Industry news

Most industry observers recognise that cloud computing represents a radical and irreversible transformation in the way business uses technology. The cloud's global reach, process automation and economies of scale make it possible for a single individual to perform essential functions that once required a team of in-house employees - and that individual may not need to be on the premises, or even in the country. But too few IT professionals understand that the cloud model represents a serious threat to their careers.

The cold, hard reality is that cloud computing will eliminate some IT specialities entirely, at least as disciplines performed on an organisation's premises by its own employees - and will significantly reduce the demand for many others. These changes won't happen overnight and they won't affect every business, every industry, every IT discipline, equally. But change is coming - and IT professionals who care about their careers need to start preparing now.

A key element of a successful career - in any field, but particularly in the endlessly changing world of IT - has always been matching individual skills to market demand. So, the IT professional needs to understand which sets of skills, and which personal and professional qualities, will make it possible to survive, and even prosper, in the cloud world.

What should the IT professional be doing now?

The key to survival and success in the future is a brutally honest appraisal of the present. IT professionals must measure their current and future capabilities against three fundamental sets of characteristics:

- technological skill

- business and socio-economical expertise

-and the elusive - but crucial - qualities of vision and creativity.

Most vulnerable: the narrow-focus technological specialist

The roles that will disappear into the cloud first are those that require intermediate-level, narrowly focused technical expertise, but little business expertise, and little vision and creativity. These specialists - who may, for example, include database, network and server administrators - perform functions that can be provided to organisations simply, cost-effectively and reasonably securely by third-party providers.

Less vulnerable: the business expert

IT professionals who clearly understand how the business works and what technology is needed to make it work - even if they lack advanced technical skills or strategic vision - are much less likely to get lost in the cloud. Application development analysts who understand their company's manufacturing processes, for example, and can articulate them so that programmers can implement a process control application are likely to see their role remain in-house.

More secure: the strategist

Roles that require substantial business expertise, significant technical knowledge, a comprehensive, strategic view of business and cultural issues, and vision and creativity - as well as the ability to communicate them with many different target audiences, both internal and external. These roles - which may include chief technology officer, senior architect and project liaison - may mean the difference between success and failure for the enterprise, and they will likely remain in-house.

Some will not only survive, but thrive

One very small set of IT professionals will be almost entirely exempt from the relentless replacement and reduction of enterprise roles by cloud services. Individuals with the highest levels of technical skill, combined with a broad and deep understanding of business and social trends and the vision and creativity and ability to innovate, will be able to remain with the organisation or to move into the cloud and become cloud creators or providers themselves.

Finding your place in the cloud world

IT professionals across a broad range of disciplines can use the above criteria to work out their current and future vulnerability to the emerging cloud-computing paradigm. This is a very personal process, and will require complete honesty and a careful assessment of both individual characteristics and technological and market trends.

If your assessment leads you to believe that your technical skills are narrow-scope, but you prefer to remain in the same organisation or industry, it is time to begin adding more business expertise to your portfolio of skills.

If you believe you possess a high degree of knowledge of your organisation's business, complemented by intermediate technical skills, your current position is likely to be reasonably secure. It is important to recognise, however, that the same factors that make your position in the organisation comparatively stable may also limit your mobility. The deep knowledge of only your own organisation may actually make you a less attractive candidate for other employers, especially those in other industry verticals.

If your assessment confirms that you excel across all three dimensions of the decision framework - technological skill, business expertise, and vision and creativity - consider your current position stable and rewarding and your value in the job market high.

If your assessment leads you to believe that your technical skills, business expertise, and vision and creativity greatly exceed the demands of your current position, consider looking for a more rewarding position - possibly with a cloud vendor.

Source: http://www.computerweekly.com/Articles/2010/12/03/244313/Stopping-the-cloud-taking-your-IT-career-away.htm

The value of the UK cloud market will more than double between now and 2014 from £2.4bn to £6.1bn, according to a report from analyst firm TechMarketView.

However, the report, called the 'UK Software and IT Services Market Forecast', argues that if the cloud market forecast was to include application provisioning (AP), it would increase from £5.8bn now to £10.4bn by 2014.

These forecasts would see cloud computing account for 15 per cent of the total UK software and information technology servicesmarket by 2014 (and 24 per cent with AP included).

TechMarketView foresees cloud adoption happening in three waves. The first wave will see the adoption of public computing for greenfield applications. The conversion of traditional datacentres to private clouds will be the second wave, and the migration of mission-critical legacy applications to public clouds will be the third.

It predicts that these will overlap, but the final wave will not peak until the middle of the decade.

The report says: "We expect that the public cloud market will grow much more rapidly than private cloud in the early years, as enterprises (especially SMEs) move ‘easy win' applications off premise.

"In contrast, private cloud implementations involve substantial investment in infrastructure and software installation and migration, and will therefore not move as fast.

"Beyond the forecast horizon we would expect public cloud growth to accelerate again as mission-critical legacy applications move to public cloud."

Source: http://www.computing.co.uk/ctg/news/1929839/uk-cloud-market-predicted-total-gbp104bn-2014

Infosys Technologies is looking for acquisition in legal process outsourcing (LPO) business and says it will consider domestic firms with strong client base or US firms with technologies and platforms in the LPO space.

“We are looking for acquisition…We are looking at some LPO players in India for starters. But our major focus is people or firms who have the technology that services the legal industry, including areas such as e-discovery, intellectual property and compliance. Acquisition of technologies or platforms can provide us the transformational potential to impact client businesses,” said Mr Rahul Shah, Associate Vice-President, Principal – Knowledge Services, Infosys Technologies.

The plans for buyout in domestic market would be driven by focus on client base, credential and value play. “These will be more opportunistic… It could be an LPO which has not been able to scale up, is in distress, but has a good track record and strong client base…Only they may not have been able to spread their engagement within client organisations,” Mr Shah said.

A domestic acquisition could entail a 50-100 people firm. For the platform play in LPO, the company could look at the US market. “The US has been a hotbed of innovation and in a sense has a head-start in bringing-in regulations. That has paved the way for innovative products in the US marketplace,” Mr Shah points out.

The LPO operations are a part of Infosys BPO's knowledge services unit.

The company currently offers a full portfolio of legal services to global clients, including contract management services, document review services, intellectual property services, legal research services, litigation and administrative support services and consulting services.

LPO engagements account for 60 per cent of the total knowledge services business of Infosys, with over 500 professionals and $15 million in annual revenue.

Bulk of the work is done from Pune (about 400 professionals), followed by Bangalore (80-100 professionals) and Gurgaon (about 20 professionals).

The company also expects to start LPO service delivery from Manila, Philippines, by the end of next fiscal.

Source: http://www.thehindubusinessline.com/2010/12/06/stories/2010120650390200.htm

Birmingham City Council has extended its contract with Capita Group by five years.

The extension of Service Birmingham is worth approximately £300 million to Capita and will deliver £55 million in savings for the Council.

Source: http://www.publictechnology.net/sector/local-gov/birmingham-extends-capita-contract

TUI Travel lost key booking systems after merging First Choice and Thomson, it reported in its full year results.

The two firms became TUI Travel which carried out IT integration and standardisation projects following the merger. A post-merger enterprise application integration is one of the most complex IT operations however TUI also outsourced parts of the system.

Its CFO, Paul Bowtell, resigned after revealing that the organisation had been forced to restate its 2009 financial results to £117 million due to an accounting error in the sysyems.

TUI said in its preliminary results for the year ended 30 September:

“As part of a drive for further cost savings and efficiencies, processes around the two systems were streamlined, roles were consolidated and parts of the process were transferred to an outsource provider in India.

“As a result, it is now understood that control weaknesses arose and the level of differences between the two systems grew.”

Dave West, Forrester analyst, said businesses should who use cost-cutting as a main driver for outsourcing should see TUI as a warning.

“Cost should not be a primary reason for outsourcing. This case highlights that when you focus on cost without thinking about the implications of the cost, you can have lots of problems.

“With £117 million, you could have got some great software engineers in,” he said.

“When you try these integration activities, it is very risky – it needs to be managed in-house. Outsourcing is like giving away your core competencies. The outsourcer does not know how it [the system] is supposed to work.

“It highlights that integration testing is really important to do. It tends to be done at the end, when it should be done at the start. You can’t integrate first and then get it to work.”

Google has won the first contract to move a US federal agency completely to cloud services with its Apps for Government suite.

The US General Services Administration (GSA) opened the contract to replace its in-house Lotus Notes and Domino systems.

Microsoft pitched its Office suite and IBM was also on the shortlist, but a group comprising Unisys, Google, Tempus Nova and Acumen Solutions won the $6.7m (£4.2m) contract.

"Cloud computing has a demonstrated track record of cost savings and efficiencies," said GSA chief information officer Casey Coleman.

"With this award, GSA employees will have a modern, robust email and collaboration platform that better supports our mission and our mobile workforce, and costs half as much."

The move will save the GSA around $15m (£9.5m) over the five-year contract, according to Coleman. Around 17,000 staff will use the new service as part of the first federal agency to move email entirely onto the cloud.

The announcement has caused more than a hint of sour grapes at Microsoft. Tom Rizzo, senior director of SharePoint at Microsoft, highlighted the failures, as he sees them, in Google's offering.

"It's no secret that large public sector organisations have consistently valued Microsoft's cloud offerings not only because of our deep understanding of enterprise organisations, but for their ease of use, security and privacy capabilities," he wrote in a blog post.

"Regardless of how organisations are thinking about the cloud, Microsoft provides a choice for their productivity needs: on premises, in the cloud or as a hosted solution. Google does not offer any such choice."

The news comes just at the right time for Google. The company lost a major New York cloud contract to Microsoft in October, and resorted to legal action last month after being excluded from a shortlist for other government contacts.

Google Apps for Government has a separate physical infrastructure and improved security in order to meet contract standards.

The UK government is moving to cloud services, and Google could be pitching for similar deals across the Atlantic.

Source: http://www.v3.co.uk/v3/news/2273654/google-apps-government-gsa

MITIE is refunding its suppliers tens of thousands of pounds after an investigation showed that some have been charged £10,000 for the privilege of working for the company.

Procurers of the FTSE 250 outsourcing group had previously asked for a “one-off payment of £10,000 in order to become a MITIE preferred supplier.”

The Cabinet Minister, Francis Maude, recently urged the Government’s 31 largest suppliers, including MITIE, to become more ‘transparent’ in its dealings with government and treatment of subcontractors and to ‘expand’ its use of small businesses.

The suppliers affected had previously worked for Dalkia Technical Facilities, which MITIE acquired for £130m last year.

Microsoft files lawsuit against Chinese companies for pirating software on computers

China is to inspect central and local government computers to ensure all the departments are using copyrighted software.

The government made the announcement on Tuesday, adding that the inspections will be completed before the end of October 2011. It follows a six month government campaign to crack down on intellectual property infringement in a country where pirated and counterfeit tech good such as DVDs, music, and cellphones thrive.

Coinciding with the announcement, Microsoft said it has filed a lawsuit against ten Chinese companies for selling computers pre-installed with pirated software. The U.S. company has been a major victim of such copyright violations in the country and has been working with China's government to stop them.

"Computers pre-installed with unauthorised software have always been a core problem for the software industry that must be resolved," said Microsoft China's intellectual property general manager, Yu Weidong, in a statement.

In terms of pirated software, China is one of the world's worst offenders. In 2009, about 79 percent of the software used on computers in the country was pirated, according to a report from the Business Software Alliance and IDC. The commercial value of that pirated software was US$7.5 billion, putting China second in the world behind the US, where the value of pirated software reached US$8.3 billion that year.

Along with the inspections of government computers, China also plans on establishing budget controls for the long-term procurement of software, according to a Tuesday statement from China's General Administration of Press and Publication. The government also wants to push businesses to use legitimate software.

As far back as 2000, China has made repeated moves to ensure its government bureaus are using legitimate software. In 2006, Chinese authorities issued a notice requiring all governmental departments to buy computers installed with copyrighted software. From 2007 to the end of 2009, the government spent 794 million yuan ($119 million) on purchasing copyrighted software.

"They have taken these kinds of steps before. My impression is that this time it's more comprehensive," said Christian Murck, the president of the American Chamber of Commerce in China. Murck said it was positive move, but cautioned: "It's not entirely transparent. It's conducted by the government, within the government," he added.

The Chamber also notes that litigation is becoming a more realistic option for companies to protect their intellectual property in China. "Microsoft has resorted more to using litigation than they did in the past," Murck said. "I would say the reason for that is the legal system is offering more recourse now in the face of copyright infringement. That's actually a positive development."

Beijing Sinetec Technology Co., one of the companies facing the lawsuit, said it could not comment on the situation. "We haven't received anything, so we can't respond at the moment," a company employee said.

Source: http://www.computerworlduk.com/news/it-business/3251531/china-pledges-to-check-state-computers-for-pirated-software/

The Government's largest IT suppliers have been told the era of "mega IT contracts" is over as the Cabinet Office unveiled "horrifying" public procurement practices.

Francis Maude, the Cabinet Office minister, told an audience of chief executives from 31 key government suppliers including BT, Hewlett Packard, IBM and CapGemini, that costly IT mistakes like the £12.7bn NHS national programme would not be repeated.

Instead future contracts would be cheaper, "smaller" and "off the shelf" rather than expensive, bespoke systems, he said.

"Government will no longer offer the easy margins of the past. We will open up the market to smaller suppliers and mutuals and we will expect you to partner with them as equals, not as sub-ordinates," Mr Maude said.

"The days of the mega IT contracts are over, we will need you to rethink the way you approach projects, making them smaller, off the shelf and open source where possible.

"We will expect you to be transparent in all your dealings with us and for the terms of the contracts we sign with you to go up online."

Mr Maude, who oversees £45bn of central government spending each year, revealed that some government purchases took 77 weeks from first publication to the award of a contract.

He said on average public buyers took "twice as long" to agree deals as their private sector counterparts.

"This is just wasted time and money on both sides of the equation and it is something we urgently need to address," Mr Maude said.

Government buyers had to cope with "some 6,000 pages of guidance on procurement", Mr Maude added.

"This is at the root of much of the bureaucracy, duplication and confusion in this area," he said.

The knock-on effect was that supplying the public sector was unnecessarily expensive, Mr Maude said.

"You will have had to deal with contracts where the specification changed 10 times before you were through, where your employees were manmarked by civil servants and where the individuals you were working with constantly changed," he told his audience.

"You will all have experienced procurements which seemed to go on forever, cost millions of pounds and took countless hours of your employees' time and energy. I know how frustrating this all was and I can promise you here today that we will do things differently."

The Cabinet Office has already secured £800m of in-year contract savings from its largest 19 suppliers by demanding rebates and changes to the scope of services they supply.

Serco, the FTSE 100 outsourcing giant, tried to pass on these cost savings to its largest suppliers in October by charging them an 2.5pc retrospective rebate. Following reports in The Sunday Telegraph it reversed the decision and refunded suppliers.

The Government's botched IT projects have cost taxpayers more than £26bn, it has been estimated. Four of the most notorious include:

National Programme for IT (NHS) – overran by 450pc, costing in total £12.7bn

Defence Information Infrastructure (MoD) – 30 months late, more than £180m over budget. Cost at least £7bn

Libra system (courts management for magistrates) – Fujitsu bid £146m in 1998. Final cost more than £400m

Single Payment System (for paying farmers' subsidies) – cost £350m, already "potentially obsolete"

Bindi Bhullar, director of HCL said:

“This is the clearest indication yet that the era of bloated IT contracts is coming to an end, and not before time. These unpredictable economic times will naturally lead to a new dawn of shorter term contracts where risk is shifted from the customer to the IT supplier. For example, an IT service provider may offer to pay the customer projected savings up front in cash before starting work. There is nothing like putting your money where your mouth is.”

Source: http://www.telegraph.co.uk/finance/newsbysector/supportservices/8174715/No-more-mega-IT-contracts-Government-tells-suppliers.html

The US government has revealed details of its latest IT procurement strategy, which includes the introduction of a “cloud-first” policy from 2012.

“We are reducing our data center footprint by 40 percent by 2015 and shifting the agency default approach to IT to a cloud-first policy as part of the 2012 budget process,” Jeffrey Zients, deputy director of the Office of Management and Budget, wrote in a blog post earlier this month.

Other reforms to the government’s IT procurement strategy include introducing a formal career track for “program management” and “aligning the IT acquisition process to the technology cycle”.

Zients also outlined how the Office recently cut $1.6 billion in cost from US government IT projects.

This involved cancelling two projects but also “pulling forward meaningful functionality in two other projects, “resulting in almost $230 million in budget reductions”, and decreasing the scope of three others.

In January 2010, US government CIO Vivek Kundra introduced a scheme called TechStat, in which ongoing projects are reviewed by agency heads and staff from the Office of Management and Budget, along with “input from the American people”.

“TechStat sessions enable the government to turnaround, halt or terminate IT investments that do not produce dividends for the American people,” Kundra wrote at the time.

“We’ve held dozens of TechStat review sessions,” Zients wrote this week, “resulting in faster deliverables, terminations of projects that didn’t work, and most importantly turned around projects that were in trouble.”