wrap-up: Super Bowl technology and Google’s advertising

Rachel Lebeaux Rachel Lebeaux Profile: Rachel Lebeaux

Super Bowl Sunday was yesterday, so let the Monday-morning quarterbacking begin! The turning point in the game was the Saints’ decision to go for that onsides kick at the beginning of the second half, yes? I don’t think the Colts ever recovered.

I imagine dissecting the Super Bowl is top of mind for many of you. According to CNN, high-tech kept the Super Bowl on track with instant replay and multiple camera angles of the Saints’ fourth-quarter two-point conversion (which was originally ruled no-good, then reversed).

For those less interested in the actual game, what did you think of the Super Bowl ads? Any favorites? Who else was surprised to see Google’s advertisement? A panel of MBA students from Northwestern University ranked it as the most effective ad of the night. (My other big surprise? Leno and Letterman in the same room.)

And, for some non-Super Bowl news, here are the latest stories from, covering IT salaries and careers, project management offices and surviving the recession.

IT salary survey shows no growth in 2009, but that could end in 2010 — A look back at IT executives’ state of mind and IT salaries for 2008 compared with our 2009 IT salary and careers survey.

Project management office helps CIO navigate rough financial waters — How did CIO Sharon Gietl help The Doe Run Co. navigate budget cuts and layoffs? With a tiny PMO that is prioritizing projects across the enterprise.

How to survive a recession using best practices in IT — Quiz time! Do you know how to survive a recession using best practices in IT cost management? In this enterprise CIO guide, review our latest stories and test your IQ on IT lessons learned.

2010 CIO and IT salaries and career survey: Read our special report — CIO and IT salaries are bouncing back in 2010 after a tough 2009. In this special report, learn about IT salaries by industry, CIO job tenures and more.

February 4, 2010  10:11 PM

2009 IT lessons: How did the recession change your IT organization?

Rachel Lebeaux Rachel Lebeaux Profile: Rachel Lebeaux

I can’t believe it’s already February (and thank goodness: I wouldn’t have been able to wait much longer for “Lost” to return!). Here at, even though a full month of 2010 is behind us, we’re still sorting through and reviewing 2009 IT lessons — “recession lessons,” if you will. This month’s CIO Briefing was a roundup of the results from our CIO and IT salaries and careers survey conducted in late 2009. I also put together a quiz to see if you’ve been paying attention to our recent coverage of technology-related recession lessons from 2009.

Why the long look back? I hate to be trite, but if you don’t learn history you’re doomed to repeat it — yes, CIOs, that includes you. A lot of desperate measures — or at least, that’s how they were viewed at the time — were put into place in IT organizations in the past year and a half. These included reduced IT staffing levels, an increased emphasis on business process management — you don’t need me to tell you, because you’re probably the one who had to make these difficult management decisions. I think we’re all looking forward to the day — maybe it will come later this year? — when IT budgets will loosen once again, allowing for the rededication of resources to IT, which can help move the entire business forward.

But if you enterprise CIOs go back to the old way of doing things once your budget dollars start trickling back, be warned that you’ll most likely be falling behind your peers. That’s because 2009 IT lessons will play a key role in dictating the future of IT.

The IT organization will always be charged with examining and implementing emerging technologies, but we’ve got to accomplish those “keeping the lights on” tasks quickly and efficiently, too. In all likelihood, business process automation will explode over the next few years as IT organizations find a cheaper way to complete this repetitive work. Business intelligence tools and dashboards will also be huge, as enterprise CIOs must keep track of an ever-widening playing field. IT outsourcing, which I covered quite a bit over the past year, will certainly make up a piece of the pie in replacing IT staffing without the salary commitments of the past.

What 2009 IT lessons are you carrying into your IT plans for 2010 — and beyond? Sound off below!

February 4, 2010  8:04 PM

Merck, Chevron and BP are touting a new IT management framework

Linda Tucci Linda Tucci Profile: Linda Tucci

It’s easy to forget how young a discipline IT is, given its enormous presence in our lives. Yesterday, however, that fact was front and center, as I watched the top IT talent at Intel Corp., Merck KGaA, BP PLC and Chevron Corp. talk about raising their “maturity levels.” Brilliant minds, and they’re talking about inching from Level 2 to Level 3 with the help of a new management IT framework called the IT-CMF, the Capability Maturity Framework.

The occasion was a morning presentation in downtown Boston by the Innovation Value Institute (IVI), a joint venture between Intel Corp., The Boston Consulting Group and the National University of Ireland, Maynooth. Established in 2006 and based in large part on the intellectual capital of Martin Curley of Intel, IVI’s mission, as the press material states, is “to tackle the universal problem of otherwise highly sophisticated companies ‘shooting in the dark’ on their IT investments.” The goal is to manage IT for business value.

News Editor Tina Torode will be writing in more detail about IT-CMF’s five-stage maturity framework, the end-to-end 36 IT processes it covers and its database of best practices culled from the insights of industry titans like Chevron, BP and Merck. Suffice it to say here that there was a lot of talk about assessments, establishing a baseline of maturity, drilldowns, identifying gaps, tapping into best practices. Oh, yes, and slide upon slide of charts with multicolored arrows to indicate the progression to maturity.

In one-on-one interviews after the slide presentations, some of the IVI presenters acknowledged the obvious: that the framework is young, that rounding out its database of best practices will realistically take more years and many more companies. Vincenzo Marchese, head of architecture capability and performance at BP, for example, said that while the framework addressed processes and delineated the underlying capabilities necessary to achieve a particular level of maturity, it did not cover people and tools much. Those 36 processes also could use some pruning, he said. But the framework, its disciples agreed, was a path to measuring whether the billions of dollars spent on IT are bringing an ROI for their funders. In addition, its emphasis on continuous improvement, an approach long embraced by business, was fundamental to helping IT mature.

Indeed, the emotional wallop for me, sitting in The Boston Consulting Group’s 31st-floor seminar room with magnificent views of the Boston Harbor, was how desperately IT wants to find a way to demonstrate its business value. IT, the Peter Pan of the commercial world, needs to grow up, in the eyes of these people. Maybe this IT-CMF framework will help.

February 1, 2010  9:18 PM

Business intelligence software as a revenue generator

Christina Torode Christina Torode Profile: Christina Torode

You’ve gotten them: those 10-page documents detailing your cell phone bill, credit card account or bank statement. But now, because of the economy, you may start to receive those statements in an online-only format — with business intelligence (BI) options built in.

At least that’s the trend that BI software vendor Information Builders Inc. is banking on. IBI sees a growing business in which third-party credit-card processors for retail or banking outlets provide consumer-facing statements in a Software as a Service or portal format, with such BI components as trending built right in. This SaaS model has allowed one credit-card processing company to save millions of dollars per year on the costs of postage and paper.

Also interesting is how some of IBI’s credit-card processing customers are using the company’s WebFocus BI software to sell consumer data back to retailers (devoid of names and accounts, of course). I haven’t heard too much about BI as a revenue generator or about companies using BI to create services to sell to their own customer base, but it’s happening among IBI’s customer base. And it’s also on the radar of Gartner’s upcoming Business Intelligence Summit this April in Las Vegas.

There’s more: Large discount retailers are using WebFocus to gather sales and marketing trend data in real time, down to each store level, and are sharing that data with all the stores — another way for BI to boost sales.

All in all, IBI believes the future of business intelligence is in creating services for your customers or using BI to generate sales in your own company, not just in internal financial forecasting and trending.

Are you finding new ways to use your BI tools to generate revenue, or are you still trying to get a handle on it for internal use? Email me at

February 1, 2010  6:00 PM

CIO weekly wrap-up: Google Chrome, iPad, social networking privacy

Rachel Lebeaux Rachel Lebeaux Profile: Rachel Lebeaux

Good afternoon! Here’s some of the latest chatter in the tech sphere today:

Google’s Chrome browser continues to gobble up market share from Internet Explorer and Firefox. A few months ago, I switched to Chrome and have loved the results (Firefox had gotten way too buggy). How about you?

The iPad chatter continues. I opined last week about some of the whiffs on the iPad device, but this article posited that the lack of Flash video might not matter.

According to a report by Sophos, malware and spam are on the rise on social networks such as Twitter, MySpace, Facebook and LinkedIn. Check those privacy settings, people.

On, we spent the past week looking at CIO best practices (and putting your knowledge to the test!), vendor contract management, methods for IT staff when salary increases are off the tables, and ways to boost efficiency through technology spending. Read the stories linked below and sound off with your comments!

CIO best practices: A self-assessment guide for top IT professionals — Some CIO best practices held steady in the recession, while others have shifted. Test if you’ve kept up with these quizzes in our self-assessment guide for top IT professionals.

Vendor contract management key to cutting costs through renegotiation — Enterprises are finding ways to use vendor contract management as a means to cut costs by renegotiating contracts down to the maintenance-clause and business-unit levels.

Motivation incentives for IT staff when salary increases not an option — How can you provide motivation incentives for IT staff when you can’t increase salaries? Offer them meaningful work and IT job opportunities, advises our CIO columnist.

CIO technology spending focused on reducing risk, boosting efficiency — Doing more with less remains the mantra for CIOs as we dig into our IT Priorities Survey on technology spending. The priorities? Mitigating risk. Essential upgrades. Cutting costs.

January 29, 2010  4:04 PM

The next big enterprise business tool: the iPad? Share your thoughts

Rachel Lebeaux Rachel Lebeaux Profile: Rachel Lebeaux

OK, OK, enough with calling Apple’s new tablet computer the “iTampon.” The name “iPad” is worth a giggle, maybe, but one of the top-trending topics on Twitter? Please. Let’s put our adult hats on and move forward in our discussions of the iPad, namely: Does this device have a future as an enterprise business tool?

It could go either way. Naysayers point to the iPad’s inability to run simultaneous apps (a big whiff, in my book), but others say it will play a big role in the enterprise and sooner than you might think — for example, this piece in The New York Times:

“The iPad is clearly one of those universal technologies that will be as useful in the home as in the office. Much like the iPhone, people will want it for work simply because it will be useful for getting work completed. Like any Apple product, it’s easy to use. It’s lightweight. And it’s mobile. Plus, this baby is as sleek as it gets.

“According to Forrester Research, the iPad will be particularly well suited to the high-end mobile office worker. These people will pay for the tablet themselves. They will primarily use it for messaging and collaboration and to access email, calendars and productivity applications.”

It’s really consumers who fell into a full-tilt swoon when they heard the iPad price point of $499 (and up, depending on your Internet coverage). And it’s consumers who will purchase the iPad for their own use — and quickly realize its benefits as an enterprise business tool and efficiency booster, if those benefits do indeed exist — that will shuttle this new tablet into the enterprise.

So, don’t be tempted to tinker with your existing hardware budget based on the iPad’s promise, at least not yet. A lot of CIOs have held off on hardware replacements since the economy took a nosedive, and once some of those dollars return to IT budgets, you can bet they’ll be looking to upgrade. But most IT shops still run on PCs and Windows, and — especially with the positive buzz around Windows 7 (as opposed to Vista grumbles) — I don’t see that changing.

If there’s a can’t-miss enterprise use for this baby, your users will let you know. If you decide to purchase an iPad for your personal use, explore its apps and interface with an eye to business efficiency.

I know we’ve all probably blogged and Tweeted the iPad to death already for the past few days, but I’d really like to hear whether you foresee the iPad being successful as an enterprise business tool, and how you see it entering that sphere.

January 27, 2010  9:11 PM

Oracle plays hardball with Rimini on third-party maintenance

Linda Tucci Linda Tucci Profile: Linda Tucci

“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.

In the case of Oracle USA Inc. v. Rimini Street Inc., Oracle’s sharp-tongued lawyers accuse Rimini of illegally downloading Oracle’s software and support materials “in a scheme that is vast in scope.” Oracle alleges that Rimini uses “‘robots or ‘crawlers,’ in intentional violation of Oracle’s Technical Support website terms of use.”

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.

Forgot Password

No problem! Submit your e-mail address below. We'll send you an e-mail containing your password.

Your password has been sent to: