The future of IT: What's on the horizon?

Between San Francisco and San Jose along Highway 101 is Silicon Valley - widely regarded as the beating heart of the world IT...

Between San Francisco and San Jose along Highway 101 is Silicon Valley - widely regarded as the beating heart of the world IT industry. Ross Bentley spoke to three senior UK IT users who attended this year's Impact study tour of the region.

Once a year senior executives of top UK companies get a chance to peek behind the scenes on a tour of firms working at the leading edge of technology. After this year's tour of Silicon Valley we asked some of them what they saw that would be siginificant for UK business.

Les Graney , group chief information officer, Consignia
Les Graney shrewdly discriminates between technologies that will become an essential part of UK business and those that, while they may seem spectacular now, are likely to peter out before they have much effect on this side of the pond.

"My overall impression of Silicon Valley is of an area that is facing up to economic reality," he says. "We were told that more than 800 start-ups have gone to the wall in the past two years. This has led to a large amount of consolidation of IT businesses.

"Suppliers are making a push into services. IBM had this strategy 10 years ago, while companies such as Microsoft have been talking about it for about a year."

Graney's interest was aroused by developing open source alternatives to Microsoft products. "More and more, Linux is starting to look like an alternative to Windows," he says. "Even Oracle is looking to move its products on to Linux, running on Intel chips and calling it the Lintel platform.

"While at Consignia we are aware of Linux, we don't think it has reached a commercial stage of maturity.

"I saw a number of companies using the Java 2 Enterprise Edition (J2EE) platform as a vehicle for new development - the adoption rate is much higher than here," says Graney.

"In Silicon Valley, there are more ripples in the pond than over here. There is a lot more innovation going on - it is a unique test-bed for new ideas and technologies. Some of the ripples will die away but some will become large waves, and they are the ones that we will feel over here. Linux and J2EE are big waves that will reach us.

"Another interesting development is the move to integrate Liberty and Microsoft Passport," Graney says. "There has been competition between the two - Microsoft has had the lead but Liberty is backed by over 40 companies. Integration is important because reliable security is vital if people are to grow confident about adopting the Internet full scale.

"This will become important when looking at technologies such as Web services. At Consignia we have already launched a pilot implementation - I think we will see a lot of activity over the next couple of years," Graney concludes.

Russ Connick , chief information officer, Barclaycard
Russ Connick spotted some trends which will inform his dealings with suppliers. "There were a couple of themes which I feel we can use and learn from," he says.

"To sustain and grow revenues more suppliers are offering an application service provider-type managed service for their software.

"There is little evidence that this will help large organisations with multiple products, but it may help smaller or more focused organisations which use single packages such as Oracle financials or customer relationship management," says Connick.

"The rapid dotcom growth meant that a significant number of IT companies had very poor internal IT management. This trend appears to be reversing and there is a significant emphasis on reducing cost, improving productivity and quality by appointing an internal chief information or technical officer and introducing common IT disciplines," he says.

"For the user community, the production of key performance indicators (KPIs) is now becoming a mission-critical IT responsibility. Organisations work in real time and need a real-time set of KPIs. The portal providers are winning business here and showing quick return on investment," says Connick.

"It seems that there is evidence that the holy grail of turning data-into-information-into-knowledge is actually beginning to happen. Tools which help to generate and manage organisations' taxonomy are being used to give competitive advantage.

"Finally," he says, "there is evidence that organisations which consider the impact of change not only on their organisation but the whole supply chain are winning.

"The lesson for us is get involved in supplier change management - work hard on ensuring that suppliers are reducing their own costs to ensure that your costs are managed."

Martin Stevens , director of e-business solutions, Cadbury Schweppes
Martin Stevens is interested in wireless technology in the longer term, and found reassurance to answer some of his security worries.

"As I expected there was a big focus on IT security," he says. "This was particularly noticeable in the wireless area. With wireless Lans there is the threat of someone walking past your building with a 3G phone and linking into your systems.

"My hunch is that wireless will become ubiquitous. It is already widely used in the Silicon Valley, where things are a little ahead of everywhere else.

"We have to get into the mindframe that it is here now - how are we going to use it? For us wireless is fascinating but a bit ahead of what we are doing at the moment," he says.

"I have also seen signs that analytical systems such as those produced by Informica are starting to throw up some useful knowledge.

"Most companies have enterprise resource planning systems in place but for a while we have struggled to make anything useful out of all the information. There has been a lot of talk and now we are starting to see some action," he says.

"There was also a lot of talk about return on investment - things are based much more in reality than a few years ago, and I think we are all facing that - not just those in Silicon Valley.

The valley gives up its secrets
Lessons for Users

  • Linux is maturing and is being adopted by established IT suppliers

  • Development of the J2EE platform is increasing

  • Integration of Liberty and Microsoft's Passport authentication software will mean better security for Internet users

  • Key performance indicators are becoming more important

  • Business intelligence and knowledge management is starting to pay dividends

  • Supply chain management includes cutting costs by making sure your suppliers are cutting costs

  • Wireless is here but the security of wireless local area networks requires some work

  • Return on investment is an absolute requirement after dotcom disappointments

Lessons for Suppliers
  • Many start-ups have gone to the wall

  • Supplier consolidation is an inevitable result

  • Suppliers can increase revenue by providing services

  • Offering managed services can extend use of their software.

For details of the 2003 Impact Silicon Valley study tour e-mail [email protected]

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