January 2012 Archives

Cosy cloud coterie snuggles into top nob govIT jobs

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Mmmmmits snug at the top. Especially if you're Julian David, IBM's top UK salesman, who last week was picked to be Director General of Intellect, the ICT oligopoly's trade association.

It's only three years since David bagged the sale of the century, getting the Cabinet Office to re-badge IBM's cloud computing slogan as HM G-Cloud. Now he's not only got the cosiest seat in the business, but Andy Nelson, his apprentice on the G-Cloud programme, has been appointed government CIO at the Cabinet Office, the most senior job in government IT.

Imagine how made up David was when, chuckling over his cognac at the Intellect hearth, he learns that Nelson, Ministry of Justice CIO and senior responsible owner for HM G-Cloud, would be his opposite number in government.

How cosy it will be round the fireside when the pair are joined by Cabinet Office permanent secretary Ian Watmore, who was Nelson's colleague at Anderson Consulting (later known as Accenture) for seven years after they joined the 1980 intake.

How quaint last March's government ICT strategy now seems, with Cabinet Office minister Francis Maude vowing to "put an end to the oligopoly of large suppliers that monopolise [government] ICT provision".

Julian David - IBM - Intellect.pngAll that puff and bluster for aught

David moves into office at a crucial time for IBM. All his work promoting the G-Cloud is about to come to fruition. But it will need an extra push to get public bodies around the country to swallow it, close all their data centres, sack all their techies and give all their computer systems over to IBM or whichever branch of Acme Data Corp. they happen to buddy. That's what the G-Cloud promises.

David's just the man for the job. For though his 28-year career at IBM was officially terminated in 2010, he has an unrivalled track record selling IT industry fads.

He was there in 1998 as IBM's European Marketing director, flogging the Year 2000 bug fix to a terrified public, telling them it would be "the kiss of death" to anyone who didn't fix it.

He was there again flogging disastrous Enterprise Resource Planning systems in the millennial boom years.

The fateful year SAP began selling IT disasters to the retail industry, there was David again as ERP marketing director at the Retail Industry Unit of IBM, telling supermarkets how by spending mere hundreds of millions of pounds they could turn reliable old systems into ones that would burn their money more efficiently.

Andy Nelson - Government CIO.pngRetailers lapped it up. Andy Nelson, our new government CIO, was there in 1997 - lapping it up as Asda director of computer services, though only as long as it took to outsource the supermarket's computing to IBM.

Asda's then new CEO Allan Leighton did the deal after returning from a Harvard MBA programme. Two Harvard professors came to see it went smoothly.

Bad reputation

ian watmore DIUS Expo 08 Manchester Uni.jpgIt might not have gone so smoothly, but it certainly gave the eggheads something to think about when that first raft of ERP deals came to fruition in the mid-noughties.

MFI's £50m IBM SAP implementation led to losses and two boardroom scalps.

Sainsbury's had outsourced its entire IT in a £1.8bn deal with Accenture, then overseen by Ian Watmore. Four years later, its first ever net loss was attributed to supply chain and IT problems.

Sainsbury's kicked Accenture out and wrote off £260m IT spend. Bringing its IT back in-house was said to have helped turn the business around. Its management still denounces outsourcing, "unequivocally".

Angela Morrison, the woman who kicked Accenture out of Sainsbury's, had earlier kicked IBM out of Asda, undoing the work our new man Nelson had done in 1997.

Asda's subsequent, do-it-yourself SAP implementation was so successful it was rolled out across the rest of Walmart, its parent. Walmart's success was said to stem from doing its own IT, because it was too integral to trust to an outsourcer.

Other companies followed suit. JP Morgan bank terminated its $5bn IBM outsourcing contract in 2005. It had been the largest such deal in banking. Even Gartner, cheerleader for the US IT industry, admitted it was "time to stop compulsive outsourcing".

Worse still for IBM, the dotcom bust had forced the private sector to freeze IT spend. So IBM and its ilk turned on the public sector, which was famously the only sector spending any money. Watmore was now in government, overseeing the spending.

That's where Julian David pitched up after retail. As vice president of IBM public sector business he started flogging the same big outsourcing deals that had gone tits up in the private sector.

There was some good news to boost his chances.

Rob Fraser - Sainsbury's IT Director - receiving 2011 CIO of the Year award.png Boots terminated a £710m IBM outsourcing contract only half-way through its term in 2007, apparently because it had been so successful its modernisation finished early.

But Boots vowed never to put all its eggs in one basket ever again.

Rob Fraser, its group IT director (now at anti-outsourcer Sainsbury's), said outsource suppliers had no interest in helping customers cut the cost of their IT.

With friends like these...

But outsourcers were now busy trashing their reputations in the public sector. They made such a good job of it that government IT became synonymous with disaster. And government is going through the same re-evaluation of outsourcing industry went through in the mid-noughties.

This is the apparent legacy of John Higgins, Intellect boss for 14 years. He became head of the CSSA in 1998 and rode the rise and fall, consolidation of power, establishment of a bankrupt contractual model, left a trail of IT disaster stories and an industry with a reputation for bodge and exploitation - a reputation that became so well established the coalition government was able to define itself in opposition to it - to define Labour as the government of big-state IT failures. Government has denounced his trade association's membership and methods as the corollary of Labour IT. It has tried to mend their mutual record of kaput computing by rallying tech entrepreneurs not normally associated with Intellect.

On the occasion of David's appointment last week Intellect issued a press release in which the DG-designate said he looked forward to doing his bit to improve skills in the industry and support SMEs.

CW asked Intellect for David's SME credentials, Intellect said he had wide experience and had worked with SMEs.

Burmuda.pngDavid used to flog computers to SMEs as vice president of IBM's SME business. But his SME credentials consist of just eight months as a board director of EGS Group, a £3m company that had worked with him on the Cabinet Office G-Cloud plans in 2010.

He left EGS in May 2011 to open a UK office for Hong Kong-based, Bermuda-registered, Azeus.

...who needs SMEs?

David's SME credentials do not compare well with the notable notches he marked up as big business honcho at IBM.

The most notable of his recent achievements was an infamous £400m outsourcing deal by which IBM sought to gain control of public computing across the entire South West England. It is hard to imagine this megalomaniacal plan having any regard for SMEs.

Flush with the Boots boost in 2007, IBM formalised an agreement in principle to subsume the IT functions of 36 councils and emergency services in Cornwall, Devon, Dorset, Somerset, Gloucestershire and Wiltshire.

It initially involved IBM taking 75 per cent ownership of a public-private partnership called SouthWest One and acquiring the IT functions of Somerset and Taunton Deane Councils and Avon & Somerset Police.

It would implement a SAP system to run them and deliver £192m savings over 10 years. David said the project would cut costs and boost the local economy. But it floundered.

The SAP implementation went awry. A report by Somerset County Council Review Panel in 2010 said participating councils would have to renegotiate their contract before they would realise the savings IBM promised at the outset.

Alan Jones - former CEO of Somerset County Council.pngThe then Somerset CEO Alan Jones had earlier denied specific allegations of SAP problems and contract failures made by Ian Liddell-Grainger, local MP.

£65m of savings had already been booked, Jones claimed in 2009. The 2010 report said the venture had delivered only £2m of savings, had no clear idea how it would produce the rest and could anyway conceive only an estimated £45m cut in procurement costs.

The affair was murky, with Unison and councillors complaining about unwarranted secrecy. IBM had blocked an ITV reporter from using a little-known public scrutiny law to view the contract. Liddell-Grainger made unsubstantiated allegations of corruption. Jones got embroiled in grubby in-fighting with councillors.

David personally played an important part in turning this trashy reputation into a revamped sales story for outsourcers. Called the cloud, it was a transcendental vision worthy of the late 90s ERP pitch.

The cloud was a rebranding of ideas already in David's public sector pitch in 2007: departmental silos were bad, paying IBM to consolidate your data centres and virtualize your systems was good. Asset re-use was the carrot on the stick.

The fully formed cloud pitch was essentially outsourcing with dodgy bits stuck on. It promised to cut costs, cut jobs and deploy a radically new sort of computer system.

Julian David Presents RBWM plans for UK LAs to cloud at Intellect - Cloud Presentation - 11 October 2010.pngIt'll be different this time

As president of Socitm in 2010, Jos Creese promoted those same ideas, proposing local authorities sack computing staff and buy services instead from the cloud.

Creese fell in with David in 2006 when as CIO of Hampshire County Council (home of IBM HQ) he did a five year deal to rent an enterprise architecture made of elements that would later underpin IBM's cloud.

Hampshire had at the time just celebrated the successful installation of an SAP system. Council IT staff had done the installation themselves. Hampshire systems were running £2m-a-year more efficiently.

Creese's ideas echoed those touted by Ian Trenholm, CEO at the Royal Borough of Windsor & Maidenhead, a council with intimate ties to the coalition government. David's cloud pitch did too.

The shared idea was that if councils standardised their business processes, their organisations would readily plug into the cloud.

Margaret Miller - Accenture - former Sainsbury's CIO.pngSainsbury's had adopted the same ideas for its abortive Accenture transformation in 2000 - the one that led the supermarket to realise how IT was too important to entrust to someone else.

Margaret Miller, its then CIO, said how was trying to adopt standard business processes so it could use commodity computer systems. Miller now advises government customers for Accenture.

Pompous postlude

The idea runs contrary to the bottom-up noises the coalition government made before coming into power.

It runs contrary also to agile and lean, the empowering methods to which government has turned in the hope of reversing the trend for moronic public computer ventures - methods more akin to Sainsbury's, Asda and Hampshire in the days when they took IT into their own hands.

The Cabinet Office is meanwhile making a song and dance about getting SMEs into the G-Cloud. But the cloud will ultimately be a greater force for consolidation than economic regeneration.

When every council in the South West is using the same business processes, IBM's SouthWest One will be able to make a better case for subsuming their IT. The G-Cloud may not, as we are told, be a greater opportunity for SMEs, but merely something that must be made to accommodate SMEs so they are not excluded entirely.

Placatory postscript

John Higgins presents an award to an IT company for being an IT company.png
David will have to work hard to prove his SME talk is anything more than hot air. He will have to work harder to rescue the legacy left by Higgins, who you might think a decent man who has done good work, but showed poor judgement by staying in office after the wind changed.

As it happens, your jaded correspondent has had the good fortune to meet the new DG, and was struck at what a jolly good chap he appeared to be. That might better qualify him for the job than any publicity guff about SMEs, for the current bout of government-led reforms have striven for genuine collaboration to replace the adversarial relationships that defined its relationship with ICT suppliers in the past. But what industry really needs is a reformer, not a placatory pair of hands.

Hope shines through crack in lid of open standards coffin

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Angel weeping over coffin.jpgWoah there, cowboy. The UK hasn't broken its open standards pledge quite yet.

The Cabinet Office may have rescinded its open standards policy. It might even be about to put it to public consultation after it had already received a democratic mandate as manifesto commitments of both parties in the coalition government. And it may be that this reversal was done despite the government having already turned that mandate into a civil service edict and a central tenet of government ICT Strategy as well.

And it might have done this after lobbying from companies like Microsoft that opposed it.

But it's not killed the policy dead. Not yet.

Bad example

The European Commission set the example of public administrations that declare a preference for open standards one minute, only to implement a propreitary standards policy the next. If this is the act to follow, it may only be a matter of time before the UK caves in to pressure from those "vested interests" the Cabinet Office has said are railed against its policy.

This is what the EU did first with its misnomerically-named European Interoperability Framework. And this is what it did again recently when choosing a document format: after a nearly decade pursuing competion cases against Microsoft, it has chosen to use Microsoft's contested OOXML document format in Microsoft word-processors across the institutions of its administration.

Prior to the Cabinet Office withdrawing its open standards edict it had received delegations from Apple, Oracle, the Business Software Alliance and IBM, as well as Microsoft.

An informal public consultation meanwhile came out resoundingly in favour of open standards - giving the Cabinet Office a second mandate for its policy.

But Public support was still not enough to protect government policy from opponents in the corporate software establishment whose dominant proprietary standards help sustain artificial monopolies in their area of technology.


This is worth repeating: public support from British citizens who had given the coalition government a democratic mandate to implement an open standards policy was not enough to withstand lobbying pressure from a handful of US corporations who have the most to lose by it.

We were reminded this week of the stifling consequences of technology monopolies when the Department for Education pledged to reform Britain's torpid computing curriculum in schools. Children were "bored out of their minds being taught how to use Word and Excel by bored teachers" said Michael Gove, Secretary of State for Education.

Instead of learning how to operate the products of American capitalism they will now be taught logic and set theory - these slaves of the machine will be taught to think for themselves.

If Gove does his job they will go on after school to produce software systems to compete with those previously deemed all-you-need-to-know about computers. British industry would benefit. US industry would benefit too, if from nothing more than being freed from the illusion that it is great when it is merely powerful.

Microsoft software has been a lobotomy inflicted on British school children. Yet Microsoft told the Cabinet Office its open standards policy would put the UK IT industry at a disadvantage. It would damage British commercial interests, said Microsoft in a Cabinet Office brief leaked to Computer Weekly.

Corporate mandate

Microsoft and other corporations known to have sent delegations to discuss standards with the Cabinet Office have not responded to our interview requests*. The apparent contradictions in their position go untested. We know open standards would damage Microsoft's commercial interests. It has been unable to tell us how its position accords with UK commercial interests.

Both coalition parties pledged open standards for reasons that should put Microsoft back in its shink-wrapped box. When the public square in a technology market - its standards of interoperability - are controlled by vested interests, innovation is stifled.

So the coalition parties fulfilled their election promises by making open standards public policy. That policy is now under threat.

When the government launches its formal consultation on open standards this month it will seek support for its policy again - a third mandate, if you like.

The exercise will be the last nail in the coffin for open standards if the government only hears from opponents. Then we will have to wait for today's generation of primary school children to grow up before this important debate is conducted in public by citizens whose intellects have not been placated by corporate Usonia.


Though IBM has not yet deigned to speak to us about its position, it may yet be supportive of government policy. It favours the Open Document Format in its Symphony office desktop software, for example. But it like other corporations is shy of speaking about its lobbying and your correspondent has little expectation that it will do so now on this matter of import to UK citizens, over which it has been in the privilaged position to be able to bend the Cabinet Office's ear informally before the mere plebs who will feel its greatest impact were even told the open standards policy was being withdrawn.

Oracle & Open Forum Europe

You might however for similar reasons say as much of Oracle, custodian of Open Office since it acquired Sun. Oracle is also backer of the Open Forum Europe, the open source campaign group that has a close working relationship with Cabinet Office and plays a prominent role in lobbying on standards policy across Europe.

Yet Oracle's delegation was shown in the leaked brief to have supported Microsoft in opposition to government's open standards policy.


Just before Christmas we broke in a fairly uncredited scoop that the policy had been scrapped. This was plain for anyone to see in an edict Cabinet Office issued in November.

(Though your humble correspondent can take some special credit for breaking this news, having learned how to read passably well in the 30 years 20 years or so since he first used Microsoft Word, and considers himself therefore to have been at a not unenviable advantage when it came to interpreting this plain-written document and relaying it in said scoop).

There wasn't any proof at the time that Microsoft was behind this, er, shameful fudge. There is now: the evil software cowpowayshen was at least lurking in the shadows. The question, however, is whether it can be credited with steering the government into a U-Turn. Or whether it was just barking with the dogs as the caravan rolled on.

Microsoft hustled UK retreat on open standards, says leaked report

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The British government withdrew its open standards policy after lobbying from Microsoft, it has been revealed in a Cabinet Office brief leaked to Computer Weekly.

The Department of Business, Innovation & Skills (BIS) also formerly opposed the policy before Cabinet Office withdrew it. BIS supported Microsoft's position against open standards, the backbone of the government's ICT policy. The Business Software Alliance, infamous for its lobbying against open standards policy in Brussels, also lobbied against the government policy.

Microsoft took up direct opposition to the ICT Strategy's pledge to give preference to technologies that supported open standards of interoperability between government computer systems, said the briefing paper.

The software supplier was concerned this would prevent companies from claiming royalties on the point of exchange between those systems.

It complained specifically about the wording of UK procurement policy, which in January 2011 established a definition to explain its edict that open standards should be used in government computing wherever possible. UK policy specified that "[open standards] must have intellectual property made irrevocably available on a royalty free basis".

Microsoft said it supported the aims of UK open standards policy - specifically that government systems should be interoperable, that it should be possible for government to re-use purchased software components, and that government should not be "locked-in" to using particular technologies.

It also told the Cabinet Office it "agrees that open standards are key to delivering this [policy mission]", said the brief.

But it opposed the Cabinet Office office definition of an open standard. It said the definition of open standards adopted in the government ICT strategy would hamper innovation and restrict "freedom of choice for citizens".

It said the government should officially adopt standards only under terms defined as Reasonable and Non-discriminatory (RAND). It referred to this as FRAND (Fair, Reasonable and Non-Discriminatory). This would permit patent holders to claim royalties from anyone trying to implement the standard.

It's position was identical to that taken by other representatives of the corporate software establishment, led by the Business Software Alliance.

Their lobbying of government would effectively erase open standards from UK policy, as it had already successfully done with the European Commission's last statement on standards, the European Interoperability Framework 2.0. Their preferred RAND licence terms are a standard feature of non-open software standards including those encumbered with hardware patents that have nevertheless come into widespread use such as GSM and WiFi.

Microsoft told the Cabinet Office its open standards policy would prevent RAND standards such as mp3 and GSM from being used in government computer systems.

UK policy had however established a preference for open standards "wherever possible". It would have allowed departments to use non-open standards when there where no open options or when the widespread use of a proprietary standard prevented alternatives from being deployed.

The Cabinet Office is expected to open a formal consultation on the rescinded policy this month, a month after it was due to publish its first list of mandated open standards.

The open source lobby has advised that abolishing the open standards policy would undermine the other key element of government ICT policy, to create a level-playing field open source software.

Open Forum Europe, a trade body, said FRAND terms precluded their implementation by open source software suppliers because the open source business model did not support collection of royalties.

In opposition to the patent lobby's arguments against open standards, the Free Software Foundation Europe, a lobby group, has cited internet standards in defence of royalty-free models.

Microsoft refused to talk to Computer Weekly about its consultation with the Cabinet Office.

It said in a written statement: "Microsoft fully supports the Government's ICT strategy and its goals of reducing cost and complexity, and increasing information sharing, interoperability, openness and re-use."

The BSA said in a written statement it also supported government's policy aims.

"However," it said, "reducing public procurement expenses in the UK does not require the adoption of a policy which undermines the value of Intellectual Property and Innovation."

Cabinet Office said in a written statement: "No lobbying has taken place that has affected our approach in creating an Open Standards definition that works for government."

BIS also refused to discuss its differences with Cabinet Office. It said in a written statement: "Discussions are still ongoing between the departments with many options being considered."

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