But Wait, There's More

Gartner Says IT Will Buy Agility

One of the classic problems that plagues this marriage of IT and business needs is that most applications are built by people who have not been given an overall picture of the business and system processes. They work in their own little application development world. Maybe they prefer it that way, but it is not conducive to building an infrastructure that can ultimately be speedy or flexible. It results in what may arguably be good infrastructure, but in also applications that don't reflect business requirements, and that means wasted money on infrastructure (which is tied closely to applications) and even lost opportunities to chase new business. Those applications also mean not being adaptable to situations as they come along, which is at the core of what the real-time and on-demand catch phrases are all about. This is one of those cultural problems.

On the technical side, Gartner analysts will point out that to become more flexible and adaptable, companies will get the biggest bang for their buck through the adoption of strategic technologies. In other words, companies will have to buy themselves in to the type of agility that on demand calls for. You still have to change your culture, but technology is what will get you over the hump.

IDC Predicts Software Licensing Is Set for a Shakeup

Researchers at IDC say that customers and software makers alike had better brace themselves for change, because neither is happy with the current licensing methods that companies use to pay for the use of software. IDC has just conducted a study of software licensing called "The Future of Software Licensing," which says that both sides of the bargaining table are unhappy.

Software makers want to have a more predictable revenue stream from software and licensing methods, to more accurately reflect the value of the software to the business, says Amy Mizoras-Konary, program manager for IDC's software pricing, licensing, and delivery practice. Interestingly, one of the things that rankles customers is that current perpetual software licenses make upgrading expensive, since they usually have to do major upgrades every few years.

IDC surveyed 100 software companies and 100 IT shops for the study, and found that across all software vendors, their perpetual software licenses (in the aggregate) accounted for 75 percent of their revenue streams. But this seems set to change. Some 43 percent of software companies and 26 percent of customers polled by IDC said that they believed the majority of software sales would be based on subscription-type licensing for 2010. With large enterprises managing an average of 40 different software licenses, the change will probably happen from the top down.

CompTIA Says Human Error Causes Most Security Breaches

According to a survey by the Computing Technology Industry Association, foul ups caused by people, not by software or hardware, continue to be the main cause of security breaches in IT shops.

CompTIA says that despite a much-increased awareness of viruses, worms, and other security issues among administrators and users alike, human error accounted either entirely or partly for 84 percent of security breaches. Last year, that was only 63 percent. About 58 percent of the 900 organizations polled said that in the past six months they had experienced at least one major security breach that resulted in the loss of confidential information or an interruption in business operations. In last year's security poll, only 38 percent of companies said they had a major IT security breach.

Forrester Finds 'Cautious Optimism' Among CIOs, Raises IT Spending Estimates

Analysts at Forrester Research have just finished a poll of chief information officers, and a review of financial results from the top IT vendors and data from the Department of Commerce related to the economy in general and the IT industry in particular. As a result, Forrester has concluded that it should raise its IT spending estimates for the United States in 2004.

Specifically, Forrester is now saying that it expects IT spending in the United States to grow by 5 percent this year, compared with 2003. The company was originally predicting 4 percent growth. Part of the reason why Forrester thinks it is time to revise its estimates upward has to do with the strong showing among the top 20 IT companies in the final quarter of 2003. They were aided by the fall of the dollar against other currencies, to be sure, but there was also some real growth in many product lines. Forrester says that it expects spending on computer hardware to be up by 10 percent in the United States this year; the company says that the rate of price declines on hardware has slowed, which suggests that demand is stabilizing. Spending on software will be up by 8 percent, predicts Forrester, thanks in large measure to a focus on security products, as well as a slight uptick in ERP and related software sales. Network and communications equipment spending, by contrast, will be up by only 1 percent.

IBM Buys Candle to Bolster 'On Demand' Plans

Seeking to improve its systems management capabilities as it moves into a self-proclaimed "on demand" world, IBM last week snapped up privately held systems management software expert Candle. IBM had not yet divulged the exact plans for the deal at press time. Candle has 800 employees, as well as 3,000 customers around the world, who use the company's tools to manage their Windows, Windows, Linux, OS/400, mainframe, and other kinds of servers. Candle, based in El Segundo, California, will undoubtedly be moved into the Tivoli unit of IBM's Software Group, which is run by Robert LeBlanc.

IBM would not say how much revenue Candle generates, but said that the company is profitable. Hoover's Online, which estimates revenues for private companies, reckoned a few years ago that Candle generated around $320 million in sales. What the acquisition means for long-time IBM partner and Candle rival BMC Software is unclear, but it may be that IBM wanted to buy BMC, which, with $1.3 billion in sales a year, is the market leader in systems management and performance tuning. But BMC is a public company with a market capitalization of $4.3 billion, and IBM could pick up Candle for a lot less money. IBM also does not have the $6 billion or so that buying BMC would cost.