Nice while it lasts

Earlier this week, the Washington Post reported that McColo Corp., a San Jose, Calif., based Web hosting service responsible for hosting some of this world's most notorious spammers, had been shut down. As a result, the volume of spam dropped by over 60% during the past 3 weeks.

Perhaps you noticed... perhaps not.

Either way, no one expects the current lower levels to be permanent. McColo's clients have likely made arrangements

with other firms to participate in their ignominious ventures. Nevertheless, the graphs below show the amazing effect that this victory has had on spam traffic. Kudos to Internet Service Providers Global Crossing and Hurricane Electric for pulling the plug on McColo.

A little knowledge

Earlier this month, Microsoft Research published a 32-page paper that details the extent to which health-related web searches contribute to a person's assessment of their own health. They conclude that, when a user searches for information about symptoms they've observed, the results can actually create anxiety and potentially unneeded medical attention. The researchers have even coined a new term for the phenomenon: Cyberchondria.

Here's how they say it works...
Someone enters their symptoms into a health site, like WebMD or MSN Health and Fitness. In the list of search results are a variety of conditions, all of which could be a real issue for that individual. But there is no context, training or real experience to use in assessing that list of conditions. Without the appropriate background knowledge, the user is left only to the limits of their imagination.

The best possible outcome is that they review the information with their doctor. But the worst-case scenario runs the spectrum from complete apathy to self-medication to a frantic trip to the ER. So while we've all heard (and probably used) the expression... "knowing just enough to be dangerous," it turns out that such a ratio of knowledge to available information (including context and experience) actually can be quite dangerous.

Microsoft Research Article: Cyberchondria: Studies of the Escalation of Medical Concerns in Web Search

Worth Paying For?

Earlier this year, I asked someone -- whose judgment I deem to be impeccable -- what he thought of Office 2K7. He said that it was an excellent product. Then I asked him a very different question... Is it worth buying... with your own money? I wasn't surprised when he said no.

And therein lies a most important matter. In uncertain times, decision makers must take a critical view of every proposition. The ultimate leverage point is value. There are many great products being released and marketed. But unless they contribute to revenue or can demonstrate actual cost reductions, then consumers (commercial and personal) won't spend real money on them. To state it a different way... there's a big difference between being willing to use a service and being willing to buy a service.

What kinds of services will be vulnerable? Here's my list:

• Instant Messaging - mobile and non-mobile
• Business oriented social networks
• Blogging - writing and reading
• Fantasy Sports support

When times are good, and people don't feel like their income stream is at risk, then they may consider paying for these kinds of services. For now, though, they are definitely useful, but they likely don't currently make anybody's "indispensable" list.

Even in tough times, profits exist

Dell (NASDAQ: DELL) posted a posted a 5% drop in net income and a 3% decline in revenue for its fiscal third quarter, according to an announcement made earlier today. That sounds like bad news, and it is. But it's not terrible news. Even though the company experienced its very first year-over-year drop in revenue, they still managed to earn over $720 million in the quarter ending October 31, 2008.

Read that again.

In what will likely go down as being among the worst 90-day periods of the post WWII era, a single company earned almost three quarters of a billion dollars. Last month's quarterly reports had to be interpreted with the understanding that, in July, we hadn't yet gotten cold-cocked by the events of August and September. But the quarterlies for this month will account for all of those system shocks.

I believe that the next 90 days will be absolutely critical. If firms come out of that period with a sense that, "Yeah it was bad, but we are still in one piece," then things will turn around in the 2nd and 3rd quarters of 2009. But if firms look at final 2008 results and find themselves in jeopardy, then these tough times might extend into 2010.

Is the IT Labor shortage real?

For several years, we have been hearing about a shortage of skilled technology labor in the US. In some specific areas - geographic and skillsets - the reality of a shortage is undeniable. Senior developers, system architects and application-specific experts (like SAP, Oracle, etc.) seem to perennially be in short supply.

Yet, some research published by Duke University earlier this year suggests that the shortage of skilled IT resources is not as dire as some would suggest. Certainly, business leaders testifying before Congress have little to lose with hyperbolic claims of not being able to find enough workers to keep the US economy going. But out here in the real world, the story is not quite so simple. Dr. Michael Teitelbaum, vice president of the Alfred P. Sloan Foundation, testified before Congress a year ago that ...

The RAND Corporation has conducted several studies of this subject; its conclusions go further than my summary above, saying that not only could they not find any evidence of shortages, but that instead the evidence is more suggestive of surpluses.

To me this conclusion is too generalized and vague to be of any use in the micro-economic world of the individual firm. The dynamics of the labor market are still very localized, even in a "global" economy. A company in Pittsburgh doesn't care if there are plenty of .NET developers in Denver. So while - on average - there may not be an overall labor shortage across the US, the situation may be dramatically different in specific markets.

What about your market? Are you experiencing difficulties in hiring technology resources? Or are you getting more résumés than ever?

A perspective on this question from Baseline Magazine : Is there really an IT labor shortage

Rethinking SLAs

When was the last time you examined your Service Level Agreements, especially for those for which you pay a premium for response time guarantees? It may be time to rethink all of those contracts, especially as you explore cost-cutting opportunities.

For instance, the most valuable part of any software maintenance agreement is upgrade assurance. Beyond that, is it really worth an extra 15-20% to pay for 2-hour response time when your own team will likely have the problem diagnosed and resolved well within that timeframe?

How often has your organization received actual benefits from a premium service level contract?

System reliability, clustering and virtualization have rendered most uptime promises largely irrelevant. Why pay extra for superior recovery services when your infrastructure has redundant built-in fault tolerance already implemented? And it seems that today's server components are (unlike automobile components) more durable than ever. As one executive put it...

"When we actually looked at the real world of performance of what we were getting even at the lowest level, the bronze service, because the equipment is so reliable and our processes are so disciplined we are exceeding the level contractually, and said, 'Gosh, can we bring everything down to that level?'"
-- Peter Whatnell, CIO, Sunoco Inc.

If you are searching for ways to reduce IT costs, looking at your service agreements is a great place to start. Call us today and we can help you rationalize and renegotiate.

VMWare: coming to a Smartphone near you

On Monday (10 November 2008), VMWare (NYSE: VMW) announced the release of a new product - Mobile Virtualization Platform. According to an article at InformationWeek.com, the product is described as a "a thin layer of software that will be embedded on mobile phones. It decouples the applications and data from the underlying hardware."

What does this mean for you?

Eventually it will mean that the types of applications that you can install on your smartphone will no longer be dependent on the specific device. In more grandiose terms, it standardizes the mobile platform in the same way that Windows standardized the desktop. No longer will mobile apps need to be tweaked and adjusted for a specific device. Instead, they will write for the platform, greatly reducing time-to-market for applications and substantially increasing customer choice.

The mobile virtualization platform could enable phone makers to bring handsets to market faster, and it could simplify migrating personal data off phones.

None of this will happen overnight. VMWare is negotiating with handset manufacturers and plans to have devices on the street in about a year. But we can be confident that the development community will begin to exploit this new technology very quickly.

Link to the InformationWeek.com article: VMware Brings Virtualization To Smartphones

BI for Open Source

There seems to be no shortage of Business Intelligence offerings, even as the industry continues to consolidate. One BI firm, Actuate (NSDQ: ACTU) has put its chips on the open source end of the table. Their next release, v 10, is targeted for shipment in the next two months, and it promises enhanced support for the Eclipse Foundation project called BIRT (Business Intelligence and Reporting Tools).

The company announced that more than 5 million copies of BIRT were downloaded during the quarter ending Sept. 30, 2008. This tells me that small and mid-sized firms are actively pursuing ways to exploit BI without the enormous upfront costs that Oracle and IBM require.

Of course, downloading the software is not the same as using the software, and firms will still need professional assistance to access and integrate the data. Inexpensive software will not absolve executives from the need to understand what BI can and cannot do, and to guide the initiatives accordingly. Please contact me if you would like to learn more about the benefits of BI and the steps you should take to get the most out of this exciting technology.

More information on the BIRT Project: BIRT on Wikipedia
The BIRT Homepage: The BIRT Project

Storage innovations

Data storage could be in for its biggest innovations in years.

SanDisk (NASDAQ: SNDK) recently unveiled a flash drive that starts to address the random write performance issues of earlier versions. This is one of those very subtle, but potentially transformative events in technology innovation. That's because it has the capability to render traditional hard drives obsolete.

Conventional hard drives have undergone massive improvements over the past decade. They are faster, more reliable and more efficient than ever. But the underlying technology is fundamentally the same as it was 20 years ago. Flash drives represented a big shift in storage, especially in terms of portability. No longer did your hard drive need its own carry-on bag. Multiple Gb's of data can be carried in your pocket. The trade-off, though, is speed. While a 5Gb memory stick is easy to tote around, it can take you a fair amount of time to use it... especially when you're adding data.

SanDisk claims to have made a big leap on this, with their ExtremeFFS file management system. If it delivers on its potential, then buying a PC with a 80Gb hard-drive will no longer be necessary. Your new laptop will be far lighter without that big magnet stuck inside. Think about the convenience of transferring files from your camera and expand it exponentially.

Keep your eye on SanDisk. They could be a big winner next year.

Ellison sounds spooked

Larry Ellison, founder of Oracle (Nasdaq: ORCL), has decided that Software-as-a-Service is falling short of expectations. He pointed to Salesforce.com as an example of a SaaS firm that hasn't improved its profitability as much as some might have hoped, even after 10 years of solid performance.

To me, this sounds a lot like the naysayers of the early 1980's. There were those who simply couldn't believe that an individual would have any need for their own personal computer. I wonder if Mr. Ellison is worried that his company, built on the now traditional big upfront licensing costs plus scandalously high "maintenance" fees, will follow in DEC's footsteps. Perhaps he believes that he can give a few prospects second thoughts about throwing in with a rival SaaS vendor.

If this belief represents the extent of Oracle's strategic thinking, then their future is not terribly bright. That Mr. Ellison made these remarks during an earnings call makes me even more bearish on thier long-term prospects. Oracle seems to be betting their success on the failure of a business model that is gaining market acceptance with each passing quarter.