Analyst Garther has issued a bunch of predictions for business technology, basically a series of areas where executives and IT professionals will need to take action in 2008. Apparently, the full impact of the trends may not appear this year, but executives need to act now so that they can fully exploit the opportunities.

“Selected from across our research areas as the most compelling and critical predictions, the trends and topics they address this year indicate a strong focus on individuals, the environment, and alternative ways of buying and selling IT services and technologies,” says Gartner managing vice president Daryl Plummer. “These areas of focus imply a significant groundswell of change that may in turn change the entire industry.”

Lots of change, then - meaning big alterations for everyone. But wait a minute... Gartner only announced the ten technologies that will have "significant impact on the enterprise in the next three years" back in early October (see Further reading, below: The future of technology, according to Gartner). So, such critical predictions are a bit ten-a-penny. But that doesn't stop:

1. Me writing about them
2. The predictions being interesting

The new predictions are apparently selected from more than 100 predictions (keep up) that Gartner presents and reviews every year. These predictions (the new predictions, OK?) focus on general technology areas, rather than on specific industries or roles. This year’s predictions (the new ones, right?) include:

• By 2011 - Apple will double its U.S. and Western Europe unit market share in computers. Gartner says Apple’s gains in computer market share reflect as much on the failures of the rest of the industry as on Apple’s success
• By 2012 - Fifty per cent of travelling workers will leave their notebooks at home in favour of other devices. Even though notebooks continue to shrink in size and weight, travelling workers lament the weight and inconvenience of carrying them on their trips
• By 2012 - Eighty per cent of all commercial software will include elements of open-source technology. Many open-source technologies are mature, stable and well supported
• By 2012- At least one-third of business application software spending will be as service subscription instead of as product license. With software as service (SaaS), the user organisation pays for software services in proportion to use
• By 2011 - Early technology adopters will forgo capital expenditures and instead purchase 40 per cent of their IT infrastructure as a service. Increased high-speed bandwidth makes it practical to locate infrastructure at other sites and still receive the same response times
• By 2009 - More than one third of IT organisations will have one or more environmental criteria in their top six buying criteria for IT-related goods. In the future, IT organisations will shift their focus from the power efficiency of products to asking service providers about their measures to improve energy efficiency
• By 2010 - Seventy-five per cent of organisations will use full life cycle energy and carbon dioxide footprint as mandatory PC hardware buying criteria. Most technology providers have little or no knowledge of the full life cycle energy and carbon dioxide footprint of their products
• By 2011 - Suppliers to large global enterprises will need to prove their green credentials via an audited process to retain preferred supplier status. Organisations with strong brands are already helping to forge the first wave of green sourcing policies and initiatives
• By 2010 - End-user preferences will decide as much as half of all software, hardware and services acquisitions made by IT. The rise of the internet and the ubiquity of the browser interface have made computing approachable and individuals are now making decisions about technology for personal and business use
• Through 2011 - The number of 3-D printers in homes and businesses will grow 100-fold compared to 2006 levels. The technology lets users send a file of a 3-D design to a printer-like device that will carve the design out of a block of resin

In short - increasing consumerisation, personalisation, software as a service provision, energy efficiency and open standards.

Further reading

• The future of technology, according to Gartner
• Gartner reveals top 30 offshoring destinations
• Twelve confusing content predictions for 2008
• Eight technology trends to help change business
• 2008 - The year of multisourcing and offshoring

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I wrote recently about the historic importance of UK IT - stating that the inherent talent of home-grown technology professionals is all well and good, but if Chinese firms continue to dedicate 50 per cent of their workforce to R&D, the UK’s lead in innovation will soon disappear (see Further reading, below: China is the home of R&D, not outsourcing).

Computing recently reported that researcher Library House has revealed that venture capital investment in Europe’s next-generation media technology sector took a nosedive at the end of last year, falling 52 per cent in just three months.

At the same, the government’s trade and investment arm, UKTI, wants a national strategy for marketing the IT sector overseas to boost UK firms’ international business and attract inward investment. The IT sector represents 6.4 per cent of UK GDP, second only to financial services at 7.5 per cent.

With the commitment to R&D from Chinese firms and a potential recession in the West, now is an ideal time for government and business to help guarantee the UK’s position at the heart of global innovation.

Full column here: The UK must react to Chinese R&D threat

Further reading

China, innovation and outsourcing:

• China is the home of R&D, not outsourcing
  
• 2008 - The year of multisourcing and offshoring
• Gartner reveals top 30 offshoring destinations

On UK R&D and the need to boost innovation:

• Forget the downturn and fight for innovation
• Don’t be afraid to be an IT innovator
• Innovate to impress the boss
• UK innovation needs private sector help
• Raise a glass to innovation partners

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There are several key positives to your publishing house being based in Soho, London - excellent pubs, good places to eat and cool record shops. There are also quite a few downsides, most notably that Soho is dirty (in more ways than one) and is full of pretentious work-avoiders with angular hairstyles.

Still, the good points make up for the bad points, especially when you see a c-list celebrity - and Soho Town is full of them.

For years, Computing staffers have regaled each other with tales of seeing TV's Tom Baker outside the local Somerfield (an easy spot, everyone who works at Incisive Media has seen the good doctor).

So, in an attempt to create order from chaos, Computing and its production desk chums have created a definitive list of Spots (a spot being a celebrity that is clocked by a technology journalist in Soho during working hours):

Spots since the list was officially opened (9/1/08)

• 9/1/08 - Bird watching's Bill Oddie
• 10/1/08 - Being funny's Paul Kaye / Dennis Pennis
• 10/1/08 - Also being funny's Simon Pegg
• 16/1/08 - Trendy fashion's Lily Cole
• 23/1/08 - Is he still funny's Vic Reeves
• 27/1/08 - With Sir Trevor McDonald's Sir Trevor McDonald
• 30/1/08 - Vic Reeves' funnier mate Bob Mortimer

A mixed list, I'm sure you'll agree. Star spot so far is probably Oddie, who was struggling with his mobile phone near our offices at the time. Most contentious spot is McDonald - seen by CRN production editor Claire Pope last Sunday in Wimbledon (therefore, outside work hours, outside Soho and outside the rules of Spots).

Anyway, "Keep 'em peeled!" as presenter Shaw Taylor always used to say at the end of ATV's crime show Police Five. Or is that one celebrity reference that is just too obscure...??

Further reading

• Gossip and scandal will make you a top CIO
• When it comes to fashion, what's the tie directive?
• Luxury and celebrity

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Using Second Life really can be an education. This week's Computing (out 31st January) features a column by e-skills UK chief executive Karen Price that analyses how has experimented with virtual world environment Second Life - and the sector skills council suggests students have been the biggest beneficiary.

Making use of IBM’s Second Life facilities, the skills body ran a special event in November last year for employers and university students. Information Technology Management for Business (ITMB) degree students were also able to discuss with employers and tutors the business benefits of virtual world technologies, with booths made available for one-to-one discussions. Price says the event provided a glimpse into the potential of Second Life:

"Virtual worlds also have the potential to enhance and enrich education. Such technologies can bring learning to life in a way that is not readily matched by other digital media. For example, virtual environments can offer students a vibrant, fully immersive environment where they can meet each other and their teachers to receive lessons, undertake projects and present work. Second Life, and similar platforms, also provide a format for students to talk to people they would rarely get the chance to encounter in person, such as senior business leaders."

Price says e-skills was so impressed with Second Life that it plans to run a virtual careers fair as part of a new Revitalise IT programme in 2008, an initiative to transform the attitudes of young people to IT-related education and careers.

The skills body is not alone, as illustrated by comments from IT leaders involved in the analysis. Meri Williams, information decision solutions manager at Procter and Gamble, says the consumer giant uses virtual environments to provide real business benefits:

"Virtualisation is a huge area for Procter and Gamble and we mix the virtual and real worlds a lot. For example, designing a new Hugo Boss perfume bottle uses a fraction of the cost of making physical mock-ups. We also use fully immersive 3D environments such as Caves (computer augmented virtual environments) to demonstrate ideas to our big customers. So, whereas before we'd have to convince Tesco to actually change a store layout in order to test an idea, now we create it virtually and walk them round it."

Further reading

• Social networking creates waste and exclusion
• Facebook? LinkedIn? Social networking is rubbish
• Facebook provides a great business opportunity
• Turn email off to stop unhelpful chatter
• $15bn Facebook valuation masks the real deal
• Web 2.0 technologies = five hours of depression

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Running a new business is a bit like being a manager of a Premier League football side - in tough operating conditions, bosses often have less than a year to prove themselves.

Big Sam Allardyce's recent departure pushed the total of Premier League departures to eight this season, and the turnover of CEOs at under-performing firms is often as high.

The European Leadership Programme (ELP) commissioned research specialist Vanson Bourne to survey a sample of 52 venture capitalist (VC) firms and found that as much as 92 per cent of VCs expect to replace a company founder with a new CEO - and one in three investors give replacement CEOs less than a year to prove themselves.

Due to a lack of experienced CEOs in the UK and Europe, many companies are forced to hire first-time CEOs - many of whom receive little support from company investors and then fail to perform to expected standards, says Ashley Ward, chief executive and founder of the ELP:

"The fact that most investors give CEOs less than a year to prove themselves seems to suggest that they think a company can recover in less than 12 months, but this is usually unrealistic, and changing the CEO again just results in valuable time lost searching for a replacement and then bringing them up to speed."

Have these VCs learnt nothing from the leadership experiences of their Premier League counterparts? The survey also found that:

• Only one in five VCs are confident one CEO can last a company’s lifetime (from original investment to exit)
• At least 70 per cent of investors expect to see at least 2 different CEOs during a company's lifetime
• Over a third (35 per cent) of VCs believe the single biggest challenge for CEOs is meeting the high growth expectations of investors
• When a company fails to meet expectations, almost half (44 per cent) of investors would not hesitate to introduce a probation period for their CEO - with 6 per cent admitting they would sack the CEO immediately
• Only one in ten investors would look to executive coaching to help CEOs raise their game

The final point is particularly important, says the ELP founder Ward: "While traditional business views are changing there is still a long way to go before investors realise that executive support can prove much more time and cost-effective than a high CEO turnover; this is an area where, unfortunately, the US is leading ahead of the UK. The next generation of investors need to acknowledge that life is hard at the top, and their CEOs need all the help they can get."

But with UK investment in R&D struggling to compete with spending in other nations (see Further reading, below), European leaders need all the support and help they can get - particularly the innovative bosses.

Further reading:

• China is the home of R&D, not outsourcing
• Forget the downturn and fight for innovation
• Don’t be afraid to be an IT innovator
• Innovate to impress the boss
• UK innovation needs private sector help
• Raise a glass to innovation partners

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Wages - the one thing guaranteed to cause consternation amongst gossiping workers at the water cooler. Well, strong-arm tactics from the boss and potential office romances are probably going to cause consternation too. But the thought of your colleagues getting paid more than you is always anathema.

And apparently the UK’s average advertised salary has broken the £32,000 barrier (£32,207, to be exact), according to the excitingly named jobs search engine AllTheTopBananas.com. The figures are based on data from more than 870,000 jobs advertised between July and December 2007.

The search engine reveals the average UK salary has increased by £917 since October 2006 and Dave Martin, managing director of AllTheTopBananas.com, says the results illustrate that wages are still increasing, despite active worries about the performance of the economy.

"Businesses are finding it harder to attract the right staff, and are upping their advertised offers. Throughout 2008 we will watch with interest to see if this trend continues."

His view, I guess - but personally I bet the upward trend drops. First, the £917 year-on-year increases are a legacy of a strong economic performance, with big bonuses for city workers and-the-like that have helped create impressive national figures. Second, public sector workers are already beginning to feel the pinch, with below-than-inflation pay offers.

And I'm not sure businesses are having to up their advertised offers to attract the right staff. If the recession hits full downward tilt, most private sector firms will follow the lead of public sector organisations and provide lower pay offers. Permanent workers, meanwhile, will just be pleased that money is entering their accounts every month and helping to pay the mortgage. Nothing like a bit of optimism, eh?

As for gossiping staff, here are the full regional variations from AllTheTopBananas.com:

1. London - £38,693
2. Wales - £31,981
3. East Anglia - £29,562
4. West Midlands - £29,356
5. Scotland - £28,697
6. South East - £28,298
7. South West - £27,817
8. Yorkshire & Humber - £26,853
9. North West - £26,845
10. East Midlands - £26,315
11. North East - £26,078

So, salaries in London continue to outpace the rest of the country, then (surprise, surprise). And a recent analysis of over 4,000 IT positions by recruitment agency CV Screen found technology wages in London had increased by 4.3 per cent during the past 12 months. The rise compares to the 3.4 per cent in the South East.

But as for departmental variations - such as how much Geoff on the help desk gets paid - forget it. The figures don't run that deep. So you'll just have to chin-wag at the water cooler.

Further reading

• Is IT always a business issue?
• CIOs will sacrifice IT contractors in downturn plan
• The end of computer science?
• Is studying computer science a waste of time?
• Don't study IT if you want to be a CIO
• The adventures of a technology career

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What is the IT department actually responsible for? It seems technology experts are increasingly keen to suggest responsibility for IT should pass to "the business" (seen End Note).

Take data quality - which sounds to me like a core IT issue. No, says Gartner analyst and research vice president Ted Friedman: “Data quality is a business issue, not an IT matter, and it requires the business to take responsibility and drive improvements." Friedman suggests a marketing specialist could act as a data steward and keep marketing data "complete, correct, consistent, honest and not redundant".

Or take service oriented architecture (SOA) - which is a complex issue at the best of times and certainly involves a great deal of data and integration. Once again, "the business" is key, says IDC research manager Jan Duffy: "The lines between IT and business are so blurred that they almost don't exist when it comes to adopting something like SOA."

I could go on - comments about "the business" needing to run technology and technology being part of "the business" are pretty much ten-a-penny. But are such sentiments get out of jail cards; basically a simple method for explaining away a complex issue?

Go on, do a random search for a CIO interview. I bet it says something in the vein of: "the business needs to run IT". Good luck to the business, I say. But where do such practices leave the IT organisation? Especially once all the basic coding tasks have been offshored around the world.

End Note - "The Business" is a turn of phrase that makes me sound like I'm trying to create a parody of Hale & Pace - which I'm not, because:

• I have never watched the Hale & Pace comedy show, but I have had the dubious pleasure of having to listen to idiots quote bits from their TV shows, like "the business"
• And I had not thought about Gareth Hale and Norman Pace for about ten years until they appeared briefly on last year's Extras Christmas special - and until now, when I wrote "the business"

Further reading

• CIOs will sacrifice IT contractors in downturn plan
• The end of computer science?
• Is studying computer science a waste of time?
• Don't study IT if you want to be a CIO
• The adventures of a technology career

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Tony Lock, programme director at analyst Freeform Dynamics, writes a piece for next week's Computing that adds further context to some of the sentiments expressed in yesterday's post - which is short, were:

1. Every IT manager knows green computing is an issue and understands the basics
2. Every IT manager is suffering from green computing overkill - and could probably do with a break
3. Every IT manager needs to know about the business benefits of technologies, not just about cutting carbon emissions in isolation

I think point two is crucial - but to further understand the reasons why green computing overkill is becoming manifest, further context is required.

But clearly I'm now going to write even more about green computing - which seems a bit self-defeating, but I hope it isn't. Because I'm trying to understand wider misunderstandings of environmentalism and the use of technology within a business context.

And unless you've been locked in a datacentre for the last 24 months, you'll be aware that Western business needs to make changes to its operational activities in order to rectify problems created through increasing carbon emissions.

In his piece, Lock says attempts to make best use of existing resources illustrate how energy optimisation and green initiatives are on the radar of many technology managers. However, he says evidence shows many organisations are far more focussed on energy reduction than genuine green projects:

It is probably fair to say that for many managers, both inside IT and in the wider business, energy consumption, optimisation or minimisation is now a synonym for green, which is a misunderstanding of the fact that environmental initiatives should really be looking at wider, impact minimisation projects.

So, while IT managers are probably suffering from green computing overkill, many of the media-attention grabbing protects that business are implementing are focussed on just reducing energy, rather than looking for real, green alternatives.

Further reading

• Green computing hype needs smarter approach
• Green computing is not crucial for CIOs
• The green IT rules from Gartner and Forrester
• JP Rangaswami says green computing drives BT
• SMEs lead the way on green computing
• Green computing is a pipe dream for IT managers

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Smart client - I'll define the technology later - manufacturer Cranberry says using a secure and efficient computer offsets carbon emissions that are equivalent to a two and a half hour business flight every year.

Which everyone knows is important, because the world is (literally) melting: “Business struggles to make energy savings and there is growing awareness of the environmental implications of IT," says Simon Ponsford, chief executive of the aforementioned Cranberry.

Thankfully, to quote the press release, a "solution is available today". And here's the previously promised definition - the new Cranberry Smart Client SC20 (pictured left), which just happens to be the industry’s most energy-efficient alternative to a desktop computer. And the facts are impressive:

No bigger than a paperback book, the SC20 consumes on average only 9 watts of power compared to a mid-range PC that has an average power consumption of 175 watts. As well as being 19 times more efficient, the SC20 comes with management software to further reduce power consumption by automatically turning off unused powered-on devices overnight.

To put the energy-efficiency of the SC20 into context, Cranberry’s research calculates that an average office PC in use 9 hours a day, 5 days a week, 48 weeks a year is responsible for 176kg of carbon dioxide each year. A Smart Client would produce just 9kg, a 95 per cent reduction. If applied to the 12.6 million office PCs in the UK today, this is a reduction in carbon dioxide emissions equivalent to 6.3 million people taking an annual return flight from London to Madrid, Barcelona, Lisbon or Rome.

And here's the rub, the smart client technology clearly promises a bunch of environmentally powerful impacts - such as consuming less than 10 per cent of the power of a standard PC.

So why dress the technology up in a context that says: "Hello, IT manager - you won't understand the potential of our technology unless we tell you the world is about to die and, thankfully, suggest our SC20 is the answer." By now, it must be pretty basic knowledge that:

1. Every IT manager knows green computing is an issue and understands the basics
2. Every IT manager is suffering from green computing overkill - and could probably do with a break
3. Every IT manager needs to know about the business benefits of technologies, not cutting carbon emissions in isolation

As if to exemplify the above points, Cranberry chief executive Simon Ponsford also says on the press release: "Our new computer can instantly save power use and emissions while improving the bottom line. This is a fantastic win-win situation. The Smart Client will make businesses operate more effectively while providing a greener, more efficient office environment.”

There is hope, then - but saying that, I did get sent the press release six times this morning and I wonder how much carbon emissions five unrequired PR emails creates...??

Further reading

• Green computing is not crucial for CIOs
• The green IT rules from Gartner and Forrester
• JP Rangaswami says green computing drives BT
• SMEs lead the way on green computing
• Green computing is a pipe dream for IT managers

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Two new pieces of research illustrate the startling contradictions taking place in the collaborative workplace - with some individuals apparently taking advantage of social networking technologies and others excluded from Web 2.0 applications.

Research from Global Secure Systems (GSS) and Infosecurity Europe 2008 suggests social networking sites - such as Facebook, MySpace and Bebo - are costing UK corporations close to £6.5 billion annually in lost productivity. Which sounds an impossibly large figure, but here's the maths:

The poll was carried out amongst 776 office workers, who admitted to spending at least 30 minutes a day visiting social networking sites whilst at work, that’s a minimum of 10 hours a month which equates to 3 weeks of every year with two respondents who were so hooked that the spend 3 hours visiting these sites everyday. The end result is potentially billions of pounds in lost productivity maintain GSS, plus the extra demand on bandwidth which is an additional cost to a business in terms of efficiency, maintenance and resources.

Potentially, yes (the bold emphasis in the above quote is important, I think). But, of course, there's also some individuals - there must be some out there (see Further Reading, below) - that are managing to gain important business benefits from social networking sites: contact building, contact managing, contact contacting. Blah, blah, blah.

If the GSS / Infosec survey seems like a slice of media-grabbing hype (and hey, it grabbed my goldfish-like attention), other research from national computing and disability charity AbilityNet highlights how social networking sites are "locking out" disabled visitors.

The research suggests the majority of disabled users can’t even register, let alone participate, in the online communities they wish to join. Kath Moonan, survey author and AbilityNet’s senior accessibility and usability consultant says:

"UK participation in social networking is the highest in Europe with around 80 per cent of the online population now making over 25 million visits a month to sites such as those covered in the review. With a disabled population of some 10 million potential users, these sites are inadvertently imposing a 'technological lock-out’ on those who have most to gain from social networking - arguably the most socially excluded members of the community."

None of the sites reviewed – Facebook, MySpace, YouTube, Yahoo or Bebo - would allow login without the identification of a CAPTCHA image, a visual verification code used to determine whether the end user is human. Individuals unable to interpret the graphic due to vision impairment, dyslexia or learning difficulties are, therefore, blocked from proceeding.

While some of the sites, such as Yahoo and Facebook, offer an (unusable, says the report) alternative, MySpace’s CAPTCHA image changed every 60 seconds – "an added complication to an already impenetrable process for many disabled users," says the AbilityNet survey. Such an oversight is not only unethical, it is also in contravention of the Disability Discrimination Act (1999). Moonan continues:

"Many of the barriers to accessibility we encountered could be easily remedied and it was shocking how little response we received when we approached the sites for advice on these issues. We would like to ask the operators of these sites to look at some of the key factors governing disabled access, namely: the reduction of the amount of CAPTCHA and the provision of an intelligible audio alternative; user-friendly support for those experiencing access problems and lastly, adherence to what is, after all, the law."

Further reading

• Facebook? LinkedIn? Social networking is rubbish
• Facebook provides a great business opportunity
• Turn email off to stop unhelpful chatter
• $15bn Facebook valuation masks the real deal
• Web 2.0 technologies = five hours of depression

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Another day, another social network launches. Voxswap arrived earlier this week - and in a bid to create what its co-founders call ‘social networking with a point,’ the site allows users to set up profiles and state which languages they are learning.

“I am convinced social networking is here to stay but it needs to have a point. There’s no benefit in creating long lists of so-called friends and business contacts you never actually meet or contact,” says co-founder Sean Hargreaves.

Couldn't agree more, actually.

Hargreaves continues: “That’s why I decided to launch a social network site that will help people learn or practise a foreign language so everybody benefits. I couldn’t find the site I was looking for, so I decided to build it.”

But is that enough of a pull? Is learning a language really going beyond contact building and taking the user into true connectivity and interaction?

Users will want open standards, access to a combination of systems and platforms - access, inevitably, to everyone at any time. So, how will social networks develop in the long-term to provide access to information? A number of people that replied to my earlier blog posting about social networks being rubbish (see Further reading, below) suggested the best way forward is sectoral.

Ian Hendry, for example, believes networks will become vertical, appealing to specific interests or demographics - one for friends, one for family, one for professional contacts: "All that remains to be seen is which sites get the traffic," he says.

Maybe. But how will such vertical networks interact? As ever, the flow of information and the need for open standards is crucial.

Further reading

• Facebook? LinkedIn? Social networking is rubbish
• Facebook provides a great business opportunity
• Turn email off to stop unhelpful chatter
• $15bn Facebook valuation masks the real deal
• Web 2.0 technologies = five hours of depression

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Social network resources with a point?

• http://www.voxswap.com - Allows users to set up profiles, stating which languages they speak and which they are practising
• http://www.ning.com - Ning offers customisable social networking features to meet each group's specific needs
• http://findasocialnetwork.com/search.php - A dedicated search engine to help find and promote social networks; though I had a quick play and found the results, well, disappointing. Still, feedback from the site says: "We're in very early stages at the moment and still building our database, so the results will be far from exhaustive." Might be worth giving the search engine more patience, then...
• http://www.linkedintelligence.com/smart-ways-to-use-linkedin - Just a glorified contact manager? Offers more than a 100 ways to make the most of LinkedIn
• http://www.wecando.biz - Combines business networking and internet searching in an attempt to provide qualified leads

New year, new Computing Business - that's the magazine I edit that provides some of the inspiration and content for this blog, in case you didn't know. The next edition is being prepared at the moment, like a well-loved and well-oiled machine.

Part of the focus is on chief information officers (CIOs) - how they should prepare for the changing nature of economic conditions and how their preparations might help improve business efficiency.

Mark Raskino, research vice president and Gartner fellow, says he thinks the timing with the story angle is "spot on for CIOs". And responses from industry experts are mixed, to say the least: improve service levels; increase outsourcing; cut contractors; and cut projects with marginal returns.

Tough choices are going to have to be made that will upset a lot of IT workers, seems to be the general call. But it is not all bad news for CIOs, says John Proudlock, transformational director at Vertex Financial Services:

"If the employment market softens, then this may be an opportunity for a few key hires that can reduce dependency on expensive contractors, while really strengthening your department, getting it in better shape for when the upturn comes."

Sounds good for the internal team - but what about contractors? Are freelance IT staff set to be the sacrificial lamb, as technology leaders attempt to improve business efficiency in 2008? Looks like, as ever, when the going gets tough, its better to have a permanent position...

Further reading

Skills issues:

• UK firms love offshoring - what about the staff?
• The end of computer science?
• Is studying computer science a waste of time?
• The adventures of a technology career

Leadership issues:

• It is time for CIOs to shape up or ship out
• CIOs will need to transform to survive
• Gossip and scandal will make you a top CIO
• Business change means nothing is certain for CIOs

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Sometimes the figures just don't match the hype. Take outsourcing to China, for example. Despite the current high profile of the country as a key global sourcing destination (see Further Reading links below), just 5 per cent of leading UK IT organisations are currently using China as base for offshoring, according to independent advisory firm EquaTerra.

So much for China as the new home of outsourcing - especially when you consider 100 per cent of UK businesses currently offshoring all or part of their IT functions are using India as one of their locations.

China, then - to paraphrase Edwin Starr, what is it good for? Well, absolutely lots of things, most notably research and development.

A recent survey by the European Commission found Europe’s research and development spending has been declining since 2000, standing at just 1.9 per cent of GDP ­ and almost half the rate devoted to research investment in China.

Want company-specific examples? Well, Computing - in the guise of editor Bryan Glick - recently took a trip to China, investigating research at Huawei, a manufacturer of telecommunications and networking equipment for customers such as BT, Vodafone and Telefonica. The following example illustrates how Huawei is able to take advantage of lower labour costs to invest big-style in R&D:

Huawei invests 10 per cent of its revenue in research and development (R&D) ­ a comparable proportion to Western IT providers. But lower staff costs make such spending levels deliver more than the firm’s rivals, says Huawei’s chief marketing officer Xu Zhijun.

“Our revenue this year will be about $11bn (£5.3bn), so our R&D investment will be about $1bn (£483m). In absolute amounts we are not investing as much as other big players, but R&D expense lies mainly in people costs," he says .

“If you look at our labour costs in R&D, China’s average is only about one-sixth that of the US and Europe. So Huawei’s $1bn (£480m) investment in R&D will amount to $4bn (£1.93bn) or even $5bn (£2.42bn) in the US or EU.”

To back up the claim, Huawei can point to a remarkable statistic: 48 per cent of its 62,000 employees work in R&D ­ that’s more than 30,000 people, a workforce percentage that no Western firm could possibly match.

Blimey, 48 per cent - where does that leave UK innovation? How can we compete long-term with China, especially when UK plc spends just 1.9 per cent of GDP on R&D?

The historic importance and inherent talent of UK IT professionals are all well-and-good. But if China carries on dedicating 50-per cent of its workforce to R&D, the UK's lead in innovation will soon disappear. Which is pretty discouraging.

Time, then, for the government and the private sector to step up to the plate and guarantee the UK's position at the heart of global IT R&D.

Further reading

China and outsourcing:

• 2008 - The year of multisourcing and offshoring
• Gartner reveals top 30 offshoring destinations

On UK R&D and the need to boost innovation:

• Forget the downturn and fight for innovation
• Don’t be afraid to be an IT innovator
• Innovate to impress the boss
• UK innovation needs private sector help
• Raise a glass to innovation partners

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Robert posted a rhetorical question on my blog yesterday. It's a good one too - check it out: "Why don't we just accept it: IT, in the West at least, is a dying industry. It's not glamorous, it's not sexy and it's not desirable. In case anyone thinks I'm overreacting, how many of the staff at Computing would recommend IT to their own children. This is not a rhetorical question, by the way: I really do want to know."

Actually, it's not a rhetorical question - as I previously stated - and I apologise. So, in an attempt to find an answer to Robert's poser, I turned (literally, to my left) and asked Computing editor Bryan Glick for his thoughts: "There's still lots of interesting jobs in the UK IT industry," he said. "But I wouldn't recommend a career as a code cutter - not unless you want to go and work in India."

And there's the rub, I guess. Grunt work - for want of a more glamorous term - is being shifted all round the globe. Take Romania, for example, which along with other Eastern European countries is becoming an outsourcing hub for Western European financial services firms and customer support:

• Consultant McKinsey says outsourcing to Eastern Europe trebled over the past three years to hit $2bn
• Outsourcing is also predicted to grow faster than anywhere else during the next four years (30 per cent compared to 25 per cent in other regions), according to analyst Gartner

Growth continues unabated too. Today, outsourcing provider WNS opened a new delivery centre in Bucharest that will provide multi-lingual services in French, German, Italian and Spanish for a range of users. So much for UK IT, eh?

But I guess we're still king of the senior technology position - right? Not according to the aforementioned Robert, who suggests IT leadership jobs are also at a premium:

"I'm in my mid-forties. In any of the professions, such as law or medicine, my career would now be approaching its peak. Unfortunately, I'm in IT, so that just makes me old and past it. However, my escape strategy is in place: I'm back at university, studying with a plan to Do Something Else."

Good luck with the Do Something Else, mate.

Further reading

• UK firms love offshoring - what about the staff?
• 2008 - The year of multisourcing and offshoring
• The end of computer science?
• Is studying computer science a waste of time?
• Don't study IT if you want to be a CIO
• The adventures of a technology career

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The debate is over - well at least until the next survey is released. Rather definitive looking results from independent advisory firm EquaTerra reveal that 100 per cent of UK businesses currently offshoring all or part of their IT functions are using India as one of their locations. And you can't get more than 100 per cent, can you?

Actually you can: surveys sometimes say spending rose by 204 per cent, for example. And that's not possible (I think), because a percentage is a way of expressing a number as a fraction of 100. So when researchers say spending increased by the aforementioned 204 per cent, I think they're just being mathematically lazy.

Anyway, I digress from the main point - which is that UK companies love outsourcing. Check out the following facts from the EquaTerra survey:

• Global sourcing is rapidly becoming an essential business option for UK firms, with a significant increase in organisations utilising near or offshoring within the last year - up from 47 per cent to 57 per cent
• Outsourcing generally is also still increasing in the UK, with 54 per cent of firms questioned planning to up their activity in 2008. Only 9 per cent predicted they will outsource less
• Real dissatisfaction with outsourcing is rare, occurring in only 14 per cent of the contracts evaluated

The EquaTerra research also illustrates that although cost is the primary driver for many organisations, more than half of firms (54 per cent) are now outsourcing for other reasons, such as availability of skills, flexibility and quality of work. Which is bad news for UK IT professionals, according to Phil Morris, managing director of EquaTerra Europe:

“Business people are making the decision to outsource to India because they can’t find the same resources in the UK."

As has been discussed on this blog recently (see further reading list below), with a significant UK IT skills gap - and more firms choosing to fill lower level technology positions with overseas talent - where will the next generation of technology managers come from?

Isn't the technical level the breeding ground for future chief information officers (CIOs)? And if not, is it really too outrageous to believe that current chief information officers - operating under increasing financial and skills pressures - will search also offshore for talented IT managers, as well as technical staff? I think the passion for outsourcing means that you should all watch your backs.

Further reading:

1. Outsourcing and the lack of skilled UK workers - http://knowledge.computing.co.uk/2007/12/outsourcing-and.html
2. UK firms offshore IT management to fill skills gap - http://knowledge.computing.co.uk/2007/12/firms-offshore.html
3. Where next for offshoring? - http://knowledge.computing.co.uk/2007/11/where-next-for-.html
4. Gartner reveals top 30 offshoring locations - http://knowledge.computing.co.uk/2007/12/gartner-reveals.html
5. TPI locations for offshoring - http://knowledge.computing.co.uk/2007/11/where-next-for-.html

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Well it is - isn't it? Pushed by friends and colleagues, I signed up to a bunch of social networking systems. Several months on, what have I gained? In short, nothing.

Let's take Facebook, for example. Oh the excitement back in 2007, as everyone rushed to find their primary school mates, to add time-wasting applications and to update their profile with pointless information.

Now - in the cold light of 2008 - the Facebook hype looks a bit silly. In fact, can I be the first to say Facebook is the new Friends Reunited - a rush to play with an exciting new internet toy that allows to you find old flames... and then nothing happens (if I'm not the first to call Facebook the new Friends Reunited, it doesn't matter - the point still stands).

Basically, I now sign on infrequently to check I haven't missed some life-changing message. Which I haven't - but you never know, do you? Because some people are still using Facebook alongside email and the phone.

Aaah, yes - email and the phone. They were rubbish last year. Everyone was social networking. Except they're not now. Because everyone has realised that some people join social networks and some people don't. And that means they're pretty much useless.

Because unless everyone you've ever met ever is part of the network and can be communicated through the technology - like they can with the phone or email - people are excluded. And loads of my mates aren't part of Facebook. So, good bye then.

Social networks are cool for Generation Newbie - the up-and-coming kids that are going to take over the world and force me to quickly realise I know nothing about technology, or worse, the world. You see, most new graduates are already on Facebook and so are all their mates. So, it works for them - it is inclusive. But for me and Generation Email, forget it.

And the same is true for LinkedIn. "Relationships matter," says their tag line - yeah, relationships do matter, but only if all your contacts can be contacted - and if half the business world is giving social networking the swerve, something is wrong.

Back in the crazy world of 2007, loved-up critics rushed to make statements in the vain of: "Facebook is more addictive than crack." If crack is that bland, I'm pushing for the re-classification of crack alongside a cup of tea.

Still, I can hardly talk. Just last month, I wrote the following (see link at the end of the post): "You can either join in with the natives, or be a social networking outcast. For the sake of your business, make the right choice."

The choice is simple - until someone creates the right tool that creates perfect connectivity between all users, there is no choice to be made. And I have no idea what that perfect social networking tool will look like, unfortunately.

But if I and a bunch of loved-up critics look crazy, what about Microsoft? They paid $240m for a 1.6 per cent slice of last year's most popular social networking phenomenon Facebook - creating an implied valuation for the total business of $15bn. Good luck and all that.

Further reading

Facebook provides a great business opportunity - http://knowledge.computing.co.uk/2007/12/facebook-provid.html

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2007 was a difficult year for IT security chiefs, with the media keen to report how organisations had failed to protect customer data through poor system implementations or slack human process.

Last March, for example, hackers half-inched the payment card details of more than 45 million TK Maxx customers. Later on in the year, misplaced disks at HM Revenue and Customs placed 25 million people at risk of identity theft.

Such problems and dangers - and the inevitable effect that data leak can have on an organisation's public profile - would surely make IT security a key spending priority? Apparently not, according to consultant Deloitte.

Only 5 per cent of technology, media and telecommunications companies increased their security investment by 15 per cent or more last year. Half of firms allocated less than 3 per cent of their IT budget to security.

Hackers breaking down defences, workers losing information and organisations failing to firm up security - talk about mixed-up priorities, especially as the research also shows just 7 per cent of companies believe they are prepared for future security threats. Other findings from the research include:

• Only 38 per cent of companies believe their organisation has all the skills and capabilities to respond effectively and efficiently to security challenges
• A third (36 per cent) of organisations do not track losses of customer data at all
• Even fewer firms (32 per cent) have performed an inventory of personal information

Maybe firms believe personal data is devalued and the risk of playing fast and loose with customer information is overplayed?

Security specialist Symantec recently found there is a global underworld of criminal organisations selling stolen information. UK-based credit cards are available from as little as £1.03, and full identities – US bank account, credit card, date of birth and government-issued identification number – can be bought for just £7.22.

As Paul B. commented on this blog: "Is the information so abundant that the criminals don't need to charge higher prices? Scary." Indeed it is - but two simple facts should help re-set the balance:

• Last July, it was revealed that the Information Commissioner’s Office (ICO) received almost 24,000 enquiries and complaints concerning personal information during the previous twelve months
• Identity theft, meanwhile, costs the UK economy more than £1.7bn per year, according to the UK’s fraud prevention service Cifas

Such figures help illustrates that investing in security has never seemed more worthwhile, despite the apparent low spending priorities of the business.

Analyst Gartner predicts the global outsourcing market will grow at a steady pace of 8.1 per cent in 2008 - and such growth will be driven by multisourcing and offshoring.

Publicly reported IT outsourcing and business process outsourcing contract values decreased overall by 50 per cent last year. Gartner says more firms are using a multisourcing strategy that includes a range of smaller deals that are not reported in the press.

Such results correspond with outsourcing advisory TPI, whose partner Duncan Aitchison told me recently that he expects multisourcing to increase in popularity as any remaining hesitancy surrounding offshoring subsides because of an increasing requirement to source specialist workers (see link 1 at the end of the post).

Gartner also says users are moving work to lower-cost, offshore locations. Indian providers gained business in 2007 and are growing approximately 40 per cent annually in the United States and 60 per cent annually in Europe. And although spending on offshore services is three times higher in North America than in Western Europe, the gap is closing.

Again such results correspond with TPI - in 2007, India-based service providers won more than 24 per cent of all the deals on which TPI advised, up from an average of 13 per cent during the previous four years (see link 2). Despite Indian dominance, Gartner expects other countries to emerge and challenge Indian providers in 2008.

Ian Marriott, research vice president at Gartner: “Strong demand is putting a strain on the available Indian labour force, while staff attrition and cost increases remain high. Global companies continue to accelerate their demands for a presence in countries other than India, and providers are seeking to expand their geographic footprint of delivery centres accordingly. More-sophisticated buyers are seeking a multi-country strategy to minimise risk and align nearshore and offshore delivery centres with their primary time zones. Although India's offshore revenue will continue to grow, the country's share of total offshore spending will decline slightly in 2008.”

Gartner recently revealed its top 30 locations (see link 3) for offshore services, many of which it expects to challenge India - with countries such as China, Russia and Brazil providing increasingly credible alternatives:

• Americas - Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Uruguay
• Asia/Pacific - Australia, China, India, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka and Vietnam
• Europe, the Middle East and Africa (EMEA) - the Czech Republic, Hungary, Ireland, Israel, Northern Ireland, Poland, Romania, Russia, Slovakia, South Africa, Spain, Turkey and Ukraine

Aitchison, meanwhile, lists a collection of countries that have been been keen to join the offshoring bandwagon: Argentina, Uruguay, Philippines, Russia, Ghana, South Africa and Mauritius. Despite such interest, Aitchison told me India stills wins on every offshoring dimension (see link 4) – probably because of the high level of English skills.

The conclusion? If you're thinking of buying external service provision in 2008, you would be well-advised to buy a compass and to also seek the advice of a trusted analyst. With new countries and providers entering the fray, users will find outsourcing an increasing challenging proposition.

Further reading:

1. Outsourcing and the lack of skilled UK workers - http://knowledge.computing.co.uk/2007/12/outsourcing-and.html

2. Where next for offshoring? - http://knowledge.computing.co.uk/2007/11/where-next-for-.html 

3. Gartner reveals top 30 offshoring locations - http://knowledge.computing.co.uk/2007/12/gartner-reveals.html

4. TPI locations for offshoring - http://knowledge.computing.co.uk/2007/11/where-next-for-.html

How much influence does the chief information officer (CIO) wield when it comes to green computing? In a column commissioned for this week's Computing (out Thursday), CIO Connect managing director Nick Kirkland says green inititiatives are invariably driven by the wider organisation - typically the board, finance, human resources and compliance functions set overall policy.

Kirkland says an important consequence of the top down approach, however, is few IT departments have their own specific green computing policy. Results from a recent CIO Connect poll suggest just a quarter (28 per cent) of technology leaders currently have a formal policy to ensure that IT systems become more environmentally friendly.

There is some good news, though. The CIO Connect research also found that a third of chief information officers (CIOs) are sufficiently concerned about green IT that they are starting to explore the use of energy and heat efficient servers in the data centre.

And Kirkland is hopeful that 2008 will be the year that every CIO makes green computing best practice a matter of course: "Although organisations recognise the reputational value of being seen to be environmentally friendly, it is cost savings that could and should be adopted as a true driver for green IT activity."

As of 11am on the 7th January 2007, the Wikipedia entry for open source search facility Wikia states the facts: "This article reads like a news release, or is otherwise written in an overly promotional tone."

Wikipedia and Wikia founder Jimmy Wales (pictured) will be hoping the article (see link 1 at the end of the post) is quickly modified by the internet community to reflect user opinion.

Such sentiment also fits squarely with Wikia, a search tool which launches today - and whose content is released under a free content license, operating on Open Source MediaWiki software. Any user can edit content on Wikia, with the inevitable hope that the quality of results - like in the case of Wikipedia - will be underpinned by user input.

So, how will Wikia fare? As the table (and link 3) below shows, Google currently receives almost two-thirds of web searches - and any new entrant faces a significant test as it attempts to wrestle control from the hands of the search giant. Percentage of US searches among leading providers (source, Hitwise):

• www.google.com - 65.10%
• search.yahoo.com - 21.21%
• search.msn.com - 7.09%
• www.ask.com - 4.63%

While taking on behemoth Google might seem a far-fetched challenge, Wales is hoping Wikia's open source and user-based project will shake-up search. And his initiative has significant financial backing.

Business Week (see link 2) reports Wikia is the result of more than a year of development - and $14m in funding from Amazon.com, venture capital firm Bessemer Venture Partners, and a series of angel investors including Netscape Communications co-founder Marc Andreesen and Linked-In co-founder Reid Hoffman.

And sometimes, life is just about showing how things can be done differently - and maybe better. Let's see how search on Wikia progresses as users modify the content.

1. Wikipedia entry for Wikia - http://en.wikipedia.org/wiki/Wikia
2. Business Week on Wikia - www.businessweek.com/technology/content/jan2008/tc2008014_155055.htm
3. Hitwise article on search engines - http://www.hitwise.com/press-center/hitwiseHS2004/searchengines200711us.php