Offering regional and national programs, CIO (and CSO) events bring together some of the most respected names and thought leaders in information technology and security. Presented by CIOs and other senior level executives, these invitation-only programs offer timely topics and strong networking. Learn More »
Public Council Teleconference: Application Rationalization — Hidden Costs and Smart Decisions
November 17 at 11:00 am US/Eastern (GMT-5)
Join Honorio Padrón, of The Hackett Group, who will share the drivers for companies to tackle application rationalization and the results of research that define the hidden cost of complexity. Additionally, we will discuss key decision milestones—to start or not, holding the course steady and fulfilling expectations.
Virtual Desktop Cost-Benefit Analysis — Michael Jacobs, Catlin Group
The analysis contained in this presentation measures the cost of everything from the machines and licenses to the infrastructure for virtual vs. traditional desktop environments.
Honor your best senior team members - Apply for the CIO Ones to Watch Award
Get well-earned public recognition for your top up-and-coming team members, your IT organization and your enterprise. Award winners will be announced, publicized and feted in May 2010, great timing to help attract new IT recruits to your company.
Learn more about the CIO Executive Council »July 01, 2003 — CIO —
A CEO watching a football game or a golf tournament on TV today is reminded during the commercial breaks of something about his IT infrastructure. He’s reminded that it’s a mess.
The bearer of this bad news is IBM. The message embedded in its ads (once you finish laughing at befuddled businesspeople peering through "magic business binoculars" or examining the "universal technology adapter") is simple: Your IT is broken, and you need IBM, the biggest technology company in the world, to fix it.
Now CIOs watching those ads know that IBM can’t, in fact, clean up the mess they live with every day—the costly proliferation of hardware and software that doesn’t work together; the shrunken staffs asked to manage more applications running on servers that typically use only 10 percent to 20 percent of their computing and storage capacity. They understand that IBM’s "e-business on-demand" proposes to solve those problems with technologies that are either in their infancy or so numbingly complex that they’re years away from being applied by the typically risk-averse Fortune 2000 company.
Unfortunately, CEOs and CFOs don’t care about any of that. All they know is that their IT costs—which are now more than 50 percent of the average Fortune 500 company’s capital costs—are throbbing on their balance sheets like big red sore thumbs. All they know is that they are facing a crisis of cost and complexity. And every time they see those IBM ads, it brings it all back.
But IBM’s on-demand vision is not going to bail CEOs out of their predicament—at least not yet. More than a year ago, American Express outsourced much of its IT group to IBM in what was hailed as the first example of IT as an outsourced utility. But it is not a utility. Amex’s computing resources are not mixed into a vast pool to get giant economies of scale, like electric utilities do. It is a variable pricing arrangement in which Amex pays a floating rate for computing power from a bunch of existing machines that are fully dedicated to Amex. That’s outsourcing with a pricing twist.
"IBM does support and the data center," says Amex Vice President and CIO Glen Salow. "We do everything else—like application development and architecture." Stripped of its on-demand hype, what you get with IBM is outsourcing, and outsourcing is what it has always been: a risky strategy that according to numerous surveys fails to achieve either better service or reduced costs 50 percent of the time.