Six industry-defining power struggles

Heated competition in six key areas, including security, storage and Linux, could change the way you build, manage and pay for your IT infrastructure

For every move one vendor makes in a hot technology area, others will make countermoves.

But not all the big guns belong in the IT security business. Acquiring Internet Security Systems with its and appliances doesn't mean IBM will fare well in the world of network security products, Pescatore says. "IBM is not a network company; it's a host, software and services company," he says.

Nor should EMC expect to simply buy its way into security prominence with its purchase of RSA Security. Vendors often rationalize such buyouts with the notion that enterprises are looking to spend their IT budgets on fewer providers. But enterprises aren't going to gamble on an unproven security provider just because the vendor is well regarded in other IT markets.

The bottom line is that enterprise security pros are smart shoppers. Just because Cisco, IBM and Microsoft are off the sidelines doesn't mean they get to control the game. The threats control the market, and smaller specialists with innovative security products will still turn IT buyers' heads. "The big guys are never the ones who react first with new answers to the new threats," Pescatore says.

Storage: Serendipity happens

After ignoring the market for years, data-storage vendors EMC, HP, IBM and Network Appliance are eyeing small and midsize businesses (SMB) with new respect. NetAppliance even formed a division, called StoreVault, to pursue SMB customers.

Each has introduced appliances designed to combine ease-of-use with advanced storage features. In September 2006, for example, HP unveiled its StorageWorks All-in-One (AiO) storage systems, which bundle network-attached storage, storage-area network (SAN) and data-protection features with wizard-driven provisioning and management tools.

St. John's Episcopal School in Tampa, Fla., is an early user of HP's AiO storage devices. "What we were looking for was a quick way not only to expand the storage of our [Microsoft] Exchange environment, and expand the storage of our normal day-to-day file sharing, but also a way to augment some of my tapes to back up to disk," says Charles Love, IT director at the school. "St. John's was in the market for some type of SAN, but the cost was always too high." The AiO's starting price of $5,000, with room to grow, was a great fit, Love says.

So why the sudden attention? While SMB deal sizes are smaller, the target population far outnumbers the large enterprises on which vendors have traditionally set their sales sights. Plus, SMBs are hungry for better options: The market for entry-level storage systems priced at less than $15,000 is the fastest-growing segment in storage, according to IDC.

While the opportunity is ripe, serving the SMB market will be a challenge for the big vendors. It likely will require building up a new crop of channel partners, because their existing resellers may not provide a pipeline to small businesses. Meanwhile, the storage requirements of smaller companies will continue to get more stringent. That's good news for SMBs, says Paul Myerson, a senior analyst at Enterprise Strategy Group: "They're going to get what they want, because the vendors are going to have to compete."

Linux: Climbing the desktop mountain

Just how secure is Microsoft's stranglehold on the desktop? Maybe less than expected, given the Redmond giant's recent Novell partnership, which focuses on Windows/Linux interoperability for the server and desktops.

Novell is among a handful of companies with Linux-based alternatives to Windows. Last July it began shipping its SUSE Linux Enterprise 10 desktop, which has an Office suite built off the Open Office project and includes the Firefox browser, Gaim instant messaging client, Beagle desktop search engine, Xen virtualization, and the Evolution e-mail and calendaring client that integrates with Microsoft Exchange Server.

SUSE 10 also integrates with Microsoft's Active Directory and includes a management infrastructure built around ZenWorks --two features with enterprise IT appeal.

Meanwhile, Ubuntu shipped a new version of its Debian-based distribution in October, and Red Hat is set to release its Enterprise 5.0 in early 2007.

Despite the range of options available, analysts aren't projecting large-scale enterprise migrations to Linux desktops. Migration is a costly endeavor and could pose problems with users who are comfortable with Windows. Linux client operating systems have hovered around 2% of market share for the past three years -- a share expected to hit just 2.8% in 2009, IDC says.

Some may find the will to convert linked to displeasure with Microsoft's Vista, which started shipping in late 2006 minus some key features originally planned for the desktop operating system. News such as the historic Microsoft-Novell partnership also could help drive adoption, given the focus on interoperability between Microsoft's Office and Open Office.

Wireless: Wi-Fi's house of cards

Wireless LAN (WLAN) vendors are readying products designed to comply with the second draft of the IEEE's standard, which promises greater Wi-Fi speeds and range. Standing by to certify these "pre-n" products next year is the Wi-Fi Alliance, which caved in to pressure to create a program for qualifying draft 802.11n high-speed WLAN products ahead of formal IEEE standards ratification.

It's not the first time certification will precede standardization: The Wi-Fi Alliance certified elements of the 802.11i security suite ahead of standards approval in 2001. But at the time a legitimate security gap needed filling. Today it's hard to argue that enterprises can't wait for 802.11n, and they should, says Paul DeBeasi, a senior analyst at Burton Group.

Consider what happened when vendors rushed to deliver products with better security than those based on Wired Equivalent Privacy (WEP). "Enterprises bought the first products with WEP, and then they were so desperate for security, they bought the prestandard version, called Wi-Fi Protected Access, or WPA," DeBeasi says. Once the 802.11i standard was complete, vendors delivered WPA2 gear. "Now enterprises have got some WEP gear, some WPA gear and some WPA2 gear, and they're trying to make all that stuff work. It's a mess."

On the positive side, some certification of the forthcoming pre-n products is better than none at all. "At least there's some semblance of testing for some level of interoperability. But it's not really what buyers need, which is a fully standardized, fully certified product," DeBeasi says.

John Turner is keeping close tabs on the 802.11n standard's progress and expects to upgrade the wireless gear in place at Brandeis University to support it, but not before the standard is ratified. "The problem tends to be that there are often two camps, and when the standard is ratified they often combine the two, making pre-standards equipment operable but not fully compliant," says Turner, who is director for networks and systems at the university in Waltham, Mass.

Turner has been through the drill before, having invested in prestandard Power over Ethernet gear, which today is not fully compliant. In that case he had no choice, because of the timing of a campuswide deployment of VoIP phones. But he doesn't plan to go down that road with 802.11n.

Enterprise apps: The services challenge

Dominant business application makers SAP and Oracle face increasing competition on multiple fronts. For starters, software-as-a-service vendors are aiming their wares at midsize and large enterprises. While software-as-a-service products have traditionally prospered in departmental settings, more enterprises are considering their use for mission-critical processes.

An example is Workday, the venture PeopleSoft founder Dave Duffield launched in November to provide hosted ERP applications, beginning with human capital management. Workday isn't bound by legacy ties; it has the advantage of building its software around XML, Web services and .

IT executives appreciate the flexibility of a modern architecture. One of Workday's first customers is San Diego biotechnology firm Biosite, which has grown from a $50 million company with 300 employees in 2002 to a $300 million business with 1,100 employees today.

"That kind of growth puts a lot of stress on the infrastructure of an organization," said Suzanne Zoumaras, Biosite's head of human resources and IT decision maker, at Workday's launch event. "We needed to replace a legacy system that we outgrew the day we implemented it."

Biosite chose Workday for its flexibility, which lets users make process and configuration changes on the fly without resorting to the bolt-on tactics of legacy systems. The hosted model also helped seal the deal, Zoumaras said: "In this day and age of technology development, to invest in a solution that isn't hosted seems archaic."

Software-as-a-service adoption is occurring in many other IT areas along with ERP, such as procurement, compliance management, document management, e-commerce and CRM.

Meanwhile, as software-as-a-service vendors continue to eat into SAP and Oracle's new license revenue, a crop of specialists is taking aim at the stalwarts' bread and butter: support and maintenance revenue.

Vendors such as netCustomer and Rimini Street built their businesses around providing independent maintenance and support services for Siebel, PeopleSoft and JD Edwards products for less money than Oracle charges.

"There's a huge disruption that's starting to play out in the support and maintenance part of the market," says Josh Greenbaum, principal at Enterprise Applications Consulting. "If you're a company that doesn't want to spend 16% to 20% on maintenance for a product you may not plan to upgrade, why pay full price?"

It all adds up to more options for enterprise application buyers, who can enjoy the pressure newcomers are placing on the old guard.

IP multimedia: Carriers' rocky road

Carriers' plans for delivering the next wave of services depend on IP Multimedia Subsystems (IMS), an architecture conceived to help network operators produce and provision IP services more quickly while protecting their existing technology and infrastructure investments.

IMS supports IP multimedia applications using Session Initiation Protocol as the signal for creating and terminating sessions. IMS isn't a prerequisite for IP-based services, such as VoIP, fixed-mobile convergence or IPTV, but it can help carriers launch and manage these services more effectively, says Ari Banerjee, senior analyst at Yankee Group.

"The pressure on telcos is coming from guys like Google, Yahoo and MSN, which aren't tied to any legacy assets and can launch service after service," Banerjee says. "For traditional telcos, a service launch takes about six months to a year," because of infrastructure challenges and the complexity of back-office systems, such as provisioning and billing. IMS can help create an environment that enables faster service launches by isolating the application layer and services development from network specifics, he says.

IMS is a work in progress, and carrier migration to the architecture won't happen overnight. There are interoperability, and security wrinkles to iron out, for example. In addition, the standard -- which was first developed as reference architecture for wireless networks -- isn't complete.

Initiatives such as A-IMS, or Advances to IMS, are further adding to the uncertainty. Led by Verizon with support from Lucent, Cisco, Nortel and others, A-IMS proposes architectural enhancements to the existing IMS standard, but not all parties are on board.

Nonetheless, there are dozens of IMS trials ongoing around the globe. Operators of fixed and mobile networks understand it will take some investment before they see big returns. ABI Research forecasts service providers will generate nearly $50 billion in revenue from IMS-enabled applications in 2011. In the meantime, they will invest $10 billion over the next five years to power new services for business customers.

That's good news for network equipment vendors such as Lucent, Alcatel, Nortel, Nokia and Ericsson, which are building out their IMS-compliant product lines. For enterprise companies, the promise of IMS is a better array of applications that can be accessed from anywhere, anytime, regardless of users' connection devices.

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Copyright © 2006 IDG Communications, Inc.

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