BMUS 18

TRADING PLACES NASDAQ vs NYSE in a high-tech head-to-head BRAVE NEW WORLD Tim Armstrong on revitalizing AOL A BITTER PILL Why Apple’s tablet will be difficult to swallow GOING GREEN Sustainable business is here to stay

www.busmanagement.com • Q2 2010

THE The cloud is forecast to transform the computing landscape. Should companies join the revolution?

REPORT

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EDS NOTE_mar10 17/03/2010 13:18 Page 9

FROM THE EDITOR 9

Managing growth Building growth should be a business positive, but if the past 10 years has taught us anything, it is that there is more to successful growth than just getting bigger.

A

s AOL finally splits from Time Warner after a decade of losing ground in the race for internet domination, it’s a timely reminder that forcing growth doesn’t always work. The super-company created back in January 2000 through America’s largest ever merger – an eye-watering $160 billion – is proofpositive that expansion without a coherent strategy will rarely succeed.

Starbucks, for example, experienced growing pains in 2008 when, after a period of rapid and well-documented expansion, it announced that it planned to close 600 of its US stores to try and recapture what CEO Howard Schultz referred to as “the soul of the past”. A series of store openings and new product launches helped fuel the stock price and drive rapid growth, but chasing quarterly earnings growth targets undermined the company brand.

First, as Starbucks increasingly appealed to grab-and-go customers for whom service meant speed of order delivery rather than recognition by and conversation with a barista, many Starbucks veterans felt alienated and switched to other, more exclusive brands. Second, by broadening its appeal and introducing a range of new products, the company undercut the integrity of the Starbucks brand for coffee purists. Finally, opening new stores and launching new products only created superficial growth. Rather than improving same store sales year-on-year, the constant opening of new stores – sometimes in competing locations nearby – actually undercut store manager efforts to build sustainable growth. Saturation and the resulting

cannibalization of existing store sales undermined not just brand health but also manager morale.

The decision to close such a high number of stores was hailed by many as a long-overdue admission that there are limits to such expansion – and serves as a cautionary tale for managers and executives looking to profit from the current upturn in the economy.

Leadership and culture are key to successfully building growth. Bob Seelert (page 76), Chairman of Saatchi & Saatchi, has organizational self-awareness as one of his key company values and, as you would expect from an ad-industry veteran, recognizes the importance of making an emotional connection with customers – something his firm has been phenomenally successful at over the years. Meanwhile back at AOL, new Chief Executive Tim Armstrong (page 38) believes it comes down to getting the culture right and putting a premium on innovation, so that employees are motivated to succeed and are inspired by the company they work for. Armstrong faces big challenges in trying to recapture lost market share and rebuild the credibility of his new firm,

“The company is big on culture, big on innovation and big on really improving our products and services, and that makes a big difference” Tim Armstrong, CEO, AOL (Page 38)

but with these values as a sound base he’s positive that growth will soon follow.

Making the right technology choices helps, too, and getting the strategy right around your technology investments is essential. The last 18 months have witnessed an explosion of interest in the cloud – and an equal amount of confusion as to what the business benefits will be. The cloud certainly offers great potential in terms of flexibility and (more pertinently with regards to growth) scalability; our special report (page 48) on what the cloud means for business aims to provide some clarity. Ultimately, technology is just an amplifier; if your strategy and processes are sound then technology can help make them great, but if they are flawed from the outset then technology will only serve to magnify any problems. n

Senior Editor Ben Thompson

“Our assets go up and down the lift every day, and our whole business is about giving birth to the ideas that are going to drive people’s businesses” Bob Seelert, Chairman, Saatchi & Saatchi (Page 76)

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CONTENTS_mar10 17/03/2010 11:49 Page 11

CONTENTS 11

102

The wisdom of the cloud Forget blue-sky thinking; clouds are forecast for 2010 and beyond. Business Management reports on why many believe the cloud will be the next big breakthrough in computing, and asks: why should your business care?

48

MAINFRAME FOCUS 72 Capitalizing on a mainframe renaissance Reports of the death of the mainframe have been greatly overstated; here’s why

War of words Does the launch of Apple’s iPad spell trouble for the emerging e-reader market?

74 Doing more with the mainframe With CA’s Dayton Semerjian

116 Green means green VPs from Kraft, Dell, Herman Miller and DuPont discuss how their companies have been building sustainability into the fabric of their business

The brand that Time forgot Can ex-Google exec Tim Armstrong help AOL recapture its position as the world’s number one internet platform?

38

CONTENTS_mar10 17/03/2010 11:49 Page 12

CONTENTS 12

82

CIO stories

60 GOLD SPONSOR

Vineeth Ram

58 Enterprise cloud: Now? Later?

Never?

Colin Lacey evaluates the key aspects and considerations of cloud computing

60 Designing the datacenter Vineeth Ram gives his advice on designing and deploying datacenter initiatives

ASK THE EXPERT 96 Philip Newcomb, Software Revolution, Inc. 98 Dmitry Faybysh, Glenture Group LLC 100 Joe Ruck, BoardVantage 112 Marcelo CondĂŠ, Spring Wireless

62 Fabric computing Is a mist computing model an alternative to costly and crowded datacenters, asks Daniel Beveridge

76

Bob Seelert

Euronext for the business of the world’s biggest companies begins

82 CIO stories Three tales from the world of the CIO

94 Building an effective MDM strategy How to ensure your master data management program is a success, by Mike Zier

110 Mobile solutions John Herrema offers an insight into the competitive advantage of a mobile workforce

114 The impact of interaction

64 Stormy times

70 Service management in the cloud

Dennis Bouley reveals how to weather the oncoming carbon allocation storm

How to accelerate IT management success with cloud computing

66 Trading places

76 The big interview

The battle between NASDAQ OMX and NYSE

With Saatchi & Saatchi Chairman Bob Seelert

Lynn Hunsaker argues the business case for a customer-centric organization

122 Establishing the technical baseline Nuno da Silva on corporate environmental sustainability strategies

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CONTENTS_mar10 17/03/2010 11:49 Page 14

CONTENTS 14

IN THE BACK

124 Owning the data With Tim Stanley, Chief Information Security Officer at Continental Airlines

126 Putting the brakes on virtualization Thomas Miller explains how to achieve greater business objectives through virtualization

128 Securing Citi With Frank Wu Dave Stewart

130 Happy at work?

How you create, nurture and develop workplace culture can be critical to your company’s success

136 Creative thinking: Dave Stewart 138 Objects of desire: Gadgets 140 36 hours: Boston

142 On the shelf: Book reviews 144 Photo ďŹ nish: Shaun White

66

Trading places

122

Nuno da Silva

Happy at work?

130

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A Controlled, Professional and Focused Environment The CIO Summit is an opportunity to debate, benchmark and learn from other industry leaders.

It is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

A Proven Format This inspired and professional format has been used by over 100 executives as a rewarding platform for discussion and learning.

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Finance Director JAMIE CANTILLON Production Coordinators LAUREN HEAL, RENATA OKRAJNI, AIMEE WHITEHEAD

“An excellent venue for CIOs to exchange information on current topics, as well as, interact with a variety of industry vendors.” Jim Cramer, Scottsdale Healthcare “What stands out from this event was the quality of the speakers chosen to moderate the round tables. I like working with genuine facilitators who can open people up and keep the discussion moving.”

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Customer Experience Engagement Maintain cross-organizational passion for consistently superior customer experiences · Employee engagement motivator discovery · Customer satisfaction bonus incentives · Customer experience innovation · Self-reporting team recognition · Personal perception discovery · Stakeholder management · Customer-centricity audit · Interaction bridges · Systems thinking · Internal branding

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UPFRONT BMUS 18:25 June

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UPFRONT 18

LEARNING FROM TOYOTA Over the past two decades Toyota has set the standard in manufacturing – and not just in the automotive industry. The Japanese giant’s ‘lean production’ system is the blueprint for manufacturers everywhere, while its painstaking attention to detail, aggressive pursuit of perfection and self-assured marketing techniques have long been the envy of firms across the

world in multiple industries.

You won’t find a single carmaker that hasn’t copied Toyota’s manufacturing and supply chain management. And so when the company was hit by a devastating series of safety recalls in February, its competitors – rather than basking in its failings and trumpeting their own superiority – instead returned to their shop floors fully

aware that the same could happen boss Akio Toyoda himself put it in to them. his testimony to a US congresBut what went sional panel: “Toyota has, wrong? In 2002, for the past few years, Between Nov 2009 and Toyota set itself the been expanding its Feb 2010, Toyota goal of increasing its business rapidly. recalled global market share Quite frankly, I fear from 11 percent to the pace at which we cars worldwide 15 percent, a goal that have grown may have was driven purely by been too quick.” “ego”, according to James Womack believes Toyota Womack, author of The Machine manufactured its own downfall by that Changed the World. As Toyota ignoring many of the well-estab-

9 billion

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Page 19

UPFRONT 19 lished processes that made it the was trying to grow, and thus the market leader in the first place. In technological failures at Toyota a relentless pursuit of growth, were born from a failure in culToyota dropped the ball as it ture. Rapid expansion, strained began to push the lean producengineering resources and a cention model beyond its limits, and tralized corporate structure put engineering quality ultimately stress on Toyota’s established and suffered as a result. widely emulated corporate disciToyota revolutionized the inpline. For example, all recall decidustry by streamlining its supply sions were made from Toyota’s chain and reducing the number of Customer Quality Engineering tiered component manufacturers, Division in Japan, meaning no generating closer working relacars could be pulled off the roads tionships and improving quality. in America, or anywhere else for But as Toyota grew, the company that matter, without first getting started to forget what it althe OK from Toyota HQ ready knew – the ‘three thousands of miles nevers’. According away. From there it is Toyota faces to Paul Ingrassia, impossible for the losses of up to an automotive excompany to truly pert who has understand the exfrom lost output studied Toyota tent of safety and and sales extensively, the quality problems.

Japanese carmaker According to neglected its philosophy people who have actually to “never build ... a new product worked with and for the Japanese in a new factory with a new workautomaker, Toyota must learn to force”. These ‘three nevers’ offer a trust non-Japanese leaders, deleuseful insight into how organizagate more authority to them and tions must combine ‘knowing’ decentralize decision-making in with their ‘growing’ if they are to order to respond more effectively succeed in a global marketplace. to future safety and quality probToyota appeared to become lems. And if Toyota is to be the obsessed with growing even to the example and the warning, then detriment of protecting its posiother carmakers must learn the tion as market leader. Toyoda true value of trust and experience himself admits that because of this in supply chain management, as lack of focus, his company’s priorwell as the passing on of ‘tacit’ ities became confused. “Toyota’s knowledge. This can be done by priority has traditionally been the simply placing a number of exfollowing: first, safety; second, perienced company employees quality; and third, volume... These with a good knowledge of combecame confused, and we were not pany culture into any new workable to stop, think and make iming environments. provements as much as we were As described by Bill Fischer, able to before, and our basic stance a Professor of Technology to listen to customers’ voices to Management at IMD, the key is make better products has weakalways keeping some of the familened somewhat.” iar while embarking on someEssentially, the company and thing new. Perhaps this is the its people could not keep up with most valuable lesson to be learned the pace at which the company from Toyota’s recall crisis.

NEWS IN PICTURES

In the final days of the healthcare debate, President Obama called for political ‘courage’ to rally skittish House lawmakers into voting for his signature healthcare overhaul at the AFL-CIO Labor Day Picnic in Cincinnati, Ohio.

$2 billion

The Federal Reserve would take on a greatly expanded role in financial regulation under new legislation unveiled by top Senate Democrat Christopher Dodd.

David Beckham will miss this Summer’s World Cup after tearing his Achilles’ tendon earlier this month. While he’s expected to make a full recovery, his earning potential is still high. He reportedly earned $16.5 million in personal sponsorship deals in his first full season with the LA Galaxy of Major League Soccer and currently has deals in place with Adidas, Motorola and Armani among others.

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UPFRONT 20

ONE YEAR ON, HOW MUCH HAS CHANGED?

BRANDING ADVICE Mark Artus, CEO of 1HQ, has been the brains behind advertising campaigns for the likes of Kraft, Nestle, Rowntree and Heinz, amongst others.

1 Worse

Better

$11tr

$12tr

7%

10%

-1.9%

0.1%

House Price Index

-7%

-3%

Average Gas Price

$1.90

$2.70

Average earnings

$720

$738

Bankruptcies

3,368,277

4,155,853

Dow Jones

9,500 10,600

NASDAQ

1,500 2,280

National Debt Unemployment rate

Consumer Price Index

USD Currency (€) USD Curren (£) USD Curren (¥)

0.68 0.62 89.8

0.71 0.61 91.2

All figures rounded up or down using most available information relevant to the time period between the changing of presidents Bankruptcies include filings, terminations and pending | Average earning - weekly | Stock market and currency data rounded up or down 01.20.2010 Sources: www.bls.gov | money.cnn.com | www.oil-price.net | www.eia.doe.gov | www.fhfa.gov | www.uscourts.gov | www.federalbudget.com

Illustration by Robin Richards

2 3 4 5 6 7 8 9 10

Your brand is more than a logo. It’s the embodiment of your business amongst its customers and the focal point around which their opinions form. Think of it as a living thing that needs constant nurturing to ensure healthy growth.

Be crystal clear who your customer is and what you do for them better than anyone else can. These two things make for the essential promise of your brand: understand it, and stick to it.

Identify the most effective way to communicate this promise. Advertising is one way but there are many others. If budgets are tight be focused in your approach and creative in your thinking.

“The way to gain a good reputation is to endeavor to be what you desire to appear,” said Socrates.

These days, it’s never been more important to walk the walk, as well as talk the talk. Don’t just say what you do – do what you say.

Take a distinctive stance in the market in which you operate – occupying the middle ground only leaves you open to attack from more angles.

Never stop expanding your knowledge of your customer – but don’t expect answers from them, only clues.

Remember there will always be an emotional, sometimes irrational component in a customer’s relationship with your brand. It can’t always be controlled, but if understood it can be influenced.

Change is inevitable if your brand is to going to stay contemporary and relevant, but don’t be tempted to abandon founding principles in favor of the latest trend.

After the deepest recession of modern times, trust is in short supply. Brands with authenticity, responsibility and integrity will prosper.

With times still tough, and budgets still tight, focus is essential. Often we spend too much time coming up with answers, and not enough on ensuring we’ve got the right question. What’s the One Hard Question your brand is facing this year?

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UPFRONT 21

THE RESULTS ARE IN…

AROUND THE WORLD IN 80 DAYS

Sales of netbooks – small, lightweight computers used primarily to interact with applications in the cloud – have greatly increased, and are expected to continue increasing

NETBOOK SALES

2007 400, 000 sold

2008 11.4 million sold

2009* 177.7 million sold

Our guide to the last quarter’s global events – and their impact on your business.

GOOGLE OUT?

SLOW JOB GROWTH

Google has said that it may end its operations in China following a ‘sophisticated and targeted’ cyber attack originating from the country. The immediate move out of China would be significant as would the company’s potential growth around the world.

BMUS impact rating: ****

The president’s annual economic report projects the same thing the administration’s budget did: slow job growth for this year. The report projected that the unemployment rate would be 9.8 percent at the end of this year; it’s currently 9.7 percent.

BMUS impact rating: ****

FALLING APART

ROAD TO FREEDOM

40m

The relationship between sports stars and sponsors changed forever when it emerged that Tiger Woods admitted ‘infidelity’ in his marriage.

Analysts suggest that Tiger’s troubles could lead to greater interest in sponsoring leagues or teams as opposed to individuals.

BMUS impact rating: ***

Thousands marked the anniversary of Nelson Mandela’s walk to freedom after 27 years as the world’s most famous political prisoner. Top leaders of the African National Congress took part in a re-enactment of the iconic march, widely seen as signalling the end of apartheid.

BMUS impact rating: ***

30m

COMMON GROUND

OIL PRICES UP

Policy makers and bankers called a truce after a week of tough talking at the World Economic Forum annual meeting, saying they agreed on the need for global financial regulations. Quick action is needed to put the areas of agreement into practice.

BMUS impact rating: ****

The nation’s energy bill is on the rise after Arctic-like winter weather conditions. Higher energy prices will not be helpful to the economy’s recovery as it will undoubtedly take money out of consumer’s pockets.

BMUS impact rating: ****

*Projection Source: The Information Network

GOOGLE RESULTS...

Google is an increasingly large part of our move towards cloud computing. Popular applications like Google Maps introduce people to using applications on the web, maintaining the same speed and interactivity as an application run on their computer

Unique Visitors

maps.google.com books.google.com docs.google.com

60m ‘09

‘08

‘07 50m

20m

10m

0m JAN

JAN

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WHERE NEXT FOR IPOs?

benefit from the capital drawn from the general market, without having to seek and negoThere are a few reasons why a tiate with individual investors. This helps to company may issue an initial drive growth through attracting higher profile public offering (IPO), but primarily C-Level executives and management to the a company will do it to provide company, and can expedite the development itself with capital expansion of mergers and acquisitions. without incurring debt.

Throughout the late 1980s and early 1990s, Japanese firms were highly active in the An IPO enables a company to gain access IPO market as technology and comto a pool of stock market investors munications companies took adthrough listing its shares on The vantage of the growing demand the public stock, thus inissuing of an IPO for high-tech ways to commuhas been creasing its chances of raisnicate during the East Asian ing revenue to drive future asset price bubble. growth. The investors are for well-established However, as the end of the firms with a loyal happy because they have a client or customer 1990s approached, internet startright to future profits distribbase ups and other companies leading uted by the company and the the way in worldwide web innovations right to a capital distribution in case of began to capture the attention of investors as dissolution; the company is happy because it the dotcom bubble transformed the IPO landgets the chance to increase income without scape. This period (between around 1995 and being required to repay the capital outlays.

2003) witnessed the domination of US IPOs, Traditionally, the issuing of an IPO has and a cluster of activity involving smaller deals been reserved for well-established firms with a – still in their billions but small compared to loyal client or customer base that is considered the likes of Nippon 10 years earlier – was ina safe bet on the stock market. British Gas dicative of a change in business focus.

PLC’s $7.6 billion IPO and Japan’s Nippon These companies were attracted by the Telegraph & Telephone’s $13.7 billion are possibility of cheap access to capital and incases in point. Once listed, these companies

reserved

creased exposure and prestige. Making money appeared to come easily to many during this time and investors were willing to throw capital at anything that caught their eye; as a result, stock markets in industrialized nations saw their equity value rise rapidly from growth in the internet sector and related fields. They never had it so good.

However, as is so often the case when things are going well, people seemed to forget that for every boom there’s a bust. The market downturn at the start of the new century culminated in the global financial meltdown – the worst in about 60 years – at the end of 2008. During this tough time for global markets, IPOs have largely taken a back seat – but when they have been issued, they have taken the more traditional form of large firms offering big sums.

But where next for IPOs? For the time being, as investors remain more cautious over where their money is spent and with start-ups and younger firms remaining a massive risk in the eyes of backers, IPOs will keep to the old school trend of big firms and big capital.

Geographically, it’s hard to look beyond China’s current domination of the IPO market continuing for some time as its economy burns brighter and brighter.

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UPFRONT 23

Largest initial public stock offerings An initial public stock offering (IPO) referred to simply as an ‘offering’ or ‘flotation,’ is when a company (called the issuer) issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.

US

France

Russia

Italy

UK

China

Sweden

Germany

Japan

Australia

1995 Dotcom bubble

Deutsche Telekom AG Charter Communications

$3.7bn

$12.5bn

Halifax PLC

$6.8bn

Telstra Corp

Goldman Sachs Group

$9.8bn

$3.7bn

NTT Mobile Communications Network

UPS

Conoco

$5.5bn

$4.4bn

$18.1bn

AT&T Wireless Group

2000

$10.6bn

Telia AB

$8.9bn

September 11 attacks

Kraft Foods

Agere Systems

$8.7bn

$4.1bn

Enel SpA

Prudential Financial

$16.6bn

Market downturn

$3.5bn Travelers Property Casualty

$4.2bn

CIT Group

$4.8bn China Construction Bank Corp

Electricite de France SA

2005

$7.5bn

$9.2bn Bank of China

OAO Rosneft

$11.2bn

$10.7bn

Financial crisis Chinese correction

Visa

$17.9bn

Industrial & Commercial Bank of China

$19.1bn China State Construction Engineering Corp

$7.3bn

2010 US

France

Russia

Italy

UK

China

Sweden

Germany

Japan

Australia

Sources: businessweek.com | wikipedia.org Created by @ripetungi

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EU MODERNIZES AIR TRAFFIC SYSTEM EATMS is an ambitious initiative to coordinate the management and regulation of all airspace throughout the EU and beyond.

An Enhanced Air Traffic Management System (EATMS) modernization strategy was developed to define new concepts in avionics and air traffic management to ensure that air traffic capacity can grow in European air space as new technology and new initiatives are introduced.

Originally written entirely in Ada, Thales Air System’s Eurocat is a fully proven air traffic management system operating at 280 air traffic control centers worldwide.

As a part of its EATMS modernization strategy, Thales recently achieved acceptance for the deployment of a new version of Eurocat’s flight data processing (FDP) subsystem written in pseudo real-time Java. This modernization facilitates meeting new technical standards and enables rapid conformance with new ATC systems and regulations.

Thales determined that replacement of the FDP Ada language with Java was pivotal to upgrading Eurocat to meet the EATMS’s modernization requirements. Because the risk of manu-

al error was unacceptable, fully automated modernization was imperative to assure system performance. Safety was paramount for the modernization of this mission-critical real-time system that will manage over 10 million passenger flights annually.

After evaluating alternative modernization solutions, Thales chose The Software Revolution Inc.’s (TSRI) JANUS Studio automated modernization capability as the most effective solution for meeting their objectives. The key to this choice was the assurance of perfect functional replication of the existing software in a new language and platform, a capability provided flawlessly by TRSI’s automated solution.

A 100 percent improvement on key code quality and design metrics was achieved using TSRI’s methods and tools along with high economies of scale and schedule compression when TSRI’s architecture-driven modernization approach was applied across three variations of the Eurocat product-line.

Today, the Eurocat system has passed factory acceptance by major ATMS customers, and will commence operation at the beginning of 2011 at significant airports all across Europe and Asia.

A BRIEF HISTORY OF OUR TIME: YOUTUBE April sees the five-year anniversary of the first video posted on YouTube, during which time user-generated content has reshaped the internet, media and political landscapes. What were the key moments?

19 seconds of founder Jawed Karim in front of the elephants at the San Diego Zoo is the first video posted to the site.

April 23, 2005

Nike is the first major company to embrace YouTube’s promotional potential. A video of Brazilian soccer star Ronaldinho dancing the samba with a ball is an early viral hit.

October 21, 2005

Saturday Night Live clip ‘Lazy Sunday’ attracts nearly two million views in a week and makes creator Andy Samberg a star. Two months later, NBC asks YouTube to take the clip down; it complies.

December 15, 2005

A day after Sequoia injects $8 million, little-known motivational speaker Judson Laipply uploads ‘The Evolution of Dance’, a six-minute mash-up of crazy dances. It becomes the most popular YouTube clip in history, with over 131 million views.

April 5, 2006

October 9, 2006

Google buys YouTube for $1.65 billion.

YouTube and CNN host the first presidential debate, featuring citizen-submitted video questions. In the 2008 election cycle, seven of the 16 presidential candidates announced their campaigns via YouTube.

July 23, 2007

YouTube passes one billion videos a day but remains unprofitable. Analysts estimated 2009 revenue of $240 million, but YouTube spent more than $700 million storing and serving all that video.

October 12, 2009

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MOVIE MAGIC

perience in the years to come, as well as inject some excitement into game consoles and struggling Production budget: $230 million. broadcast TV stations. Many movies are set to hit the Marketing budget: $150 million. Box big screen later this year, including Toy Story 3, and office takings to date: $2.5 billion it is thought that the success of Avatar will only hasand counting. Now that’s a return ten the trend. on investment.

“When James Cameron conceived the idea for Whether you enjoyed it or not, James Cameron’s Avatar 15 years ago, the technology wasn’t available Oscar-winning Avatar is officially the highest grossing to make it,” explains Nolan Murtha, digital effects sufilm to hit the box office ever. Worldwide takings after pervisor at Cameron’s production company only six weeks stood at $1.85 billion versus Titanic’s Lightstorm Entertainment. “Over the past few years, however, we were able to bring his vision to life. On $1.84 billion, while the record-breaking film also became the fastest movie ever to achieve $1 billion in set, we essentially created a live video game of each ticket sales around the world, beating Lord of the scene; we could see what the movie was going to look like and make adjustments right away, rather Rings: The Return of the King into second place. than waiting until post-production.”

While the 161-minute narrative The filmmakers re-created the feels a little tired, there can be ablive-action shooting experience solutely no doubt that the groundby using Autodesk breaking visual effects have MotionBuilder perforinstilled a long-missing level of enmance capture software thusiasm back into movie theaters. cost to modify a theatre screen on set. Performances by And the key to Avatar’s success is to 3D live actors were applied onto that it has revived interest in the 3D fordigital characters and viewed in mat. Last year, animated features such as Up, Monsters Vs Aliens and Ice Age: Dawn of the real-time. The digital characters were seen within virtual environments, which were preDinosaurs introduced the industry to digital 3D projection as a viable proposition and Avatar was able to built with MotionBuilder and Autodesk build on that success, capitalize on higher ticket Maya visual effects, animation and prices and ultimately introduce many moviegoers to rendering software. In addition, Autodesk Mudbox digital new 3D technology for the first time.

3D has once again made movie-going an event sculpting software was used and has opened the floodgates for people to see what for asset creation, and a creative filmmaker can do with that technology. then Maya was again Indeed the proliferation of 3D entertainment as a used for final scene creation and finishing. whole is expected to revitalize the movie theater ex-

$65,000$100,000

3D FILM: A SHORT HISTORY The earliest confirmed 3D film shown to a paying audience was The Power of Love. The camera rig was a product of the film’s producer, Harry K. Fairall, and cinematographer Robert F. Elder

1922

William Castle released an ‘IllusionO’ film, 13 Ghosts, a forerunner of 3D. The audience is given colored viewers to see the ghosts on screen

1960

IMAX 3D is introduced with the film Wings of Courage, viewed through goggles with liquid crystal lenses

1995

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Autodesk CEO Carl Bass is in no doubt that Cameron’s film has reinvigorated the nascent 3D film industry. “They literally changed the way movies are made by using digital technology in a way that was impossible just a few years ago,” he says. “Avatar is a truly immersive experience, advancing virtual moviemaking and taking storytelling to new heights.”

Cliff DeYoung, CTO at the country’s largest theater chain Regal Entertainment, agrees. “The James Cameron film was one of the first that didn’t try to use 3D as a gimmick,” he explains. “It wasn’t there to make things jump out of the screen. It was there to add depth in the jungle. It was there to add depth while ships were flying around. It was there to immerse the audience in the presentation. I think it’s groundbreaking because of that, and it’s probably how we’ll see a lot more films being made in the future.”

Nonetheless, the transformation to digital 3D is something of a double-edged sword for the entertainment industry; change does not come cheap. As DeYoung explains, completing the theater modifications needed for movie screens to be able to show 3D films can be an expensive business. “It costs anywhere from $65,000 to $100,000 per screen, depending on the size of the theater,” he says.

“However, there’s no significant benefit to the exhibitor in doing that.

The benefits are largely with the studios in not having to produce, replicate, distribute and store celluloid film. So that’s

where the hang-up has been over the last couple of years: getting it financed by somebody who is actually going to benefit.”

Indeed, DeYoung believes the transition to 3D would have happened a lot sooner had such funding issues been resolved; Cameron had wanted to release Avatar earlier than its actual December debut, but was constrained by the number of theaters able to handle the format.

There’s also a cautionary lesson from recent history to take into account, too. “I think you would have seen exhibitors rush out and equip as many screens as possible with 3D capabilities if they hadn’t already learned a tough lesson with stadium seating,” DeYoung explains. “There was a mad rush to go out and put stadium seating in movie theatres across the country, which put a lot of debt on exhibitors. And in fact, most of the big theater exhibitors that filed for bankruptcy in the 1990s and early 2000s did so partly because of the debt that was accumulated from that big capital expense.”

But despite concerns, there’s no sign of the 3D bandwagon slowing down just yet. As Business Management went to press, Tim Burton’s Alice in Wonderland had just broken opening weekend box office figures, earning an estimated $116.3 million – the highest grossing weekend ever for a spring release. IMAX alone sold out every seat they had for the entire weekend. If there was ever a question as to whether or not 3D was here to stay, it’s now officially been answered. Avatar was not an anomaly; all it did was expand the marketplace to moviegoers that were non-believers in the 3D technology.

2003 James Cameron's Ghosts of the Abyss, a 3D documentary tour of the Titanic wreckage, lays the foundation for the technology he will need to make Avatar Avatar breaks box-office records with its groundbreaking 3D special effects

2009

Tim Burton’s Alice in Wonderland, starring Johnny Depp, earns the highest opening weekend figures for a 3D film, beating Avatar into second place

2010

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NO NEED FOR A SERVER ROOM

FAST FACT

IT executives are seeking alternatives to traditional server environments in an attempt to reduce cost.

The cost of building a 9ft2 airconditioned server-room used to house numerous server racks will typically cost between $15,000 and $31,000 with an ongoing energy usage often exceeding 3000 watts. Therefore, it is clear that traditional setups located in custom built air conditioned server rooms are not only expensive to install but also expensive to run.

Furthermore, once constructed, server rooms offer no flexibility in deployment, having zero portability and no scalability and take between four to six months typically to construct.

Alternative approach One solution to the high-energy costs associated with traditional server environments is to deploy passively cooled server cabinets. Kell units require 6ft2 and are cooled by the surrounding air without the need for dedi-

cated air conditioning. Air is drawn into the front of the quiet server cabinet, channeled through the equipment and then extracted out of the back of the unit.

These cabinets are acoustically sealed and therefore virtually silent and each quiet server cabinet can easily be relocated should the need arise. More importantly, they cost far less to own than dedicated server rooms and often consume less than 60w, a huge saving.

Due to the volatile nature of current fuel markets it is likely that energy costs will continue to rise.

This in turn will place the responsibility of finding more efficient server environments firmly on the IT department. Combine this with the ethical pressure companies are now experiencing to reduce their carbon footprint, it is clear that the demand for energy efficient alternatives to traditional server environments is increasing.

Even after his death Michael Jackson is still setitng music-industry records, this time thanks to a deal between his estate and Sony Corp, valued at as much as

$250 million THE JOURNEY OF A TWEET With social media becoming more on who this confident, attractive and more prevalent, news and imyoung girl was. The attention has ages can be spread around the world been so strong that people have within a matter of seconds. Tweets even commented on her clothing in particular have increasingly beat the time, leading Ms Wang to recome a major source of news with spond to such comments on her politicians, celebrities and everyday blog. On the other hand, the lack of people posting exclusives on a Tweet can cause news, such as Twitter, only to have them when it was revealed that picked up by other peoPresident Obama does ple and spread not even use Twitter. around the globe.

But for some Websites have organizations, been set up to breaking news via tweets are sent report the news twitter has caused per day delivered from problems. When tweets, such as Reuters released its BreakingTweets.com social media policy reand some news sites, such as cently it instructed journalists Sky News, now have ‘Twitter correnot to break news via Twitter but to spondents’. ensure that hard news content is Tweets have even created first broken via the wire. Journalists breaking news, such as in the case were also warned to avoid raising of Wang Zifei, who became an questions about their freedom from overnight sensation in China after bias or posting anything that may images of her sitting behind harm the reputation of Reuters.

President Obama during a speech In this infographic, we take a in Shanghai last year hit Twitter. look at the journey of a Tweet and Later photos showed her confihow it evolves from a simple 140dently shaking the President’s character long message to a Google hand, leading bloggers to speculate news story.

50 million

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HYPE OR REALITY? Last year, social-media adoption by businesses with fewer than 100 employees doubled to 24 percent from 12 percent, according to a survey (of 2000 US entrepreneurs) from the University of Maryland’s Smith School of Business and Network Solutions released in January. Meanwhile, a separate survey of 500 US small-business owners found that just 22 percent made a profit last year from promoting their firms via social media, with 53 percent saying they broke even and 19 percent claiming they lost money due to social media initiatives.

And the time spent could also go to waste

with 50 percent of the latter survey’s response saying it requires more effort than expected.

“The hype right now exceeds the reality,” says Larry Chiagouris, Professor of Marketing at Pace University’s Lubin School of Business. “It could harm you if you end up inadvertently saying something stupid, offensive or even grammatically incorrect.”

To gain positive results, entrepreneurs need to regularly interact with consumers through these sites and not simply create static profiles, advises Jacob Morgan, co-owner of Chess Media Group Corp, a consulting firm in San Francisco that specializes in social media.

Source: Wall Street Journal

FAST FACT

Champagne shipments to the US fell by almost

30% in 2009

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CEOs PLAN TO INCREASE WORKFORCE IN 2010 IN STARK CONTRAST TO THE GLOOMY PROSPECTS OF A YEAR AGO, A NEW REPORT REVEALS THAT CEOs’ CONFIDENCE FOR FUTURE GROWTH HAS BOUNCED BACK. It’s official; companies are putting their worst fears of prolonged recession behind them and once again looking to the future, according to the results of PricewaterhouseCoopers’ 13th Annual Global CEO Survey. This rising confidence has translated into a planned boost in recruitment, with nearly 40 percent of CEOs expecting to increase their headcount this year. That contrasts with 25 percent of CEOs planning job cuts over the next year, down from nearly half who decreased headcount in the past 12 months.

The survey revealed striking differences in confidence levels among CEOs in emerging economies and those in developed nations. In North America and Western Europe, for example, about 80 percent of CEOs said they were confident of growth in the next year.

That compared with 91 percent in Latin America and in China/Hong Kong, and 97 percent in India.

“The fears of a global economic meltdown have receded and CEOs are more upbeat about their prospects,” said Dennis M. Nally, Global Chairman of PricewaterhouseCoopers.

“CEO confidence is tempered, however, by the slow pace of recovery and the impact of often drastic cost-cutting and other steps taken to survive the downturn. The emerging economies are clearly recovering at a faster pace than those that are more developed.

Companies with the best prospects for early recovery are those who managed through the recession while keeping an eye on the recovery ahead.”

For the future, a total of 60 percent of CEOs said they expect recovery in their national economies only in the second half of 2010 or later, while 13 percent said recovery was already underway, and 21 percent said it would set in during the first half of this year. Return to growth was fastest in China, where 67 percent of CEOs said recovery had begun in 2009. However, nearly two-thirds of CEOs in the US and more than 70 percent in Western Europe said the turnaround would not begin until the second half of 2010.

“The timing of the recovery will vary depending on geography and industry,” Nally said. “In some fast-growing economies the turnaround is well under way; but CEOs in the countries hardest hit by the crisis see its effects remaining through 2010 and beyond. CEOs must now shift their mindset to making strategic decisions about investing in growth in order to gain competitive advantage.”

In terms of fears for the future, a protracted global recession remains the biggest overall concern of CEOs around the world (65 percent), followed closely by fear of over-regulation (60 percent). More CEOs are “extremely concerned” about over-regulation (27 percent) than any other threat to business growth. Other high-ranking potential business threats included instability in capital markets, and exchange rate volatility. At the other end of the spectrum, concerns over terrorism and infrastructure were cited by less than a third of CEOs globally as threats to growth.

CEOs were very clear about the threat of over-regulation. Over two-thirds of CEOs disagreed with the notion that governments have reduced the overall regulatory burden. They also opposed government ownership in the private sector except in the worst of times – nearly half agreed that government ownership helps to stabilise an industry during a crisis. CEOs from two sectors that received considerable government support during the crisis – automakers and banks – were amongst the most appreciative of government ownership in troubled times.

At the same time, CEOs were optimistic about governments’ efforts to address systemic risks such as another economic crisis – 65 percent of CEOs agreed that regulatory cooperation will help successfully mitigate systemic risks.

Indeed, risk management took on greater importance among CEOs as a result of the recession. Two-fifths of CEOs plan to make major changes to their company’s approach to managing risk, and another 43 percent report plans to make some change to their processes.

Boards of directors are becoming more engaged in key aspects of management such as assessing strategic risk, monitoring financial health and overseeing company strategy.

Finally, more than 60 percent of CEOs said their companies are preparing for the impact of climate change initiatives and believe those efforts will improve their company's reputation. The recession had little impact on the green momentum: 61 percent of companies with climate change initiatives saw no effect of the recession on their strategies and 17 percent raised such investments last year.

“CEOs will be in a post-survival mode in the coming months,” concludes Nally. “Their most common regret about how they dealt with the recession was not fully understanding the risks and failing to respond more quickly, and thus the importance of managing risk was the most often cited lesson to emerge from the financial crisis. CEOs are learning to balance risk management with decisiveness and flexibility as they seek to return to prosperity.”

SYMANTEC AD.indd 31

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SILICON VALLEY STARTUPS One minute America is about to emerge from recession, the next Wall Street and Main Street start to wobble and the message comes from Washington to tighten our belts once again as we try to avoid a second dip into crisis. But there is one place that has started giving out some positive vibes – Silicon Valley.

On February 10, the AP reported that Silicon Valley’s economy took a pretty big hit during the global economic meltdown and predicted that it could have some trouble climbing out of the crisis unscathed. The 2010 Index of Silicon Valley said the region is entering a ‘new phase of uncertainty’ where job losses, a shrinking foreign talent pool, drop in investments and state legislative gridlock could

put its standing as the center of technology at risk.

However it appears that the new kids on the block (or, should we say, in the Valley) are doing their best to drag it back to relative normality, as Silicon Valley’s start-up economy stepped up a gear.

Mercury News reports that within just two weeks, a diverse group of start-ups raised a staggering $600 million in investments, topped by $350 million for Better Place, a Palo Alto company with a global vision for a 21st-century electric car batterycharging network. Meanwhile Tesla Motors, widely seen as the poster child for the infant electric car industry, filed for an initial public stock offering.

INTEGRATED VIRTUAL DATACENTER PLATFORM LAUNCHED Layered Tech, a leading worldwide provider of on-demand IT infrastructure, has developed a new virtual private datacenter (VPDC) platform with levels of managed services, security and flexibility via a proprietary API that were previously unavailable in an integrated offering. The new platform is a hybrid cloud computing infrastructure that gives customers a virtualized environment on dedicated servers within Layered Tech datacenters, as well as levels of flexibility on how to securely access their VPDC, whether by dedicated lines, VPN or internet.

“Since pioneering the VPDC, we worked closely with enterprises of all sizes and different business goals and found that they share the same requirement for enterprise-class security, choice and flexibility,” says Layered Tech CEO Jack Finlayson. “By migrating to off-premise private clouds, businesses get an immediate payback by better utilizing their IT staff, resources and budget, while enjoying the long-term benefits from reduced capital spending, higher productivity, greater speed to market and near-instanta-

M&A ACTIVITY IN 2009 An unconventional M&A landscape in 2009 was dominated by mega pharma deals, consolidation within the hurting financial services sector, and technology and media deals.

The year began with a bang as the first quarter saw two mega deals in the space of three months, as pharmaceutical giants looked to secure healthy pipelines in the face of a spate of pending patent expirations. New York pharma giant Pfizer acquired New Jersey’s Wyeth for $63.6 billion, the largest deal of the year globally, while Merck snapped up New Jersey’s Schering Plough for $43.2 billion in order to keep pace, creating two pharmaceutical behemoths in the North East.

The financial services sector on the other hand witnessed consolidation of the involuntary kind, as struggling firms sought either government bailout funds or partnerships with peers in order to stave off bankruptcy. The most high-profile of these was the $25 billion investment in Citigroup by the US Treasury.

neous scalability of computing resources.”

The new VPDC offering is technology agnostic, so customers can choose the virtualization platform that best suits their needs, including 3Tera’s AppLogic, VMWare and Microsoft Hyper-V. Layered Tech’s automated server provisioning system enables enterprise customers to design, order and deploy their virtualized environment within an hour, instead of the weeks or months it can take to provision a similar solution within many companies’ onpremise datacenters. The VPDC platform provides an API, which makes more than 100 applications immediately available to the customer’s developers, who then have access to the API for customizing additional applications.

Layered Tech will offer tiered levels of managed services, giving VPDC customers a choice from fully managed by Layered Tech to selfmanaged options with varying levels in between, so customers can focus on managing their businesses, not their VPDC. For more information, visit www.layeredtech.com, email info@layeredtech.com, or call Layered Tech at 1866-584-6784.

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2010 TECHNOLOGY TRENDS REVEALED The final results from the 2010 IT & Technology Trends Survey – conducted by independent research firm ITIC on behalf of Sunbelt Software – indicate that organizations of all sizes, across all verticals, will maintain IT staffing levels and budgets during 2010 as they continue to implement upgrade and migration projects that began in 2009.

Over one-third of organizations revealed that IT budgets will remain the same in 2010, while 26 percent said their budgets will increase and a 15 percent minority said IT budgets will decrease in the New Year. Interestingly, 16 percent of respondents said their 2010 IT budgets are still not approved and eight percent remain unsure of their budgets for the next 12 months.

Not surprisingly, the survey revealed that the top spending priorities in 2010 are disaster recovery, deploying new applications in support of the business, upgrading server hardware and deploying/upgrading server virtualization software.

Security remains a top concern for organizations of all sizes and in all vertical markets, and security spending is sacrosanct: it is one of the only technology segments that has remained immune from budget cuts. According to the survey data only three percent of organizations reduced their security spending over the last two years, while 36 percent of survey respondents cited security as their top

DON’T MISS...

spending priority for 2010.

It’s clear from the responses that keeping server hardware current is a crucial and necessary component of ongoing IT strategies. Two out of five survey participants said they upgrade servers on an “as-needed” basis. Some 30 percent indicated their main line of business server hardware is two-to-three years old; 20 percent said it is one-totwo years old, while nine percent have relatively new server hardware that was purchased in the last six-to-12 months.

Some 21 percent of respondents said their server hardware is three-to-four years old; 11 percent have main line of business servers that are four to five years old while nine percent of respondents indicated their organizations lag way behind the upgrade curve with server hardware that is more than five years old.

Two out of five respondents said the ongoing economic downturn has caused product lifecycles to lengthen. However, nearly that same percent of respondents said the tight economy has not impacted product upgrade cycles. Almost one-quarter of those polled said their organization retrofits its servers to save money instead of purchasing new servers. And 18 percent said their firms are adopting a more strategic approach to the tough economic climate by purchasing more robust/more expensive servers so they last longer.

COMPANY INDEX Q2 2010 Companies in this issue are indexed to the first page of the article in which each is mentioned.

Aberdeen Group 110 ACL 55 Amazon 48, 102 AOL 40 APC by Schneider Electric 64, 65, IBC Apple 102 B2M Solutions 106 Bank of America 72 BoardVantage 8, 100, 101 Booz & Company 130 CA 2, 74 Cadbury’s 82 Canto 81 Capgemini 72 CIPD 130 Cisco IFC Citi 128 Clear Action 17, 114 Continental Airlines 124

Datamonitor 48 Dataupia 25 Dell 116 Disney 82 Dr Pepper Snapple Group 82 Duke Energy 130 DuPont 116 eCube Systems 89 Equifax 94, 95 Exinda 44 Facebook 48 Fox Networks 82 Freescale Semiconductor 102 GlassHouse Technologies 62, 63 Glenture Group LLC 13, 98, 99 Good Technology 108, 110

Google 40, 48 Herman Miller 116 HP 46 IBM 48 IDC 72 iStrategy 139 Kell Systems 28, 75 Kraft Foods 116 Layered Technologies 32, 85 Meettheboss.com 111 Mercedes 134 NASDAQ OMX 66 Nexaweb 93 NYSE Euronext 66 Object Management Group (OMG) 96 Panduit 6, 60 Patricia Seybold Group 114 PE International 122, 123

Plastic Logic 102 Rainforest Alliance 116 RightStar Systems 15, 70 Saatchi & Saatchi 76 Spring Wireless 112, 113 Symantec 31 TechValley Continuity 129 TerraCycle 116 The Software Revolution, Inc. (TSRI) 10, 24, 96, 97, 142 Time Warner 40 Tishman Realty & Construction Co. 130 Trend Micro 126, 127, OBC Unisys 4, 58 Universal Orlando 82 Walmart 116 YouTube 48 Yum Brands Inc 130

TRADING PLACES The battle for business between NASDAQ OMX and NYSE Euronext p68

CIOSTORIES With Dr Pepper Snapple Group, Fox Networks and Universal Orlando p78

PLAY TIME Why Dave Stewart is adding author to his extensive resume p136

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NEW CEOs: THE FIRST 100 DAYS

APPOINTMENTS

At General Motors, 67-year-old Ed Whitacre Jr, who built AT&T into the For every incoming executive in how critically important it is to come biggest US provider of telephone service, becomes Chairman and Chief corporate America – as well as in in and learn from the past. Even if Executive despite knowing next to nothing about the car industry. People politics – the first 100 days is conyou’re not embracing the current who know Whitacre claim that he can meet GM’s need for transformation sidered crucial. It’s a period during culture philosophically or opera– something he previously orchestrated at AT&T – and with Ford’s Alan which opinions are formed and tionally, you have to know where the Mulally already proving you can make it in Detroit as an auto industry outlong-term judgements are made – troops are coming from and how sider, don’t bet against him succeeding. and for this reason, the first 100 they’ve operated previously, beMeanwhile Bank of America named their new Chief Executive as days is usually seen as a cause if you object and Brian Moynihan, ending a mammoth three-month search to replace pretty good indicator just say ‘Nope, we’re The first Kenneth Lewis. Moynihan, who previously ran the bank’s consumer and as to how successdoing a total shift in small business division, took over on January 1, beating Gregory Curl, Chief ful a new CEO is the way this orgais considered crucial.

Risk Officer, to the top job. going to be. nization is going It’s a period during John Thain has been named as Chairman and CEO of CIT group Inc., There are to be run’, then which opinions the New York lender to small and middle-market companies. Thain, previways for an incomthere is a real potenare formed ously top dog at Merrill Lynch, has been tasked with optimizing the coming CEO to prepare for tial for conflict.” pany’s business model. a new role, but one of the A CEO can also make Universal Music Group is also making some most important is to research the life easier by taking into account strategic changes at the top; Vivendi has ancompany in order to understand even the smallest details, such as the nounced that the music giant will get a new and appreciate the culture of the ornuances in word choice that they CEO in Lucian Grainge this year, replacing ganization they’re going to be headuse. By understanding the language Doug Morris who will remain as company ing up. Only based on this and terms specific to the company, chairman. Morris will officially hand over the understanding can a new leader the process of making changes can reigns on January 1, 2011. begin to think about the changes be facilitated. Indeed, Culp says that And stepping out of his CEO shoes, that need to be made. not neglecting the minor details MySpace’s Owen Van Natta is leaving the Ron Culp, a partner and direcwithin a company’s culture is his struggling social network company after just 10 tor at Ketchum Inc., one of the “number one piece of advice”. months at the helm. Van Natta is world’s leading public relations and being replaced by communications firms, has overnewly elevated coseen the first 100 days of CEOs at President Mike some of the world’s largest compaJones. nies. He believes that before even taking up the role, a new CEO must Jason “find ways of getting the culture to buy their leadership and then launch into the change or transformation effort” once in the role. “An incoming CEO must then make the necessary cultural, strategic and structural changes,” he says.

Of course, the nature of a new appointment – whether the previous Brian CEO was dismissed or whether they Moynihan left voluntarily – is important when it comes to how the new boss approaches his new position. Culp gives the following advice: “You need to spend time understanding the culture of the organization, and appreciate Ed Whitacre John Thain

100 days

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MANAGING CHANGE Eight years after stepping into the world of pharmaceuticals, Joe Jimenez struck his most important milestone this month and officially accepted the position of CEO for Novartis Pharma AG. Prior to his latest role, Jimenez headed up Novartis’ Consumer Health Division and successfully oversaw the progression of several promising new medicines – including multiple sclerosis pill Givenia and cancer drug Afinator.

His appointment at the head of a slimmeddown executive board comes as the company reports a 54 percent rise in fourth-quarter net profits to $2.3 billion, and just after his long-serving Swiss predecessor Daniel Vasella completed the acquisition of US eye-care group Alcon Inc. “One thing we are aligned on is the strategy of the company, which is one of focused diversification,” Jimenez told Reuters. “We believe that the portfolio now is broadly right to help us grow into the future so I don’t anticipate seeing significant changes there.”

This idea of successful diversification will, without doubt, be one of Jimenez’s biggest chal-

lenges in his new role as CEO. Indeed, Novartis’ acquisition of Alcon will be used to both spread the business into such areas as emerging markets and eye-care, but also to insulate against losing exclusivity on treatments such as its top-selling blood pressure drug Diovan when it loses patent protection in 2012.

Yet this is nothing new to Jimenez, who built and ran the ‘Project Forward’ strategy back in October 2007 to ensure Novartis would not only survive in a tougher environment – through tackling issues of development, productivity and dealing with commercial models – but also gain a competitive edge by shifting from an internally focused culture to one that is focused externally on the patients, customers, payers and providers.

“The pharmaceutical industry is a good industry, ” he told Business Management back in 2008, “but it is going through some tough times. The long-term prospects for the industry are very positive. With an aging population and with the cost of chronic illness accelerating, the capability of dis-

covering and developing new and innovative medicines that meet unmet medical needs is going to position us very well for the future.”

His experience as President and Chief Executive of HJ Heinz will also be key: “In the consumer packaged goods world, cost savings and doing things more efficiently is very important because margins are not as high as they are in the pharmaceutical industry. You’re always trying to become more and more efficient.”

Fast-forward to the present, and Jimenez’ mission now includes the need to focus on his shareholder’s attitudes towards redefining salaries by giving them the opportunity to vote on executive pay – a hot topic given the tight economic times, and particularly for Novartis with Vasella’s salary of over $19 million drawing criticism from both the press and investors alike. However, thus far he seems to be hitting all the right notes, as Deutsche Bank analysts are quick to note: “We see this as a positive, placing a well respected progressive thinker as CEO.”

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MIND OVER MATTER RECKON THOUGHT-CONTROLLED COMPUTING SOUNDS LIKE SCIENCE FICTION? THINK AGAIN. ARIEL GARTEN – ARTIST, SCIENTIST, PSYCHOTHERAPIST AND ENTREPRENEUR – BELIEVES THE FUTURE IS ALREADY HERE. What was your personal highlight of the recent Winter Olympics? Shaun White’s sensational gold medal winning half-pipe run? Lindsey Vonn overcoming injury to triumph in the women’s downhill? Or using the power of your mind to influence inanimate objects thousands of miles away?

If you were lucky enough to be in Vancouver for last month’s Games, there’s a good chance it will have been the latter. InteraXon’s Bright Ideas project, located at the Olympic Pavilion at Ontario House, was billed as the world’s largest mind-controlled computing installation and promised to harness visitors’ thoughts and use them to control spectacular light displays at Niagara Falls as well as Ottawa’s Parliament building and Toronto’s CN Tower. Guests were invited to don a headset that measured the brain’s electrical output and reacted to alpha waves (associated with relaxation) and beta waves (associated with concentration); as the users relaxed or focused their thoughts, the computer sent a message over the internet to a site viewed on screen while InteraXon’s custom-designed software connected users’ thoughts to the lighting controls to change the display. For many visitors, it was a mind-blowing experience.

“Everybody loved it,” confirms InteraXon’s CEO and founder Ariel Garten, back home in Toronto after a whirlwind two weeks. “The experience of controlling something 3000 kilometers away with your mind so that everybody can see is pretty amazing. Most people think this technology is science fiction, so people felt like they were stepping into the future. It felt more like a world expo than the Olympics.”

If there ever was a gap between art and technology, Garten has closed it.

Her work converts the workings of the mind into tangible solutions, and has veered from researching at the Krembil Neuroscience Institute studying hippocampal neurogenesis, to displaying work at the Art Gallery of Ontario and DeLeon White Gallery, to opening Toronto Fashion Week. She sees thoughtcontrolled computing as the intersection point for her many diverse interests.

“Psychotherapy is all about managing your mind, and for me thought-controlled computing is very much a business; but it’s also about using the brain in artistic applications, creative applications, practical applications.”

The company she founded in 2007 has come a long way in a short time.

Since meeting world-renowned (and Toronto-based) cyberneticist Steve Mann in 2003 to collaborate on various technology-driven music projects and art installations, Garten – along with Mann and his colleague, Dr. James

Fung – has been at the forefront of the pioneering field of thought-controlled computing. Over the course of the following four years, she began to realize that brainwave-controlled computing was a technology whose time had come. “The technology was very much in just a laboratory setting back then, but I realized there was something to it and that it could be commercialized,” she explains.

To achieve her vision, she enrolled long-time friend and multifaceted engineer Chris Aimone, and Trevor Coleman, a rising star in Toronto’s entertainment industry, and together the three went about building a company to support their vision of a thought-controlled world. Indeed, despite dabbling in art, music, neuroscience and fashion, business has always been in Garten’s blood. “I’ve been renting apartments and selling houses since I was about 12,” she laughs. “My family were in real estate, and one day my dad didn’t want to do it anymore; he sent me instead, and I’ve never looked back.”

While it might sound like something from the X-Men, Garten believes the applications for such technology are huge. “We’re already beginning to see the first thought-controlled games come out,” she explains. “Shortly, we’re going to see things like stress relievers on the market. And then within a few years we’re going to see quite an explosion of thought-controlled gadgets.”

And as more of these products arrive on the market, the technology is only going to get better and the experience only going to become even richer. “Within five years it’ll be standard to have a thought-controlled something somewhere, either in the home or the office, and it won’t seem weird in the least,” she says. “Within 10 years we’ll begin to see things like thoughtcontrolled computing and thought-controlled mobile applications. And in 15-20 years, it’ll be a pretty standard way to interface with the world.

“Eventually, anything that we currently do with the touch of a button we’re going to be able to do with thought, just as voice-activated technology is now replacing those buttons in many applications,” she continues. “Voice-activation is seamlessly integrated into the way that we use our daily lives, and thought will be the same; we’re going to see it integrated quite widely and quite seamlessly into most technologies.”

In fact, the greatest issue might be persuading people that this is not just a cheap gimmick to enable toymakers to produce Star Wars-like Jedi trainers, but a viable –and incredibly useful – development. “The biggest challenge that we face is education,” Garten confirms. “Not many people have heard of our products or of thought-controlled computing – or if they have, they think it’s science fiction. So it’s a challenge letting people know that we are for real.

That this is not the future, this is now. And then the other issue is finding appropriate and natural ways that the technology can integrate with a business’s existing products and services. Not all applications are the right fit, but for those that are it’s a killer idea.”

“I’ve been renting apartments and selling houses since I was about 12,” she laughs. “My family were in real estate, and one day my dad didn’t want to do it anymore; he sent me instead, and I’ve never looked back”

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INSIDE STORY

After a decade of losing ground in the battle for internet domination, AOL has regrouped, parted company with Time Warner and struck out on its own once more. But can ex-Google exec Tim Armstrong help the firm recapture its position as the world’s number one internet platform?

BY BEN THOMPSON

J

anuary 2000. The dawn of a new decade – and the birth, so it was thought, of a new super-firm that was destined to redefine the media landscape. The creation of AOL Time Warner, in what is still the largest merger in American business history, was supposed to take two of the world’s leading information giants and create, in the words of a statement released at the time, “the world’s first fully integrated media and communications company for the internet century”. And as the ink dried on the two firms’ historic union – valued at a staggering $160 billion – analysts, journalists and investors hailed the deal as the coming of age for the digital movement.

Certainly, the logic behind combining Time Warner, the world’s biggest media and entertainment firm, with the company that had become a byword for the internet, America Online Inc., appeared to make sense at the time. The internet, it was believed, would vaporize mainstream media business models overnight and both sides in the partnership envisioned an AOL brimming with a trove of new content from CNN, film studios, Warner Music Group artists such as Eric Clapton and more. “We’ve transformed the landscape of media and the internet,” then-AOL Chief Executive Steve Case proclaimed. And at the height of the dotcom boom, few doubted his vision.

But the reality turned out to be very different. In fact, the companies were “both sitting on doomed business models,” according to Forrester Research analyst James McQuivey. AOL was primarily a provider of dial-up internet access, with a portal highly dependent on its subscribers; Time Warner was reliant on endangered media properties such as magazines. Far from being a media powerhouse, the combined company was already rotting from within on the day it was formed. “It was the marriage of two giants, both crippled by a devastating illness,” says McQuivey.

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The brand that

Time

forgot

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Since you’ve been gone As such, it’s been a sobering 10 years for AOL. Just two months after the deal was struck, the dotcom bubble burst and took the air out of the burgeoning web industry. Within two years, boardroom disagreements had driven out both of the CEOs behind the merger; and then in October 2003 AOL Time Warner dropped the ‘AOL’ from its name – a symbolic slap in the face for the internet upstarts and a public assertion of the true balance of power at the faltering media conglomerate. During the course of the following years, a chastened AOL ceded its position as the world’s number one internet platform to new rival Google, and stock has been falling ever since: today the value of both AOL and Time Warner combined is only about one-seventh of their worth on the day of the merger.

So when the news came that the two were parting company last year – bringing to an end what Time Warner majority shareholder Ted Turner called, somewhat melodramatically, “one of the biggest disasters to have occurred to our country” – few at either firm can have been sorry to see the back of their former partner. Wall Street gave AOL a slim chance of survival on its own. But the company had one remaining ace up its sleeve: its new boss, Tim Armstrong.

A lot can happen in 10 years; here’s what AOL missed while it was tied up with Time Warner October 2000: Fledgling start-up Google begins selling text-based advertisements associated with search keywords

A matter of perception When the former Google exec took the reins last March, most commentators thought he was crazy. As the search giant’s head of US ad sales, Armstrong was involved at Google almost from the outset – originally working from his house in Connecticut before opening the firm’s first office outside of its Mountain View, California headquarters – and played a huge role in making Google the advertising juggernaut it is today. For AOL, the advantages of such a big-name hire were clear. “He’s an advertising pioneer with a stellar reputation and proven track record. We are privileged to have him preside over AOL,” remarked Time Warner CEO Jeff Bewkes when the move was announced. The attraction for Armstrong himself, however, was less clear-cut; many industry insiders felt that moving to an ailing AOL was a challenge too far – a suggestion Armstrong himself hotly disputes.

“There’s a material difference between what people in the investment, media and technology worlds think about AOL and what our customers think about AOL,” he argues. “As an ad customer, if you look at AOL in the US there are 100 million unique users, we have some of the best content properties online, and we offer some of the best ad serving technology out there.

AOL can go head to head with any company on the internet for ad dollars at this point.”

He claims that what got him “out of my chair” whilst at Google and persuaded him to jump ship for AOL was the company’s past heritage – and future potential – in the internet space. “The company is big on culture, big on innovation and big on improving our products and services,” he says with all the enthusiasm of a recent convert. “Is AOL back fully recovered in the ad business? Not yet. Is AOL light-years ahead of where it was in April 2009? Yes. And can we compete against the Yahoos, Googles and other competitors for brand display budgets? Definitely. I think many customers see the stuff we’re doing as very different to what everyone else is doing, and that makes a big difference.”

So just what does Armstrong have planned? In its latest incarnation, AOL is developing a digital-media business that involves everything from selling advertising to employing a staff of journalists. It has zeroed in on the market for online-display advertising – graphical messages paired with news items,

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April 2003: The completion of the mapping of the human genome provides new avenues for advances in medicine and biotechnology

September 2001: The terrorist attacks of 9/11 change the business landscape – not to mention New York’s iconic skyline – forever

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July 2006: Cuban President Fidel Castro transfers power indefinitely to younger brother Raul, sparking rumors about the future of the communist island

February 2007: The Intergovernmental Panel on Climate Change finds ‘unequivocal’ evidence that humans are causing global warming

November 2001:

September 2008: The economic world is turned upside down after the collapse of Lehman Brothers sparks a full-blown financial crisis

China accedes to the WTO and begins its march towards becoming the most powerful economic engine in the world

January 2002: Euro notes and coins enter circulation in 12 European Union countries in the biggest monetary changeover in history

November 2008: The US overwhelmingly votes for change with President Barack Obama’s resounding election victory

March 2003: Nearly 250,000 US troops invade Iraq.

The invasion sparked some of the biggest anti-war protests ever seen

February 2004: Mark Zuckerberg launches the social networking phenomenon Facebook while still at Harvard; it currently has more than 400 million active users worldwide

August 2005: Hurricane Katrina proves to be the costliest, as well as the fifth-deadliest, storm in US history, with damage estimated at $81.2 billion

January 2007: Apple launches the iPhone and almost single-handedly transforms the consumption of webenabled content on the move

May 2009: Car giant General Motors files for bankruptcy protection, marking the biggest failure of an industrial company in US history

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betting that as AOL becomes better known for creating its own quality content, advertisers will pay more to place advertising on its pages. “Brand ads should be a lot bigger on the internet today and I think it’s going to take hard work and creativity to achieve that,” he says. Where AOL is getting creative is in building what has been dubbed “the newsroom of the future”. Rather than merely craft articles and passively post them on the web, as many newspapers and magazines do, AOL is using software to determine which articles to write and give journalists up-to-the-minute data on how much traffic those articles generate.

The merger of AOL and Time It’s a pioneering approach.

Warner in 2000 remains the biggest in American history News editors’ computers come – and has been called the equipped with software – created biggest M&A failure of internally by combining data from all time the firm’s own analytic tools with other resources such as social network feeds and Google’s trend-tracking service – that provides daily updates on the number of web clicks AOL’s stories generate. “Audience growth and audience engagement have to be the things that we judge our journalist investments on,” Armstrong says. AOL is even considering sharing a portion of quarterly profits with staffers whose work fetches the most page views.

Getting to grips with content that users want to access is crucial to AOL’s future success, and as such Armstrong is focusing just as much attention on local content as he is on mainstream news. Patch, which was acquired by AOL in June of last year, currently offers hyperlocal news for 37 small towns and communities in New York, New Jersey, Massachusetts, Connecticut and California. Armstrong plans to invest up to $50 million in the service during the remainder of 2010, amidst reports that Patch will be rolled out to hundreds more communities in the near future. Indeed, he believes that local content is the next great ‘white space’ internet opportunity.

“Local remains one of the most disaggregated experiences on the web today – there’s a lot of information out there but simply no way for consumers to find it quickly and easily,” he explains. “It’s a space that’s prime for innovation and an area where AOL has a significant audience and a valuable mapping service in MapQuest. Going forward, local will be a core area of focus and investment for AOL. The acquisitions of Patch and Going [a local platform for people to discover and share information about things to do in a number of leading cities across the country] will help us build out our local network further with excellent local services that enable people to stay better informed about what’s going on in their neighborhood.”

$160 billion

sports scores or other content – all with the aim of luring in big brands. And it has placed content at the center of its business.

“I think one of the more exciting things about AOL right now is our focus on content,” Armstrong confirms. “Content matters a lot to brands, and the fact that we have 80-plus percent of our own content that we’re able to do branded engagement with is a big advantage. We want to provide the world’s best content online, which comes down to having a complete portfolio: from big, branded, multinational content all the way down to content that’s very local in its focus. And we’ve built systems and technology to create and support that.”

Content is king The first phase of this plan has seen AOL hire more than 500 full-time journalists – many of them veteran reporters and editors caught up in the fallout from the decline in print journalism – to create new content, alongside material bought from more than 3000 freelance contributors. Armstrong is

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The acquisitions extend AOL’s network of local services, which currently represents the largest online local network, reaching more than 54 million total unique visitors per month. Both acquisitions also leverage a consumer and marketplace trend toward greater consumption of news and information online. “There’s not enough content that’s actually built for web distribution,” continues Armstrong. “Patch is a great example. When you meet people who live in Patch towns (and I’ve had this experience because I live close to some of the Patch towns and have traveled to see them), people proactively say, ‘Thank you for doing this, this is really helpful. I appreciate you investing in the community’. They thank us for making their school-selection experience better, for making their travel better. Why

should people still use AOL in 2010? I think it would come down to one thing: because it’s helpful.”

Armstrong is not only bullish on niche content but is also looking for AOL to become a content powerhouse. The company has developed its own content management system called Seed that aims to redefine journalism, and in addition has just bought internet video company StudioNow to boost its video content on editorial sites. Seed pays freelance journalists to write on subjects in demand, while StudioNow – acquired for $36.5 million in January – will let videographers post content on AOL sites for pay.

Capitalizing on the trend towards user-generated content is clearly another key part of the AOL masterplan.

25%

50%

100%

INTERNET USE BY AGE GROUP

KEY BLOGGING

12-17 YEAR OLDS

SOCIAL NETWORKING

18-29 YEAR OLDS 30-49 YEAR OLDS 50-64 YEAR OLDS 65+ YEAR OLDS BREAKDOWN OF USEAGE BY ACTIVITY/GADGET OWNERSHIP 12-17 YEAR OLDS 18-29 YEAR OLDS 30+ YEARS OLDS

How different age groups are using the internet With the growth of social media networks such as Facebook and Twitter, traditional blogging has been usurped by micro-blogging quick and short 140 character updates instead of lengthy, indepth (and sometimes still equally pointless) articles.

TWITTER SHARE CONTENT ONLINE CELL PHONE OWNERSHIP MP3 OWNERSHIP

2009

ADULT’S POSTING COMMENTS ON BLOGS 18-29 YEARS OLD 30% 30+ YEARS OLDS 24%

12-17 YEAR OLDS 18-29 YEAR OLDS 30+ YEARS OLDS 12-17 YEAR OLDS 18+ ALL ADULTS 12-17 YEAR OLDS 30+ YEARS OLDS 12-17 YEAR OLDS 18+ ALL ADULTS 12-17 YEAR OLDS 18+ ALL ADULTS

ADULT SOCIAL NETWORK ACCOUNTS FACEBOOK 73% MYSPACE 48% LINKEDIN 14%

2008

2007

2006

2005

2004

25%

50%

100%

Source: www.pewinternet.org Created by Robin Richards

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Putting the pieces in place Armstrong also sees great potential for building out the advertising side of the business – something that dovetails neatly with his increased focus on content. “It was very enjoyable for me to spend the last decade at Google and I think Google will be successful for a long time into the future based on its search model,” he says. “But there’s also huge demand in the marketplace for display and brand advertising. For example, if you’re Proctor & Gamble and you have a great product like Tide, how do you find consumers? How do you create a brand premium for Tide? How do you explain that brand to consumers? I think we’re really focused on AOL being the place where those type of companies can come and build brands online.”

The final piece of the AOL puzzle, meanwhile, is related to enhancing the communications element. “We’re working on products and services around unified messaging,” he says. “It’s amazing how many devices, applications and online platforms there are right now; unified messaging systems will be key.

So if you look at what our team is laser focused on right now, it’s content systems and platforms, it’s brand advertising systems and platforms, and it’s messaging systems and platforms that are unified. There has been a lot of noise at AOL in recent years, but I would say we are the most focused we’ve been for a long time right now.”

To counter the negativity, Armstrong made establishing a culture of transparency and honesty a priority in order to show employees where the company was headed and what was required to get it there. He also placed a focus on getting some new products out into the market. “We launched some new things, improved some of our existing products, showed some changes in our ad business and those types of thing, and I think that had a really beneficial effect,” he explains. “And I think the culture has improved; people are now starting to believe that we can win. So even though we’re going through a challenging time with the layoffs, we’ve been transparent with employees and I believe there’s a lot of trust in what the company is doing.”

And that trust is a two-way street, with the executive team placing its faith in the remaining employees’ ability to help the company realize its turnaround goals. “What’s the number one thing on our list?” Armstrong muses. “It’s talent. We’re maniacal on products and services and those things, but the culture of AOL needs to be driven by the world’s most talented people working on the most creative products and services. All of us are under tremendous pressure to make sure that this company is successful in the long run. We’re not running from the accountability, I think we’re embracing it.”

A tough task ahead

“The culture of AOL needs to be driven by the world’s most talented people working on the most creative products and services” A large part of getting that focus right has been Armstrong’s attention to addressing one of the most tough-to-tackle areas of any struggling firm: that of staff morale and workplace culture. When he first arrived, he concedes that all was far from rosy. “The first thing I did in my opening three months was visit almost all of the offices we operate in to try and get a read on what the culture was – and the culture was fairly negative,” he says. “The company had gone through a failed merger with Yahoo!, had been broken up to be sold off in pieces, and there were different engineering systems in every country we operated in, so there wasn’t a lot of positivity and momentum. And when you’re not winning, I think that has a very damaging cultural effect on your employees.”

That mood was probably not helped by the fact that in order to achieve planned annual cost savings of around $300 million – necessary to help it compete in the online advertising market against the likes of Microsoft, Google, Yahoo and others, and to counter double-digit declines in subscription and advertising revenue as well as drop-offs in traffic to its sites during 2008/2009 – the company announced it would be instigating a round of layoffs and office closures in December. About 1100 employees accepted a buyout package, with another 1200 jobs slashed in January. The cuts will leave AOL at less than a quarter the size it was at its peak in 2004, when it had more than 20,000 employees.

The year 2009 marked the closing of an important chapter in AOL’s history and the opening of a new one – one that Armstrong and his leadership team are passionately pursuing. “We have a clearly defined strategy, and we enter 2010 incredibly focused on day-to-day execution,” he says.

But nonetheless, he is the first to admit that the firm faces some difficult times ahead – a view Wall Street shares.

“AOL’s strategy of differentiating itself through content creation and more vertical sites will be difficult in an increasingly competitive online advertising space and with declines in unique visitors and page views likely to continue,” says Barclays Capital analyst Douglas Anmuth, adding that growing the company will be “very challenging”. The access business is expected to decline 25 percent a year over the next few years – and access customers are the most engaged users of AOL’s content sites. Anmuth is forecasting 2010 revenue of $2.8 billion, down 13 percent.

Despite the naysayers, however, Armstrong is positive about what the future holds for AOL. “The future is big, the future has a huge ocean of opportunity in front of it, and I think we’re going to be maniacal about improving the products and services for years to come,” he says. “We’re going through a very difficult time in terms of a layoff period right now, but I think of all the years that I’ve spent doing internet stuff, I don’t think I’ve ever been more proud of a group of people than I am of the AOL employees. We have made real progress, and I hope investors see that in 2010 and 2011.”

For many of those investors, speculating on AOL since Armstrong took up the top job has been a lot like betting on the jockey rather than the horse – a fact that Armstrong himself acknowledges, albeit with the caveat that much has changed at the company over the last 12 months. “I don’t think people understand what’s at the company, what assets we have, and what the ability for us to play a big part in the future of the market is,” he explains, before adding with tongue planted firmly in cheek: “Our horse needs a lot of training and directional help, but we’re working on those things.” n

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COVER STORY

The

wisdom of the

Forget blue-sky thinking; clouds are forecast for 2010 and beyond. Senior Editor Ben Thompson reports on why many believe the cloud will be the next big breakthrough in computing, and asks: why should your business care?

cloud

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T

he sprawl of beige, box-like buildings on an unremarkable industrial park deep in Oregon’s Columbia Gorge area hardly looks like a hotbed of technological revolution. The two huge units on the outskirts of The Dalles – each the size of a football-field – could easily be confused for a warehouse or assembly plant, while the low-rise admin block out front looks more like a construction project site office than the nerve center for one of the world’s most innovative companies.

But look closer and telltale signs begin to emerge: the proliferation of power lines; the giant HVAC units sitting on the roof; the almost imperceptible hum of machinery as you approach. And then, of course, there’s the security. Until recently, no-one in the area could tell you what was inside or even who owned the building, deterred by rigorously applied non-disclosure agreements and a strictly enforced no-access policy. ‘Keep Out’ signs are plentiful – unlike company logos or other

such corporate branding. But secrets don’t stay that way for long in a small community; beyond the plethora of cameras, the formidable iron fence and the implacable security guards lies what the locals have come to call ‘Googleville’ – and what many believe holds the key to the internet giant’s phenomenal success.

Like the scene in Jurassic Park when you realize the resort is just a front for a highly developed industrial operation, visiting one of Google’s many utilitarian server farms – the physical network that allows the world to search the internet, store fi les and send email, the sheer scale of which gives the company its competitive advantage – is a vastly different experience from stopping by the company’s touchy-feely, beanbags-andbaristas headquarters building in Mountain View, California. For one thing, you’ve got more chance of gaining an audience with the President than you do of getting access to the endless rows of servers inside one of the company’s datacenters; Google guards its prize assets with all the attention to detail you would expect from a fi rm protecting its secret sauce.

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And while the Googleplex headquarters wins plaudits for its innovative working environment and army of boffi ns working tirelessly to develop new products and services, it is the datacenter that best represents the future of computing.

Why? Because the complex at The Dalles is just one of many facilities in far-flung locations, owned by some of the world’s largest companies, that promise to deliver the next great shift in computing technology: the cloud.

Inside the cloud As technology continues to evolve, more and more elements of our lives are being held not on our personal computers at home or in the office, but by websites on servers in remote locations we never even see.

Data storage is cheap in these environments, often in the range of pennies per gigabyte – so cheap, in fact, that it is often provided in surprising

“Cloud computing is one of these concepts that come along every once in a while in IT and shakes up the foundation of the way we think about computing” Ric Telford, IBM quantities for free. Th ink the cloud doesn’t affect you? Then think again.

Those photos you uploaded to Flickr last night? In the cloud. Your Facebook profi le? That’s in the cloud, too. The YouTube video you posted of Uncle Brian falling over at cousin Susan’s wedding? Sitting on a server somewhere in a facility very much like the one in The Dalles – again, in the cloud.

To the end user, the cloud is invisible. You access an application being run on a server operated by someone else, through the internet, as opposed to one stored on your own computer’s hard drive. As far as Joe Public is concerned, the technology that supports the applications doesn’t matter; it is the fact that the applications are always available that is important.

One of the earliest ways people used cloud computing was to store and access their email: rather than buying a server themselves, they signed up for an email account at a website like Yahoo! or Hotmail, had their emails go directly to the provider’s server and accessed them via the web. Gradually, that model came to be the accepted method of delivery for an increasingly varied array of services and products. For instance, people have quickly begun to take advantage of streaming video websites instead of downloading shows or recording them on DVR. Overall online video streams grew 48.9 percent from the middle of 2008 to October 2009, a figure that is still rising, and in 2009, TV on-demand provider Hulu saw total streams rise by a staggering 490 percent year-on-year. Meanwhile, streaming music sites such as Pandora and Last.fm have also seen growing interest as people choose to listen to music on-demand online rather than gather and maintain a large music collection on their hard drives.

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“Cloud computing is one of these concepts that come along every once in a while in IT and shakes up the foundation of the way we think about computing,” says Ric Telford, VP of Cloud Delivery Services at IBM. “It’s a new style of IT delivery model that gives a highly scaleable, quickly provisionable, pay-as-you-go base to IT services – and does so in a way that allows customers to consume technology in a highly standardized way.”

“Cloud computing is all about offering services over the network,” agrees Telford’s colleague Dennis Quan, IBM’s Director of Autonomic Computer Development. “Service can mean anything from an email account, to access to computing facilities for doing a large-scale computation, to access to different information repositories and online video streams. No matter where you are, you can get access to your applications and your information, and using a laptop or a mobile device connect to the network. And these applications and collections of information are being managed for us centrally, somewhere up there in the cloud, so to speak.”

A silver lining The business benefits of such an approach are significant. Reducing – even eliminating – hardware and associated operating costs is clearly a no-brainer for corporate users, many of whom are already moving toward subscription-based soft ware-as-a-service (SaaS) models. Online business applications offered by companies such as Salesforce.com (for customer relationship management) and Workday (for human resources and fi nancial soft ware) not only replace expensive programs that would otherwise need to be On September 8th 2009, TechCrunch run and managed by the company onsite, they predicted that Apple would soon can also reduce the need for corporate computer be moving iTunes into the cloud. servers and the related costs of maintaining Because movies and TV shows are them. Instead, companies pay subscription fees such big files, a large collection for usage rather than licensing costly enterprise takes up an unreasonable amount of soft ware. SaaS is a growth industry: a new study space. TechCrunch predicted Apple

by Forrester Research concludes that even in the would allow streaming of purchased recent downturn, soft ware-as-a-service providmovies, TV shows and even songs ers were seeing double-digit growth in their from Apple’s own servers. subscription revenues.

Quan believes the variety of applications that could harness such cloud capabilities is substantial. “Online banking and e-commerce, web 2.0 social networking and collaboration, different types of real-time video and information exchange, as well as applications that support business, such as customer relationship management or fi nancial modeling applications, could all benefit,” suggests Quan. “We’ve also worked a lot with clients in the last year on different kinds of business use cases ranging from real-time collaboration to soft ware development and test environments all the way up to different applications in fi nancial services.”

Amazon Chief Technology Officer Werner Vogels was recently named Information Week CIO of the Year for his role in bringing the online giant to the cusp of what he believes will be the computer industry’s next major architecture. He believes companies large and small can benefit from the advantages on offer. “Cloud computing means highly

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reliable IT components can be used by startups, midsized and large eration was a core competency they needed to have because otherwise enterprises alike to provide an environment in which developers or they couldn’t perform basic tasks,” he says. “However, as soon as public engineers no longer have to worry about managing physical resources,” companies that provided electricity as a service came along, businesses he explains. “Instead, they can use these resources as a service over the couldn’t wait to decommission their generators and focus on the things internet, and that will have a major effect on how applications are built. they did well. Th is is similar. Companies are investing a lot in managing Applications will become more reliable, they will become more secure, a physical infrastructure when it doesn’t actually help them build a better they will become more cost-effective.” product for their customers.”

He feels such a development will free companies up to concentrate on the things that matter. “Just look at the amount of time that businesses Stormy weather ahead currently waste on managing physical resources,” he says. “Companies Nonetheless, questions and concerns remain, not least around secuboth large and small invest an enormous amount of manpower rity, liability and interoperability – a point acknowledged by on just getting their infrastructure off the ground; factor in Telford. “How secure are public clouds? What if the cloud the cost of maintaining that infrastructure so that it is goes down? What if there’s a disruption to the network? highly reliable and performing in such a way that cusHow do we solve that?” he asks. Security is certainly an tomers can actually make use of it, and that’s issue: the fi ndings of one recent survey from a big commitment.”

SaaS provider Mimecast show that secuVogels likens the current situation rity concerns were the leading reason of internet users to the dilemma faced by businesses at given by respondents in all categories already use a webmail the beginning of the last century when, for not moving forward with cloudservice like Hotmail, before the days of public utilities, most based applications. Over 46 percent of Yahoo! or Gmail companies generated their own elecrespondents that had considered cloudtricity. “Everybody felt that power genbased applications chose security as the

56%

Microsoft is set to debut a Google Docslike product that will let users create and edit documents in the browser

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Is the cloud right for me? main reason for not moving forward, and this was true across a majority of industries, including fi nancial services (76 percent), energy (75 percent), government (67 percent), retail (61 percent) and technology (40 percent).

“At the heart of cloud infrastructure is this idea of multi-tenancy and decoupling between specific hardware resources and applications,” explains Datamonitor Senior Analyst Vuk Trifković. “In the jungle of multi-tenant data, you need to trust the cloud provider that your information will not be exposed.” The answer lies in better security technologies around identity management, access control, perimeter defense and virus detection. “It’s like in the days when people were uncomfortable giving their credit card details to e-commerce systems,” says Telford. “We need to make sure people are comfortable leveraging cloud services over the internet too.”

Rolf von Roessing, Vice President of notfor-profit IT governance association ISACA,

Here are 10 excuses as to why enterprises aren’t ready to trust the cloud – and 10 reasons why they should.

THE SKEPTICS ▼ It’s not secure. Many industries have to maintain strict watch on their data at all times, either because they’re heavily regulated or because they’re super paranoid ▼ It can’t be logged. Putting data in the cloud makes it hard to log for compliance purposes. While there are currently technical ways around this, it’s still early days.

THE CONVERTS ▼

1

▼

2

▼ Reliability is still an issue. Even inside an enterprise servers go down, but generally the communication around such outages is better and fail-over options exist. ▼ Portability isn’t seamless. The cloud is in fact made of up several clouds, and getting your data from one to another isn’t as easy as IT managers would like. ▼ It’s not environmentally sustainable.

Cloud computing uses megawatts of power at an ever-increasing rate, and not all clouds are built to energy-efficiency standards. ▼ Physical location. Canada is concerned about projects being hosted on US-based servers; under the US Patriot Act, they could be accessed by the US government.

3

▼ The private cloud is here already. Large companies already have an internal cloud within company firewalls, and internal IT shops work hard to stay competitive. ▼ Bureaucracy rules. Big companies are conservative, and transitions in computing can take years to implement. Plus, internal IT managers may fight outsourcing.

Free up your IT department. Removing the burden of managing servers, network equipment and software will help reduce costs in the IT department

▼

4

Improved reliability. If a server on the cloud fails, the service provider need only shift the load over to other servers or bring up a backup server in its place.

▼

5

Accessibility. One the greatest advantages to cloud computing is the availability of files and software anywhere there is an active internet connection.

▼

6

Environmentally friendly. One of the greatest advantages of cloud computing is the increased longevity and use of older hardware used by datacenters.

▼

7

Subscription-based service. Traditional vendors charge substantial one-off fees for software, user licence, maintenance, plus customization and upgrade costs.

▼

▼ The need for speed still reigns. Putting data in the cloud means accepting the latency inherent in transmitting data across the country.

Reduced software maintenance.

Upgrades made to software in the cloud do not affect the user’s computer – resulting in a reduction in systems maintenance.

▼

▼ It’s not platform agnostic. If you need to support multiple platforms then you’re looking at multiple clouds – a nightmare to manage.

No hardware required. In the cloud there’s no need to buy and setup expensive hardware or do upgrades to keep abreast of the latest technology trends.

8

Greater scalability. Storage is not an issue, the same goes for application use; companies just need to contact the service provider if they need additional resources.

▼

9

Faster development. SaaS can deliver fully functioning applications in far less time than traditional software development projects.

▼

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believes business and IT managers should take the time to review their security systems and resources, and ask themselves whether their information security management can effectively defend their data and other assets in the cloud. And even if an initial budget to extend and enhance a firm’s IT security resources to fully support the cloud is not apparently available, IT managers should not lose sight of the possibility that some of the direct cost savings that arise from cloud migration can be invested in security facilities. “It’s important that in the rush to embrace the obvious benefits of the cloud, businesses do not overlook the security implications of extending their IT resource into what is, to all intents and purposes, a virtual environment,” he says.

And security is not the only issue concerning IT experts. Vint Cerf, founding father of the internet and Google’s so-called Chief Internet Evangelist, believes that while the cloud is already here, considerable work needs to be done in order for its true potential to be fully realized. “We don’t have any inter-cloud standards,” he warns,

End-user perspective With David Day, Director of Global Information Systems, Dow Chemical

W

e see the cloud really to be an extension of a sourcing strategy. For us, it’s not a technology that you’re going to race towards. You’re going to go to it because it can help you achieve economies of scale or deliver additional capability at a lower cost. So we are focusing on more end-to-end or software-as-a-service types of approaches. And certainly, our desire is to continue our strategy of being able to deliver IT with a low capex. I’ve heard quite a bit this week about how people think that it ultimately increases your opex, but I don’t believe that’s the case, at least not from a Dow Chemical perspective. So that’s really how we’re getting out of the gate.

We’ve had a source out strategy since 2000, which in reality has been a private cloud kind of concept. We’ve had a strategic outsourcer delivering all our infrastructure services – voicemail, email, network services. It’s been very much an evolution of something we were already moving towards.

I think the security concerns and the data integrity concerns are real. Ultimately we do see more mature security practices from the strategic cloud providers; I think the HPs, the Microsofts and the Amazons of the world are going to have a far superior security practice than Dow will have. But I also think that you have to be concerned about designing security into your content, because no matter how secure your infrastructure is, you’re still sending it out over the wire. So security has to be designed into your content, and that’s a big focus that Dow has right now.

Dow is very centralized, we have standards already, and we’ve been on the cloud journey for the last 10 years. I think

comparing the situation to the lack of communication and interoperability between computer networks he faced back in 1973 when designing the common protocols that revolutionized – and paved the way for – the worldwide web. “People are going to want to move data around, they’re going to want to ask clouds to do things for them. They might even want to have multiple clouds interact with each other in order to take advantage of the computing power offered through such combinations. There’s a whole raft of research work still to be done and protocols to be designed and standards to be adopted that will allow people to manage those assets.”

However, not everyone is convinced that the industry is ready for standards yet. “Standards by defi nition are restrictive,” says Trifković.

“Consequently, people are questioning whether cloud computing can benefit from standardization at this stage of market development. There is a slight reluctance on the part of cloud providers to create standards before the market landscape is fully formed.”

understanding your costs is a key consideration. I’ve heard a lot of people say that their operational costs actually increase when they go into a private cloud or a public cloud. I don’t see that, and it makes me wonder if they understand the full cost of their operations in terms of managing the full lifecycle.

Understanding the true requirements of what you can give up and you can’t give up is another. When it really comes down to it, you have to really question the business value of giving certain things up. And in reality, at least at the Dow Chemical Company, there’re a lot of things that we don’t need to put in the cloud. I think it’s a highly personalized decision, and I think your business model also has to be considered. For instance, our appetite for risk is very conservative. As a petrochemical and raw materials company where intellectual property is very important, our model is trust, verify and don’t rely on a contract or SLA.

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ACL AD.indd 1

9/3/10 15:40:36

VIZUALIZING LIFE IN THE CLOUD Data processed by Google (In petabytes) AUGUST

3,288

2004 MARCH

52,254

2006 SEPT

403,152

2007 0

100,000

200,000

2008 62.2 MILLION

300,000

400,000

Hulu’s total streams grew

490% in 2009

373.3 MILLION

2009

A compelling case Such confusion has done much to dampen enthusiasm around the cloud for many companies. Yet despite these concerns, there can be no doubt that the cloud is here to stay. Research just released by Resource on Demand, an IT recruitment firm, reports a record number of enquiries for Salesforce and soft ware-as-a-service specialists during the fi rst months of 2010. The fi nancial and organizational benefits of switching to cloud-based storage and computing systems are clearly driving this surge in demand, and analyst fi rm Gartner recently predicted that within the next four years 20 percent of companies will have no appreciable local resources.

And like all great computing revolutions, it is the business case rather than the technology that is driving uptake. “With all due respect to the many wonderful providers out there, there’s no breakthrough technology driving cloud computing,” acknowledges Justin Ricketts, CIO at Susan G. Komen for the Cure, a not-for-profit organization at the forefront of the global fight against breast cancer that recently made the move to a public cloud solution. “For me, what’s so compelling about cloud computing is the economics. If I can significantly lower my capex, and I don’t have to manage it, don’t have to maintain it, don’t have to enhance it, and don’t have to worry about new compliance coming down

the pipe, then count me in. That’s compelling. I believe the real paradigm shift in cloud computing is that computing boundaries are going to be defi ned by economics, not technical limitation.”

Under Vogels, Amazon initially began investing in large scale cloudbased technologies to serve its own operational requirements, but following considerable internal success is now looking at using these to help other companies become more reliable, more cost-effective and more productive – without having the massive cost of building and maintaining those technologies themselves. “We can help companies become more reliable and more secure than they are now, at a much lower price point,” he says. “Plus the pay-as-you-go model means that you pay only for those resources that you use. If you look at starting a typical new enterprise product, then often you have to get a large budget upfront to make sure you have the physical resources to execute on. By using web services, there is no upfront investment, and only if your product becomes successful will you carry the cost for the resources that you’ve been using.”

He also believes the shift from a capital expense to an operational expense model lowers the risks for enterprises to do new product innovation. “There are no boundaries anymore for any company in any country to access these resources,” he explains. “In some ways, cloud computing provides the democratization of business creation. You no longer need access to huge sums of money to get access to physical computing resources in order to get your business or product off the ground. I think technology development will shift – from actually having to manage physical resources and having multiple system administrators in order to keep your service going, towards building

“I believe the real paradigm shift in cloud computing is that computing boundaries are going to be defined by economics, not technical limitation” Justin Rickets, Susan G. Kamen for the Cure

better applications for your customers. Th at’s where the focus will be.

Cloud computing will trigger a whole new range of application building that wasn’t possible before because we were so focused on just getting the basics right. And we will see that applications become more available with better performance, because there will be more automation in terms of keeping these enterprise applications running – under all circumstances – in the cloud.”

The future is now These days, no computer user is an island. A recent study determined that 80 percent of the data used by business comes from outside the company, and cloud computing is the technical response to this reality. And while many don’t see it as significantly different from preexisting computing models such as hosted services and outsourcing, the point is that attributes such as usage-based pricing, shared resources,

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near real-time deployment and user simplification together make business and consumer cloud services easier and cheaper – and often better – to consume than through traditional delivery modes.

Paul Maritz is CEO of virtualization soft ware fi rm VMware. He thinks the movement to the cloud is inevitable as more and more information – personal, professional and statistical – gets digitized. “Increasingly, individuals are characterized by a body of digital information,” he explains. “And that information needs to live on over a period of decades – the rest of our lives – beyond the lifetime of any device you might have. Everybody is going to need somebody to be the custodian of their information. Just like we don’t put our money under the mattress anymore, we put it in the bank, so most of us will become customers of an ‘information bank’ – and in so doing become dependent on the cloud.”

And herein lies the reason why cloud computing is so important: not because it creates greater efficiencies or scalability, or because the economics are so attractive; not because the vendors, marketers and media tell us so; but because it will ubiquitously come to touch every aspect of our increasingly digital lives.

The pile of letters on the mat each morning has already given way to the email database on the computer, which in turn is now making way for cloud-based Hotmail or Gmail accounts. The clipping left on the desk of a colleague becomes the attached PDF fi le, later to be superseded by a set of shared bookmarks, hosted offsite. The faded photos in an album are replaced by JPEGs on a hard drive, then a hosted sharing service like Flickr. The tilting CD tower – itself a digital replacement for our scratched and much-loved vinyl – gives way to the MP3-fi lled hard drive, which then inevitably yields to a service like Spotify: music that is always ‘there’, waiting to be heard, somewhere in the cloud.

The point is, the cloud isn’t just about the future; it’s already here, present in both our homes and our places of work. Is cloud computing new? Not really. Will it reshape the way we use and buy IT power? Defi nitely. Like the internet in the 1990s, the cloud is an aggregation of ideas and solutions that just work. And the cloud will change the IT landscape like the internet changed the world. Adopting it is not a case of if, but when.

Analyst perspective With Michelle Bailey, Research Vice President for IDC’s Enterprise Platforms

I

think it’s easy for people to understand what the public cloud means because there are players out there that have great visibility in the market, such as Google and Amazon. What’s fuzzier is this notion of the private cloud.

In a private cloud, you get a similar experience to what you would from a public cloud, but you’re doing it within your own resources. That doesn’t necessarily mean it’s inside one of your own operated datacenters; while the classic private cloud environment would typically be within your own datacenter, on your own assets, you could just as easily be sourcing a third party to help you get that datacenter space using your systems.

The key benefit for many companies is that there’s no multi-tenancy happening within those systems. Security is far and away the overarching concern around public cloud environments, and that’s one of the reasons why we at IDC believe the private cloud has more momentum because you can still control security in the way you’ve always been able to control security. I heard someone say recently that the public cloud will just amplify all the mistakes companies have been making internally, and I think that’s a really good way to think of it. Having said that, people will learn as they go with the public cloud, and while there’s going to be mistakes made along the way, ultimately that’s where a big part of the market will be going.

From an adoption perspective, what we’re seeing is the early applications tend to be things that don’t necessarily differentiate the business. So email, for example, or collaborative applications and things that don’t differentiate one company from another. Application development is another incredible use of the public cloud. If you have a need to build an application quickly, send it out to the public cloud, build it there, then once it’s ready you can bring it back into your own datacenters. So, we see that as another common approach.

Moving to the cloud is no different from any other IT project you take on. You pick something that’s going to give you good visibility if it goes well and doesn’t mean you’re going to lose your job if it goes badly. Pick an application that really plays on the strength of the cloud, where time-to-market and scale is important.

Grid-based applications, email and your application development environment are all a really good fit for the cloud. Then you’ve got to look at your whole application portfolio, and if things go well there, decide what will be the next tier of applications to bring over.

Really when we look at the future we see a hybrid model. You’re going to have some things you always keep in house, some things you send to a service provider and some things you send to the cloud. And at the end of the day, it’s all about cost justifying and economics: where is the cheapest place I can run this application without giving up on security and quality?

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EXECUTIVE INTERVIEW

Most applications don’t run all the time and don’t really require dedicated resources – although IT traditionally has given almost all workloads dedicated assets – so cyclical workloads are a key consideration, particularly at a time when cost-efficiency rules and capital outlay can no longer be justified. IT now has the means to consolidate many workloads onto shared IT infrastructures, whether those are public or private clouds, or a combination known as hybrid clouds.

Enterprises can choose a public cloud with a subscription payment model or alternatively, they can maximize their IT capital spending by migrating workloads to an internal, private cloud where they can achieve very high levels of consolidation and IT automation. The key in any case is eliminating capital expenditures, therefore payment options remain a key consideration.

Enterprise cloud: Now? Later? Never?

Colin Lacey evaluates the key aspects and considerations of cloud computing.

O

ngoing cuts to IT budgets, pressures for IT to be more agile in responding to business opportunities and overall cost reductions are leading CIOs and CTOs around the globe to seriously consider cloud computing as a game changer for their enterprises. IT executives are looking to cloud computing to solve challenges ranging from managing the enterprise IT infrastructure economically to improving employee productivity. The conversation has evolved from thought leadership to practice.

Chances are that sooner or later you are going to need to evaluate how cloud computing could benefit your business. When that time comes, consider up-leveling the thinking from applications to application workloads.

The question is: which workloads make sense to move to the cloud now, which make sense to

keep in-house now, and which ones should be exempt from the cloud discussion this year or perhaps even forever?

Colin Lacey, Vice President of Cloud Computing at Unisys Corporation, walks through key aspects and considerations for evaluating cloud computing’s potential for your enterprise business.

What are the key business criteria used to evaluate workloads appropriate for private and public clouds?

Colin Lacey. There are at least three key considerations, which are risk tolerance, cyclical workloads and payment options. Risk tolerance encompasses topics such as security, compliance requirements, IT reliability and network performance. For example, what impact would a brief disruption in service have on your business? What impact would a data breach have?

Which types of applications are appropriate for the cloud?

CL. It’s not really about the application or even the data characteristics that fit the cloud, it’s about the service and ensuring that the cloud has the agility both to deliver elastic capacity and to dynamically meet the operational requirements of the business function that it is supporting.

Which workloads are best in private and public clouds?

CL. It’s best to start with a detailed feasibility analysis (such as Unisys offers) analyzing the potential target area for cloud adoption, aligning business demand with IT supply through the business value chain, and identifying potential risks and impacts to the business. This type of analysis decomposes the target workload for evaluation against cloud deployment patterns. Consultants can aid organizations in analyzing current-state infrastructure and operation, create a value analysis and determine the applicability and feasibility of applying cloud architecture within the existing infrastructure and into public clouds.

What are some common workload deployment patterns to consider?

CL. There are four common workload deployment patterns: low latency; complex transaction; intensive numerical processing; and information integration.

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In terms of low latency, is your missioncritical workload sensitive to millisecond–level latency delays? These workloads typically require high system resiliency and data transfer at wire speed without queuing or buffering.

Complex transactions are workloads that require a lot of data requests or network interaction between internal and external systems to complete a single transaction. They usually occur in real or near-real time.

Intensive numerical processing are workloads that process large data sets (millions of records, gigabytes of data), involving iterative calculations. These massive calculations and rewrites need to be done in the least amount of time.

Information integration refers to workloads that deal with integration of large amounts of data from multiple sources into a unified view. These typically have requirements for high security, high throughput and the ability to aggregate, translate and distribute data.

Where does a business start to map out the benefits that cloud computing promises?

CL. Today many organizations are dabbling with cloud computing for development and test environments and for backup and recovery needs. Email and Microsoft SharePoint services in the cloud are gaining in popularity as well. At the end of the day, it’s wise to carefully consider a top-down approach to understanding the demand characteristics of your business workloads. This IT-to-businessvalue-chain mapping clarifies where cloud computing can provide the most benefit to your business.

Are there workloads/applications I should not yet consider for the cloud?

CL. In time, perhaps any workload can move to a private, public or hybrid cloud. Today there is some complexity and varying risk, depending on the vendor’s solution, in moving certain workloads to a public cloud. Enterprise workloads composed of multiple, co-dependent services are more difficult to control when the infrastructure is external to the enterprise – for example, when it’s managed as a public cloud. Also, workloads requiring a high level of regulatory compliance and accountability can make auditing the content more difficult

in a public cloud, so you’ll want to understand the cloud provider’s auditing procedures and ability to help you meet your regulatory and compliance requirements. Lastly, workloads based on third-party soft ware that does not have a virtualization or cloud-aware licensing strategy aren’t usually suitable for the cloud because they may require licenses for total cores on the physical box, regardless of the number of virtual machines (VMs). For these

underestimated yet could be core to the success or failure of the transition to cloud. For business reasons such as these, it’s important to consider the full spectrum of private, public and hybrid cloud options that will best meet your business needs at this time. Some organizations, however, will consider the in-house control of core functions as an opportunity for competitive differentiation and even advantage, and choose to keep these workloads in-house.

How do I know how to use what we already have, or can cloud be a self-funding implementation?

CL. By using the Unisys top-down, fit-forpurpose methodology, you can determine how to best align IT supply with business demand and optimize your environment to balance IT efficiency with business effectiveness. You can employ the methodology and approach to effectively solve a specific business challenge or apply it across your entire business value chain to determine the best-fit solution.

“In time, perhaps any workload can move to a private, public or hybrid cloud. Today there is some complexity and varying risk”

complex workloads, a private cloud may be the best place to start.

In addition to technical considerations, what other factors influence the successful adoption of cloud?

CL. Business risks related to processes for adequate audit and compliance reporting, issues relating to end-user service levels, or even competitive differentiation based on specialized technical implementation are sometimes just as important as cost reductions. An organization’s cultural and process readiness to entrust a critical portion of its operations to a third party is something that could easily be

Where do I begin, and are there low-risk steps I can take toward cloud?

CL. Education is always a good start. Take the time to think through and document key considerations before you begin. You can do this independently or with a combination of online ROI calculators and vendor advice.

These will likely be sufficient for a small pilot; however, the aid of an external trusted advisor often provides the necessary discipline and focus an organization needs to accurately assess and communicate unbiased options to management. One good place to start may be the Unisys Cloud Series on YouTube.

Whichever approach you take, consider these: business drivers (time to market? costs?); ‘pilot’ workload (perhaps a development and test environment, or a new service); technology needs (infrastructure, platform, storage, network); process changes needed within your organization to gain expected benefits; fi nancial analysis, calculating expected ROI; and success criteria to evaluate implementation of cloud computing.

Colin Lacey is Vice President, DCT, Cloud and Security Solutions and Services in the Technology Consulting & Integration Solutions division at Unisys. He is responsible for the management of all datacenter transformation, security and cloud solutions and services portfolios.

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Panduit Ed_25 June 17/03/2010 11:57 Page 60

EXECUTIVE INTERVIEW

The systems infrastructure and the physical infrastructure need to be aligned so that the relevant data can be utilized by the appropriate stakeholders and ultimately shared across various disciplines to drive increased operating efficiencies and capacity planning.

This becomes more pronounced with next generation logical systems architectures that introduce complex technologies.

Infrastructure monitoring and management software also needs to be tightly integrated to provide services management capabilities across all systems and the underlying physical infrastructure. These software applications can provide visibility across the infrastructure to provide real-time data reflecting energy consumption, cooling capac-

OPTIMIZING THE DATACENTER Vineeth Ram gives his advice on optimizing the datacenter infrastructure lifecycle for energy efficiency, sustainability and performance.

According to a recent survey by Gartner, companies are mandating datacenter initiatives that promote energy efficiency, with 68 percent of respondents rating green IT a top priority issue. But, with just seven percent of respondents prioritizing the green IT issue, why should companies move green IT to the top of their ‘to do’ list?

Vineeth Ram. As IT organizations address sustainability challenges they typically become more efficient while lowering the infrastructure risk and increasing their agility. This in turn, allows them to free up resources to focus on more value added activities that makes them more relevant to their organization. Champions within the organization must understand the most critical activities to engage in and must bring these priorities into balance with policies that conserve resources, make financial sense for the organization, and that are good for the planet.

In addition, as IT organizations embrace infrastructure consolidation and virtualization and deploy next generation architectures to improve efficiencies and systems performance, they are

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being confronted with significant challenges around managing power, cooling, space, speed and infrastructure performance. This is leading them to confront sustainability issues head on in the datacenter environment, where being green is tied to a significant green dollar impact.

What are the key criteria for planning and operating a datacenter that enables reliability, agility and flexibility while also managing sustainability goals?

VR. Customer needs and business requirements will ultimately define this design. To support the design, Panduit recommends a unified physical and logical systems infrastructure that utilizes appropriate management software to optimize datacenter performance and conserve valuable and finite resources.

The degree of integration or unification of all the infrastructure elements is becoming extremely important. Traditional disparate systems – computing, communication, power, control and security – need to be architected in a manner that optimizes their combined performance to solve this complex challenge.

ity, space availability, asset tracking for capacity management and planning. This becomes more relevant as organizations test the limits of their operating environment in order to maximize the efficiency of the overall infrastructure.

Can you explain the main challenges involved in designing and deploying the datacenter?

What is your advice in terms of tackling these challenges?

VR. The key challenges revolve around integrated designs that optimize all design criteria while successfully meeting the constraints. As we discussed earlier, the integrated design approach needs to cut across traditional silos and address all elements of the logical systems infrastructure as well as the physical infrastructure.

The ability to optimize power and cooling capacity and costs, space utilization, speed and performance enhancements through the integrated design is a complex task. This needs to be done while maximizing the technical systems performance, ensuring high availability, increasing efficiency and reducing costs. This becomes more challenging as customers embrace consolidation, virtualization, automation and cloud computing paradigms to improve the efficiency of the infrastructure.

We address these challenges with physical and logical reference architectures that support business and application needs. The rapid pace of technological system evolution, together with the heterogeneous nature of the infrastructure environment, imposes significant demands that need to be satisfied. Our approach

Panduit Ed_25 June 17/03/2010 11:57 Page 61

helps to bring together disparate teams and enable them to have an aligned conversation that enables optimization of the infrastructure across the datacenter lifecycle.

Panduit has adopted a new holistic approach to promote convergence, helping customers build smart datacenter systems into a single, interconnected environment to effectively address cross-functional challenges. Can you explain more about this new infrastructure and its potential for the market?

VR. Physical infrastructure systems traditionally have been designed, deployed and operated separately, often in proprietary silos. Our comprehensive and holistic Unified Physical Infrastructure (UPI) approach enables enterprises to converge and harmonize those systems onto common pathways.

The UPI approach aligns the physical infrastructure to the logical systems infrastructure, and offers numerous opportunities to optimize power, cooling, speed, space and performance across the entire lifecycle of the customer’s buying and decision making process for datacenters, connected buildings and industrial automation solutions. Our comprehensive portfolio of components, active devices, hardware, software and partner-inclusive professional services are offered in close alignment with technology partners like Cisco, IBM, EMC, Rockwell Automation and others.

For instance, UPI-based reference architectures and reference designs enable the integrated planning and design while certified partners deploy these solutions. Panduit’s physical infrastructure management software solutions enable real-time monitoring, management and automation of operating environments. Finally, Panduit’s UPI-based services enable customers to embrace the integrated, optimized solution with audit, assessment and design services delivered by our certified partners.

Recent Panduit customer ROI results demonstrate that more frequent and deeper interaction between IT and facilities management to deploy a comprehensive, integrated physical infrastructure solution – aligned with a logical network and systems infrastructure designed to support current business and future application needs – results in significant capital and operational cost savings while reducing infrastructure risks.

Energy costs are increasing. What risk management strategy would you recommend to address concerns over energy costs, security and supply?

VR. We believe that a holistic multi-step approach based on UPI principles across the entire datacenter lifecycle is required to meet sustainable IT goals.

The first step is planning. During this phase, the project champion looks across business units to understand top business initiatives and prioritize application needs. Then both champion and stakeholders select a datacenter reference architecture that successfully translates business needs into IT and facilities infrastructure requirements. These decisions are best made in consultation with a strong partner ecosystem that leverages UPI based princi-

Vineeth Ram joined Panduit Corp. in 2007 as Vice President of Global Marketing. His current responsibilities include global strategic marketing and new business initiatives. Prior to Panduit, Ram held leadership marketing roles at IBM, Dell and 3M. He holds a BE in Mechanical Engineering, a MS in Systems Engineering, and an MBA.

ples to minimize power/cooling consumption and maximize datacenter real estate while enhancing availability, reliability and scalability.

Next is to design the datacenter. Datacenter stakeholders must leverage the skills and services (such as computational fluid dynamics-based predictive analysis through mathematical modeling of air flow and temperature) of their partner and vendor ecosystem based on UPI principles to achieve efficient capacity planning. Once the design is com-

pleted, it is time to deploy. IT stakeholders must now leverage channel partners and pre-configured systems to achieve speedy infrastructure deployment and conserve labor resources. UPI based design principles provide optimization of energy, space and sustainability through physical to logical infrastructure integration.

Lastly, it is time to operate. At this phase, physical infrastructure management systems provide deep visibility into real-time systems information, enabling datacenter stakeholders to embed sustainability and security directly into IT processes.

The result is a datacenter deployment that meets the business performance requirements and optimizes energy consumption, space and sustainability across multiple levels – rack, cabinet and room – and lowers operational cost while reducing the carbon footprint and the infrastructure risk of the organization.

In your opinion, what does the datacenter of the future look like? What do you see as the key principles and why?

VR. Panduit’s vision is a truly smart datacenter that meets the business performance requirements with a unified, integrated, efficient, sustainable and automated infrastructure across all core systems, optimized to successfully address power, cooling, speed, space and performance challenges.

This optimized architecture can work in concert with flowing workloads to ensure uptime while reducing energy costs significantly.

It would ensure that cooling capacity is matched for the best efficiency, highest performance and lowest operational risk. It would optimize speed by allowing applications and business processes to be matched to the proper topology.

Infrastructure management software would provide visibility into both the physical and logical systems and enables optimization of energy consumption and space utilization in a production environment. Software automation will enable integrated services management capabilities across all systems and the underlying physical infrastructure. Lastly, it would also ensure that planned growth and changes are accommodated efficiently, with the lowest risk and highest agility. It will enable compliance with regulations through enhanced audit management capabilities. n

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NEXT BIG THING

Fabric computing Is a mist computing model an alternative to costly and crowded datacenters?

DANIEL BEVERIDGE

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ver the past 10 years, virtualization has brought dramatic gains in datacenter efficiency, density and management. The virtual machine paradigm has been so triumphant that it’s almost taken for granted that the datacenter is the best place to put most of our compute workloads. We have witnessed the virtual server consolidation trend and now the mass centralization of desktop workloads looms large. Do all these workloads really belong in the datacenter? Does the future hold a world populated with heavy datacenters and mostly thin-terminals on the edge? Does the cloud really have to mean placing compute somewhere ‘out there’ away from the resource consumers? I see a different vision of compute resource management emerging and ultimately eclipsing the heavily concentrated model in vogue today.

The current IT paradigm is defi ned by the datacenter, desktop computers, laptops and thin-clients. These options for workload placement have been and largely still are the lens through which we organize our information world. In recent years, the emergence of smart phones and netbooks has introduced a new class of user experience – the mobile application platform. It seems clear that tomorrow’s users will engage a variety of devices in the course of their activities, with seamless access to data and resources. Today’s concentrated datacenters will ultimately give way to a fabric-based model made possible by a new class of emerging hardware.

A new class of ultra low power PCs is emerging, the best example of which is the Fit-PC2i. Consuming less than 15 Watts, hosting 2GB RAM or more with diskless, HDD or solid state configurations, this 4x4x1 inch device provides excellent multimedia, is similarly robust and ‘green’ as thin-clients yet powerful enough for a good Windows 7 experience. New desktop and application virtualization technologies now make it possible to publish applications from an auxiliary physical or virtual machine while maintaining a seamless desktop experience. Heavy applications that need more capacity than these lean units provide could be hosted by spare/

the need for large and expensive datacenters.

Performance would always be latency optimized, and a true supply/demand economy would emerge to provide just in time capacity augmentation at the cheapest price based on location.

With client-side hypervisor technology just around the corner, small compute nodes can be further subdivided allowing flexible multi-tenancy of workloads. If there’s a big idea here, it’s simply recognizing how many efficient ways compute workloads could be managed and priced if capacity exists between the endpoint and the datacenter. A ‘mist computing’ model based on small silent nodes ergonomically integrated with office environments holds tremendous promise as an alternative to costly crowded datacenters. Increasingly advanced virtualization technologies make it possible to locate and manage our workloads centrally, but is it really the right strategy?

As these small compute nodes grow in capacity datacenters can be right-sized, host-

“A ‘mist computing’ model based on small silent nodes ergonomically integrated with office environments holds tremendous promise as an alternative to costly crowded datacenters”

unused units peppered seamlessly, and invisibly into an office environment. The small form factor of such devices can power a grid based ‘local cloud’ or ‘Mist Compute Fabric’.

Mist is the cloud ‘all around us’ instead of the ‘cloud out there somewhere else’.

Imagine provisioning all users the same base device and handling user differences with elastic capacity hosted on the peer-topeer local grid. Bursting up to the datacenter for elastic capacity or out to a remote cloud remains an option when the local ‘mist’ reaches capacity. By leveraging generic and tiny compute nodes, companies participating in this model could borrow capacity from each other, from the local building complex, or from upstream cloud providers without

ing workloads that require low latency access to datasets and large bandwidth. For many workloads, an emerging fabric of embedded utility compute nodes tied together with advanced grid and virtualization technologies will suffice and even provide superior resiliency and performance. Desktop, application, resilient grid-storage and application services are all possibilities within this advanced fabric compute model ‘mist computing’ – it’s the next big thing.

Daniel Beveridge is Managing Director of Virtualization Services at GlassHouse Technologies, a leading consulting and managed services company focused on infrastructure optimization and virtualization technologies. Four-time speaker at VMworld on VDI, Beveridge brings together both end-user experience managing virtual infrastructure and extensive consulting experience in Fortune 500 accounts.

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INDUSTRY INSIGHT

Stormy times How to weather the oncoming carbon allocation storm.

DENNIS BOULEY

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rivate organizations and governments are proposing that all corporations be assigned a carbon allocation. Under such an allocation plan, exceeding the allocation would result in fines and other penalties. With impending government regulation of carbon emissions, the development of an energy cost and carbon allocation strategy will be essential in minimizing the business and financial impact on an organization. Within an office building, the datacenter will most likely represent the biggest source of carbon emissions and wasted energy.

A logical first step, in order to avoid excessive energy expense, is to learn how to measure the datacenter’s carbon footprint. Th ree key variables – datacenter location, IT load and electrical efficiency – impact datacenter power consumption the most and are the drivers for the development of datacenter energy consumption measurement tools.

First key variable: Location A geographical location that experiences extreme temperatures and humidity levels will consume more energy as the datacenter physical infrastructure systems (e.g., power and cooling systems) work harder to maintain consistent, moderate temperature and humidity levels.

The local source of power generation will also have a major impact on a datacenter’s carbon footprint. In France, for example, most of utilitygenerated power comes from nuclear energy. A datacenter in France would have a much lower carbon footprint, from a daily operations perspective, than one located in the Midwestern US. In the case of the US datacenter, the energy source ‘mix’ may be 60 percent coal, 20 percent oil, 10 percent natural gas, five percent hydro and five percent wind farms. The datacenter in central France would draw 95 percent of its electricity from a nuclear power plant. A nuclear reactor does not emit CO2 while a fossil fuel burning power plant emits significant quantities of CO2.

Second key variable: IT load IT load reflects how much power the IT equipment in the datacenter consumes. The IT load consists of all of the IT hardware components that make up the IT business architecture: servers, routers, computers, storage devices, telecommunications equipment, as well as the security systems, fi re and monitoring systems that protect them. The higher the load, the more power will be required and the higher the carbon footprint.

Third key variable: Electrical efficiency Datacenter systems have traditionally been oversized in order to build in a fat margin for error in terms of estimating datacenter capacity.

Oversizing results in underutilization of equipment that impacts overall datacenter efficiency.

Fortunately, new generations of modular scalable IT and physical infrastructure equipment allow for a ‘pay as you grow’ approach that helps

to optimize equipment utilization. Advancements in capacity planning soft ware also allow for a much more accurate prediction of datacenter capacities and power consumption.

Measurement tools Automated measurement tools, such as the APC by Schneider Electric Data Center Carbon Calculator, Efficiency Calculator, Energy Allocation Calculator and Power Sizing Calculator TradeOff tools (http://tools.apc. com) can be accessed at no cost and can help datacenter professionals understand how they use electricity, and to recognize how changes in efficiency can impact carbon footprint.

Although not precise, these tools do provide sufficient accuracy to allow for meaningful analysis of various ‘what if’ scenarios.

Entering the data into each of the tools requires some knowledge about the particular datacenter’s environment (e.g number of servers, type of cooling systems, power distribution). In some cases, IT staff and facilities staff will work together to gather appropriate input data. Third parties, such as APC by Schneider Electric, can provide assistance by offering datacenter efficiency assessments that can also provide valuable input to the tools.

For more information on carbon allocation and datacenter carbon emissions see APC white papers #66, Estimating a Data Center’s Electrical Carbon Footprint and #161, Allocating Data Center Energy Costs and Carbon to IT Users available for review at www.apc.com Dennis Bouley is a Strategic Research Analyst at APC’s Data Center Science Center. He holds bachelor’s degrees in Journalism and French from the University of Rhode Island and the Certificat Annuel from the Sorbonne in Paris, France.

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TECHNOLOGY FOCUS

Trading places NASDAQ OMX and NYSE Euronext are battling for the business of the world’s biggest companies. Business Management hears how technology is the main weapon in the fight for supremacy.

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eparated by just a couple of city blocks in downtown Manhattan lie the headquarters of two major business rivals. As the leading listing and trade companies in the world, the venerable NYSE Euronext and upstart NASDAQ OMX have been engaged in a turf war for years. The recent news that Charles Schwab Corp. is moving its listing from the NASDAQ to the NYSE, reversing the move it made back in 2005, is just the latest development in an ongoing battle for the hearts and minds – not to mention the business – of America’s leading fi rms.

Brian Clark is VP and Chief Architect at NYSE. He acknowledges that the rivalry between his organization and its near neighbor is a driving factor in technology development. “Our business in the trading complex, where we compete with the NASDAQ and Direct Edge, continues to be about extreme performance,” he says. “It’s about being able to attract order flow by having turnarounds of under a millisecond – under five hundred microseconds these days – and also being able to stabilize the network so that it’s more predictive, and there are no outliers. We’re always going to try to engineer that and eliminate any points of failure or points of degradation of performance.”

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NASDAQ OMX Head of Global IT Services Carl Magnus Hallberg agrees that operating in the world’s fi nancial capital is a challenging proposition. “New York is probably the area where we have the toughest and meanest market in terms of the competition from the major exchanges in the New York area,” he says. Just as at NYSE, technology is the driving factor in the battle for supremacy. “For us, the key thing has and will continue to be to ensure that we drive our technology innovation so that we can provide the market with the best execution in terms of pricing and performance requirements when it comes to latency and throughput of our systems,” he says. The figures behind this performance are striking. Hallberg estimates that NASDAQ handles around one million messages a second with an average latency of just 250 microseconds, a speed that marks out NASDAQ as the fastest rating system in the world.

NYSE EURONEXT – QUICK FACTS

High-speed data The information-intensive nature of both businesses means that the way data is handled is of paramount importance. However, each organization approaches the issue in slightly different ways. “We do not own our own data centers,” Hallberg explains. “We work with partners to provide us with those services where we base our operations. Verizon provides us with a primary data center in New York. They also provide us with the primary data center capability in northern Europe.”

By contrast, NYSE is currently building two new data centers, one in the northeast of the US and one in Europe. “It allows us to do a technology refresh, optimize some of our server farms and bring in a leadingedge network,” says Clark. “Also, half of our data centers will be occupied by customers who want to co-locate with us; they want to be close to our trading platforms and want to leverage on the high speed they provide.

That’s pretty mission critical for us, and we have hard end dates to make that happen.”

Such is the demand for lightning fast response times from the exchanges that this tendency for client companies to get up close and personal is mirrored at NASDAQ. “The introduction of high frequency algorithmic trading that requires very low latency, high-throughput requirements means we can’t have trading systems connected to us via a network,” says Hallberg. “They have to be co-located within our data centers. Our cooperation with Verizon around data center and data center growth provides us with the data centers and also the capability to grow in those. Our co-location business in the United States, where member firms come in and place their equipment in our data centers, has grown tremendously during the last year so we have had to continuously build out that capacity.”

The aforementioned data center development at NYSE is of central importance to the company’s operations. In addition to handling the exchange’s trading environment, it also comes into play post-trade in the integration and aggregation of data along with inventory and billing functions. “Because of our global network, we’re also looking to potentially hang services off of that,” says Clark. “Th at would reside in the network. We could say it’s a cloud, but it’s like a soft ware-as-a-service or infrastructure-as-a-service solution where we’re able to provide managed services for small hedge funds, small broker dealers and private equity fi rms that don’t want to manage that environment themselves.”

Key clients: Microsoft, Cisco, Intel Employees: 3760 Founded: 2007 Listed companies: Over 8000 Net income: $738 million

Crisis lessons The recent fi nancial crisis provided a powerful lesson on the need for processing speed and power in the exchange space. The turmoil that the market was thrown into resulted in vastly inflated volumes of trade.

Ensuring that the technology is in place to cope with spikes like this is absolutely critical. Latency needs to be trimmed to the bone, so that as volumes swell, speed is not negatively affected. “When the fi nancial crisis started to hit, what happened in the actual trading industry was that the velocity really went through the roof,” says Hallberg. “That meant that trading volumes increased tremendously over a very short period of time. From an IT perspective it has been a continuous race to ensure that we can live up to the volume requirements put on to us, remembering that we are fighting in real time for business. If we cannot cope with the requirements, the order flow will go to another trading venue.”

The challenge around preparing for such events is their rarity. Until a financial tsunami strikes, it is incredibly difficult to predict how severe it will be and what requirements will be needed. More recently, traders had to cope with the collapse of the Dubai property market in late 2009, which once again sent shockwaves through the market. Lessons learned from earlier problems came in useful in this situation. “The trick has really been to ensure that it is possible to trade even during quite extraordinary

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situations in terms of volume growth,” says Hallberg. “It should always be possible to trade, even during turmoil situations that hit us with higher trading volumes, and we need to ensure that we can live up to expectations.”

The trading requirements of an overloaded market are daunting, even by the standards of an industry that has been getting progressively faster throughout the digital age. During a period of particularly high traffic, huge spikes can come at one to two millisecond intervals, rendering them virtually continuous. Unfortunately, there is no way to slow the system down, so it is simply a case of fly-or-die. Despite the challenges that it has faced, Hallberg is bullish that NASDAQ possesses the capability to cope with just about anything the market throws at it. “Honestly, we haven’t

found a faster computer system than ours in any industry in the world right now,” he says.

“That maybe says something about the extreme performance requirements we have. We have to work with the absolute latest technology in our systems to ensure we live up to the requirements; the biggest challenge is to ensure that you’re always pushing that new technology.”

The emphasis placed on speed and bleeding-edge technology is not the only consideration, however. The way in which organizations interact with their customers also has a major impact, and getting a clear view of this interaction can pose problems for an entity like NYSE. “One of the challenges with the exchange is knowing exactly who our customer is,” says Clark.

“We have listings companies, people we want to service on the market

“The informationintensive nature of both NYSE and NASDAQ’s business means that the way data is handled is of paramount importance”

Mapped out

In touch

Brian Clark outlines the importance of having a clear idea where you’re going

Carl Magnus Hallberg on the importance of a close relationship with tech providers

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bout two years ago we launched our global architecture council. It’s a virtual organization and it includes people globally from different disciplines, whether it’s security data, communications infrastructure or application architecture.

Together as a team we engage with vendors. We’re always looking out 18-24 months at what new technology we can adopt. What kind of roadmaps do we have? So we have regularly scheduled meetings with all the businesses across the globe and talk about what technologies we’re looking at and what the priorities are for the business. That kind of dialogue has really just started over the last year. We were very focused on getting some technology deployed over the first year, but this is a form and a mechanism to make sure we have the alignment we need with the business.

If you look at our business lines, we have our listings business, we have our trading business, but we have multiple trading venues. We have them in Europe with equities. We have US equities and derivatives, and each one has their own priorities and their own demands for their client. What we’ve been trying to do is get them to prioritize what we should be looking at in terms of business functionality, but also bringing technology to the table where we can collapse the typical silos we see. We’ve had some experience with that in the post trade area where we deal with a lot of data management. We’re a little bit ahead of the business in terms of collapsing these silos and operating as one team.

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e work extremely closely with our technology partners. So we work with companies like Intel, Cisco and a few others to ensure we have the latest technology. On the networking side we bring in companies like Verizon to ensure that the volume growth can be transported out through our global community.

The trading traffic is only one thing. We also have all the information distribution that has to go out to the millions of users around the globe that consume real-time trading information. But having architects sitting in our partners’ R&D labs allows us to decide very quickly when we have new technologies that we can use, and enables us to quickly bring those technologies in without any disruptions to the market.

Even though you seldom see outages in exchanges, there is quite a lot of technology exchanged underneath all the time, and if you look in Europe right now Verizon is undertaking a huge shift in our network without affecting the trading traffic. We’re doing that to prepare for the volume growth we have in Europe. So you need to have very close cooperation with your partners, it’s not the kind of cycle where you can just spend six months evaluating the technology. Working out what we need for our next trading systems has to be a part of our ongoing, everyday work.

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and issuing front; we have our members and people that trade with us; and you can even argue that some of our customers are the regulatory agencies such as the FCC. And there’s a lot of demand from each one of these constituents. We have adopted salesforce.com to help better manage our customer data; that’s how we can get an holistic view. It’s those kinds of relationship management aspects that we have to get better at.” To this end, NYSE has been engaged in leadership forums centered around the theme of managing relationships with clients.

NASDAQ OMX

A changing world If the events of recent years have taught us anything, it is that the business environment can alter very quickly. The ability to cope with change at a global level is therefore of paramount importance going forward for both NYSE and NASDAQ. “For us, moving forward, the priority is to continue to build the global footprint with new exchanges and new offerings in the various regions we are already in and where we will become active,” says Hallberg. “We also have an interesting new business we have started to develop in terms of new services that we provide to publicly listed companies. We have a means to ease those companies’ operations in the public world, to be able to ensure that they can do their board work sufficiently, that they can distribute press lists of information and be in contact with the investor community. In addition to developing trading venues, making them more attractive and building our global footprint, we also have better services that we can provide to these companies.”

For Clark, the process of change is something that has to be approached with a great deal of deliberation. New decisions about major transformation or technology change start with small proof of concepts.

“For example, we’ve adopted a framework for our post trade which is completely different from the technologies that people use today,” he explains. “We brought it in and started to train people up on it. Frankly, some people adopt it right away, and they’re ready to go, and some people don’t. The people that adopt it tend to stay and the ones that don’t often end up leaving. There’s a saying that if you’re making a major change 20 percent of the people get behind you right away, 60 percent wait and see what happens and 20 percent would rather go to hell than follow you.

That’s kind of been the model we see.”

Key clients: Coca-Cola, Wal-Mart, GE Employees: 2500 Founded: 1971 Net income: 319 million Listed companies: Over 3700

In order to get around resistance to change, the process has to be managed carefully. “We typically have a number of people that want to adopt it,” Clark continues. “We do have to do something of a marketing and sales campaign to the business when we make these changes because sometimes they don’t understand the value in IT-driven developments. We also need to do sales and marketing when we’re changing the underlying processes that we use today.”

What is clear from both Clark and Hallberg is that the pursuit of ever faster and more refi ned technology will remain the battleground between NASDAQ OMX and NYSE Euronext as they vie for position in an ever more competitive business environment. The ability to serve clients with the speed and accuracy that they require will continue to be the key differentiator as we go forward. It doesn’t look as if either organization will be landing a knockout blow anytime soon, but the contest for domination should prove fascinating.

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EXECUTIVE INTERVIEW

service management cloud solutions for several reasons. The first is often the degree of complexity a fully integrated ITIL-based solution may require in an upper-mid market or enterprise market. The second is the perception that a service desk must have 100 percent uptime and that can only be guaranteed if one owns the servers and soft ware.

Where does RightStar see cloud computing going?

Dick Stark. As a long-time BMC elite solution provider and ITIL consultancy, RightStar is

Service management in the cloud How to accelerate IT management success with cloud computing.

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t the recent Salesforce.com Dreamforce conference in November, BMC CEO Bob Beauchamp and Salesforce. com CEO Mark Benioff announced a strategic partnership to deliver BMC SDE solutions on the Force.com platform.

Business Management caught up with Dick Stark, President and CEO of RightStar Systems – BMC’s largest Service Desk Express (SDE) solution provider – and Greg Myers, Director for the SDE product line, to discuss the Salesforce/ BMC joint service management offering that will be available in the second quarter of 2010.

Customers can now leverage enterprise-class IT management completely in the cloud with Force.com and BMC Soft ware. In other words, incident management, inventory management and self-service will now be available on the Force.com platform.

How does service management cloud computing simplify things?

DS. The new SDE Salesforce offering allows organizations to quickly and efficiently roll out an ITIL-based service management solution.

It comes with detailed process defi nitions,

Dick Stark

“The biggest delay on any service management implementation is not the technology but trying to arrive at consensus on foundation data and processes”

First of all, can you describe this new Salesforce offering in more detail?

Greg Myers. To date, there has been no cloud computing market leader in the service management space. Soft ware companies that offer service management solutions (like CA, HP and BMC) have tried for several years to launch their own hosted versions with limited success.

Salesforce believes that the alliance between Salesforce.com and BMC will accelerate IT management success with cloud computing.

very excited about service management in the cloud. We can assist customers looking for strong IT-business integration and rapid time-to-value. For one thing, every chance we get we will push ITIL as the organizational framework for service management. It’s much more efficient to begin with an existing process standard (ITIL) rather than fit a service management solution into a customer’s existing processes. BMC, with its Alignability Process Model (APM), provides ‘ITIL in a box’. It’s an easy button for ITIL rollouts that doesn’t require a large outlay in terms of time and money.

Why have these software companies had such limited success in the past?

GM. A traditional soft ware company’s pricing model and sales incentive plans are often skewed towards perpetual license sales, not term or on-demand pricing. But more importantly, customers have been slower to adopt

which can be used to review and determine the necessary processes for an organization to complete a service management implementation in a sharply reduced timeframe.

The biggest delay on any service management implementation is not the technology but trying to arrive at consensus on foundation

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Datacenter performance management data and processes. The use of the new SDE Salesforce offering means less time is required for process defi nition and tool configuration.

But that assumes that the customer is ITILaware. If the customer is not ITIL-aware, we can offer ITIL training classes that will help them better prepare for the rollout.

Is any integration required?

DS. Most customers at a minimum integrate to a lightweight directory access protocol (LDAP) so their client or user data is accurately synched up. And customers will normally want to set up a configuration management database (CMDB) for configuration items for inventory management.

Greg Myers

“What’s exciting about this release is that it combines the best of BMC’s Remedy and SDE” Won’t this initial release be a 1.0 release lacking many features already built into the BMC SDE product?

GM. Yes and no. What’s exciting about this release is that it combines the best of BMC’s Remedy and SDE. For example, we took a common data model out of the BMC Atrium CMDB and with very little effort added this to the product’s initial release. The result is a SaaS offering with a nearly identical CMDB as BMC’s largest Remedy customers. And BMC Solution Providers like RightStar are already working to have their add-on products, like MagicMobile, available on the force.com platform. MagicMobile allows users to mobilize SDE applications to a PDA such as a BlackBerry or iPhone.

DCPM is based on providing integrated visibility and control over datacenter performance, so that guesswork is removed and results are predictable.

STEP 1: DISCOVER The first step is to collect and centralize all relevant data about your datacenter – both physical and virtual. This should be an automated discovery and inventory process to unify data and catalog information about servers and other systems.

STEP 2: VISUALIZE The next step is to take these collected assets and virtually walk through the datacenter, looking at multi-dimensional front, rear and side views of the assets. This is particularly valuable if racks are densely packed.

STEP 3: MODEL Once you have a 3D visualization of the datacenter, you are ready to manipulate, plan and manage the physical layout of the floors and rooms. This should be viewed for each asset category, such as cabinets, floor standing servers, cage representations, power infrastructure, air conditioning and networks.

STEP 4: CONTROL Optimal datacenter management requires far more than effective planning and modeling; it also requires that staff work together and consistently leverage best practices to manage day-to-day operations. To consistently implement corrective actions that prevent problems and minimize costs, a single source of data, best practices and management oversight of all assets is required.

STEP 5: REPORT Given the complexities of managing today’s large datacenters, you need fast access to ad hoc reports, powerful visualizations and sophisticated what-if analysis.

STEP 6: PREDICT Before you plan a datacenter migration or consolidation, you need to know if capacity is up to the task. With DCPM you can precisely forecast your datacenter’s capacity and analyze the impact of changes so you can plan ahead, instead of just reacting.

Customer story: DJO DJO, headquartered in Vista, California, is a global provider of high-quality orthopedic devices with a broad range of products used for rehabilitation, pain management and physical therapy. The company employs approximately 4500 people and has annual revenues of nearly $1 billion.

Like most organizations, in 2009 DJO was tasked with reducing IT spending.

“Due to the magnitude of the recession, DJO had to figure out a way to use technology to make the company more efficient overall, including the processes that drive revenue and support our customers and employees,” explains John Iraci, DJO’s Vice President of Enterprise Infrastructure.

RightStar Systems, an IT consultancy and BMC Elite Solution Provider, has partnered with DJO for service management solutions since 2007, when DJO was seeking to make improvements to BMC Service Desk Express (SDE) for incident, problem and change management. In late 2009, DJO improved its ability to accurately track its resources by adopting MagicWand, RightStar’s own barcode scanning solution for portable asset management. Upon receipt of new assets such as PCs and laptops, MagicWand scans the asset tag and automatically updates the SDE CMDB. When the item is deployed, the location information is updated in SDE. Warranty information is also recorded and an alert defined as a reminder when it is time to renew the maintenance.

“The end result has been a reduction in the overall cost of inventory and configuration management as a result of better knowledge and more efficient inventory levels,” says Iraci.

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MAINFRAME FOCUS

CAPITALIZING ON A MAINFRAME RENAISSANCE Reports of the death of the mainframe have been greatly overstated; here’s why.

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t wasn’t so long ago that mainframes ruled supreme in the data centers of the Fortune 500. Big and powerful, the mainframe was a symbol of corporate might, revered for its processing capabilities and capacity to handle huge volumes of transactional data.

But from the early 1990s onwards, attitudes began to change; the mainframe was portrayed as the dinosaur of computing, too big, too unwieldy and too slow to adapt to a rapidly changing computing environment. Gradually, it was overtaken by more glamorous platforms and newer technologies such as distributed systems – networks of smaller and cheaper machines, usually not based on proprietary technology – and revenues for firms in the mainframe business plunged.

But while the number of mainframe deployments may now be in decline, many large companies still run crucial applications on mainframe systems and there are still about 10,000 in use worldwide. Withdraw money or buy insurance and in most cases mainframes are handling the transaction, and the mainframe remains a core system for high volume, high transaction processes, particularly those used in large fi nancial services companies such as Bank of America.

Kimberly Grim, Senior Vice President of Mainframe Engineering at the Charlotte-headquartered fi nancial services fi rm, describes the mainframe systems that handle the fi rm’s most critical applications as essential. “We have been operating this platform for 40 years,” she says. “It’s changed a lot, but it is still state-of-the-art.” She believes the mainframe

platform can handle high-volume work better than non-mainframe systems, and explains that hundreds of the company’s IT workers are still assigned to mainframe tasks.

Indeed, widespread predictions that the mainframe would be effectively dead within a decade, killed off by the rise of distributed computing, super-powerful PCs and newer, apparently more exciting options such as the client server have been shown to be wildly off the mark, according to Capgemini’s Chief Operating Officer Liz Bernison. “There are many indications – including some hard facts – that reports of the mainframe’s death have been greatly exaggerated,” she says.

Reliability is high on the list, with many machines having a record of a decade or more of running without interruption, and with hardware upgrades taking place during normal operation. “Manifestly that is a benefit that can never be overlooked in the many applications where downtime would be costly or even disastrous,” she explains. Availability is another key factor, with the so-called ‘five nines’ – 99.999 percent availability – often being seen as the rock-bottom starting point, not the ultimate goal, in day-to-day commercial mainframe operations. On top of that, there are the unmatchable security features, the high in-built redundancy and disaster recovery, the extensive input-output facilities and, last but not least, the sheer processing power and MIPS ratings that support the massive throughput often required by larger enterprises.

Clearly, the mainframe is far from dead. Nearly half of mainframe

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INVESTMENT PRIORITIES In a recent BMC survey, three mainframe-related projects were cited by those surveyed as key investment priorities:

Application modernization (34%) Disaster recovery (31%) Server virtualization (28%)

professionals say they plan to boost spending on technologies that can help drive more business value or cut operations expenses for their mainframes, according to a thorough user survey conducted by BMC Soft ware, while an increasing number say they believe management is more open to new mainframe investments compared with the same time last year.

Analysts agree. “The mainframe continues to stand out as a secure, reliable, efficient and highly scalable platform for mission critical applications and databases,” says Tim Grieser, VP of System Management Soft ware Research at IDC. In fact, the list of successful mainframe applications is extensive.

Last summer, the UK-based Co-operative Financial Services (CFS) upgraded the mainframe infrastructure behind its banking and insurance businesses in order to support a $750 million IT transformation. The upgrade to a newer generation system was completed in late February under a replacement and ‘buy-back’ process, using the residual value of the legacy equipment. The switch is expected to ultimately save the company $4.5 million.

CFS hopes the machines will provide a more flexible and environmentally friendly soft ware testing environment – with the old equipment, processing power could only be reduced or increased in 400 million instructions per second (MIPS) chunks, while the new mainframe allows changes in power use of 100 MIPS. “We will be going through a significant amount of change over the next four to five years, so we needed greater flexibility to scale power up and down according to our requirements,” explains Gary James, Head of Enterprise Computing at CFS. “The new mainframes will act as one of the enablers for the overall change program. It will meet short-term requirements such as support of our testing activities as well as provide operational and fi nancial savings for the organization.” James believes further benefits of the migration, carried out over two months last year, will include higher levels of security, control and automation.

In addition, mainframes are increasingly attracting new customers in fast-growing emerging markets. Without mainframes, businesses such as India’s Housing Development Finance Corporation and the Bank of China in Hong Kong would have a hard time dealing with their explosive growth, while Namibia, through its First National Bank, acquired its first ever mainframe computer last year.

The Bank of Russia, meanwhile, recently reported savings of $400 million per annum following a move from 200 distributed servers across 11 time-zones to a mainframe environment. Mikhail Senatorov, the Bank’s Deputy Chairman, highlights the system’s scalability as a key benefit. “With IBM System z, instead of buying an oversized server and growing into it over the years, we only need to pay for what we use,” he explains. “As volumes increase, we can ask IBM to activate more processors within the mainframe to deal with the demand.”

One reason for the current renaissance in mainframe computing is the increased interest in cloud computing and virtualization, with many people waking up to the fact that such concepts – often touted as brandnew – have been realities in the mainframe world for decades. Dele Oladapo is VP of Cross-Platform Engineering at Prudential Insurance, and believes that the cloud is, in many ways, causing people to re-assess the value of their mainframe environment. “If you look at the client/server paradigm, that represented a shift away from the mainframe model because you wanted to be able to give each of the application owners more decision-making power over what they wanted to do,” he explains. “But if you look at virtualization and the cloud, it’s much more about going back to a mainframe paradigm where you have resources that you just carve up within virtual images, offering that back up to the end-user so that they can be abstracted from infrastructure decisions and just focus on their business objectives.

“widespread predictions that the mainframe would be effectively dead within a decade have been shown to be wildly off the mark” “In Fortune 500 companies, you’re typically going to see all three of those platforms – mainframe, distributed and virtualized – and crossplatform interoperability is where the challenge comes from,” he adds.

Capgemini’s Bernison agrees that leveraging existing models, platforms and systems will see an increasing number of firms re-evaluate their approach to the mainframe. “With today’s budget pressures, a major focus for many CIOs with mainframe installations is figuring out how to do more with less by leveraging their assets (for example, by modernising applications) and driving out costs,” she explains. “Th is can mean a one-off exercise, often undertaken with an expert, independent partner, or it can mean a long-term commitment to move from in-house to thirdparty support. And certainly many companies with strong mainframe expertise are currently strengthening their capabilities in offerings in both these areas for their mainframe-based clients.”

In 2010 it will become more important than ever that mainframes play well with other systems. In fact, two-thirds of mainframe respondents told the BMC survey that they have already aligned, or are in the process of aligning, mainframe resources with their distributed environments. “I would suggest that you cannot think seriously about your longer-term IT architecture without thinking equally seriously about what today’s mainframe environment has to offer,” concludes Bernison.

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INDUSTRY INSIGHT

Doing more with the mainframe Dayton Semerjian explains the role of the mainframe and reveals how to make the platform the most innovative in the organization.

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eaders have a lot on their plates. There are always new technologies and strategies proposed to deliver innovative solutions to complex IT problems. The challenges of newer regulatory regimes have further compounded the technological and budget conundrums.

However, the fundamental challenge of trying to balance existing commitments with the need to deliver innovation to the business is particularly vexing. In fact, after discussing this topic with many technology executives, we found that many organizations spend about 80 percent of their resources on basic core operations. The 20 percent balance is spent on delivering innovation. The challenge then becomes one of bending the operations-innovation curve to actually do more with less.

Fundamentally, we can apply a few simple rules to help us bend the cost-investment. We believe that a focus on delivering incremental efficiency improvements on the operations side can free up significant amounts of investment for innovation. For example, a five percent decrease of operational expenditures yields a 20 percent increase on the innovation side of that same ledger. Said more succinctly, small improvements in operational efficiency can free up significant amounts of monies for the innovation. The fi rst thing to examine is the fundamentals – do we have the right pieces in place? The answer, of course, is ‘it depends’.

However, there are some core attributes that are necessary in terms of making sure that the portfolio of technologies does indeed deliver business critical functions and services well.

Today there is only one platform that has these attributes and delivers on the key needs, the mainframe. Th is explains why over 70 percent of the world’s business data still resides on mainframes and why, contrary to the decades of predictions by pundits, the platform continues as the main workhorse for a very large proportion of the world’s largest and most suc-

cessful organizations. For many business leaders, the idea of doing more with the mainframe is not surprising, but they have been looking for solutions to three issues, and recently the market has responded with exciting new ways to address them.

The fi rst issue has been one of cost – or at least perceived cost. While on a cost per transaction level it outperforms all other choices, the feeling has always been that there must be a continual flow of new ways to make it even more cost effective. The second issue has been the need to rejuvenate the workforce. Despite huge growth in transaction workloads many organizations essentially have had the same very experienced, relatively unchanged mainframe staff managing it all, due to mainframe’s incredible performance over multiple decades.

But what happens when the staff starts to retire, who will run it next?

The third issue is one of agility. How can the mainframe be used for both new and existing work, more flexibly than ever before, but continue to deliver in terms of reliability, security and performance?

It turns out that all of these issues have a similar root cause – the level of complexity of the platform. By driving down this complexity and, at the same time, introducing the most advanced industrial design and IT management methodologies, it is possible to turn the mainframe into the most innovative platform in an organization. Further, it is also possible to make it easy and exciting to use, by all levels of IT staff working across an organization, to flexibly deliver more services for less cost.

We call this strategy Mainframe 2.0 and it is changing the way the mainframe is managed.

Mainframe 2.0 has been delivering real value for the last year, and in May 2010 a whole new range of innovative additions to this strategy will be announced. To hear the details for yourself, come and join me and my team at CA World (www.caworld.com) or join us virtually at our month long mainframe event called May Mainframe Madness (www.ca.com/mmm).

As Corporate Senior Vice President and General Manager of the Mainframe Business Unit, Dayton Semerjian is responsible for leading strategy and driving innovation and execution across CA’s market leading mainframe product portfolio.

Seven key attributes of highly effective IT 1. IT must be reliable. For core business functions, no unscheduled downtime is acceptable. The common goal that is discussed is uptime of 99.999 percent or ‘five nines’.

2. IT systems need to be able to deal with changes in workload without failing or requiring significant additional resources.

3. The environment must be demonstrably secure.

4. IT must use as little power and cooling as possible.

5. The holistic cost of running the system must be manageable and capable of continuous improvement.

6. I must be able to manage the environment without incurring the expense of an ever-expanding hardware footprint. To accomplish this, the ability to support virtualization models that can enable fast and flexible service delivery is critical.

7. Finally, the systems must not only support continuous improvement programs, but must do so without requiring massive shifts or rip and replace models – in short, the technology must be highly leverageable.

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THE BIG INTERVIEW

“

Our business is

all about

people

and

ideas”

When someone tells you that their company is ‘an ideas factory’, the typical reaction is to roll one’s eyes.

However, when that person is Bob Seelert, Global Chairman for Saatchi & Saatchi – the most famous advertising company in the world – perhaps it’s time to sit up and take notice.

Interview by Diana Milne

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ith two Harvard degrees and a 40-year career at the forefront of some of the world’s toughest leadership assignments, Bob Seelert has amassed a reputation as a turnaround expert. He’s revived the fortunes of businesses and brands in both the US and internationally, and done so through a commitment to nurturing top talent – and demanding the very best from the people under his command.

For the past 12 years he’s been the Chairman of Saatchi & Saatchi, one of the world’s leading creative ideas companies. His journey from small-town Connecticut to CEO of some of the world’s leading companies – not to mention board member for nine companies in the United States, England and France – has led him to develop a unique perspective on leadership and success, and made him one of the most respected figures in global business.

As Chairman, he is actively involved in the strategy and management of Saatchi & Saatchi, dispensing advice, counsel and perspective to senior executives and client teams. “Our business is all about people and ideas,” he explains. “We don’t have any factories, we don’t have any formulas, we don’t have products, and we don’t have manufacturing capabilities. Our assets go up and down the elevator every day, and our whole business is about giving birth to the ideas that are going to drive people’s businesses.”

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You’ve had a long and illustrious career. How do you think things have changed for CEOs and other C-level executives compared to when you started in business? Do you think things are tougher now, or require adoption of a different approach?

I suppose there are many things that have changed, but just as many things are timeless. The whole challenge of leadership – how to be a great leader – is, I think, fundamentally the same today as it was back when I got started. Leaders have to do three things. They have to set direction for the enterprise. They have to establish standards or expectations for how the enterprise is going to perform. And once they have those two things in place, they have to unleash the energy of the organization – to empower people to go out and get the job done, because you can’t get the job done alone.

at my best. That will happen 100 percent of the time. And it’ll happen flawlessly.

I’ll never be late. I’ll never be in the wrong place. I’ll never arrive at the airport and find that I didn’t have a ticket, or at a restaurant and I didn’t have a booking, or whatever. We set a clear standard of expectations for the job and she performed them ‘flawlessly’.

Would you say you’re a tough boss?

I’d say I’m a person who sets high expectations and then recognizes and rewards people for performing against them. A football coach once said, “Expect a lot of your people. They’ll usually meet it.” And quite frankly, I think one of the things that maybe some people don’t do is they don’t set expectations high enough. They don’t encourage people to come forward and perform at the level that they could be capable of if you made it clear what their Okay, let’s talk a little about setting the right direction. What does this inperformance levels should be. volve?

And this is where the third element of leadership – unleashing the enerSetting direction is all about having an inspirational gy of the organization – comes in, because a lot of that dream for the company. Other people call this creating a has to do with communications. It is making sure that mission statement. But Martin Luther King didn’t get up people know that you want and expect them to conat the Lincoln Memorial and say, “I have a mission statetribute, and that you’re going to recognize and reward ment.” He said, “I have a dream”, because dreams are a them when they do. Those are the same kind of expecFOUNDED: 1970 very powerful thing. We wrote our inspirational dream at tations that one would’ve had from a leader when I got HEADQUARTERS: New York Saatchi & Saatchi back in 1996: “To be revered as the hotstarted 40 years ago. Are there more pressures today?

REACH: 6000 people in 150 house for world-changing ideas that create sustainable Sure. Is there a faster pace? Sure. Are there more wideoffices over 86 countries growth for our clients.” I think that’s 17 words or thereranging considerations, including political and social KEY CLIENTS: Carlsberg, abouts, and you should be able to do this in 20 words or and global kinds of considerations? Sure. But is the Deutsche Telekom, General less so that everybody in the organization can metaphorfundamental role of a leader any different than it was?

Mills, JCPenney, Lexus, ically tape the strategy to their forehead. It needs to be No. I think they still need to do those three basic things Novartis, Procter & Gamble, short enough and memorable enough so that every sinin today’s environment.

Toyota, Visa Europe gle person in the company can be expected to know what INSPIRATIONAL DREAM: To this is.

Looking back over your career, is it possible to isobe revered as the hothouse Everywhere I go in Saatchi & Saatchi, I always start late one instance, project or situation that you’re for world-changing ideas off with a reminder of this. Our inspirational dream is to most proud of? that create sustainable be revered as the hothouse for world-changing ideas that The thing that I’m most proud of is when I first came growth for our clients create sustainable growth for our clients. That’s why we’re to Saatchi & Saatchi in 1995. The board had ousted the here. That’s what inspires customers and employees to two founding brothers, and I was recruited to come in come to our company. So that’s what an inspirational and take over. When the brothers left, six percent of dream is: it’s an expression of who you are and what you’re all about and how the revenue had walked out the door. They’d gone across town to start up a you’re going to go forward as a company. For us, this is a timeless thing. We’ve new and supposedly rival agency. The company was losing money. It was been caught up in the difficulties of the 2009 economic environment, but we burning cash. It had too much debt at too high an interest rate. It was all comhaven’t changed a word of our inspirational dream. When you can write it and ing due soon. And everybody in the company, as well as all the clients, were it can sustain you in good times and bad, it’s a really powerful statement. asking, “Should I stay or leave?”

So, you talk about tough times; that was a really difficult situation. When I guess this leads naturally into the idea of maintaining high standards. How I took the job, a friend of mine called me up and said, “Oh, my God. I’m have you consistently achieved this in your career? amazed that you’re doing this. Congratulations, but you’d better enjoy it while I’ve always tried to establish high standards and expectations; some of my core you can because the company might not be there in three months.” But the values in that regard have been a belief in the long-term, a belief in growth, a bereality is, after I arrived, nobody left. We refinanced the company. We startlief in continuous improvement, and a belief in out-competing all of the comed to re-grow the revenue, and up until 2009 we’ve had 13 consecutive years panies in our peer group so that we grow faster than them. But you can set of revenue growth. We did a merger with the Publicis Group in 2000, and that standards of performance for any job. So take my PA at Saatchi & Saatchi, for intransaction occurred at a share price that was 450-percent above where it was stance. I remember saying to her, “Look, your job is to help ensure that I am sucwhen I started in 1995. So I think that was my single greatest accomplishment cessful in what I do. And the standard of performance for your job is going to be – in essence, taking this company and rescuing it from the brink and growing it what I call ‘flawless execution’. You will make sure that I am always in the right to a point where it was a highly valued merger partner, and has gone on to be a place at the right time fully prepared with everything I need in order to perform consistently growing and excellent worldwide network.

KEY FACTS

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Was it quite clear to you when you walked in what you needed to do, or did it take a long time to figure out what was required?

Well, it was quite clear to me that the company was in crisis, and one of the things that I did was try to gain presence with as many offices, as many people, and as many clients as I possibly could, as quickly as possible. So I came in and said, “Here’s who I am. Here are some things that I believe in.” And I think that immediately gave some sense of inspiration and leadership that things were going to work out OK. I got around to offices that accounted for 65 percent of our revenues worldwide within the first six months that I was with the company. I got around to meet with the top 10 clients of all of the networks, and the top 20 clients of the group. I got around to meet with the 10 leading shareholders who owned more than 60 percent of the shares. So I was active 24/7, but more importantly than that I had a presence; I didn’t go isolate myself in an office and just send out bulletins. I was an in-your-face presence trying to inspire people and give them confidence that we were going to survive and prosper.

You’re now no longer overseeing the day-to-day operations of the firm, you’ve moved upstairs to the role of chairman. Do you think that the role of the chairman has become more complex given recent concerns over executive behavior?

I certainly believe the chairman has broader and more complicated external issues to deal with. We’re in a global economy with a lot of wide-ranging governmental, regulatory, political, environmental and social kinds of considerations. Those things have grown in complexity. But internally, you still set direction, establish standards and unleash the energy of the group.

That’s what it’s all about.

What leaders have inspired you throughout your career?

I just got through reading an article where they named Steve Jobs the CEO of the decade, and I think he is an incredibly inspirational and innovative leader. Here’s someone who has been in the computer business since the first emergence of the personal computer. And he is now taking it through what I think even he would call its final phase of development, whereby he is creating devices linked to the internet that create and enable a whole new digital lifestyle, which increasing numbers of people are living every day. It’s things like the iPod and the iPhone and everything else that you can do on the internet that makes all of this possible. And he’s been at the heart of that, to be honest. His company has been at the heart of that in an innovation sense. You have to have great respect for innovative, entrepreneurial people who not only develop incredible business success, but who have, in this case, shaped an entirely new lifestyle. It’s really quite amazing.

What kind of impact is the advent of the digital lifestyle having on your business?

It is having a tremendous impact on the advertising business. When I got started I could put together a television and print campaign to launch a product in the United States that would reach 90 percent of American consumers four or five times within a four-week period of time. Now, that’s completely impossible, because the media is so fractionated. There are so many different channels and platforms.

The other big thing is that we used to intrude into homes; now we need to get invited into them. We want consumers to seek us out. We don’t just want to bludgeon them over the head with messages. We want to make con-

“Martin Luther King didn’t get up at the Lincoln Memorial and say, ‘I have a mission statement’. He said, ‘I have a dream’, because dreams are a much more powerful thing”

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nections with them. And getting in front of these people that are living the digital lifestyle through screens – whether it’s their mobile phone or the internet or a TV or seeing a movie – is a big challenge. We’re asking ourselves two questions now with regard to our campaigns. Will people want to see it again? And will they want to share it with their friends? The ‘share-ability’ aspect is recognizing that we’re in a world of incredible social interconnectedness and things can spread like wildfire. We used to totally control the message. We would develop the ad and we would place it, and that was pretty much the way it got from here to there. Now, the idea goes out and it can evolve and go almost anywhere.

Advertising excellence

Does that make it harder to both plan campaigns and keep up with them once they’ve launched?

It’s very demanding, because the devices that people like Steve Jobs keep inventing are constantly changing how all of this is taking place and disseminated, and new social networks keep coming along and building momentum, while others fall by the wayside. So the world is a constantly changing place.

TV came in and people thought radio was going to just vanish, but it didn’t; instead it evolved into a very different kind of medium. In the same way, the digitally driven internet world is having a tremendous impact on a lot of media. But I don’t think they’re going to go away; they’re just going to have to adjust to whatever the economic requirements are.

Saatchi & Saatchi has a particular reputation for creative excellence, and works with six of the top Your business is all about people and ideas. Does running a creative busi10 and over half of the top 50 global advertisers. ness like Saatchi & Saatchi require a different skillset to managMajor clients include Bel, Deutsche Telekom/Ting a financial services or manufacturing firm, for instance?

Mobile, Diageo/Guinness, Emirates Airline, The reality is, here at Saatchi & Saatchi, we have a lot of rightGeneral Mills, Mead Johnson, Novartis, brained people – ideas and creative kinds of people – who Procter & Gamble, Sony Ericsson, Advertising Age see the world through a different pair of glasses than a Toyota/Lexus and Visa Europe. estimated worldwide left-brained person would. I’m more of a left-brained advertising revenues of guy. I think manufacturing companies and other industrial-type folk are more left-brained kind of people. for Saatchi & Saatchi I’ve worked in those industries myself. But I always in 2008 knew why we hired advertising agencies: to get access to But the old Western world is in a different kind of the right-brained people that we didn’t have, in order to mode right now. They’re struggling to recover. Media generate the insights and ideas that could help build our busispend in the United States in 2010 will be down for the third ness. So, I had a keen appreciation for that from the day I arrived at consecutive year. In 2008, it was down four-point-something percent, Saatchi & Saatchi. That keen appreciation has served me in good stead. last year it was down 12.9. Our prognostication for the next year is 2.6 negI think that’s important. When you’re leading a public company ative. So you have three years in a row of decline, which when you count it and/or something that all comes together in a profit-and-loss statement, up means 2010 will be something like 19 percent below where things were you have to have a certain quantitative appreciation and understanding for in 2007. That’s a pretty big change. how revenue comes in at the top and turns into a thing called profit at the Having said that, my view is that the worst parts of the downturn are bottom. But there’s room for both types of people in a good enterprise. behind us, but we’re still in a recovery mode. If things are up one or two

$790m

percent after having fallen 18 or 19, it doesn’t really feel all that buoyant.

Where do you see the greatest growth potential over the next few years? Do you see the emerging BRIC economies taking the initiative?

My own view is that we have entered into what I would broadly call “The Asian Century”, but more specifically “The Chinese Century”. I’m very big on China. It is an incredibly dynamic, growing economy and has fantastic prospects. And so if you ask me where the growth is going to be, that’s the part of the world where I think development is going to be strongest. But there are other places, too. So, China, India, some of the African countries are growing quite rapidly in our business, as are Latin American countries.

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Finally, what is the single most important piece of advice you could give to someone who’s about to embark on a leadership career?

I think it’s terribly important to know who you are, what you stand for, what you’re all about, and to then carry that through in your career. I always stand for the same things, so people know who I am and what they can expect. My hope has always been that this has proven inspirational to them, that it’s been an organization that they want to be a part of, and that it’s brought out the best in them and in the company. n

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CIO STORIES

ON THE BLEEDING

EDGE CIO PROFILE Name: Ben Hope works Company: Fox Net Joined: 2008 ent Systems, m in a rt te En f o P Previous role: SV NBC/Universal n be ca gacy applications le e os th ng zi ni er th hour “Mod t wait until the 11 n’ ca so al e w t bu a tough sell longer sustainable” no is rm fo at pl e th when

Ben Hope

CIO Stories_25 June 17/03/2010 11:56 Page 83

The use of IT in media organizations has come a long way since the early days of computerization, and nowhere more so than at Fox Networks. CIO Ben Hope reveals the role of innovative and bleeding-edge technology at the broadcasting company.

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ike many media organizations across the country, Fox Networks keeps IT at the heart of everything it doe. Without it we wouldn’t be able to watch our favorite TV programs – and just imagine a world without Glee, American Idol or House. Thankfully, the firm’s CIO Ben Hope, is working to ensure that technology remains a key priority for the company in order to keep everything working smoothly as well as bring new and innovative television products to the consumer. Currently Hope is working on a couple of areas, including focusing on the computer storage equation particularly in relation to leveraging cloud capability. “We’re looking at whether the cloud is just play for us or whether we should continue to architect and build out our datacenters,” explains Hope. “From a business perspective, we are continuing to try to look at various business processes that are still terribly manual and work out how best to automate those processes.

Hope is also focusing on how best to respond to all the bleeding-edge technologies on the market. “Being in the media and entertainment business means that all of your executives get the latest toy in the marketplace. Six weeks ago everyone had a Kindle so they could trade scripting information, and then of course the iPad came out and the first thing I did was call the CFO and ask when we were trading our Kindles in,” laughs Hope. “But seriously, staying abreast of what’s going on with smartphones and mobile computing is extremely important so that we can figure out how best to support our business executives.”

Hope goes on to explain that Fox Networks currently has fairly largescale internal process automation projects going on around the back office in terms of time management, payroll, business intelligence, budget and planning in order to take advantage of technology and ultimately redeploy resources to more strategic activities. There is also a huge focus on legacy platforms at the company. Hope reveals that while the organization has many legacy platforms that are extremely effective applications they are not all that efficient, so he is looking at how to re-platform those in a more effective way.

“When you re-platform an application, the big struggle is defining the ROI when you already have something that works – albeit not as effectively as you would like – and how do you sell the value proposition and demonstrate the business case that in the absence of doing this, you’re going to lose out on business opportunities.

“Modernizing those legacy applications can be a tough sell because if it’s there and it works it means that you’re going to spend money but you’re not necessarily reducing your headcount – it’s a soft benefit. However, we also can’t wait until the 11th hour when the platform is no longer sustainable to then make that switch, so it’s all about finding when you are in a good position to start making those transitions.”

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And Hope is not only working to consolidate those applications, but also modernize them. Portfolio management is a huge part of this, he explains, “We have a lot of one-off applications with say three to five users, and we’ve got a portfolio of over 70 applications when we could probably do the same with 30.”

Importance of modernizing legacy applications

Modernizing key legacy applications is the top software initiative for businesses according to a survey by research firm Forrester Research. In fact, updating key legacy applications was cited as the top initiative for both enterprises and SMBs, Structure at 64 percent and 55 percent, respectively.

Being in the broadcast industry, the convergence of broadcast IT has a More than one-quarter of enterprises and more than huge impact on Hope’s role as CIO. However, the way that the IT organizaone-fifth of SMBs said that updating and modernizing key tion is structured means that non-linear content is viewed simply as an alterlegacy applications is very important according to the survey native piece of content – in fact it is consciously viewed at the organization as results, which were collected from more than 2200 IT no different to any production. “So if I produce linear TV, for example, I’m executives in North America and Europe. “The costs of going to produce non-linear content as well and so the technology that goes operating monolithic legacy applications makes them along with that is actually done as if it’s a production unit – it’s not really prounsustainable, and these survey results show that firms are duced as part of your core IT group,” explains Hope. seeking efficient ways to modernize,” says Jean-Pierre While Hope supports all of those units from a business perspective, all of Garbani, Forrester’s Vice President and Principal Analyst, who the application requirements that are needed to run a business have also says automation is the key to IT's future. a separate technology group that is specifically focused on gen“Companies are willing to adapt their business erating content. These groups will build out the sides to processes to cheaper packaged software solutions We’ve got a CMS and the digital asset management decisions are all rather than wait for custom applications.” portfolio of over done as part of this production unit. This has resulted in two core IT teams – one that manages the business and applications the other that creates the content. The degree of collabwhen we could oration between these two teams is fairly comprehensive So on which side of the fence does Hope sit in the pubprobably do the and basically focused on the revenue side of the business lic versus private cloud debate? Well, for Fox Networks, he same with 30 – looking at how best to sell content, systems for monetizpredicts a lean towards a virtual private cloud or VPC, which ing it, how it is priced, billed and collected as well as how the is where it is possible to extend a network into a cloud that’s hosttraffic is tracked, for example. ed by a third party, which offers a certain degree of flexibility, such as “We build out research, sales and support marketing systems and that’s resources on demand. But, ultimately for Hope it is within the network that it is really where they overlap,” says Hope. “They’re creating the content, but possible to control the inbound and outbound traffic. “Most of what I do is inthey’re also selling the advertising inside that content, and then of course we’re ternal customer-facing so most of what I would be looking for is solved by the responsible for figuring out how to bill, collect and administrate those sales.”

VPC as opposed to anything else – I’m still struggling with the difference between The content group is also responsible for the platforms and channels that a private cloud and datacenters,” laughs Hope. the content is distributed through. Hope reveals that most of what current “To me, if you own the equipment and have to power and cool it, then it’s goes on inside of the Fox Networks Group is a digital extension of the linear a datacenter, Yes, there are ways to use virtualization to allow you to spin things channels. “We don’t do the behemoth digital properties of Fox,” he explains. up and clone very quickly, but at the end of the day, I’m just not sure of the eco“MySpace, IGN and Photobucket – they’re run out of a totally separate businomics of that. It’ll give you elasticity and some agility, but it may not solve your ness unit. The digital assets that we have within the Fox Networks Groups are economic problem – leveraging a third party might be able to give you a better just digital extensions of our linear products, so foxsports.com, fx.com, price on a per-gigabyte basis, which is perhaps a more compelling option.” speed.com and so on.”

Thinking about the potential of cloud computing technology inevitably Looking to the next 12 to 18 months, Hope believes that the key techleads to thoughts of a mobile workforce – something that Hope is currently connology trends will be all about storage and compute. He suggests that as sidering at Fox Networks. He says that a mobile workforce has two dynamics, media files continue to grow exponentially – both in terms of the number the first of which is around understanding the technology itself and then, more of files and the size of each of those files – keeping up with storage and important, is the security or lack thereof currently around many of these mobile compute is extremely important. “It’s now very easy to produce collaterdevices. “Securing content is key to our business model and that’s going to be a al materials almost instantaneously, where you used to have a lot of lead challenge for sure,” says Hope. “The long extended conversation of whether or time on your collateral materials, it’s now all done on the desktop,” says not we should include texting in our telecom plans was humorous to me because Hope, which is why Fox Networks is looking to cloud computing to help it was a dialog between some of our senior executives that some of our younger solve those storage needs. workforce don’t use email – they blog, they text and they tweet but they don’t “Principally for us, cloud computing is all about the agility and ability to necessarily use email. It hit home with me because my 15-year-old won’t answer expand on demand, so having some level of elasticity in your compute space. an email, but he will respond to a text. So you have to get used to this as another And the other reason is of course cost – it all comes down to dollars and cents form of communication, and add it to your toolset and make sure it keeps pace at the end of the day.” with your workforce.” n

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CIO STORIES

Doctor’s orders When the Dr Pepper Snapple Group underwent a de-merger from Cadbury’s back in 2008, it left the CIO in a sticky situation. Almost two years later, Virginia Guthrie explains how the de-merger has ultimately benefited the beverage giant, breathing new life into a 100-year-old brand.

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adbury Schweppes was under relentless pressure back in the datacenter system down at all was highly sensitive.” The second chal2008 to sell its beverage business to maximize shareholdlenge for Guthrie was all about managing resources – and while she recer value and improve performance. However, unable to ognizes the tricky position she was in regarding which staff went where, find a buyer given the collapse of the credit markets, it was she still declares that it was “the touchiest situation I’ve ever been in”. forced to spin off its soft-drinks unit as the Dr Pepper Indeed, by involving a third party it eased the relationship with the thenSnapple Group. While the challenges of integration CIO, who was based in the UK, and Guthrie ended up emerging “pretin terms of mergers and acquisitions are well publicized, little is ty pleased” with the team she inherited. known about what’s involved in a de-merger and how to The third potentially tough situation for Guthrie was cenmanage it. tered around the amount of change that was happening in The company At this point, while Virginia Guthrie was leading the the top management tier of the company while the dehas all the IT team she was not yet CIO, and despite being wellmerger was taking place – particularly the stepping down advantages of a versed in mergers and acquisitions, the de-merger of the CIO and the CEO of the beverages division, who process was radically different to M&A and posed a exited the company. “They were the two that hired me brand, but with the number of critical challenges for the team as the organiand as such it meant a lot of change going on in an already energy of a small zation was split in two. “About six months before the deunsettled period – but obviously, that meant I became CIO start-up merger was announced, the global IT department for the and the new CEO is great, he has a tremendous passion for company had made the decision to consolidate the two dataimproving things and it’s actually worked out really well.” centers, which meant we were still in the midst of data consolidation Guthrie describes the de-merger as short-term pain in compariyet suddenly had to separate our systems and redo the whole agreement with son to a merger or acquisition because there was no change management to Cadbury,” she says, going on to explain that this was without doubt the most go through – there aren’t “two different companies each trying to plug for technically difficult challenge. their processes or systems.” Indeed, she believes that the consequences of the “Even down to the last piece of network that was being split we just had de-merger couldn’t have worked out better for the Dr Pepper Snapple Group, to add more and more people to the project and continue improving comexplaining that the company has all the advantages of a 100-year-old brand, munications because they were doing all these FCC filings – and to have but with the energy of a small start-up. “There’s definitely an energy about the

100-year-old

CIO PROFILE uthrie Name: Virginia G p per Snapple Grou p Pe r D y: n a p m o C Joined: 2006 any rs Brewing Comp o o C , IO C : le ro s u Previo idation idst of data consol “We were in the m s and redo parate our system se to d ha ly en dd yet su t with Cadbury” the whole agreemen

Virginia Guthrie

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place and it’s just a fun place to work, there’s a real ‘get out there and make it happen attitude’ – we’ve got a completely execution-focused sales force and are also able to continue working on improving standards across the board.

It’s a fun place right now – exhausting, but fun.”

And a huge part of that has been about the team structure. Without Cadbury the team no longer has a global focus and as such Guthrie found her employees thrilled that it would allow them to function more closely together: “I think this has been a key process, more so than the de-merger process, it’s like we all survived the Hudson together or something,” she says, referencing the Hudson river plane crash that occurred in January 2009.

Going on to explain the impact on the business, Guthrie cites the importance of business process management, revealing that the Dr Pepper Snapple Group is taking a number of steps to establish better processes for managing resources to ensure that they are directed to the right areas in order to realize efficiency and cost savings. Guthrie explains that effectively being a new company has allowed her to do some basic process tracking in order to define problem areas, which has been a great start. “We are looking to streamline the processes, but our challenges are that while we’re doing a great job monitoring, for instance, they’re not metrics that the business can relate to,” she says. “I think that presenting things that management really cares about will be hugely beneficial to IT operations.”

Indeed, Guthrie goes on to explain that the group is working on many new ways in order to reach a maturity curve, because the traditional way of reaching this is too cumbersome for the organization and she wants it to become more nimble and flexible in the way it makes decisions and improves processes. Guthrie is looking at many alternative simulations as well as automated business process mapping to drive the processes that are already out there and working for the company. “What I want to do,” she says, “is use some of the processes that we have out there today, and become very goal-driven with those processes and link them every step of the way with the processes and use rich monitoring tools to not only do IT monitoring, but also produce some real-time scoreboards for them.”

Guthrie explains that she is currently semi-piloting this system in one section of the business today. And rather than get the CEO to announce a change to process engineering across the whole company, the department has simply taken a couple of core processes, mapped them out and begun tagging in the hope of getting some real-time metrics in place. “Flash forward 18 months and I would hope that all of our major processes are being handled in this way,” says Guthrie.

With the key to success of any project being the level of engagement and getting people on board, Guthrie has been working hard to really enthuse people about her role and the current projects she’s been rolling out. She believes that she’s seen enthusiasm across all levels of the company and even from

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MDM: The lowdown other CIOs in various other businesses. “We’re all interested in using some of the tools we have in place to engage in a different way within the business. IT is an underleveraged resources. It irritates me when things go wrong and people don’t want to know how the watch works, they simply want to know what the time is, and some of our new projects are certainly good vehicles for achieving this and ensuring people know more about how the systems actually work.”

Indeed, communication remains one of the key challenges for IT professionals. Having a communication element in terms of talking to the rest of the business in a language they can understand and giving them the metrics that they can visualize a lot more easily means that IT can be fully leveraged and finally get that place at the table that it deserves. “I get a lot of questions from colleagues who are concerned about the business ownership of the process that we’re rolling out, but while that is a huge element, this is currently something that we’re doing at grassroots level on a kind of project-by-project basis, so really the proof is in the pudding. I’m sure this will be something we’ll start building in, particularly if our pilot is any indication, and it’ll be well embraced,” says Guthrie.

Looking forward, Guthrie explains that the beverage company has a pretty clear roadmap that it is currently refreshing and looking to continue to improve. “After we complete the ERP consolidation, which will largely be done this year, we have a two-year project on warehouse management systems that will leak into next year, although it will largely be done over 2010, hopefully.

And what we’re starting on right now, which will take more and more front

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One of the projects that Guthrie is working on at the Dr Pepper Snapple Group is installing a master data management (MDM) system to provide more structure to the IT department. An MDM comprises a set of processes and tools that consistently defines and manages non-transactional data entities of an organization. MDM has the objective of providing processes for collecting, aggregating, matching, consolidating, quality-assuring, persisting and distributing such data throughout an organization to ensure consistency and control in the ongoing maintenance and application use of this information.

and center stage, is our data warehouse and how we are going to consolidate some of the decision tools.”

And that’s not all; Guthrie reveals that she putting a master data management system in place in order to provide some structure to the IT department. “It’s not an ROI project per se. What we’re doing is lining up a lot of governance around master data, in order to clean up all the data across all systems, as well as understand where our errors come from and increase efficiency as much as possible. There’s a high focus on getting these systems right – three years from now I’d like to see the company in the upper echelon because there’s no doubt that it will be critical to our success to do this better than most people do it.” n

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CIO STORIES

THE CHANGE AGENT

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Michelle McKenna is not a typical CIO. Originally from a finance background, she has brought a unique perspective to the role and reveals why IT should be firmly integrated with all business objectives.

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ichelle McKenna began her career at Disney ever, left her in a tough position with her colleagues; being the change agent as a certified public accountant and worked in can often lead to unpopular decisions. As such, one of the biggest challenges marketing and sales before eventually moving for the CIO is to ensure that they build up good partnerships and relationinto IT. In fact, it is all thanks to a visionary ships across the organization. “I brought a huge amount of transformational CEO that she entered the IT profession at all. change to Universal, including new websites and other projects that were on “I worked in many departments across the frontline of the business,” explains McKenna. “You have to be OK sayDisney, including finance and operations, and ing no and you have to be willing to stir things up, hold your head up and each little step along the way I’d always face some issue or other that be competent enough with your interpersonal skills that people I needed a technology solution for,” explains McKenna. “The will trust your decisions. It’s popular with the shareholders CEO at the time suggested I run the IT department and at of course, but to live with that everyday, well, I needed to first I said to him, “I’m not an engineer, I have no idea work at my relationships all the way up the organizaabout IT. I can’t do this.’” tion, even with my employees, and that is without However, together the two collaborated and ended doubt the hardest element of the job – not figuring out of departmental up producing a business integration team, designing the next wave of technology or the next buzz change.” ratings are based on a program whereby people were rotated in from variIndeed, McKenna believes that the role of the CIO is client satisfaction ous business units in the group that was somewhere in to understand business strategy, process implementation between IT and the business. And this is where McKenna and integration. And she is truly excited about how the role began to learn every piece and process of the business and will continue to evolve and the transformative effect it is bringimplemented several really successful, major projects that typiing to the sector. “The way we classify departments in business is cally would have been run as IT projects. Along the way, McKenna was going to be different in the next 10 years and the sooner companies understand approached again to head up the IT department and quickly found herthat, the sooner they’ll be successful.” self in a unique situation.

However, she admits that without a visionary chairman or CEO at the “When I hear the term cloud computing it means nothing to me – and helm believing in and supporting the important role of IT in the business, it’s not until you describe the business need around it that I get it,” says there is a potential for friction. “I am uniquely qualified to be the CEO of McKenna by way of example. “I’ve been successful in IT primarily from being the company more than any other role at the company and that’s because a good salesperson and a good financial person, and I don’t present a case to my job requires me to look at business strategy, integrate it and make dethe CEO for investment in technology for any other reason than to make cisions based on the data. As a result, what ends up happening is that you money for the company. As result, I’ve been really successful doing that.” know more about how the company works than the CEO – I mean you can After 14 years at Disney, McKenna made the move to Universal. She delook at what is happening in the business and really understand why.” scribes it as a “tough call” at the time, but quickly found the entrepreneurial McKenna believes that this is why there currently aren’t many transitions and decision-making environment enjoyable. In fact it gave her the chance to from CIO to CEO. “Twenty years ago the CIO wasn’t trained in making bring rapid technology change to a company that really needed it. This how-

50%

CIO PROFILE cKenna Name: Michelle M sal Orlando Company: Univer Joined: 2007 & CIO, Centex Previous role: SVP erties Destination Prop

up, hold your illing to stir things w be to ve ha ou “Y ith your mpetent enough w decisions” head up and be co tr ople will ust your pe at th s ill sk l na interperso

Michelle McKenna

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Journey to the top Michelle McKenna explains how she secured her current position at Universal Orlando: “When I was being recruited for this position at Universal I was told during the interview process that it reported to the CFO, to which I replied that I wouldn’t take the position if it it wasn’t on a senior vice president level with the CFO and COO. They weren’t prepared for that and went away and recruited a little more. Eventually they called back and asked me to talk to them about the position. Ultimately, it will take other people in the job market to stand up and say this too, and as they do I believe we’ll see more CEO presence for people who have been in my role.”

year won’t see any major transformational projects, but rather IT will be turning

business decisions, but today, if you’re very good at IT, you’re not only trained you are uniquely qualified,” says McKenna. “The people making the decisions have been in the business for 30 or 40 years and they see someone like me coming along with all these ideas and at some point it become uncomfortable. In tech firms it’s much more acceptable for a CIO to go to the top and become a CEO, but in major Fortune 500 firms the structure just isn’t there for that to happen.”

Despite the situation, McKenna is convinced that this will change over the next few years. She points out that the CIO job title it still relatively new compared to CEO or CFO for example, but as the role matures and business becomes more familiar with what IT can bring to the organization, the position will grow in importance. “I didn’t think I’d end up being a pioneer in a field, but I truly believe now that I am,” says McKenna. “Ten years from now the title will be compensated on par with the presidents of business units. And while a lot of companies have come really far, we still have a way to go.”

Having been at Universal for almost three years now, McKenna admits that she has reached a point where she has to figure out her next move. She says that having pushed for so much change through the organization, this

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into a service provider and becoming more like a consultancy, which means that service levels need to improve in order to become increasingly efficient. “I’ve changed the objectives of the department this year so that 50 percent of their rating will be based on customer and client satisfaction. It hasn’t gone down well – they’re up in arms in fact – because they say we’ll never be happy with IT because we will never be able to give end-users what they want. However, I believe we can figure this out and while we may not be able to give the end-users what they want, we can provide what they need and when they need it,” reveals McKenna.

Indeed, the role of the IT department is to provide good communication and understand the business in order to talk intelligently with end-users and influence them. McKenna reveals that one of the hardest elements in managing her staff is that while they are all extremely knowledgeable about their particular technology, they don’t have the ability to sit down and sell an idea to a business person who doesn’t care how the technology works. That said, she is working hard to solve this difficulty by rotating staff into IT for a while and then back out into the business.

McKenna reveals that the biggest system at Universal Orlando is the ticketing transaction and entrance system, particularly the biometrics around making sure the ticket belongs to the right person. “We get a lot of people rotating in and out of this system,” she explains, before going on to explain that this process is one of the ways in which she finds new staff. “Lots of recent graduates who are really interested in getting into the company will work at the front entrance as a host or hostess, monitoring the line, and I regularly scan for the smart ones and move them to the IT department. In fact, a couple of my best managers used to work out there taking and selling tickets. And this is important – if we’re going to get where we want to get to, you have to them rotate in.”

In fact, McKenna is working this year to make the rotating position concept a management development program, which takes her back to her original situation where she found herself working at Disney on a rotating program. “It serves you well to understand your investment areas and it will be a real development program where people will raise their hands, come into IT and stay for a year before going back to their business area.”

Making the transition from the business side of an organization to the IT side has undoubtedly influenced McKenna and all that she strives for as a CIO. Will the CIO role become as important as she predicts? Only time will tell, but one thing is for sure, McKenna will be doing all she can to ensure that it does. n

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INDUSTRY INSIGHT

BUILDING AN EFFECTIVE MDM STRATEGY In order to ensure your master data management program is recognized as a success throughout your company, make sure you plan for what you know – and what you don’t. By Mike Zier

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hether starting, rebuilding or simply refreshing your company’s MDM program, the best way to begin is to take a giant step backwards.

While this may seem contradictory – or even too simplified – it is an often overlooked, yet critical, first step.

Before embarking on your company’s MDM program, ask yourself two questions.

First, which specific, short-term business objectives will it solve? The issue may be related to customers, suppliers or even employees. Enlist an executive sponsor whose success is tied to the solution and make sure the initiative solves a particular, pressing problem. It’s always best to start off with a victory everyone can clearly recognize. You’ll validate your supporters and gain the confidence of any skeptics.

Second, and equally as important, determine if your MDM solution has the flexibility to solve future, longer-term objectives – even if you’re not sure exactly what those may be.

Sound like a job for a crystal ball? Thankfully the solution is much more logical. With the right strategy, the best partners, an open environment and the highest-quality data, you can virtually assure your program’s short- and long-term success.

Today Developing an MDM roadmap can be a long and winding endeavor. Make the trip less arduous by identifying your fi rst stop right away (see sidebar). And once the issue is identified, think about the internal and external data required to get the job done right. If it’s a sales or marketing matter, make sure your data allows you to establish a baseline for revenue and profit by customer. Also think about the data’s ability to determine market share by industry and geography. That can lend valuable insight into profitable opportunities you may

have otherwise missed.

When it comes to procurement, it’s critical that your supplier risk framework keeps up with business cycle dynamics. Another concern might be fi nding the most efficient and least time-consuming way to demonstrate

divisions and how they can leverage data for their purposes. Marketing, procurement and HR data should all work together. Often, the true value of MDM is the ability to make better decisions across your entire organization.

Future phases of your MDM plan should not only integrate across divisions, but functional areas as well. In the MDM ecosystem, there are many fi rms: technology providers, service providers and data providers. But no single company can do it all. Work with providers who know how to play nice with each other – and offer the flexibility to integrate with each other come what may.

One last vital point: your customer, supplier and employee base is constantly changing. Business leaders and team members need timely insights into these real-world changes in order to be successful. A world-class MDM program provides a clear reflection from the rearview mirror as well as the visibility to smoothly navigate both risks and opportunities on the road ahead.

IDENTIFY THE ISSUE Mike Zier is SVP of Marketing and Data Management Sales for Equifax Commercial Information Solutions.

compliance to existing and emerging regulatory policies relevant to your industry.

With all the mergers and acquisitions taking place today, savvy organizations rely on external databases to provide the most up-to-date information on their customer and supply base. For some companies, achieving cost-effective workforce management is the most pronounced challenge. Employment tax management, employment verifications and other administrative workforce responsibilities may distract leadership from more strategic matters such as talent management.

Tomorrow Even if you are starting off with one issue or department, don’t lock yourself into only one type of data. Consider the needs across other

Identifying issues is key to ensuring your MDM program is on-track. So is your company’s biggest challenge: Allocating limited sales resources to the best existing and potential customer opportunities?

Helping the procurement department with supplier cost savings or compliance issues?

Targeting customers who are most likely to pay their bills?

Improving the quality of the information used to make decisions across numerous departments?

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ASK THE EXPERT

Architecture-driven enterprise modernization Philip Newcomb, CEO of The Software Revolution, Inc. (TSRI), explains the competitive necessity of continuous modernization.

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ithout question legacy system modernization is both vital as well as a Legacy challenge of epic proportions.

Systems Running on shockingly obsolete and ADA expensive hardware, these increasingly complex ‘ancient Assembler software dinosaurs’ are essential to our institutions’ very C capacity to produce and deliver goods and services. Yet CMS 2 COBOL resistant to change, because of the brittleness, size and DCL complexity of the outdated languages in which they are Fortran written, legacy systems constrain organizational producJava JCL tivity and the efficiency of our institutions and our nation.

Jovial Executives in all sectors of the economy are coming MagnaX to the stark realization that legacy systems can no longer Mumps Natural be ignored. They are not going to fade away; they must be PL/1 dealt with proactively and not reactively. Yet so many orPower Builder ganizations have faltered or outright failed in carrying out SQL Vax Basic their expensive modernization plans that undertaking a Visual Basic 6 legacy system modernization program is regarded as any+ Others thing but an easy or career enhancing decision. As an understandable consequence, when the alternatives of accepting another year of ever spiraling costs or risking spectacular failure are placed on a CIO’s decision-making balance scales, inaction has become the greatest handicap.

Despite the many horror stories of ‘silver bullet’ solutions that failed miserably, there have also been many recent signs of progress and some quite spectacular successes. A body of standards has emerged from the Object Management Group (OMG) along with conformant tools, methods and technologies that have been developed by TSRI and others. One example is a pragmatic, affordable and repeatable architectural-driven approach to information system modernization. TSRI has proven this approach by repeatedly and successfully modeling and transforming very large, mission-critical information systems using customized automation in contrast to the error prone and ad hoc methods of the past.

Using architecture-driven modernization, many huge and complex missionAn internationally recognized expert in the application of critical information systems, whose artificial intelligence and formal methods to software modernization could not have been atengineering and creator of tempted just a few years ago, can now be The Software Revolution, Inc., Philip Newcomb, has modernized affordably and in astonishpublished numerous papers and several books including ingly shortened time frames. Due to sigInformation System nificantly improved hardware capacity Transformation: ArchitectureDriven Modernization, and new technology innovations, inforMorgan-Kaufman, 2010 with William Ulrich. mation system transformation is now

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Target Systems

Architecture-Driven Modernization Transform System

Generate Blueprint

Refactor Design and Architecture

Test Integrate and Deploy

C# C++ Java EGL VB, Net +Others

Intermediate Object Model

Application Blueprint

Transformation Blueprint

Document AS-IS

Document TO-BE

3rd Party Software Products Eclipse

EGL Café

Visual Studio Web Sphere

+Others

being applied routinely on an unprecedented scale using repeatable, perfective, adaptive processes in conformance with OMG best practices.

With news of the extraordinary successes of architecture-driven modernization projects spreading, the message conveyed is crystal clear.

Automated modernization has become a proven commodity. Architecturedriven modernization is now playing a strategic role in building agility and competitive advantage for a growing number of organizations and industries.

The realization is dawning that modernization should no longer be regarded as a one-time fix to deal with a one-time legacy problem. To ensure IT infrastructures are perpetually agile and support rapid enactment of business strategies, organizations are learning they must adopt continuous modernization as a vehicle for future competitiveness.

Applying modernization options to existing software systems is no longer a tactical luxury or last gasp measure. For many organizations continuous modernization is now an essential and strategic necessity for competitive survival. Architecture-driven modernization has emerged just in time to provide enterprises with a wide variety of options for understanding, evolving and ultimately transforming critical software assets. While modernization has long been regarded as a cost to be avoided, the advent of architecture driven-modernization creates a vast array of new options for executives considering the best way to revitalize their IT architectures.

The convergence of customizable automated software transformation and architecture-driven modernization is producing exciting results. By actually building upon the value of legacy systems as assets, today executives are embracing vastly expanded strategies to build agile and competitive enterprises. n For more information, visit www.tsri.com

Automated Modernization Of Legacy Systems Why TSRI? Highest Code Quality Greatest Schedule Compression Agile Customizable Solution Unequaled Track Record

free Get your legacy system Transformation Blueprint preview.* Accelerating Enterprise Transformation With Architecture-Driven Modernization

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T: 425.284.2770 • E: info@TSRI.com

www.TSRI.com

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ASK THE EXPERT

Enterprise performance management in a connected culture Dmitry Faybysh discusses how to revolutionize the way we manage business based on the latest advances in communications technology.

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any finance organizations have recognized the need to take enterprise performance management to the next level. It is commonly believed that the plan itself has no significance, but rather is a means to an end. As a result, leading organizations forecast more frequently and/or on a rolling basis. New real-time communications technologies, however, should enable real-time planning. We now have the ability to collaborate and address opportunities and decisions as they arise. This type of management technique, which we have termed collaborative management, is the next logical step from enterprise performance management.

Collaborative management, the integrated planning and analysis platform, supports a common forecast model across all functions in the enterprise. As such, the model can be adjusted from different perspectives in combination with an online dialog. This gives improved visibility to projected results and involves more corporate managers in decisions. In addition, more decision points can be opened for collaboration and their impacts forecasted.

When discussing collaborative management retail clients are top of mind. Retail sales are driven by a wide variety of initiatives – from sales training to merchandise availability to promotions. One multibillion dollar, hardlines client tackled the tough problem of understanding the impact of each area through developing a collaborative sales plan at store, day and item level. Although they could not actively plan to that level, they could take each department’s plans and allocate them so a meaningful performance comparison to actual could be made, and exception stores could be quickly addressed. For this client, collaborative management fostered the ability to understand the drivers of sales and impact them.

It is difficult to believe that the smartphone has been around for 10 years now. Social networking has already reached its fifth anniversary and Facebook has over 350 million users, over half of which connect every day. Businesses worldwide are attempting to leverage these new communications technologies in their marketing strategies, but far fewer recognize their impact on internal corporate management techniques. In fact, it has been over 15 years since the

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last significant change in the way we measure and manage enterprise performance.

Throughout the years, enterprise performance management technology has evolved to become more integrated.

Our clients progress along a similar continuum of integration that improves their ability to manage efficiently across the enterprise. Integration begins with a strong data foundation and progresses to metadata, business rules and then analysis and planning platforms. Each level of achievement improves the communications between managers based on more commonalities in the way they understand and react to results. Collaborative management is enabled by the sharing of not only the planning platform, but also an integrated planning model.

“Integration begins with a strong data foundation and progresses to metadata, business rules and then analysis and planning platforms”

Culturally, we have adopted collaborative management in our personal lives. We text each other to decide what might be best for dinner or who should retrieve the children from school. In order to apply communications technology to the complexities of corporate decisions, we must not only integrate the management technology platform, but also the business model itself, building in the forecast logic and the ability to view a common plan from different functional perspectives. This forecast model, in conjunction with new communication technologies, empower managers with a real-time forecasted view of the results expected from any decision deemed pertinent enough to discuss. n Dmitry Faybysh is founder and Managing Partner of The Glenture Group LLC. Faybysh brings 18 years of experience in consulting worldclass clients to Glenture. In addition to being a Certified Public Accountant, Faybysh earned an MBA from Lake Forest Graduate School and a BS in Accounting from DePaul University.

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ASK THE EXPERT

The anti-social network Joe Ruck reveals the importance of social media tools in business today.

JOE RUCK

T

he buzz around social networks is inescapable, and it is now moving from the realm of the purely personal into the business world. But when I speak with execs, there is an unmistakable wariness about the benefits coupled with a lingering concern of time wasting. Considering the highly personal and often trivial nature of interactions on popular social networks, it is easy to see why there is deep skepticism about the value of any social media in the business environment. However, a closer look reveals that there are quantifiable benefits that go beyond the purely ‘feel-good’ factor and can materially benefit both managers and dramatically improve employee productivity.

All businesses always operate in essentially one of two modes; when things go according to plan, and when they don’t. When things go as they should, automation is straightforward and your systems take care of everything. Such data-driven processes are the lifeblood of most enterprises and it is here that the heavy lift ing of transaction-oriented soft ware such as CRM and ERP make their mark. There is though, a whole other world of processes to capture corner cases and one-offs – when things don’t go according to plan – that are people-driven.

‘Where are we with that contract? Can we stop shipment on this order? Who authorized that?’ Sorting out the urgent from the merely important is a critical skill. Successful executives are familiar with the demands of this chaotic atmosphere. They are adept at prioritizing the handful of tasks they must do today, over the 50 things they could do that same day. In these people-driven processes, management frequently has to intervene, and in such cases, visibility is crucial. The earlier an intervention can take place, the greater the chance of success.

It is here that social media tools shine.

Not by befriending a colleague who shares a passion for snowboarding, but by enabling a VP of Sales to know the availability of the General Counsel and the whereabouts of the relevant Product Manager when a deal needs to close. Employees can connect remotely to collaborate on joint work such as RFPs. Presence information can guide you to message someone you know is at their desk rather than out to lunch for a quick response. Access to repository information 24/7, without waiting on gatekeepers, gives back time on deadline.

We can look at ‘chat’ as a technology with an association of frivolity when it was first introduced. Now several years later it has made great strides in penetrating corporate America. Initially, many in business were skeptical of the benefits. Today though the technology has matured to fit in with enterprise security policies, in many cases forming what is in effect a ‘closed’ system. Most customer support organizations depend on chat to fi x issues in minutes rather than days.

All of these cases hinge on access as you might expect, but it is inherently a controlled form of access. With significant fi nancial impact riding on much of this content, networking is not about connecting to anybody and everybody; it is about access to critical resources. Those resources include people, their schedules and their work product (often in document form). Security and fi ltered access then becomes essential and denying access is as important as providing it. It’s appropriate for the VP of Sales to get a fast path access to legal, but not for every sales person. Th is is the anti-social network – connecting critical path resources with no extraneous noise. Not popular personal networking sites such as Facebook and Twitter, but instead an emerging class of enterprise-grade social media tools that are now starting to address this requirement. The real benefit of social networking for business is in better managing chaos and creating time on deadline. However to do this effectively, any social networking tool must conform to the privacy and security expectations of the enterprise.

Joe Ruck is President and CEO of BoardVantage.

Previously, he was Senior Vice President of marketing at Interwoven and has held sales, marketing and executive positions at Sun Microsystems, Network Appliance and Genesys Telecommunications, subsequently acquired

by Alcatel.

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Apple CEO Steve Jobs introduces Apple’s new tablet computer in San Francisco in January.

Analysts are divided as to its potential impact on the e-reader market

War of

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The emerging e-reader market has given both device manufacturers and content providers a much-needed boost over the last few years. But as the battle for readers’ eyeballs heats up, what direction will the sector take next?

I

f the buzz generated at this year’s Consumer Electronics Show in Las Vegas– the technology industry’s premier showcase for parading new product ideas – is any gauge of market health, then the burgeoning e-book sector is booming right now. Electronics vendors and device-makers alike were jostling for floorspace at the industry-leading event, as fi rms looked to capitalize on the stellar success of Amazon’s Kindle in transforming e-readers into what one commentator called “the thinkingperson’s iPod”.

Barely a day goes by without an announcement of a new device release or acquisition; at CES alone the industry witnessed the unveiling of the Orizon from Bookeen, the RCA Lexi, the iRiver Story, the Jinke SiPix readers, the Hanvon WISEreader, the Cool-er readers from Interead, the Ocean and Tidal series from Copia, and a pair of E6 and E10 e-book readers from industry heavyweight Samsung.

And these are just the most interesting of the dozens of new devices on show, all of which hope to earn the tag of ‘Kindle killer’ and capture a share of the rapidly expanding digital reader market.

In fact, the interest in e-readers, or e-books as they are called now, has reached fever pitch. Amazon CEO Jeff Bezos fielded nothing but Kindle questions at the company’s most recent shareholder meeting, while last summer Prime View picked up E Ink, the company that supplies the screen to the Kindle, for a mouth-watering $215 million. And heavyweight companies ranging from electronics giants like Sony and Fujitsu to booksellers like Barnes & Noble are aiming to upset Amazon’s early advantage.

One of this year’s most eagerly anticipated releases is the QUE reader from Mountain View, California-based Plastic Logic, which claims to be the first e-reader device specifically targeted at the business community.

“The thing that really differentiates our product is the fact that, from the ground up, we’ve designed it for business users,” says Plastic Logic Chief Executive Richard Archuleta. “We started out by looking at how business people use paper, and we found that a huge majority of people print things out to read and study them rather than read them electronically – even if those documents are already in electronic format. So we spent a good amount of time trying to understand whether there was a need there that could be met with an electronic device that would read like paper, and could essentially replace the paper that business people had. And we believe that there is.”

Up until now, digital juggernaut Amazon.com – leveraging its position as a dominant book retailer – has catalyzed the market for e-books.

But Forrester Research Analyst Sarah Rotman Epps believes that this is just the beginning of the e-reader revolution. “Competitors will attack Amazon’s market position by launching new features, expanding content beyond books, dominating markets outside the US, reducing costs and improving relationships with publishers,” she suggests.

All of which plays into Plastic Logic’s hands. “We didn’t try to create an e-book reader, and we weren’t trying to create something that was just primarily an email client either,” explains Archuleta. “We were trying to come up with a new class of product that would actually lighten the load for business people, so that they didn’t have to carry paper with them all the time. Corporations use paper for a number of different purposes – take people in sales force automation programs where they always need access to the latest price sheets and catalogues, for example. To be able to always have those with you on a very thin, very light device that you can carry

“Competitors will attack Amazon’s market position by launching new features, expanding content beyond books, dominating markets outside the US, reducing costs and improving relationships with publishers”

The shape of things to come Forrester Research provides its top 10 predictions for the e-reader market in 2010 1. E-Ink won’t be the only game in town anymore 2. Dual-screened smart phones and netbooks will eat away at the e-reader market 3. Applications for non-dedicated e-readers will increase in use 4. E-readers will get apps that will increase their fuctionality 5. Amazon will release a new touch screen Kindle 6. Barnes & Noble will eat into Amazon and Sony’s near 75 percent control of the market 7. E-books will sell over $500 million in the US 8. E-textbooks will become more popular but still have modest sales 9. Newspapers and magazines will publish their own apps and create new content devices 10. The EU, China, India and Brazil will power global e-reader growth, but the US will still be the largest market

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around and that gets updated all the time because it’s always connected to the internet is very empowering. There are also a number of vertical markets – healthcare, for example – where there’s a lot of application for a device like this; the military is very interested in it too, for everything from in-field use to classroom training.”

Archuleta cites one client – a large airplane manufacturer – that expressed an interest in using the device to empower its service personnel, many of whom need to crawl around inside aircraft fuselages to conduct inspections and other maintenance work. “They need access to big stacks of documents, and right now they might use a laptop or a tablet PC, but if they could have something that was one third or less the weight of what they currently have, it would really make their jobs a lot easier,” he says.

Another significant area of market growth will be in the emerging etextbook market. “The education market is a big one for us in the future,” says Archuleta. “The technology we’ve developed with the display allows us to go into a number of different markets and to position electronic reading devices for different purposes.”

Forrester agrees that this sector could prove lucrative for device-

makers, but suggests that the drivers for growth could come from a surprising source. “The textbook tipping point won’t come from Harvard, MIT or even Stanford,” says Epps. “We think it will come from developing nations like China and India, whose universities will use technology to leapfrog ahead of Western counterparts. China is already a fast-growing market for e-readers like Jinke Electronics’ HanLin eBook, which sells for $299 and includes 600 free books. We expect the textbook e-reader market to start this year with modest sales of content through the Kindle DX, with greater adoption starting in 2011 and reaching more sizable numbers by 2013.”

She feels that while frequent book readers drive device and content sales today, the next five years will see an explosion of the e-reader textbook market, and in 10 years, the market will be driven by businesses going green in government, education, health and other sectors. “With retailers, mobile operators and device manufacturers all vying for a piece of the e-reader action,” she says, “publishers should proactively shape their own e-reader opportunity – or miss their last best chance to control their own destiny.” Indeed, the 2010 e-reader story is likely to extend way

A CROWDED MARKET

iREX DR800SD iRex’s new touch-screen eReader is quietly offering many of the same features as other, better-known readers.

The screen is larger than many of its competitors: 8.1 inches. It has wireless capabilities and also supports formats like ePub and PDF. Unlike the Sony Touch Edition, the iRex’s touch-screen can only work with a stylus, reports CNET, but the iRex screen doesn’t have the glare that Sony users complain of. However, the price is a daunting $399.

SKIFF READER The largest and highest-resolution electronic-paper display yet unveiled in a consumer device, the Skiff features a full touchscreen that enables users to intuitively navigate and engage with the newspapers, magazines, books and other digital content they purchase through the Skiff Store, as well as personal and work documents. The Skiff is the first consumer product to feature the next-generation of e-paper display – one based on a thin, flexible sheet of stainless-steel foil.

AMAZON KINDLE 2 Perhaps the most popular e-reader currently on the market, Amazon’s Kindle 2 (an update of its original Kindle) has a lot going for it. “The well-established Whisper Sync technology lets people keep track of a single book across multiple devices, there’s a physical keyboard right up front, and the device can even browse the web,” says tech review website Engadget. Drawbacks include the lack of support for ePub formats, and the inability to share e-books with other devices.

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beyond just e-books and include newspapers and magazines augmented with audio and full-color animations, video and imagery. Establishing partnerships with publishers and other content providers oviders will be key for device-makers going forward.

Of course, the big question for everyone in the he market is whether the next-generation e-book reader will prove to be dead on arrival thanks to the Apple iPad and the advent of its slate tablet PC siblings. Apple’s latest addition to its product family generated unprecedented excitement prior to its announcement earlier this year, but many commentators remain skeptical as to which market category it will fall into.

Archuleta, for one, doesn’t see the iPad as a direct competitor. “To be honest, we don’t see it as much of a threat,” he says. “The user interface that we’ve d developed, l d which is unlike anything else in the market, is really designed for how business people work, and how they manage their documents is some-

thing that’s a huge differentiator for us. And even though the iPad’s not on the market yet, it’ll be interesting to see how it evolves over time, because right no now it’s very close to a laptop in a lot of its capabilities, and the business users we talked to aren’t necessarily looking ffor a product to replace their laptop. The customers we we’re targeting have both a smartphone and a laptop, aand what we fi nd is our product is really designed to rreplace the paper that they have in addition to that, rather than those devices themselves.”

And he’s not the only one bullish about the ffuture for e-readers. Glen Burchers, Consumer Markketing Director for chipmaker Freescale Semiconductor tor, predicts that the e-reader market will continue to grow over the next few years regardless of the impact of the iPad iPad. “For the average e-reader customer, leisure reading iis th the primary i leisure activity, before TV, before the internet,” he says. “The average e-reader customer is 47 years old, makes $75,000 a year and reads two books per month. But the tablet market consumer

The amazon kindle currently owns 68% of the e-reader market

PLASTIC LOGIC QUE READER Plastic Logic’s QUE reader is about a third of an inch thick and features an 8.5-by-11-inch screen. The device is designed for business folks, featuring support for Word, Excel and PowerPoint, plus BlackBerry file connectivity. The QUE also puts extra emphasis on newspaper content, highlighting publications such as the Wall Street Journal and USA Today. The sticking point could be price: QUE comes in two flavours, the $649 4GB WiFi model and the $799 8GB WiFi/3Genabled version.

SONY READER TOUCH EDITION Sony’s touch-screen e-reader is in many ways a great alternative to the Kindle. It supports ePub documents and PDFs, and the touch screen is a very sleek design.

As CNET says, the reader has “a clean, minimalist styling and only a handful of buttons”. A major drawback, especially compared to the Kindle, is its lack of wireless capabilities. Gizmodo also points out Sony’s problems with glare, which can make the reading experience unpleasant.

BARNES & NOBLE NOOK The recently released Nook could be Kindle’s first real competition. It has a dual-screen interface, featuring a color, touch-screen component. It supports ePub and PDF and allows readers to share books. And, as Engadget says, “the best addition here isn’t Google Books or the free WiFi; it’s the Barnes & Noble book-buying experience.

If there’s one thing the company knows how to do, it’s sell books, and that’s clear when using the Nook to browse or purchase titles.”

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is much different: their primary function is web surfi ng. The typical web user is younger: student age, and not into leisure reading. The average American teen is online 35 hours per week. They’re on their phone 30 minutes per day. They need a bigger screen device. These are two different markets.”

Nonetheless, a ChangeWave survey of 3171 consumers – conducted in the aftermath of the Apple iPad announcement – shows a huge wave of pre-launch demand for the device and offers key evidence that the Apple tablet will have a major impact on the e-reader, laptop and home-entertainment markets going forward. Among consumers who already own an e-book reader, the Amazon Kindle (68 percent) towers over its closest rival, the Sony Reader (10 percent).

But to gauge the potential impact of the iPad on this market, ChangeWave asked e-reader owners whether they would have purchased their current e-reader if the Apple iPad had also been available. While nearly half said they would have still bought their same device, better than one in four report they’d have bought the Apple iPad if it had been available at the time of purchase. The survey suggests that the iPad is now poised to capture an astonishing 40 percent of the e-reader market going forward in the fi rst 90 days after its launch.

Companies like Amazon, Barnes & Noble and Sony aren’t standing still. Analysts say they’re planning major facelifts this year for popular e-readers including the Kindle and the Nook. Some of the changes may include switching to color touchscreen technology and making the devices more durable. A big selling point for Plastic Logic is that its device is made primarily of (you guessed it) plastic.

“Our current display in the QUE Reader has over a million transistors in it, and all those transistors are made out of plastic,” explains Archuleta. Not only does this have obvious benefits in terms of making the device more robust for the user (a major criticism of the current generation of e-readers – and indeed, of the Apple iPad – has been their reliance on breakable glass screens), it also simplifies the manufacturing process significantly. “With silicon, it takes about three weeks from when the material goes into the factory until you can build the display. But with our process, it’s just a few days, which offers significant benefits.”

Even so, many commentators believe it is inevitable that the e-reader market will be severely impacted by Apple’s involvement, if for no other

A banner for the DMC Worldwise Copia e-reader sits on display during the 2010 International Consumer Electronics Show

reason that the company has an uncanny knack of convincing otherwise sane and rational people that their products are must-have accessories for digital living – even if their use is not entirely clear. “Do I want an iPad as a replacement for my MacBook Pro?” tweeted MacFormat magazine’s usually sane and rational Chris Phinn. “No. Do I want one as a replacement for my iPhone? No. Do I want one? Yes.” Whether consumers will be willing to shell out for both a standalone e-reader device and an iPad remains to be seen. It is this force – the irrational power of desirability – that could prove to be the biggest hurdle for e-readers going forward.

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GOOD TECHNO AD.indd 2

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EXECUTIVE INTERVIEW

Mobile solutions Good Technology’s John Herrema offers an insight into the competitive advantage of a mobile workforce and the major drivers behind the adoption of such solutions.

The widespread adoption of consumer devices plications and knowing exactly which device(s) such as smartphones into the enterprise has they’re currently using for such access. caught many IT departments off guard. What Self-service and zero IT touch: consumerization typchallenges does this scenario present to enterically leads to larger mobile deployments, but rarely prises? to larger IT support budgets. Best-in-class companies John Herrema. At Good, we call this the ‘conrespond to this, not by limiting or restricting mobilisumerization’ of enterprise mobility, which presents ty, but rather by enabling a policy-based ‘self-service’ both opportunities and challenges. Our customers model that allows users to activate devices, wipe data, are seizing this opportunity to increase employee reset passwords, install applications and perform productivity, operational efficiency and responsiveother routine troubleshooting without the need for ness to customers by enabling more employees to ‘go expensive support calls or direct IT intervention. mobile’ and stay connected to critical business data and processes. By actively embracing consumerizaWhen managed successfully, what advantages do the growing variety of mobile workforce solutions tion, many of our customers have actually expanded offer to businesses looking to gain a competitive their mobility deployments while reducing their advantage? overall mobility spending. Employees are so pasJohn Herrema joined Visto Corporation, the parent JH. Companies that proactively invest in mobile sionate about devices like the iPhone and the Google company of Good Technology, in June 2003 as VP workforce solutions are more productive, collaboraNexus One that they will pay their own way in exBusiness Development when Visto acquired ViAir Inc. Herrema helped drive Visto’s growth based on tive and responsive to customers and new business change for being able to use their device of choice for marketing and distribution partnerships with partners such as IBM, Microsoft, Palm and Ericsson. opportunities than their competitors who do not. It both personal and business use. This is a significant is no longer a question of whether workforce mobiland very unique opportunity for companies – you ity delivers competitive advantages to the companies who embrace it. It is rebasically have a large and rapidly growing group of employees who are willally a question of whether your company has a proactive enterprise mobility ing to spend their own money to make your business more productive, effiplan and solutions in place that will allow your company to maximize the bencient and responsive. Seizing this opportunity requires companies to efits of workforce mobility, while minimizing costs and security risks. overcome the management and security challenges found with larger mobile deployments.

How can companies manage increasing device proliferation within the enterprise? What factors do they need to consider?

JH. The most important thing that companies can do to resolve this device dilemma is to take a proactive approach to enterprise mobility management that encompasses four ‘best-in-class’ practices: Multi-platform support: as reported by Aberdeen Group and others, bestin-class companies support multiple mobile devices and platforms and embrace consumerization as a way to increase their operational efficiency, productivity and responsiveness by enabling broad mobile access to critical business data and processes.

Mobile security and policies: best-in-class companies also adopt a proactive approach to mobile security and policies based on knowing, not assuming, that business data and applications are consistently secured and that policies are enforced.

Control and tracking: best-in-class companies control how employees and their devices are accessing business data and applications. This includes tracking and reporting on who has been authorized to access business data and ap-

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“The most important thing that companies can do to resolve this device dilemma is to take a proactive approach to enterprise mobility management” What will be the major drivers behind the adoption of such solutions over the next 12 months? Are there any key developments on the horizon that you see impacting this sector in 2010 and beyond?

JH. Good sponsored the Aberdeen Group study, Enterprise Mobility Strategies 2010: More Mobility, Less Budget, which found that increased operational efficiency and economic pressure to boost worker productivity are key drivers behind the growth in workforce mobility solutions. These findings are consistent with what our customers are telling us and what we see every day in our own business. We see no end in sight to mobile device proliferation and believe the distinctions we draw today between ‘mobile’ and ‘desktop’ computing environments will become increasingly blurred. n If you want more information about Good, please visit www.good.com

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Spring Wireless ATE_25 June 17/03/2010 11:58 Page 112

ASK THE EXPERT

Going mobile Marcelo Condé explains why wireless technologies and mobile enterprise projects are improving business processes and operations.

A

utomating processes, improving care control and increasing sales productivity or the quality of services are some requisites of adherence to enterprise mobility solutions that are growing around the world. In general, the advantage of m-commerce in comparison to e-commerce is the ease of getting information electronically anytime, anywhere. With 24/7 access, it is essential for the rapid assimilation of new technologies and is increasingly the most direct and interactive answer for users.

Companies are using wireless technologies to gain productivity and sell more. Examples are some of Spring Wireless’ clients including L’Oreal in

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several events within the enterprise, which in turn will influence other mobile processes. An example of this in the CPG space is sales order taking impacting supply chain and delivery, and merchandising impacting consumer facing mobile marketing. The op-

“Mobile technology is changing so fast, and the expectations of new workers are changing even faster”

France, InBev in Belgium and the ThyssenKrupp company in Brazil. All three of these companies have improved processes for sales and delivery, leveraged existing infrastructure, become increasingly cost-efficient, and also reduced operational costs and paperbased processes.

Mobile technology is changing so fast, and the expectations of new workers are changing even portunity today is to stitch together all these disparate faster. Today, enterprises are looking at mobility as processes resulting in the effective supply chain that a strategic platform across the board of their conenterprises have had as their vision since the time stituents – not only internally within the organizathey have been implementing CRM and ERP solution, but also externally. This is tions. Mobility is the glue that fiwhat we at Spring Wireless denally brings all these together, scribe as the integrated mobile delivering the complete ROI that value chain, where the mobile was expected with the enterprise applications are not only targetback office solutions. ed at the operational side of Now with more than the business but also the mar240,000 users around the world keting side of the business and an average annual growth of directly impacting the cus100 percent since its founding in tomer channel with brand 2001, Spring Wireless serves awareness and loyalty promore than 450 clients including grams. There is a shift in top Fortune 1000 companies Marcelo Condé is Spring Wireless Chief Executive Officer. Prior to paradigm from simple and many of the most recognizfounding Spring Wireless in 2001, Condé worked at Gradus screens on a mobile deable names in a variety of indus(affiliate of GP Investments) and vice driven by business tries such as inBev, Santander, at Goldman Sachs in the Mergers & Acquisitions Division. data to more of an intelKellogg’s, P&G, Unilever and Condé holds a MBA from Harvard Business School and a ligent mobile enterprise Coca-Cola.

BS in Robotics & Engineering. that is context driven The company delivers with analytical data. complete mobility solutions that Today, Spring enable people and organizations Wireless is one of the few companies that to increase their productivity, optimize real-time deliver and implement mobile enterprise processes and maximize their business success. Our projects with customers around the world, end-to-end approach extends investments by builddeploying and managing end-to-end soing applications on a single, proven and strategic lutions comprised of software, infrastrucplatform – one foundation for all base technologies ture, connectivity and services that that work across a wide range of devices, clients, opmaximize business value by creating new eration systems and networks. revenue channels, increasing productiviGartner estimates that, although more than ty and improving business processes and 80% of enterprises with mobile line of business apoperations. plication requirements have invested in mobile enWe believe that the greatest opportuniterprise applications platform (MEAPs) or packaged ty for enterprise mobility is the impact it can solutions, fewer than 15% of organizations have bring to the business as a whole. A simple MEAP-based deployments that have reached all mobile process can trigger and influence business units, all processes and all employees. n

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HEAD TO HEAD

The impact of interaction Clear Action’s Lynn Hunsaker and Patricia Seybold Group’s Matthew Lees argue the business case for a customer-centric organization.

What defines a customer-centric organization, and why is taking a customer-centric approach increasingly seen as important?

Lynn Hunsaker. When the customer’s well-being comes fi rst in your decision-making, you’re customer-centric. A customer-centric manager feels certain that all other interests will be well served as a by-product of putting the customer fi rst. Round-the-clock two-way communications in a wide variety of forums have put customers in the driver’s seat as informed, sophisticated and powerful parties in purchase decisions. Fastpaced lives, reducing wait times, and services as share-of-wallet have also increased for consumers as well as business customers, heightening the impact of interactions with companies.

Matthew Lees. Th rough the advent of the internet, faster computers and fast connectivity, people have the ability to communicate with each other in a way that’s never happened before. The traditional walls of communication with customers are crumbling due to the speed and availability of information and information flow and so instead of the center of your universe being your products and expertise it’s about your services and your brand. Customer-centricity is about what your customers and prospective customers are looking to do.

Crowdsourcing offers a customer-centric approach for tapping into the collective experience, knowledge, creativity and skills of your

customers. What approaches can companies take to help make crowdsourcing work for them?

LH. Anytime customers provide inputs, make sure you have a process in place to act on those inputs and to inform customers of your actions.

A best practice for crowdsourcing is to inform customers in advance of your process and any limitations and disclaimers. Use the general rules for effective brainstorming.

My recommendation for innovation research is to focus primarily on the customer’s world, and secondarily on the company’s product, service or process. Thoroughly understand the bigger picture of how the customer is using your offering, and their related challenges, workarounds, and any excesses or deficiencies, and you’ll fi nd a great deal of inspiration for innovation. By taking the responsibility to focus fi rst on their world and connect it to yours, you may fi nd it unnecessary to ask customers to enter your world so intimately and literally.

Many researchers have the mistaken idea that customers don’t know or can’t articulate what they want. They found that customers may not be qualified to make meaningful technical suggestions, or their actual behavior doesn’t match their reported intentions. In reality, customers do know their own world – it’s a mistake to expect them to know the company’s world. Customers may not be able to articulate a new solution, but they can show companies how and why they are getting something done, their related challenges, work-arounds, and any excesses or defi-

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Lynn Hunsaker is Head of ClearAction consulting and an expert in customer-centric culture, customer experience innovation, employee engagement and customer relationship skill-building. She is author of three handbooks: Metrics You Can Manage For Success, Customer Experience Improvement Momentum, and Innovating Superior Customer Experience.

ciencies of current solutions. Crowdsourcing is a valuable brainstorming technique that should be used in conjunction with thorough research of the customer’s world.

ML. There are crowdsourcing applications out there, and they’re getting good traction, and some of them are really terrific. But if you’re a marketing person or an R&D person and you’re looking to do some crowdsourcing, even among your employees, you could have the best crowdsourcing technology, and it’s not going to be effective if your organizational mindset and culture isn’t willing to listen and take some action on what the crowd is saying.

With crowdsourcing you need to be much more transparent and implicitly suggest that you are going to take on board what the crowd is saying. There is an implicit agreement that you will take a consumers input seriously and that’s the fi rst step – before technology even enters into the picture. However, you don’t want to over-promise and let customers think that if they send you an idea, a week later it will turn into reality.

Who needs to take ownership of a company’s customer community initiative? Should this be a departmental or business unit project, or does it need more of a company-wide focus?

LH. Customer communities may have a wide or narrow scope, which could determine the appropriate owner within the company. A crossfunctional discussion should take place before creating a community to determine the company’s strategy and roadmap. Creating a community also establishes expectations among customers, so be sure to carefully plan and to proactively manage expectations of all parties.

ML. It’s really about being approached in both of those ways by different organizations and there isn’t a clear delineation on which of those works better. It’s simply that doing something is better than doing nothing, partly because that helps to socialize this within the organization and start to learn about the business practices.

Any business depends on hiring great people, but customer-centricity is particularly dependent on employing and developing people that understand the importance of the business-consumer relationship. How can companies ensure their organizational culture is geared towards customer-centricity?

LH. Engagement of employees and customers go hand-in-hand, but it’s not a chicken-and-egg issue. Always start with a clear identification of

your target market and a thorough understanding of its world, and then determine the required competencies of employees to hire, and their intrinsic motivators. Nurture customer-centricity by keeping employees continually aware of developments in the customer’s world, and by maintaining a customer-fi rst mindset in all internal discussions, decisions and activities.

The vision and values that top management communicates, both verbally and behaviorally, set the tone and direction for the organization. The key is consistency – at every opportunity, management should continually communicate the necessity of making it easier and nicer for customers to get and use solutions. Consistency occurs in formal and informal meetings, written correspondence, external messages and in every business process and every management ritual such as performance reviews, annual operating plans and performance dashboards.

Customer-centricity, as priority number one, must permeate the entire business, and be un-challenged by other concerns as the organization’s primary focus of attention and efforts.

Accountability determines the degree to which customer-centricity takes root. What gets rewarded gets done. Proper balance and wise management of rewards and penalties are extremely important. The best planned accountability programs are undermined if group members view them as inequitable or unfair, so close monitoring of group member’s perceptions is key.

Matthew Lees is a Consultant and Vice President at the Patricia Seybold Group.

He brings over 15 years of experience in helping organizations leverage technology to build stronger relationships with customers.

As an analyst in the group’s Strategic Research Service, his current research is focused on customer communities and social networking.

ML. Customer-centricity is about getting employees, who previously never interacted directly with customers, to engage directly with them.

And so, for the companies that are implementing crowdsourcing now and engaging with their customers, they are getting a head start and they’re setting up the processes and learning what goes into it.

There are many companies that are setting up innovation centers and these almost separate groups are charged with thinking about how the entire organization can innovate. Again, whether it’s innovating products, services, business processes, internal processes, customer facing processes, processes involving business partners, it’s a question of how they can innovate more quickly and be more flexible.

It’s a kind of centralized approach, and many of these groups are looking at crowdsourcing methodologies whether for internal innovation or for opening up to customers and others outside of the organization as opposed to an R&D group.

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SUSTAINABILITY

GREEN

GREEN

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It’s clear that as we head into 2010, sustainable companies are not only here to stay but will define the next wave of corporate success. Rebecca Goozee speaks to VPs from Kraft, Dell, Herman Miller and DuPont to discuss how their companies have been building sustainability into the fabric of their business.

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ack in 2009, there was no doubt that the sustainability sector suffered a wobble. After both the tech and housing bubbles burst it seemed set that ‘going green’ would suffer the same fate. However, with sustainability garnering ever-greater public attention it is climbing higher and higher on the agendas of just about every company in the US. So, while the concept is growing in importance, just what are the business implications of going – and staying – green?

Firstly, success at corporate sustainability takes focus, great partners and seeing opportunities across the supply chain, suggests

Kraft’s SVP of Sustainability, Steve Yucknut, who believes that the fi rst step is looking at your business in a new light – only then will you be able to harness business opportunities and turn people’s good intentions into meaningful results. “Whatever the business,” suggests Yucknut, “there are sure to be lots of opportunities for improvement. Thankfully, more employees than ever ‘get sustainability’ and want to make a meaningful difference. A number of companies are doing great things and what they all have in common is focus – a willingness to partner and a guiding vision.”

At Kraft Foods, the approach to sustainability is helping the company meet the needs of the present while also being mindful of the future. Yucknut believes it is all down

to leading from the head and the heart and about each and every individual taking steps, both big and small, to do their part. “We believe it’s about working together to build a better world. We’ve been on this journey for a number of years, and we’re making good progress – in the last three years we’ve raised the bar significantly higher – making sustainability a company-wide effort, setting aggressive sustainability goals and making it a business priority,” explains Yucknut.

The company are working to make a lasting difference, he continues, and part of the business strategy by incorporating it into business decisions and to help guide thinking and actions. “We view sustainability as having three core components: social responsibility,

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Walmart’s journey to sustainability Walmart, the world’s largest retailer with more than 7800 stores around the globe, has set itself a new goal of reducing its environmental footprint by focusing on its supply chain. Walmart is looking to its suppliers to help it achieve a 20-million-tonne cut in greenhouse gas emissions from the lifestyle and supply chain of Walmart products by 2015.

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he company’s measures to reduce some of its impact include working toward 100 percent use of renewable energy; zero waste at its sites; and a prototype design for new stores to make them 20 percent more energy efficient. Speaking at a webcast news conference, CEO Mike Duke gave details of how Walmart plans to make the entire business more environmentally friendly. The cut in emissions is about one-and-a-half times the company’s projected carbon growth over the next five years and is roughly equivalent to the emissions of 3.8 million cars during a year, he said.

“Today we’re announcing an aggressive new goal,” said Duke.

“There are opportunities throughout the product lifecycle – from the sourcing of the raw materials to the manufacturing of a product to its transportation and how customers use it, dispose of it and recycle it. We will be efficient because we can find the reductions anywhere in the world and at the lowest price. We will be a leader

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in retail because we will be the first to take a look at the supply chain on a global scale.”

Fred Krupp, President of the Environmental Defence Fund (EDF), an organization who has been working closely with Walmart to implement their measures, has praised Walmart’s initiatives.

“This is real leadership. Walmart is looking at the whole picture,” said Krupp, referencing the firm’s work to reduce emissions of its fleets and buildings, establish a Sustainability Index and increase standards among suppliers in China and around the globe.

Duke acknowledged EDF’s counsel and assistance in developing the new goal, as well as input from the Natural Resources Defense Council and the World Wildlife Fund in the company’s broad environmental program. Other help on the supply chain goal is coming from PricewaterhouseCoopers, ClearCarbon Inc., the Carbon Disclosure Project and the Applied Sustainability Center (ASC) at the University of Arkansas. These organizations will help identify projects, measure and verify reductions and engage with suppliers.

Elizabeth Sturcken, Managing Director of EDF’s Corporate Partnerships program, said the company, its suppliers and the various advisory groups collaborating on supply chain emissions are venturing into “uncharted waters”. They plan to share their framework for some of the key processes. “We’re going to open this up to the world to make sure this is real and accurate,” she said.

With 90 percent of its carbon footprint embedded in its products’ supply chain and lifecycle, the company plans to focus first on the sectors that are likely to yield the greatest amount of emissions reductions as well as the greatest amount of cost savings, said Matt Kistler, Walmart’s Senior Vice President for Sustainability, Green Biz reported.

Walmart has more than 100,000 global suppliers. With its biggest-bang-for-the-buck strategy, the supply chain reduction effort is expected to involve several hundred suppliers. Walmart ran several pilots with suppliers before announcing the goal, Kistler said. Early successes include that of Fox Home Entertainment, whose reductions in DVD packaging have served as a model and resulted in DVD suppliers eliminating 28,000 tonnes of greenhouse gas emissions last year alone.

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economic responsibility and environmental opportunities. If you envision each component as a circle that intersects the other, the center area is sustainability. Now envision that center area as a lens – look through that lens and you’ll see things differently. There will be unique opportunities for positive change that will come into focus. And ideas that we may not have seen or appreciated in the past will become apparent.”

the entire Cote d’Or and Marabou chocolate ranges. When it comes to packaging Kraft have been busy here too, working to become as efficient as possible by maximizing product to package ration, minimizing head space and thickness and using materials that better lend themselves to being recycled. One way the company has found to optimize end-of-life solutions is to partner with innovative companies like Terracycle, Recyclebank and Sonoco.

“We encourage our employees to consider their own environmental impact and to take an active role in helping to ensure a greener future”

part of senior management.” Enter the Environmental Quality Action Team (EQAT). From this point Murray pioneered the environmental steering committee, set up due to the immense amount of rules and regulations pertaining to the environment that were starting to evolve in the US at this time. “It really made sense that we had a group together to talk about the policy, goals and efforts that we were making in this sector and that we should be doing it in a consistent and organized way,” adds Murray.

The next level Kraft has focused on six key areas – agricultural commodities, packaging, energy, water, waste and transportation/distribution – and have outlined aggressive goals, some of which have already been exceeded since they were set in 2005. The food giant has seen a 15 percent reduction in plant energy use, and a 16 percent cut in plant energy-related CO2 emissions, and has eliminated 152 million pounds of packaging material. Of the six areas, Yucknut sees the agricultural commodities and packaging having the most impact based on the firm’s ability to influence these areas and how big they are.

“At Kraft Foods we’ve been deeply involved in agricultural sustainability for more than 15 years,” says Yucknut. “We’re involved because we’re dependent on raw agricultural materials to make our products. We chose to focus on specific commodities that are big to us and we’re big to them – like coffee, cocoa and cashews. But we couldn’t have made a difference on our own. We found some great experts in agricultural certification – the Rainforest Alliance – and we’ve been with them since 2003.

We started with coffee and then expanded into cocoa in 2004. And we have a great track record for growth: in 2009 we’ve increased the amount of certified coffee we purchased 15 percent versus 2008 and we’ve recorded a 12fold increase since 2004.”

Recently the company has committed to use 30,000 metric tons of cocoa beans from Rainforest Alliance Certified farms by 2012.

In fact, by 2012, Kraft will only be using beans from Rainforest Alliance Certified farms

“In 2008, we started working with TerraCycle, an innovative upstart company that ‘upcycles’ material that otherwise would be destined to go to landfi ll. In other words, TerraCycle reuses packaging to make new, useful products. We are the largest sponsor of TerraCycle ‘brigades’ or collection points, with close to 30,000 locations and nearly seven million people collecting waste across the US,” says Yucknut.

And it’s not just Kraft Foods that are pushing the sustainability of their products, Herman Miller have had a huge focus on sustainability that goes back further than the current SVP for Sustainability, Paul Murray.

In fact, Herman Miller began it’s work on sustainability back in the 1950’s, when the company’s founder, DJ Dupree, stated that every employee should be a good corporate environmental steward. “There is no doubt that the founder of the company really set the DNA if you will, for the environmental program and he said, you know, it’s OK to worry about the environment,” explains Murray. “He set a precedent by saying that every person should be able to see out of a window for no less than 50 feet and proclaimed that any land bought should be kept at 50 percent green space. And he continued doing things as he went along, like creating a wood waste boiler so that we could burn our wood waste to create energy so what is recognized today as renewable fuel.

“Then, when I joined the company, back in 1988, there were a couple of others that were already budding tree-huggers in the organization, including DJ’s son, Max Dupree who was

At Herman Miller there has been a lot of consideration for material sourcing for some time. In fact, Murray believes that as early as 1990, the firm was looking to achieve zero landfi ll – the company recognized the importance of a family of products that were designed to last a lifetime. “A group of us got together in early 1990,” recalls Murray, “and, at that time of course, there were no books on green or environmentally friendly design so we created our own set of guidelines to be used by our designers and product engineers.”

And while this process continued throughout the 1990’s at Herman Miller, it wasn’t until 1999 that William McDonough approached the company and asked to work alongside the fi rm on a new concept with himself and Michael Baumgarten, which eventually came to be a protocol known as ‘cradle to cradle’, taking the company to the next level in terms of sustainable products. “What it amounted to was that we reengineered the chair,” says Murray. “We looked at the recycled content and how recyclable it would be, those kind of things, and this protocol made it into our new product commercialization process, in that we actually contact every supplier for each material and send for the formula of that material – which is actually a bit like asking Coke for the recipe to make Coca Cola – and we’ve had to sign secrecy and non-disclosure agreements. We’ll go down to the fourth or fi ft h tier of suppliers to get the formula at 100 parts per million and if there is anything that harms the environment we ask them to take it out. As you can imagine, that is a pretty

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intense interaction between Herman Miller and our supply base.”

Product sustainability has also been a key focus at Dell. Product recycling remains a key element of the company’s green strategy and Mark Newton, Dell’s Environmental Policy Leader, maintains that the fi rm takes a whole lifestyle approach to sustainability that takes into account product design, business operations, supply chain efficiency, manufacturing and end of life product considerations.

“With this approach we aim to make ‘being green’ easier, more efficient and more cost effective for our customers,” says Newton. “For example, we were one of the first organizations in the industry to offer a free global recycling program for consumers and a suite of asset recovery services for businesses. We’re actively working to integrate innovative agricultural materials into packaging for products across our portfolio.”

Dell has always maintained a positive approach to sustainability and in many cases remains on top of its game in adopting green practices. Newton explains that the com-

puter giant has taken a number of measures to reduce its environmental footprint through improving operational efficiencies, increasing purchases of renewable energy and offsetting remaining impacts. Like Herman Miller, Dell is working with both its direct and indirect suppliers with regard to greenhouse gas emissions and broader environmental impact. “We scrutinize supplier environmental records and ensure they sign a Supplier Declaration of Conformity to ensure that all product materials comply with Dell’s chemical policy.”

But it’s not just the suppliers that are helping Dell with its green commitments; Newton admits that what encourages him is the enthusiasm of the workforce when it comes to taking on individual responsibility in meeting green goals. “We encourage our employees to consider their own environmental impact and to take an active role in helping to ensure a greener future. Initiatives include energy and waste reduction programs and employee recycling events held at Dell facilities around the world.

Furthermore, Dell employees take part in local focus events for Earth Day and World

Kraft has eliminated 152 million pounds of packaging

TOP 10

Environment Day and are actively encouraged to volunteer for green programs.”

Nevertheless there are always challenges that require addressing on the road to becoming a more sustainable company. Dell’s Newton explains that the company is continuing to work on two of the areas that it sees as the most important, namely, making it easy and costeffective for customers to reduce their impact on the planet and secondly becoming an environmentally responsible company itself. He claims that Dell is making great progress on both fronts by making products more energy efficient – in fact 25 percent more energy efficient since 2008 – as well as revolutionizing packaging with the environment in mind, and offering convenient, affordable recycling programs to customers worldwide.

Over at DuPont, Dawn Rittenhouse, Director of Sustainable Growth for the chemical company, believes that the main challenges include understanding the business opportunities in helping to address sustainability and connecting those opportunities directly with the company’s business offerings. “The question we must continually ask is where is the intersection of these important trends and challenges and DuPont’s core competency, which is market-driven science,” she advises.

And like both Herman Miller and Dell,

Newsweek has compiled an environmental ranking of America’s 500 largest corporations and formulated a list of the top 10 greenest companies.

Hewlett-Packard

Dell

Strong programs to reduce GHG emissions. The first IT company to report GHG emissions associated with its supply chain. Has made an effort to remove toxic substances from its products, but Greenpeace has targeted it for failing to do better.

Ranks fourth among the top US corporate users of renewable energy; headquarters uses 100 percent renewable energy.

All its desktop and laptop computers will consume up to 25 percent less energy by 2010.

Johnson & Johnson Its commitment to climate change is rare for its peer group and has strong environmental management in place, but has not pledged to become carbon neutral.

Has largest fleet of hybrid vehicles in the world.

Intel

IBM

Largest corporate purchaser of renewable energy in the US, equivalent to 46 percent of the company’s US energy use. Energy efficiency is a major focus of product development.

Has had formal environmental policies since 1971. All new employees undergo environmental awareness training. Ultra carbonconscious, it’s the only company to receive the EPA’s Climate Protection Award twice.

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DuPont has focused on corporate sustainability for some time, in fact DuPont has over two decades of experience in the sustainability sector. In 1989, the company announced its first set of goals with a focus on reducing the environmental footprint of manufacturing operations and performing in line with public expectations. Over the last several years, Rittenhouse has moved the company to recognize the value of helping its customers and consumers improve their environmental footprint. In 2006, the company established it’s current goals, which Rittenhouse hopes to have achieved by 2015. “While the 2015 goals continue out drive toward a smaller footprint, they also commit us to apply our science and innovation to deliver sustainable solutions to markets around the world.

“Our market-facing goals identify opportunities where we can create new products and services that will help meet our customers’ needs and expectation for more sustainable offerings,” she continues. “We are anticipating and responding to changes in the global marketplace that are driving demand for solutions to major challenges, such as climate change, clean energy, water and ecosystem protection.”

And there is no doubt that the enthusiasm for sustainability inside DuPont has grown because it is now directly tied to the company’s

growth. Rittenhouse explains that the fi rm has taken a holistic approach to sustainability that is fully integrated into the business model, having become a central factor in the research and development, marketing and sales functions. Additionally, DuPont is focused on four megatrends that it sees driving the economy, as well as business opportunities, for the next several years. These include: providing food for a growing population; reducing dependence on fossil fuels; protecting people, assets and the environment; and growth in emerging markets.

“The overlay between these four megatrends and sustainability is enormous – nearly 80 percent of DuPont’s $1.4 billion annual

State Street

Nike

In an industry slow to acknowledge its environmental impacts, State Street does more than most. Earned highest score among asset managers in 2008 for integrating climate change strategies into its business model.

Leads its industry in environmental management of suppliers. Code of conduct requires over 650 contract factories in 52 countries to have written environmental policies.

Bristol-Myers Squibb Announced goal to reduce direct and indirect GHG emissions by 10 percent by 2010, from 2001 levels. Also aims to reduce emissions of sulfur oxides, nitrogen oxides and hydrogen chloride.

spend in research and development is focused on these trends and we see addressing them as critical to the future growth of the company,” says Rittenhouse.

While many companies have been on the journey to sustainability for several decades now, it’s only recently that the bar has been raised significantly higher and sustainability has been made a company-wide effort, by setting aggressive sustainability goals and making it a business priority. With more and more companies on the right path to sustainability and with the correct vision and focus in place it will be possible to find opportunities that are good for business, the environment and people.

Applied Materials

Starbucks

Semiconductor manufacturer designs its products to use less water, energy, greenhouse gases. Has also expanded its solar manufacturing equipment business.

However, uses substantial amount of water in its manufacturing.

Announced commitment in 2008 to source products in environmentally and socially responsible ways.

Encourages suppliers to protect water supplies, and uses recycled paper products and organic and shade-grown coffee.

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INDUSTRY INSIGHT

Establishing the technical baseline Nuno da Silva reveals the essential information for developing and determining corporate environmental sustainability strategies.

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early every Fortune 500 company, along with many others, has established a sustainability department leading the company in developing and implementing sustainability programs. These programs are typically based on an overall plan, possibly developed with the assistance of an outside consulting fi rm or with guidance from an environmental NGO (non-government organization), identifying the areas of focus for the organization. In today’s geopolitical situation, there are many drivers for companies to include an initiative to measure and manage the organization’s environmental impact – not only carbon or green house gases (GHG), but for most other environmental considerations such as usage of clean water, smog, water pollution, recycling and other air pollutants. There is no shortNuno da Silva age of organizations that can assist companies in determining what to measure or what data to collect.

While this is helpful, the challenge for a company really comes in implementing the technical procedures and management systems throughout the organization to support such initiatives.

One article in this issue of Business Management features Steve Yucknut, VP of Sustainability at Kraft, who describes how his company addresses enterprise-wide and product system specific environmental impacts. My company, PE Americas, has a significant role in assisting Kraft (as well as others) with both the enterprise-wide environmental data collection and management, as well as the study of products to understand their environmental impact. Kraft is an excellent example of a company that fully understands how the company is impacting sustainability globally, regionally and even locally for different sites. How did they do it?

Well, for one, they invested in a dedicated sustainability information management system. Companies typically start attempting to collect, track and manage sustainability data with common desktop soft ware tools. Unless they are very small with only a handful of locations to collect and input data, they quickly realize managing sustainability initiatives has unique requirements that go beyond

common desktop tools or general data management systems. Sustainability information management systems like PE International’s SoFi system include several functional attributes not found in common office soft ware tools or data management systems. They are designed to collect data from many sites, globally and from a variety of different users, including vendors in the supply chain. Secondly, they include a report generator that provides on-demand reporting tools to support internal initiatives and external reporting registries such as the CDP and The Climate Registry. Third, they offer advisory or support services when companies need assistance for strategic development of GHG and other environmental and social impacts reduction and establishing key performance indicators.

The other aspect of Kraft’s established procedures is focusing on product impact. They, like most companies, use life cycle assessment (LCA) as the methodology to evaluate product systems. While LCA has been used as a tool for over 20 years beginning in Europe, it has only recently become commonly used within the North American industry. Some view LCA as complex and difficult, yet the reality is with the right training and support it is by far the best way to evaluate a product system. An LCA provides companies a quantified and detailed understanding of the impact of its products. Companies know within the lifecycle (materials, manufacturing, transportation, product use and disposal) where the biggest contributors of green house gases and the other environmental categories are. It will be clearly evident for companies to identify areas to improve and focus upon. With LCA results companies can identify operational inefficiencies, impact future product development, better communicate to external audiences the sustainability effort and develop programs to make consumers aware of how they can best use and dispose of products for the good of the environment.

The technical baseline of establishing the procedures and systems is a necessary and critical requirement to meet today’s sustainability challenges. Without it companies will not be able to effectively measure the environmental footprint and drive initiatives through the organization.

The Managing Director of North American operations at PE, Nuno da Silva has led projects addressing every aspect of product sustainability, from eco-design tools to sustainability branding.

Joining PE from Unilever’s Safety and Environmental Assurance Centre, da Silva has extensive experience managing sustainability projects across organizational boundaries and with all levels of management engagement.

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SECURITY FOCUS

OWNING THE DATA Working out who owns companyheld information is vital to securing it, argues Tim Stanley, Chief Information Security Officer at Continental Airlines.

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hen it comes to securing vital company information, implementing the right type of technology is important.

But establishing who owns that data – and what value it has to the organization – is just as crucial in ensuring companies apply the right level of security to each piece.

Tim Stanley is responsible for development and execution of Continental Airlines’ enterprise-wide IT security strategy, and drives implementation of security related programs within each business unit. He believes investing employees with responsibility for keeping data correct and protected is the best way for a company to guard against security threats. “If you look at the data within our organization, I wouldn’t have a clue what it’s for or why it’s used, or why we’re even storing it in the first place,” he says. “But

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for somebody, that data makes a difference.

Me, I just want to secure it; I could delete it all and it would be really easy to secure that way, but somebody’s likely to get upset about that.

Someone is probably the owner of that data and they know what the value of it is. It may be really important to the company; it may be not as important. My point is that I wouldn’t have a clue either way.”

to risk level, at least periodically, 30 percent don’t ever do it.

According to Stanley, it’s all about defining the rules of engagement. “Is compliance an issue? Is it impacted by HIPAA or SOX? PCI? What about GLBA or some other regulation?

The owners of that data need to tell me. And then once I know what rule set needs to be applied to each piece of data, I can come back and say, ‘this

“If you look at the data within our organization, I wouldn’t have a clue what it’s for or why it’s used, or why we’re even storing it in the first place” Stanley’s argument is that it is not until he has figured out who actually owns each piece of data within the organization – and asked them how important that data is – that he is able to assign it the appropriate protection. “If it’s public information, let’s treat it like public information; if it’s restricted information, let’s treat it like restricted information and not mix the two of those together,” he explains. “Getting that distinction right means I can go to the owner and say, ‘Okay, if this really is the most important data in the company, we’re gonna protect it accordingly. We’re gonna back it up twice a day. We’re gonna have it on redundant systems. And oh, by the way, this is the price tag for that. Th is is coming out of your budget; are you prepared to pay for it?’ Most of the time I fi nd people tell me the data’s not that important after all, which means we can then figure out what the proper level of protection should be. Once I figure that out, the dollars that I’m saving for protecting the data comes back into the budget and that helps the company. I’m tired of spending $10 to protect $5 of data. I want to spend $1 to protect $5 of data. I want it the other way around.”

Stanley wants to categorize every fi le in the enterprise by three different variables: owner, business value and risk level. The government has ‘top secret’, ‘secret’ and ‘confidential’ ratings, but Continental’s designations will be more granular and dynamic, using tiers and subsets of tiers. Th inking this way vaults Continental ahead of most companies. Just 24 percent report that classifying the business value of data is part of their security policies. And while 68 percent classify their data according

is the proper level of security, and this is how I will implement it.’ That’s my job as CISO. It’s not to analyze what the value of the data is, but it’s to figure out – once we know what that value is – what level of security we need to implement, ensure that we do that, and then monitor for any violations of that security.”

Stanley expects the project to take three or four years. “Anything that keeps planes in the air and money coming through is Tier 1,” Stanley explains. That would include information about crew scheduling, cargo and fuel needs, as well as credit card processing information. Tier 2 or 3 is still important to protect, but not critical to keeping planes aloft – for example, providing employees access to their 401(k) accounts.

Security technology and procedures will correspond to the risk and tier level in which a given piece of data falls, as defi ned by the data owner. Tier 1 might mandate twice-a-day backups and two-factor user authentication, he says.

As such, he sees security as more of a process-driven approach, rather than a technology-driven approach. “Technology changes too fast to keep up,” he says with a wry smile.

“What we’re using today, we weren’t using 10 years ago – and I’m pretty sure that we’re not going to be using those same systems 10 years from now, either. The technologies we use in 10 years’ time won’t look anything like what we’re

using today. IT is nothing but an amplifier. If the process is good, IT makes it great. If it’s broken, it makes it ugly.”

So given that the security particular is a particularly fast-moving industry in terms of the emerging threats and the responses to it, what will be the key technologies for security professionals going forward? “It’s the technology that doesn’t exist yet,” laughs Stanley. “In all seriousness, fi rst we need to know how to identify the owner. There is no soft ware package out there today that will help me do that.

There are several of them in the works, but nothing exists just yet. And that’s a key component because they’re the people that are going to tell me how to protect the information.”

For Stanley, it’s all about users taking on a greater burden of responsibility for the management of their data. “What I’m trying to do is push the accountability, because that’s what we don’t have at the moment,” he says. “We used to have just a few kilobytes of data, and now we have terabytes of the stuff, but nobody knows who it belongs to and nobody wants to be accountable for the constant growth of it.” He cites the explosion in the volumes of email data as a prime example.

“Once upon a time people had five megabytes of storage. Then they had 10 megabytes. Now we have people that have a gigabyte of email being stored, and very few people actually follow the established retention policy – it’s just a fairytale.”

The end result is not just greater security, but greater operational efficiency. Indeed, Stanley believes that a greater understanding between the business and IT regarding the issue of security is essential in terms of ensuring better security, reducing costs and making things operationally more efficient. “I want to make everything more efficient because once I know I’m putting the proper level of security around the right data, that will mean I’m reducing the amount of load that I’m putting on IT, on security, and on the users proportionate with what the value of that data is,” he says. “That can only help improve the efficiency of the organization as a whole.”

24%

of companie s classify the b usiness value of data as part of their security poli cies

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INDUSTRY INSIGHT

Putting the brakes on virtualization In order to achieve greater business objectives through virtualization, it’s time to put the brakes on, suggests Trend Micro’s Thomas Miller.

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ebruary 2010 will likely be remembered most for ‘Snowmageddon’ crippling Washington, DC. Toyota was also plagued with class-action lawsuits and admitted to recalling 8.1 million vehicles over gas pedal-related issues, followed immediately by news of problems with the anti-lock braking systems of its 2010 Prius. Hearing snowstorm and anti-lock brakes in the same newscast got me thinking about the invention of the brake.

We all know that brakes are designed to stop cars; that’s what they do. But really, that is not why they were invented. Brakes were invented to allow cars to go faster. In fact, the faster the car the more comprehensive the braking system. Let’s translate this into the original topic at hand: virtualization, which is already being adopted at breakneck speeds. How can putting the brakes on virtualization make your organization move faster? And what are the brakes for virtual environments?

CIOs around the globe are turning to virtualization to achieve a number of business objectives.

First and foremost, to achieve more computing capacity at less operating expense and capital costs.

Second is to increase the speed at which IT is able to offer new and more competitive services.

Are there hazards on the road to virtualization that will limit deployments and hinder our

tions ranging from SMBs to large enterprise have and new tools are developed to support virtualvirtualized servers to support IT business objecized environments. tives. A similar survey run by CDW found this The last challenge being encountered on the number to be 90 percent. The road to virtualization is prounfortunate finding by both tecting our newly virtualized groups was that these deployenvironments – which should ments seem to tap out with only cause you to put on the brakes 34-42 percent of the IT infrain virtualization. I don’t say structure virtualized. In fact, the this to make you fearful.

CDW research found that Remember the purpose of more than 50 percent of these brakes on the car, they allow us organizations considered to go faster. And going faster themselves ‘fully deployed’ with in virtualization means we an average of 37 percent of their consolidate more and achieve IT infrastructure virtualized. greater business objectives.

This means we are experiBrakes for virtualized encing initial challenges and environments are the securinot fully meeting our business ty and compliance solutions, As Executive Vice President of Sales and Marketing, Thomas objectives. Based on many cuspurpose-built to work with Miller is responsible for driving tomer conversations I have virtualization that will enable the US go-to-market strategy for Trend Micro products. Miller also had I believe the challenges you to consolidate more. heads all sales activity for the US business unit including might fall into three categories.

These are the solutions that consumer, retail, online, channel, The first two challenges are make it possible to virtualize SMB and enterprise strategies. natural occurrences with relamore servers, giving us the tively new technology as it enconfidence to mix previously ters the mainstream. As we continue to take disparate servers and applications with comadvantage of the virtualization opportunity, pletely different security thresholds, together there will be a shortage of skilled personnel on the same physical server. They provide the available to accelerate deployments. Luckily, visibility to see and prevent malicious or accidental traffic moving between virtual machines on the same physical server. They monitor the integrity of these systems to detect suspicious activity. And they work with the complexity of virtualization platforms to enable you to optimize your computing power using live migration, without losing the context of security as virtual machines move. knowledge is available to the masses and the Brakes in virtualized environments provide market will overcorrect quickly with a deluge of the confidence that we need to virtualize more virtualization experts in 2010. Likewise, a corand achieve greater velocities. All we need to do responding proliferation of ISVs supporting then is fasten our seatbelts. n virtualization will quickly smooth out the secFor more information, visit www.trendmicro.com/thinkagain ond roadblock as existing tools are integrated

“How can putting the brakes on virtualization make your organization move faster?” business objectives? Yes, as with any major business undertaking there are always challenges. In fact, recent polls of IT executives by both research firms and services vendors alike suggest that we may likely be our own worst enemies. According to Nemertes Research, 93 percent of organiza-

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SECURITY

Fortified Citi Citi’s Frank Wu reveals the challenges of global security management and how new technologies are currently impacting the space.

T

he biggest challenge we face at Citi is around the complexity of the solutions that we have in place.

We currently have approximately 10,000 different technologies deployed across the firm and in the past we have tried to unify the solutions as a security policy across the board, however, it turned out that it cannot be done in reality – we either applied it too hard or made it too loose. And so right now, the biggest challenge is really how big the risk is for that particular implementation.

From that perspective, we are converting to a risk-based security strategy. Everything is about looking at risk itself, and if it’s a high risk, we have to address that with more cost and more capital investment. If it’s a lower risk with less potential impact, it really shouldn’t be addressed as much. That’s a good concept and the biggest challenge to us right now is that we are still in the evolving stage of determining the risk – so often you don’t know the risk until you know exactly how you want to manage it and deal with it. However, I believe we are headed in the right direction.

While a strong security architecture is clearly important for a firm like Citi, in reality we can never be completely certain that our strategy is watertight – you can only keep trying to improve yourself, because security’s a never-ending challenge. One year, you think you’ve hit it, and then another threat comes in.

The threats keep building in sophistication, and every day brings something new.

You will only ever get to the point where you feel comfortable and in terms of security architecture, this occurs in multiple stages as a series of events that process along the entire deployment cycle and life cycle management. From the beginning, when we engage with a vendor at the feasibility study stage, we really take the time to look at the solution ourselves and identify how it complies with our needs.

A complete solution While everybody has security soft ware, there’s not one cohesive solution – almost every company tends to have point solutions, so one solution for the desktop, another one to protect entry points at network premises and so on. And these solutions may not come from the same vendor or address identical issues, which means a lot of the coverage is overlapping or leaves holes.

The industry will probably not come to a very good solution until a lot of security companies are integrated under one umbrella. And right now, we have a lot of point solutions provided by smaller vendors, which results in a lot of niche solutions, and while you can stitch them together, it doesn’t make a fabric.

In combination with that the recent financial turmoil has had a definite impact on Citi’s security architecture and as a result the deployment of new technology tends to be slowed down and many vendors become unstable.

However, it’s not all about cutting heads and cutting costs, often it’s about spending money

New technologies New customer technologies – like Web 2.0 – clearly has a prominent role to play in the future of banking, but what challenges do they pose?

Frank Wu: I am not so sure about Web 2.0 yet, to me it is still too new to know a whole lot about. I’m more concerned about the amount of information and the bandwidth of the consumption as the first thing that happens that is you need to handle more information.

More information means more CPUs and more datacenters. People in the market always want something better or nicer, that’s what 2.0 is all about. However, from the Datacenter perspective, you really want to have something that reduces the cycle, less CPU footprint, less heat fingerprint. On the one hand, you want to give a very good service to the customer and on the other hand, you try to contain your resources because all of those come to cost. All in all I’m just not sure about Web 2.0 yet.

in a wiser way, and while the next three to five years is a very long time in the security space we are specifically focusing on two domains: security application and security administrative solutions. Application tends to concern the user interface for dealing with customers. We are looking into this tool more and more and then trying to converge it into our risk management solutions. We are not going to use it to unify the assessment or approach for everything. That alone will probably take us a few years to do.

Frank Wu is VP of Security Architecture at Citi.

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17/3/10 13:19:15

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9/3/10 15:46:24

THE BIG DEBATE

Happy at work?

For good or bad, every workplace has a culture; and how you create, nurture and develop that culture can be critical to your company’s success. But is enough value being placed on the importance of getting that culture right? And what role does HR need to play in building it?

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D

uring the credit crunch, it was all too easy for employers to forget about motivating their staff in the scramble to cut costs. And while, the smart fi rms recognized that their people were key to surviving the recession and emerging on the other side as a stronger and more effective organization, those that neglected to pay attention to their most valuable resource were guilty of making a grave error of judgment. “The economy will always bounce back, but there’s absolutely no point in coming through the other side with a workforce that feels undervalued and frustrated,” explains Kingston University’s Professor Katie Truss. “Organizations need to continually invest in their staff.”

In fact, the culture of an organization or corporation is more important than many people realize. Ask anyone who’s tried to change or shift a well-established ‘way of doing things’ in an organization and they’ll tell you just how big a force culture can be. However, culture is not stagnant and it can, and does, change over time – corporate mergers, major changes in leadership, and significant market and production changes can all influence a change in an organization’s culture.

So how do you create a culture that works? The key is to help employees understand how their work has real value, suggests Mike Emmott, Employee Engagement Adviser at the CIPD. “People who are happy in their work perform better, they ‘talk up’ their organization, are more loyal and tend to recommend the organization to others,” he says.

And while the economic downturn has taken a toll on businesses worldwide, the tumultuous environment also provides a unique opportunity for HR to demonstrate leadership and creativity. Indeed, the majority of survey respondents agree that when business conditions become unfavorable, senior managers rely on HR more than they do in good economic times. “Doing more with less resources makes it imperative that HR be in sync with the business,” says Gilda Stahl, an editor at the Economist Intelligence Unit. “Developing an awareness of the skills of each employee can help HR align these to its business strategy.”

It really isn’t rocket science. “We’ve found that helping people connect with their roles is just about common sense principles – providing a good work-life balance, listening to staff, providing people with the time and opportunity to share ideas and, most importantly, recognizing and rewarding them for their contribution to your organization,” agrees Truss.

But nonetheless, many companies – particularly those in a turnaround situation or those integrating new business units following a merger or acquisition – fail to recognize the importance of getting the culture right, or struggle to overhaul a culture that’s not working. Does this represent a failure in leadership? Can and should different working styles be accommodated? And what role can HR play in facilitating cultural transformation? Over the next few pages, we fi nd out.

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MISTY REICH Vice President of Global Talent Management for Yum Brands Inc.

JENNIFER WEBER SVP and Chief Human Resources Officer for Duke Energy A STRONG CORPORATE culture is vital. We already have a strong corporate culture at Duke. We have a real ‘take the hill’ culture, so when there’s an area that we need to focus on – for instance, because of the economic downturn we’ve recently had a focus on cost management – this company has a way of knowing how to get things done to realize that end-goal. Safety is big, too. We have a lot of jobs, especially in our nuclear facilities and our fossil plants, which are quite dangerous so we really instill a focus on safety and that’s a very important part of our culture. And we also have a very strong culture of community service, and we actively encourage our employees to get involved in charities and community projects of their choice.

Duke is a combination of a number of different acquisitions and mergers over a period of time, which raises challenges with regards to integrating different working cultures. What you’ve got to do is get to a point where you’re clear with expectations: you’re giving the employees all the information they need, and you’re giving managers and supervisors all the information they need on how to do things the Duke way.

What are the things that are distinct? What are the things that have given us a competitive advantage? So we have to make sure that we’re teaching the new organization, but that we’re also open to learning from them. If there are cultural attributes that are important for them to preserve, then we have to be open to hearing what those are, and maybe even figure out a way that we could have those positive elements influence Duke’s culture.

Leadership behaviors and leadership accountability are really important, because the cultural tone is oftentimes set at the top. I think it comes through in the way in which decisions get made, the way in which information gets communicated. Those things really contribute to and help form a corporate culture. As such, HR plays a role in helping advise the CEO and other leaders on culture and promoting a positive work environment, making sure that we are making changes to various aspects of the way we handle employee programs, that it is consistent with where we are trying to go as an organization. So I would say that we play more of an advisory role; it’s really the CEO’s responsibility to make sure that we’re disseminating the cultural attributes that are consistent with the kind of company he’s trying to create.

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IN TIMES LIKE THIS, when companies might be tightening the belt around pay, around rewards and benefits or even training, you would hope that you have a culture that’s ‘sticky’ enough – that makes people want to stay and has them engaged. When you think about the experience of having a job and what that feels like – which is essentially what culture is all about – it impacts your performance day-to-day, it impacts whether you want to stay there, it impacts how you feel about the company and whether you want to invite other people to come work there. We like to talk about people falling in love with the company, and it takes a special culture for people to stick with it when times get tough.

We have a very intentionally built culture. When we spun out of PepsiCo, our Chairman David Novak spent eight or nine months meeting with what he thought were the best companies and took bits of the culture from each one of them to build our own. So our culture is defi ned. We have what we call the ‘How we win together’ principles, and recognition is one of them, belief in all people is another, being customer maniacs is a third. In fact, our employees tell us that recognition is one of the highlights of our culture. We believe that every human, no matter what country you live in or how senior you’ve become in your work career, likes to be recognized. Support and accountability are also really important for us. We believe in peoples’ capabilities and we trust in their positive intentions and their ability to get things done.

My role is really championing the culture and keeping it alive. I’m not defi ning it, I’m not adapting it; I’ve got a great culture that’s really already been cascaded effectively throughout the business, and I’m just the keeper of that culture. My top three priorities, and the things that I want my team to be known for as an HR team, are great recruitment, great people development, and building a culture that makes people want to come to work for KFC and stay. And that’s the piece of the culture that I’m focused on. First and foremost you have to be a business leader and understand what the business is trying to accomplish. What is the core strategy? And only from that point can you start talking about how the people resources in the organization can help drive towards that.

17/3/10 11:54:57

MATT STOLPER Chief Human Resources Officer at Tishman Realty & Construction Co.

THOMAS STEWART Chief Knowledge Officer at Booz & Company CULTURE IS EXTRAORDINARILY important in these tough times, for a number of reasons. First of all, you’ve got to fi nd ways to keep people engaged, even when they’re anxious. What is a corporate culture? Essentially it is a set of ways in which we work together, a set of ways in which we engage with one another in order to achieve our organizational goals.

And a strong culture is going to be one where we relate to one another in a supportive way; it’s going to give you the strong cultural support of a peer group.

The second thing is that the cultures that often work best are those that are grounded in the kind of work you do. So you don’t necessarily want to get all touchy-feely when you’re in a very difficult, dirty working environment, or get all tough and macho when you’re in a softer, consultative environment; those attributes are not necessarily how you want to defi ne your working culture. Your ethos should connect with what you do for customers. So I think that in a tough time a strong culture reinforces not only the value proposition of why you’re here, but also the value proposition of what you’re doing for your customers, however few they may be.

At Booz & Company, we’re currently going through an investigation of, revitalization of, affirmation of and in some cases tweaking of our corporate culture. So one thing that is very key to our corporate culture is teamwork. It’s the nature of the client service business. So what are the things that we do to make teaming happen, that make teaming successful, or that can inhibit teaming from happening? A certain degree of selfknowledge regarding how your culture operates – and how it connects to the work you do – is essential.

The other thing that is important is how to create the circumstances in which we as an organization can learn from each other and draw on our collective knowledge. I should at all times be adding what I learn to our common knowledge pool, and in return I should be able to draw on that common pool to help solve the business challenges I face on a daily basis. Again, it is the cultural environment that allows such knowledge to be shared and communicated effectively within a company or organization. And building that culture is key to any fi rm’s success, in good times and in bad.

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T THE REAL KEY to a successful culture is that it’s not about policies, it’s aabout people. I think that Tishman – right from the time it was a small ccompany – has always given people the opportunity to express themsselves professionally and personally, and I think that’s what people want.

People want the opportunity to show who they are and what they know, P with the right amount of structure to ensure that they know they’re a w part of the company, but giving them the opportunities they need to p show what they can contribute.

And people can contribute a lot. Our senior workforce has an average tenure of 20-plus years, and one of the most important things we do is to get the people who do have tenure with Tishman – those people who understand its culture intuitively, and understand instinctively the kind of person that will make it in this environment and those that won’t – involved in the hiring process. By getting the people who really understand the culture to participate in that hiring decision, we can perpetuate that culture and continue to make it work.

Of course, the challenge we face as we move forward is that just because something has worked well in the past, it doesn’t necessarily mean it’s going to work that way in the future. Part of the reason for this is that things – technologies, relationships, ways of working – change, and we must be responsive to that. The other is that a lot of the folks who have made decisions collectively and individually for us are at some point going to leave the organization; the challenge then becomes how to ‘download’ that knowledge, experience and intuition and make it available to other people in the organization so that we can continue to make the right decisions.

Good, professional people are focused on their careers, on making a difference, and leaving a legacy of the work that they’ve done. That’s a universal truism for people, and we operate on that basis. So it gets built into every interaction that happens every day, it gets built into every decision we make strategically from a short, mid or long-term perspective, and it works. I think having the right culture is about giving the organization confidence that it can take on risk, can take on a challenging project and can do it with a sense of conviction because it knows it has the organizational and leadership capabilities to marshal and harness those resources effectively to make the project a success.

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CREATIVE THINKING 136

to play Adding author to his extensive resume, rocker Dave Stewart is releasing a book, Business Playground, divulging his business tips, revealing why creating a culture of creativity – and allowing some playtime – is the key to success.

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CREATIVE THINKING 137

A

s one of the most respected and accomplished talents in the rise of companies like Facebook that were created in a garage or a college music industry – achieving over 100 million album sales with dorm really turned them on to the possibilities.”

Eurythmics partner Annie Lennox – Dave Stewart has long Stewart wrote the publication in collaboration with Mark Simbeen at the forefront of musical innovation. Now, he’s turning mons, author of Punk Marketing, who has been involved in many huge his hand to revolutionizing the world of suits and corporate boardrooms. advertising campaigns as well as having been an advisor to the Bill Gates The transition from musician to business coach isn’t the most obvious of Foundation. Stewart explains how the duo got together: “We decided to progressions – but, as Stewart explains, rock stars have more in common write the book from both our points of view married together and then with business executives than it might appear at first glance. “People in pop go out and interview people in companies. And then we wrote anecdotal are often involved in complex contracts and complicated deals or negotiathings about stuff I’ve experienced with fun, creative games that make tions,” he says. “A lot of them don’t take any notice of what’s going on – they your brain think differently – you’ll see it in the book, it’s fun and it’s have managers taking care of it. I was one of those people who was asking defi nitely not a business textbook. about parts of the contract I didn’t understand, and then immediately “It’s like there are a series of unconnected dots that are what make you’re engaged in a business conversation, just as you would be if it was creative thinkers win. When we interviewed Paul Allen from Microsoft , a company making biscuits and you’d have to talk about everything from for example, he talked about how he was walking past a newspaper stand retail and finance to marketing. Basically, you have to understand how a when he saw the front cover and noticed an article about a particular business works if you’re in it.” company. And he could have just walked past Over the past 25 years, Stewart has built the stand, but in his head, something went In review up a wide range of business experience. When boom, because it was connected to something Through a quirky selection of ideathe Eurythmics stopped recording in the that he was working on with Bill Gates at the inducing games and stimulating stories, early 1990s, Stewart began directing shorts, time. When he went to meet this company Dave Stewart and branding guru Mark Simmons reveal how to rediscover your taking photographs and working with adand heard about the operating system they creative side with lessons from innovative vertising agencies and it wasn’t long before were developing called Q-DOS, Paul said companies like Google, NASA and Nokia. he was asked to do some presentations on his at that moment he could almost visualize Business Playground is a fascinating take creative background. “Creativity, even then, laptops.” (Gates and Allen later reinvented on the impact of creativity on business success, with an interesting selection of was an overused word and bandied about all Q-DOS as MS-DOS and redefined the comgames designed to take you out of your the time – it’s like, yawn. But one thing I did puting landscape.) comfort zone and help you start thinking demonstrate was how to make a commercial Stewart explains that the book is meant from an opposing point of view. Overall, for $10 using an eight-millimeter camera. And to shock your brain into thinking in ways an alternative to a heavy-going business manual and a must for the bookshelf, with I slowly started to become prescient in terms of that you hadn’t previously considered. “The a fun take on many vital business sectors – foreseeing how the future would be influenced book is very humorous and it’s poking fun get ready to play. by technology and all that stuff.” at traditional mores, but on the other hand After receiving invitations to all sorts of it’s got a slant to it that points out that your industry events, it wasn’t long before Stewart began meeting people outbusiness won’t survive unless you admit and welcome in these kinds side the music business in a variety of different sectors, and from there it of thought processes,” he adds. The book is designed to reveal all about was just a short step to the point where he began doing consulting work. what businesses and entrepreneurs need to know to nurture a culture In February 2008, in what seemed like an odd pairing, Stewart was named of creativity within their organizations, and Stewart explains that the a founding member of Nokia’s new Artist Advisory Council, an initiative book is aimed at anybody who’s interested in learning more about crecreated to foster an artist-friendly environment within the company, and ativity in business – from a teenager who wants to start a band, to huge is an official Change Agent for the firm. Stewart, with strong ideas on how corporations, to small businesses with two employees. “Obviously some technology and digital business models could benefit acts and their fans, companies are better at looking after this creativity than others, which and Nokia, one of the world’s most progressive communications compais why the book focuses on firms like Google and Pixar where employees nies, are together striving to help fans and artists better connect and comare incentivized to come up with ideas.” municate through social networking capabilities. Last year, he was named But of course, there is more to building a creative culture than funkyas one of Fast Company’s 100 Most Creative People in Business. shaped chairs and beanbags. “It’s all about creating an atmosphere in Now, he’s putting his experience to good use. The subtitle of his new which people are free to express themselves, as opposed to sitting at the book, Business Playground, is Where Creativity and Commerce Collide – end of a great long table as an underling and not feeling as though you and Stewart explains that it focuses on two worlds that have been forced can say anything,” says Stewart. “There have to be moments and times together. “When the internet happened, a lot of smaller, entrepreneurial where everybody is comfortable and involved enough to be able to say companies recognized its potential, whereas a lot of huge corporations just something. Japanese companies have been doing it for years, but there didn’t understand why people weren’t going to their websites. They started are still so many companies out there that see themselves as rigidly fi xed getting in creative people and creativity suddenly became important; the as to who or what they are.”

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OBJECTS OF DESIRE 138

Technology for today’s executive >>> Apple iPad After months of fervent speculation and rumour, Apple has fi nally unveiled its latest piece of shiny new tech – the unimaginatively named iPad. Apple believes its new tablet-style device will occupy a gap in the market between an iPhone and a MacBook. For the critics (of which there are many), therein lies the problem; it’s too big to fit in your pocket and too impractical to replace a laptop. There’s no denying the iPad’s seductive curves and glorious 9.7-inch screen will have Apple fans’ palms perspiring, but its ability to garner mass-market appeal looks unlikely. For starters, it cannot run Flash and it won’t even allow you to multi-task. It also has no USB port, no SD slot, no camera and no GPS. In essence its an iPhone on steroids.

Desirability rating: aa >>> LG GD910 A watch that doubles as a mobile phone; what’s not to love? Thanks to LG and its futuristic-looking watch phone, the stuff of dreams when you were a kid is now a reality. As a wristwatch it’s on the chunky side, but its pleasing looks more than compensate. It boasts a touch screen, high speed internet and video calling capabilities. Oh and it also displays the time too. The GD910 comes bundled with a Bluetooth ear-piece, meaning you won’t have to whisper at your wrist during the daily commute, thus avoiding the embarrassment of looking like somebody with delusions of being James Bond. A sim-free unlocked version will set you back around US$800. Overall, a niche product and a bit of a gimmick but we still crave one strapped to our arm.

Desirability rating: aaaa

>>> Denon AH-D7000 headphones Can you ever justify shelling out US$1080 on a set of headphones? Denon thinks you can, which is why its premium AH-D7000s have been receiving critical acclaim from both tech experts and audiophiles. These lighweight cans produce stunning sound quality across all genres, be it rock, pop, electronic, classical and metal. Users claim these headphones are the most comfortable on the market and are easily suited to hours of continuous listening. As you would expect from a pair of headphones the price of a bespoke Saville Row suit, the build quality is sumptuous – personified by the glossy mahogany enclosures and soft leather earcups. Even the elastomer cabling is less likely to end up tangled during use and when packed away.

Desirability rating: aaaa

>>> Fujifilm Finepix REAL 3D W1 Since the blockbuster movie Avatar hit the silver screen late last year, 3D technology has become the toast of Hollywood. Despite having to don the silly glasses, we flocked to cinemas in our droves, catapulting Avatar to the top of the list of highest grossing movies of all time. Camera manufacturer Fujifilm has capitalised on the 3D hype with the world’s first digital camera with three-dimensional imaging. The W1 uses two lenses and two sensors, which take an image of the foreground and background. This is processed to create an image that jumps out at you. Users can either view the image on the camera’s 2.8-inch screen or buy a special eight-inch digital photo frame (sold separately). Expect to pay around US$500 for the camera and another US$400 for the frame.

Desirability rating: aaa

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iStrategy USA Chicago, Il

5th-6th October 2010 The Intercontinental

Transforming the Enterprise with Digital Expertise

Participation in Social Media and Interactive Marketing is no longer revolutionary.

it’s crucial.

In 2009, companies with dedicated social media activity boosted sales by over 18%, while those with minimal or no presence saw a 6% decrease.

As 2010 marks a shift in consumer mentality from recession to recovery, companies must adjust their strategies according to how customers make purchasing decisions. Brand differentiation will be key, and companies must be at the forefront in areas like social web, mobile apps and SEO in order to create a distinguished customer experience. iStrategy October 2010 marks the next step in your marketing strategy. Here, you will learn: • The biggest trends in consumer spending online • Innovative technologies for communicating with customers and how to best implement them

• The top 10 most important factors in your social media strategy • How to measure your social capital and monetize your efforts • Hot buttons to bring people to your web store front • How to find your best fit in integrating email and social media • How to deliver a response-driven, relevant message The simple truth is that there is no magic one-sizefits-all marketing mix. iStrategy will arm you with the deep understanding of aligning social media and digital strategy according to your organization’s processes and operations to achieve the objectives you’re after. Join us in October to network, share ideas, and most importantly find out how to build your marketing strategy to its fullest potential.

For More Information, Please Call: Max Ford, Global Event Director. Tel: +44 (0) 117 915 4753. Mobile: + 44 (0) 7798 820 711

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CITY GUIDE 140

36 hours in…Boston Time: + 5hrs GMT | State: Massachusetts | Area code: 617 and 857 | Population: 620, 535 (2008)

Boston-headquartered firms Liberty Mutual New Balance Bain & Company State Street Fidelity Investments

Greater Bostonheadquartered firms Staples Inc. EMC Corporation 3Com Boston Scientific TJX Corporation

In the know The most populous city in the Commonwealth of Massachusetts and founded in 1630, Boston lies at the center of America’s 11th largest metropolitan area, Greater Boston, and is located between the Charles River and along the Atlantic ocean. The city’s key economic areas are technology, fi nancial services and tourism and the city attracts large numbers of young professionals from its prestigious educational institutions, Harvard and the Massachusetts Institute of Technology (MIT) from the nearby town of Cambridge.

Economy Boston’s colleges and universities have a major impact on the city and region’s economy, with students contributing an estimated $4.8 billion annually. Not only are Boston’s schools major employers, but they also attract high-tech industries to the city and surrounding region. Boston is home to a number of technology companies and is a hub for biotech-

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nology, with the Milken Institute rating the area as the top life sciences cluster in the country. Tourism also comprises a large part in the economy, and in 2004 tourists spent $7.9 billion and made the city one of the 10-most-popular tourist locations in the US. Other important industries include fi nancial services and consulting.

Drink The Bristol Lounge at the Four Seasons is a seamless backdrop for business conversation with mini sitting areas and charming service. Overlooking the famed Public Garden and Beacon Hill it is within easy reach of every notable business, entertainment and cultural attraction. Alternatively if you are looking for something a little more laid back, take off the tie and head to Silverstone Bar & Grill, an unassuming downstairs bar, which is a popular spot for locals who know where to go for great cocktails and bar food.

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CITY GUIDE 141

Eat Grill 23 & Bar is one of the longest standing steakhouse’s in Boston and recently voted Boston’s Best of 2009, it delivers on great food and service, and the historic Salada Tea building is a magnificent space with dark wood paneling and Corinthian columns. If seafood is more you thing then you’re in the right place – head to Atlantic Fish and tuck into the divine Shellfi sh Tower before sampling some of the seafood specialties and enjoy superb service to boot.

Sweeping drapes, dark wood and low-lighting all feature at Sorelline – one of chef/owner Jamie Mammano’s many restaurants in the city – but this restaurant offers a twist on the traditional Italian fare and is an absolute must.

Sleep

Time off

The Boston Harbour Hotel The Boston Harbour Hotel has become a city landmark with its handsome architecture and is just steps away from the financial district, making it popular among powerful business people. There are 230 luxuriously appointed rooms plus an impressive business center, which includes private office spaces, computer rental, courier, translation and even calligraphy services.

Boston is well-known for its historic sites, so it is worth checking out the Freedom Trail, the Paul Revere House and the Old North Church to soak up some of the city’s culture. Alternatively, why not explore the quaint colonial architecture of Beacon Hill, have a coffee in the Italian North End, shop the boutiques along Newbury Street in the Back Bay, or spend an afternoon in the academic enclave that is Cambridge. If sports is your thing, why not take in a game? Boston is home to several major league sports teams, including the Boston Red Sox (baseball), Boston Celtics (basketball) and Boston Bruins (hockey). The NFL’s New England Patriots and soccer side New England Revolution play at Gillette Stadium in nearby Foxborough. The city also plays host to the prestigious Boston Marathon.

Colonnade Hotel Alternatively, the centrally located Colonnade Hotel is a boutique providing a personal and friendly service and the recent $18 million renovation means rooms are state-of-the-art with high-definition TVs and large windows, while pillowtop mattresses are covered with 350-count linens. The rooftop pool is a great place to escape to even if you don’t plan to get wet, as is the fully-stocked workout room. The hotel’s restaurant is the French bistro Brasserie Jo, and a perfect spot for a business lunch.

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IN THE BACK 142

On the shelf From internet revolution to boosting your mojo and technical architecture, Business Management uncovers the best of this quarter’s business book releases.

Mojo: How to Get It, How to Use It, How to Get It Back If You Lose It M

By Marshall Goldsmith B M is the concept of positive momentum: success building upon success. It anchors our self-esteem, shapes our careers Mojo aand influences those around us. Here, executive coach Marshall Goldsmith explains how we can capture it, keep it and if necessary regain it. Based on years of experience coaching the world’s top CEOs, Goldsmith reveals how to do this through 14 practical tools that will help you achieve happiness and meaning – not only in business, but also in life. th BM SAYS: A great book for business people and leaders who are looking for practical tips on how to succeed. The B aauthor has struck gold with this inspiring look at how to become better – and happier – in life.

Work Less, Achieve More: Great Ideas to Get Your Life Back W

By Fergus O’Connell B A step-by-step guide on how to de-stress, deliver work on time and get your life back in order, Fergus O’Connell, one of the world’s leading authorities in project management, aims to get the work/life balance in order. O’Connell reveals o tthat balance is not a time management issue, but requires a change of attitude to ensure you go home feeling happy aand confident and become a more productive and relaxed asset to your business.

BM SAYS: Full of practical advice, methods and techniques to achieve better business performance from your organiB zzation, O’Connell undoubtedly knows his stuff. An inspiring read for those in search of more life and less work.

Red Wired: China’s Internet Revolution R

By Sherman So & J. Christopher Westland B C China now contains over 250 million internet users – and it’s still growing. Red Wired is the fi rst book to comprehenssively survey the nature of China’s internet, from fi rst-hand interviews with the successful entrepreneurs and visionaaries who forged the market. The book offers business lessons from internet companies that have succeeded in this m most complex of markets and reveals a new perspective on the fastest growing economic superpower in the world.

B BM SAYS: An interesting and comprehensive exploration into the internet business; however, Red Wired doesn’t look ccover some of the greater issues – namely controversies over censorship.

IInformation Systems Transformation: Architecture-Driven Modernization Case Studies

By William Ulrich and Philip Newcomb B

E Every system has an architecture, but as the authors explain, it is only by continuous, intentional architectural transfo formation that one can attend to costs while simultaneously creating a mechanism wherein innovation may flourish.

F From the moment one writes a line of code, it becomes legacy, and that legacy accumulates. Whether it becomes a ccause of innovation inertia or a source of future value is a factor of how it is continuously modernized.

B BM SAYS: The focus on architecture as an artifact for governance is sound, but the authors go far beyond the technical is issues and address many of the social and economic practices that help evolve a good technical architecture.

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Your World.

COVERED From the people you hire to the products you sell, if you’re in business, we’ve got it covered...

Business Management What business processes work? What are the proven, successful strategies for taking advantage of domestic and international markets?

Business Management is about real, daily management challenges. It is a targeted blend of leadership and learning for key decision makers in government and private enterprise.

ALSO AVAILABLE FOR: EU & MENA

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Find out more: www.busmanagement.com

Next Generation Pharmaceutical

Next Generation Power & Energy

Approximately 50% of new drug development fails in the late stages of phase 3 – while the cost of getting a drug to market continues to rise. NGP is written by pharmaceutical experts from the discovery, technology, business, outsourcing, and manufacturing sectors. It is committed to providing information for every step of the pharmaceutical development path.

Available for: EU

A poll of 4000 utility executives posed the simple question: what keeps you up at night? The answers were costs, new technologies, ageing infrastructure, congested transmission and distribution, viable renewables and inadequate generation capacity.

Available for: US

Find out more: www.nextgenpe.com

Find out more: www.ngpharma.com

Oil & Gas

Infrastructure

Collaboration between Government and multinationals to ensure the energy supply is developing on two fronts. O&G is the definitive publication for stakeholders and service companies to read about the regional projects, technologies and strategies affecting their group.

Available for: MENA, US, Russia

Infrastructure provides insight on how developers can achieve critical objectives by integrating leading-edge solutions across their operations – helping them to make informed decisions about technology and operations solutions for all of their areas of responsibility.

Available for: US, EU

Find out more: www.americaninfra.com Find out more: www.ngoilgas.com

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PHOTO FINISH 144

CHAIRMAN OF THE BOARD Move over Tiger; there’s a new brand in town.

W

hen it comes to successful sports marketing, Tiger Woods has been the man to beat in terms of earning potential – at least up until recently. But with the golfer’s personal life impacting his ability to reel in the bigmoney sponsors, is it time for a new global superstar to take center stage?

Forbes magazine recently ranked snowboarder Shaun White – known for his flaming red hair – as the top-earning athlete at the Winter Games with $8 million last year. And following his success in Vancouver, experts predict White is likely to add to his lucrative line-up of sponsors that already includes deals with such household names as Target, Red Bull, American Express, AT&T, Sony, PepsiCo and Ubisoft.

What’s more, White is also winning plaudits for the management of his brand. Unlike the countless celebrities ready to sell their soul for a piece of corporate silver, the ‘Flying Tomato’ as he is known, gives the impression of picking and choosing marketing partners he feels an affinity with. “White has certainly established himself as a stellar pitchman, one with great credibility, likability and flare,” says David Carter, Executive Director with the USC Sports Business Institute.

“Shaun has really done a nice job building his brand,” agrees Kevin Lane Keller, a marketing professor at the Tuck School of Business at Dartmouth College. “Th at’s one thing athletes have to realize – it’s not just being successful at the sport. With Shaun, it’s his personality.”

And that second consecutive snowboarding Olympic gold medal is only likely to generate more excitement around the Shaun White brand. According to web analysts ExactDrive, on February 17 – the day after destroying the halfpipe field with his signature Double McTwist 1260 move – the term ‘Shaun White’ was Tweeted 67,141 times, posted 570 times in message boards, received 1974 blog mentions and 1408 news mentions. As a point of comparison, Tiger Woods – the fallen giant of sports-crossover marketing – was Tweeted 36,511 times, posted 1040 times in message boards, received 3822 blog mentions and 3172 news mentions during the same period.

If social media buzz is anything to go by, expect White to be dominating a significant portion of the $150 billion youth market in the year to come.

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