Application Availability, Reliability and Downtime: Ignorance is NOT Bliss

ITIC Reports & Surveys / By

Two out of five businesses – 40% – report that their major business applications require higher availability rates than they did two or three years ago. However an overwhelming 81% are unable to quantify the cost of downtime and only a small 5% minority of businesses are willing to spend whatever it takes to guarantee the highest levels of application availability 99.99% and above. Those are the results of the latest ITIC survey which polled C-level executives and IT managers at 300 corporations worldwide.

ITIC partnered with Stratus Technologies in Maynard, Ma. a vendor that specializes in high availability and fault tolerant hardware and software solutions, to compose the Web-based survey. ITIC conducted this blind, non-vendor and non-product specific survey which polled businesses on their application availability requirements, virtualization and the compliance rate of their service level agreements (SLAs). None of the respondents received any remuneration. The Web-based survey consisted of multiple choice and essay questions. ITIC analysts also conducted two dozen first person customer interviews to obtain detailed anecdotal data.

Respondents ranged from SMBs with 100 users to very large enterprises with over 100,000 end users. Industries represented: academic, advertising, aerospace, banking, communications, consumer products, defense, energy, finance, government, healthcare, insurance, IT services, legal, manufacturing, media and entertainment, telecommunications, transportation, and utilities. None of the survey respondents received any remuneration for their participation. The respondents hailed from 15 countries; 85% were based in North America.

Survey Highlights

The survey results uncovered many “disconnects” between the levels of application reliability that corporate enterprises profess to need and the availability rates their systems and applications actually deliver. Additionally, a significant portion of the survey respondents had difficulty defining what constitutes high application availability; do not specifically track downtime and could not quantify or qualify the cost of downtime and its impact on their network operations and business.

Among the other survey highlights:

  • A 54% majority of IT managers and executives surveyed said more than two-thirds of their companies’ applications require the highest level of availability – 99.99% — or four nines of uptime.
  • Over half – 52% of survey respondents said that virtualization technology increases application uptime and availability; only 4% said availability decreased as a result of virtualization deployments.
  • In response to the question, “which aspect of application availability is most important” to the business, 59% of those polled cited the prevention of unplanned downtime as being most crucial; 40% said disaster recovery and business continuity were most important; 38% said that minimizing planned downtime to apply patches and upgrades was their top priority; 16% said the ability to meet SLAs was most important and 40% of the survey respondents said all of the choices were equally crucial to their business needs.
  • Some 41% said they would be satisfied with conventional 99% to 99.9% (the equivalent of two or three nines) availability for their most critical applications. Ninety-nine percent or 99.9% does not qualify as a high-availability or continuous-availability solution.
  • An overwhelming 81% of survey respondents said the number of applications that demand high availability has increased in the past two-to-three years.
  • Of those who said they have been unable to meet service level agreements (SLAs), 72% can’t or don’t keep track of the cost and productivity losses created by downtime.
  • Budgetary constraints are a gating factor prohibiting many organizations from installing software solutions that would improve application availability. Overall, 70% of the survey respondents said they lacked the funds to purchase value-added availability solutions (40%); or were unsure how much or if their companies would spend to guarantee application availability (30%).
  • Of the 30% of businesses that quantified how much their firms would spend on availability solutions, 3% indicated they would spend $2,000 to $4,000; 8% said $4,000 to $5,000; another 3% said $5,000 to $10,000; 11% — mainly large enterprises indicated they were willing to allocate $10,000 to $15,000 to ensure application availability and 5% said they would spend “whatever it takes.”

According to the survey findings, just under half of all businesses – 49% – lack the budget for high availability technology and 40% of the respondents reported they don’t understand what qualifies as high availability. An overwhelming eight out of 10 IT managers – 80% — are unable to quantify the cost of downtime to their C-level executives.

To reiterate, the ITIC survey polled users on the various aspects and impact of application availability and downtime but it did not specify any products or vendors.

The survey results supplemented by ITIC first person interviews with IT managers and C-level executives clearly shows that on a visceral level, businesses are very aware of the need for increased application availability has grown. This is particularly true in light of the emergence of new technologies like application and desktop virtualization, cloud computing, Service Oriented Architecture (SOA). The fast growing remote, mobile and telecommuting end user population utilizes unified communications and collaboration applications and utilities is also spurring the need for greater application availability and reliability.

High Application Availability Not a Reality for 80% of Businesses

The survey results clearly show that network uptime isn’t keeping pace with the need for application availability. At the same time, IT managers and C-level executives interviewed by ITIC did comprehend the business risks associated with downtime, even though most are unable to quantify the cost of downtime or qualify the impact to the corporation, its customers, suppliers and business partners when unplanned application and network outages occur.

“We are continually being asked to do more with less,” said an IT manager at a large enterprise in the Northeast. “We are now at a point, where the number of complex systems requiring expert knowledge has exceeded the headcount needed to maintain them … I am dreading vacation season,” he added.

Another executive at an Application Service provider acknowledged that even though his firm’s SLA guarantees to customers are a modest 98%, it has on occasion, been unable to meet those goals. The executive said his firm compensated one of its clients for a significant outage incident. “We had a half day outage a couple of years ago which cost us in excess of $40,000 in goodwill payouts to a handful of our clients, despite the fact that it was the first outage in five years,” he said.

Another user said a lack of funds prevented his firm from allocating capital expenditure monies to purchase solutions that would guarantee 99.99% application availability. “Our biggest concern is keeping what we have running and available. Change usually costs money, and at the moment our budgets are simply in survival mode,” he said.

Another VP of IT at a New Jersey-based business said that ignorance is not bliss. “If people knew the actual dollar value their applications and customers represent, they’d already have the necessary software availability solutions in place to safeguard applications,” he said. “Yes, it does cost money to purchase application availability solutions, but we’d rather pay now, then wait for something to fail and pay more later,” the VP of IT said.

Overall, the survey results show that the inability of users to put valid metrics and cost formulas in place to track and quantify what uptime means to their organization is woefully inadequate and many corporations are courting disaster.

ITIC advises businesses to track downtime, the actual cost of downtime to the organization and to take the necessary steps to qualify the impact of downtime including lost data, potential liability risks e.g. lost business, lost customers, potential lawsuits and damage to the company’s reputation. Once a company can quantify the amount of downtime associated with its main line of business applications, the impact of downtime and the risk to the business, it can then make an accurate assessment of whether or not its current IT infrastructure adequately supports the degree of application availability the corporation needs to maintain its SLAs.

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IBM Charts Green, Energy Efficient Course with Dynamic Infrastructure Initiatives

Laura's Insights ITIC Blog / By

These days just about every high technology vendor is “keen to be green.” However, few vendors can match IBM for its pioneering efforts and long term commitment to energy efficient solutions that are both good for the planet and good for recession racked enterprises.

This week, IBM took another giant step in its green data efforts. It officially launched its Dynamic Infrastructure for Energy Efficiency initiative, which is a comprehensive, compelling set of new hardware, software and services offerings designed to help customers build, manage and maintain more energy efficient infrastructures.

IBM’s Managing Dynamic Infrastructure for Energy Efficiency initiative serves as a blueprint for vendors and corporate customers to follow and emulate in their respective efforts to reduce power consumption, utility costs and their carbon footprints in the pursuit of greater system, application and network equipment economies of scale.

Declaring that “Environmental sustainability is an imperative for 21st Century business,” Rich Lechner, IBM’s VP of Energy & Environment, outlined IBM’s ambitious plan. Lechner and Chris O’Connor, VP of Tivoli Strategy, Product Management and SWG Green said that Big Blue worked with some 3,200 customers over the past two years to construct and validate metrics on energy usage and costs. Among the key findings from these efforts:

  • IT energy expenses are expected to increase 35% between 2009 and 2013
  • An overwhelming 80% of CEOs expect climate change regulations in five years
  • Buildings account for 40% of worldwide energy consumption

The company’s new products and services are the product of years of primary research and extensive research and development (R&D) in which the company has. spared no effort or expense in its quest to “go green” and assist its customers. It addresses the full spectrum of Green IT issues including: conservation, pollution prevention, consolidation and regulatory compliance initiatives for the physical devices and facilities and using renewable energy sources.

Managing Dynamic Infrastructure for Energy Efficiency

IBM’s Managing Dynamic Infrastructure for Energy Efficiency calls for corporations to build Green Infrastructures, Sustainable Solutions and Intelligent Systems. IBM’s plan is backed by a wide array of product offerings such as the Tivoli Monitoring for Energy Management and enhancements to the existing Tivoli Business Service Manager. IBM is offering customer a free trial of the Tivoli Monitoring for Energy Management.

The Tivoli Energy Management solution is supported by IBM hardware and IBM Global Services. The latter includes chargeback and accounting services and the ability to demonstrate to customers how to optimize assets (plant and facilities) and improve energy usage.

On the hardware front, IBM is embedding new capabilities in its x86 servers through consolidation which can result in an astounding 95% reduction of power compared to servers built three or four years ago.

IBM also has a Green Infrastructure ROI analysis tool. This is an interactive Web-based assessment toll that provides business with benchmarks on green/energy efficiency performance. It also provides the customers with specific recommendations to reduce energy consumption.

IBM also has a full set of services offerings to assist corporations in reviewing their current consumption and infrastructure and constructing customized plans for Green IT. IBM also has agreements in place with a number of technology partners – including Novell and Thunderhead – to deliver solutions that are certified to reduce environmental impact.

Going Green is Good Business

According to Lechner and O’Connor, Green IT initiatives will yield tangible benefits. Actual dollar value cost savings will vary according to the business and its specific cost cutting efforts. IBM customer Care2 for instance, cut energy consumption by 70% and reduced energy usage by 340 megawatt hours with proactive management. Another enterprise customer, Nationwide Insurance anticipates it will save $15 million (US dollars) over the next three years, including an 85% to 90% reduction in server utilization rates via virtualization and an 80% decrease in its environmental costs.

Not surprisingly, Lechner and O’Connor said that IBM practices what it preaches: IBM’s Austin facility achieved a 150% capacity increase while simultaneously cutting energy consumption by 25%. Those figures were good enough for the EPA to rank IBM’s Austin facility number 31 on its list of Greenest hardware vendors.

“Four years ago when we worked with clients [regarding energy efficiency] the discussion was academic,” Lechner said. “Now they want IBM to help them with Proof of Concept (POC) initiatives. The ROI for Green IT is two years or less,” he added.

Analysis

IBM’s Managing Dynamic Infrastructure for Energy Efficiency is the real deal. It is the result of years of dedication and commitment. And it shows. As one of the founding developers of the Electronic Industry Code of Conduct (EICC) in 2004 IBM has always backed up its words with action. The EICC is a code of best practices adopted and implemented by some of the world’s major electronics brands and their suppliers. Its goal is to improve conditions in the electronics supply chain.

It is well known and well documented that demand for Green desktop and server hardware and services will increase significantly over the next one-to-five years. Governments, states, municipalities and utility firms are now offering consumers and businesses a mixture of incentives, backed by mandates to reduce costs, power consumption and produce hardware, whose material components won’t poison the planet when it comes time to discard and/or recycle them.

Green IT initiatives are rising sharply and it’s easy to see why. The energy used to process and route server requests and transactions will exceed 100 Billion kilowatts (kWh) at an annual cost of $7.4 Billion by the year 2011, according to the Environmental Protection Agency (EPA). PCs and servers are currently the biggest hogs consuming 60% of peak power even when idle!!! This is double the energy servers used in 2006!

Corporations have a choice: go green voluntarily or be compelled to do so by a slew of new regulations which are now being written into law. For example, one of the mandates of the Green Building Act of 2006 requires that commercial buildings in Washington, D.C. larger than 50,000 sq. ft. must meet or exceed New Construction standards by 2012. Others are voluntary like the Energy Policy Act of 2005. It allows building owners to realize a tax savings of $1.80 per sq. ft. for new commercial buildings that reduce regulated energy use by 50%.

ITIC’s own survey data indicates that 74% of corporate data centers face limitations and constraints on space, power consumption and the rising costs associated with energy and physical plant leasing/rentals. The obvious solution is to cut energy consumption and utility costs, which in turn, reduce carbon emissions and cut the greenhouse gases.

IBM’s Managing Dynamic Infrastructure for Energy Efficiency initiative is a well-conceived and powerful set of products and services. It solidifies IBM’s reputation and position as an energy efficiency pioneer. Few vendors can match IBM in this area. IBM is well positioned to help corporations achieve their goals of cutting costs, consolidating server hardware and physical plant space and ultimately becoming carbon neutral. Corporations are urged to examine IBM’s products and services and test them for themselves.

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Cost Formulas Essential to Qualify and Quantify Uptime

ITIC Reports & Surveys / By

ITIC survey finds that corporate application availability requirements are increasing; 50% of businesses lack funds for new reliability technology.

BOSTON, MA (April 6, 2009) — Eight out of 10 businesses — 81% — report that their major business applications require higher availability rates than they did two or three years ago. However, nearly three-quarters of companies — 73% — are unable to quantify the cost of downtime or the impact that unplanned outages have on the business. Those are the results of a new survey from Information Technology Intelligence Corporation (ITIC), a high-tech research and consulting firm.

The survey polled 300 C-level executives and IT managers at 300 corporations worldwide. However, the survey findings also indicated that approximately half of all businesses — 49% — lack the budget for high availability technology. Additionally, 40% of the respondents said they don’t understand what qualifies as high availability. Eight out of 10 IT managers can’t quantify the cost of downtime to their C-level executives.

“The demand for application availability has grown, particularly with the emergence of Virtualization 2.0. However, network uptime isn’t keeping pace. Only two out of 10 companies understand that four nines — 99.99% availability and above — is what they need today. The inability of users to put valid metrics and cost formulas in place to track and quantify what uptime means to their organization is woefully inadequate,” said Laura DiDio, Principal at ITIC.

Survey Results Summary:

  • 54% of IT managers and executives surveyed said more than two-thirds of their companies’ applications require the highest level of availability. Yet, 41% said would be satisfied with conventional 99 to 99.9% availability for their most critical applications, which does not qualify as a high-availability or continuous-availability solution.
  • 81% said the number of applications that demand high availability has increased in the past two-to-three years.
  • Of those who said they have been unable to meet service level agreements (SLAs), 72% can’t or don’t keep track of the cost and productivity losses created by downtime.

End User Comments:

  • “We are continually being asked to do more with less. We are now at a point, where the number of complex systems requiring expert knowledge has exceeded the headcount needed to maintain them … I am dreading vacation season.”
  • “We are an Application Service Provider. While our SLA guarantees are fairly modest – 98% uptime – We have found that we have to compensate our larger clients for any significant downtime. We had a half day outage a couple of years ago which cost us in excess of $40,000 in goodwill payouts to a handful of our clients, despite the fact that it was the first outage in 5 years.”
  • “If people knew the actual dollar value their customers represent, they’d already have the necessary software availability solutions in place to safeguard applications.”
  • “Most of the time, our biggest concerns center around keeping what we have running and available. Change usually costs money, and at the moment our budgets are simply in survival mode.”

Survey Methodology and Background

The ITIC survey was commissioned by Stratus Technologies in Maynard, MA. ITIC conducted a blind, non product-specific survey of 300 IT professionals and queried them on their application availability requirements, virtualization and service level agreement compliance. None of the respondents received any remuneration. The Web-based survey consisted of multiple choice and essay questions. ITIC analysts also conducted two dozen first person customer interviews to obtain detailed anecdotal data.

Respondents ranged from SMBs with 100 users to very large enterprises with over 100,000 end users. Industries represented: academic, advertising, aerospace, banking, communications, consumer products, defense, energy, finance, government, healthcare, insurance, IT services, legal, manufacturing, media and entertainment, telecommunications, transportation, and utilities. None of the survey respondents received any remuneration for their participation.

About Information Technology Intelligence Corporation (ITIC)

ITIC, founded in 2002, is a research and consulting firm in suburban Boston. It provides primary research on a wide variety of technology topics for vendors and enterprises. ITIC’s mission is to help its clients make sense of the technology and business events and provide tactical, practical and actionable advice. For more information visit ITIC’s website at https://itic-corp.com.

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Apple Gets More Entrenched in the Enterprise

ITIC Reports & Surveys / By

Apple Macintosh Enterprise Usage Continues to Grow

Apple Mac and OS X 10.x continue to make inroads in the enterprise.

ITIC’s 2009 Global IT and Technology Trends Survey shows that corporate enterprises continue to embrace the Apple Mac and OS X 10.x server operating system in numbers not seen since the late 1980s. ITIC polled IT managers and C-level executives at 700 corporations worldwide. Among the survey highlights:

  • Over two-thirds of the 700 survey respondents – 68% — indicated they are likely to allow their end users to deploy Macs as their corporate enterprise desktops in the next 12 months.
  • Almost one-quarter or 23% have a significant number of Macintoshes (> 50) present in their organizations. Apple Macs have long been a favorite of company executives, but the survey responses clearly indicate that Mac usage has filtered down to rank and file knowledge workers across the enterprise.
  • Half of all the survey respondents – 50% — said they plan to increase integration with existing Apple consumer products such as the iPhone to allow users to access corporate Email and other applications. This augurs well for the iPhone to establish itself as a viable alternative to Research In Motion’s (RIM) as a mobile device that allows users to access Email and other collaboration applications.

In summary, the ITIC/Sunbelt survey responses show that businesses will find themselves challenged to do more with fewer resources. The respondents also exhibited their practicality and resourcefulness in extending the lifespan of still-useful technologies like Windows XP. However those who have the need and the budget, will get an able assist from emerging technologies like virtualization – and for those that correctly configure and deploy them – Vista and the Mac and OS X 10.x

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ITIC Survey Indicates 35% of Companies Will Delay Network Upgrades for Lack of Money

ITIC Reports & Surveys / By

Server hardware, network infrastructure and storage upgrades are hardest hit; 97% of security upgrades are on course; nearly 40% of companies report their migrations will proceed on schedule.

BOSTON, MA (February 2, 2009) — Information Technology Intelligence Corporation (ITIC), a high-tech research and consulting firm, today announced that the global economic downturn will force 35% of corporations to delay or abandon crucial network upgrades during 2009.

The latest joint survey conducted by ITIC and Sunbelt Software polled over 700 C-level executives and IT managers at 700 corporations worldwide. The results showed that budgetary constraints and IT staffing issues topped users’ list of most daunting business challenges in the year ahead. The corporate respondents indicated they are understandably cautious about spending their precious capital expenditure monies and are only committing to crucial upgrades on an “as needed” basis.

Among the key survey findings:

  • Over one-third of the corporate respondents — 35% — said that the ongoing economic downturn had caused their companies to delay or abandon planned software, hardware and network infrastructure upgrades. However, an additional 26% of those polled — over one-quarter of companies — indicated they may yet be forced to shelve crucial migration plans due to lack of funds and a dearth of trained IT staff.
  • Of the 35% of companies that indicated they will delay or abandon certain planned upgrades — the network projects that will be most impacted are: server hardware (21%) and network infrastructure products such as routers (19%) and storage devices (15%).
  • Security remains the sole market segment that appears to be immune to the global economic downturn. An overwhelming 97% majority of the survey respondents said their security upgrades will proceed as planned, with only a very small 3% minority indicating they will defer security upgrades.
  • Overall, 39% of the survey respondents — nearly two out of five businesses — reported that their network migration and upgrade plans will proceed as planned in calendar 2009.
  • Some 27% of companies — or about three out of 10 businesses — reported their 2009 IT budgets will decrease; another 32% said their budgets will remain the same as 2008. Only 16% of the survey respondents reported their IT budgets will increase during the next 12 months.
  • Of the 16% of corporations that said budgets will increase — the largest portion — 23% said the budget increases would be modest — ranging from 5% to 15%. 8% reported their IT budgets would rise minimally — 1% to 5%. Large budget increases will be a rarity in 2009: only 1% of companies will see budgets go up by 20% to 30%, and 3% will see IT budgets increase by more than 30%.

Survey Methodology and Background

The Web-based survey included multiple choice and essay responses. In addition, ITIC and Sunbelt conducted two dozen first person customer interviews to validate the survey responses. ITIC and Sunbelt received no vendor sponsorship for this research and none of the survey respondents received any remuneration for their participation. Approximately 85% of the respondents came from North America; the remaining 15% came from 20 countries including Europe, Asia, Australia, New Zealand and South America.

About Information Technology Intelligence Corporation (ITIC)

ITIC, founded in 2002, is a research and consulting firm in suburban Boston. It provides primary research on a wide variety of technology topics for vendors and enterprises. ITIC’s mission is to help its clients make sense of the technology and business events and provide tactical, practical and actionable advice. For more information visit ITIC’s website at https://itic-corp.com.

About Sunbelt Software

Sunbelt Software was founded in 1994 and is a leading provider of Windows security and management software with product solutions in the areas of antispam and antivirus, antispyware, and vulnerability assessment. Leading products include the CounterSpy and VIPRE product lines. For more information, visit the company’s website at http://sunbeltsoftware.com.

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Apple Shines

Laura's Insights ITIC Blog / By

Apple rang in 2009 by celebrating a trio of milestones that were impressive by any standards including those of a company whose 32-year span has been filled with a cornucopia of noteworthy events. In quick succession, Apple posted the best financial results in its history: during the just ended 2009 first fiscal quarter it achieved record revenues of nearly $10.2 billion on record net quarterly profits of $1.61 billion and it sold an astounding 22.7 million iPods, another record. The icing on the cake: Apple’s flagship Mac computer celebrated its 25th birthday amidst the news that the Cupertino, California firm’s latest Mac Book and Mac Book Pro notebooks contributed to the overall financial bonanza with sales of 2.5 million units; a 34% gain in year-over-year unit shipments.

These feats would be extraordinary at any time but they offered even more cause for celebration due to their arrival during a week in which the news from almost all of Apple’s high-tech vendor counterparts ranged from disappointing to dismal to downright dire. Intel said it would shed up to 6,000 workers and close five manufacturing plants; Microsoft announced it will lay off 5,000 workers (the first such major action in its history) amidst declining demand for Windows PC solutions, and even the goliath Google saw a sharp decline in its 2009 first fiscal quarter profits.

With such a bountiful harvest, it was more than a little perplexing to read the headline in the January 22 issue of Silicon Valley.com column proclaiming: “Mac’s influence could wane.” Granted, the headline was a bit misleading. The article itself stated that things look good for Apple and its Macs in the near term, but what about the next 25 years? Good question.

Long term forecasts of even five years are more art or guesswork than science. But decades long prognostications are rarities unless you’re talking about Nostradamus or the Oracle of Delphi. So we’re left to forecast with the tools at our disposal – in this case, the facts. So here for your consideration is our Top 10 List concerning Apple’s health and well-being. It includes some little known facts of both a positive and even potentially negative nature.

10. Big Mac sales shrink. Apple Mac desktop sales dipped slightly even as sales of its notebooks and the lightweight Apple Mac Book Air soared. This is hardly surprising. Both the American and global consumers and workforces are becoming increasingly mobile, transitioning into an era of ever-more powerful notebooks, Netbooks (or minis) and PDAs. Critics argue that the commoditization of PC hardware will make it difficult for Apple or any hardware vendor to distinguish itself. As a result, Apple desktop sales may continue to contract along with those of PCs although they won’t become obsolete for many years. Meanwhile, Apple has a wide array of Mac Book, Mac Book Pro and the Mac Book Air products to take up the slack. The company also wisely cut hardware and OS X 10.x operating system prices to be more competitive with PCs.

9. iPod and iPhone. Apple sold a record 22.7 million iPods during the quarter, and the device has approximately 70% market share in the U.S. Worldwide market share percentages vary by country from 70% in Western Europe and Australia to well over 60% in Japan and over 50% in Canada. At the same time, iPhone sales in Q1 were 4.36 units million, representing 88% unit growth over the year-ago quarter. At some point, iPod and iPhone sales may reach saturation but that won’t happen anytime soon and when it does, Apple will most likely have another device in the offing.

8. Up, up and away. Data is no longer tied to the PC or desktop, it is moving to the cloud. Apple is right there in the cloud. Cloud computing is the new buzz word for delivering applications as services via the Internet. The first fruits of Apple’s cloud computing initiative involves the integration of Google’s cloud computing offering, the Google App Engine with Apple’s iPhone mobile computing platform. ITIC anticipates Apple will expand its reach into the cloud, again based on customer demand. Nearly half – 49% of the ITIC/Sunbelt Software survey respondents said they plan to increase integration between existing Apple consumer products like the iPhone to allow corporate users to access corporate Email and other applications over the next 12 months.

7. Marketing. No one does it better. From the moment that Steve Jobs stepped onstage 25 years ago and unveiled his 20lb. baby, to the creative licensing of the Rolling Stones tune “Like a Rainbow”, to partnering with the Irish rock group U2 to help promote iPod usage, Apple’s marketing has always been stellar. Apple uses every available channel – from the airwaves to the street – to promote its brand. There are now 251 Apple retail stores open in 10 countries, with total quarterly traffic of 46.7 million visitors.

6. New gadgets. Users and industry watchers have grown accustomed to Apple debuting revolutionary new products at MacWorld and they disappointed when it doesn’t happen. It is unrealistic to expect that any company, even one as inventive as Apple, can deliver a iPod or iPhone every year. Meanwhile, users will have to “settle” for evolutionary innovations like new laptop batteries that will run for eight hours without re-charging and Time Capsule, an all-in-one 802.11n wireless backup router that includes up to 1 terabyte of disk storage.

5. Leadership. It’s impossible to overstate or understate what company founder Steve Jobs has meant to Apple. His 1996 return to Apple sparked one of the greatest corporate revivals since Lazarus. An iconic figure in Silicon Valley for over 30 years, Jobs’ future is now clouded by health concerns, and investors and industry watchers are rightly nervous. Only time will tell when or if Jobs will return. If he does not, it will be a devastating loss on many levels but it will not cripple the company’s ability to thrive and survive. Still, Apple must allay customer, investor and government concerns by being truthful and forthcoming regarding Jobs and the company’s future.

4. What’s in Apple’s Wallet? Cash — $28.1 billion to be exact and $0 debt. That’s more than Google ($15.85B); Microsoft ($20.3B); IBM ($12.9B); Intel ($11.84B) or Sony ($6.05B). Apple also has double digit profit margins of 14.70% and operating margins of nearly 19%; return on assets is 10.77% while return on shareholders’ equity is a robust 24.47%. Few if any corporations can boast such a healthy balance sheet, which leaves Apple free to invest heavily in R&D, marketing initiatives and other efforts to keep ahead of competitors.

3. Apple is hot – and cool. Consumers have always loved Apple and there’s nothing to indicate that will change. Consumer enthusiasm for iPods and iPhones has fueled the resurgence of Macs and OS X 10.x in enterprises. Everyone it seems has or wishes they had an iPod or an iPhone. Beyond that the latest joint ITIC/Sunbelt Software data indicates that Apple is increasing its presence in many markets thanks to the performance and reliability of the core products. Eight out of 10 businesses – 82% of the survey respondents – rated the reliability of the Mac and OS X 10.x as “excellent” or “very good,” while almost 70% of those polled gave the same high marks to the security of the Apple platform. Tellingly, 68% of the survey respondents said their firms are likely to allow more users to deploy Macs as their enterprise desktops in the next six-to-12 months.

2. Enterprising. Over the past three years Apple has made a comeback in the enterprise. The latest joint ITIC/Sunbelt Software survey of 700 companies worldwide indicates that nearly 80% of businesses have Macs in their environment and 25% have significant (>30) numbers of Macs. But while enterprise users love Apple, IT managers remain divided. The biggest drawback for the Mac is the dearth of enterprise-class third party management and performance enhancement tools but technical service and support is also an issue. Apple will have to address these points if the company expects or plans to challenge Microsoft’s dominance on business desktops. So far, Apple has been silent about its enterprise strategy but a new consortium of five third party vendors calling itself the Enterprise Desktop Alliance (EDA) is determined to promote the management, integration and interoperability capabilities of the Mac in corporate environments.

1. Mobile and agile, not fragile. The combination and plethora of Apple consumer and corporate devices makes for a powerful product portfolio with widespread appeal. Unlike many of its competitors Apple is not dependent on a single product or market segment. Hence, when sales decline in one sector, the slippage is offset by another product as we’ve seen with Mac notebooks picking up the slack for Mac desktops. This enables Apple to adjust both its technology plans and market focus accordingly, strengthening and insulating the company from cyclical downturns.

One of the hallmarks of Apple’s existence has been the ability to re-invent itself – not only changing with the times – but keeping its fingers on the pulse of an often fickle public and anticipating what its users and the industry wants. Apple is well positioned for both the near and intermediate term. It will have to stay focused, keep its edge and clearly communicate its strategy in order to maintain the same level of success it has achieved in the last 32 years.

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ITIC 2009 Global IT and Deployment Trends Survey

ITIC Reports & Surveys / By

Dear Santa: All I want for Christmas is a Virtual Data Center and a Big (Apple) Mac on my office desktop

The latest independent joint ITIC/Sunbelt Software survey found that demand and deployment for several technology sectors – most notably server and application virtualization – will remain robust in direct contrast to the bearish global economic climate.

ITIC and Sunbelt, polled C-level executives and network administrators at over 700 corporations worldwide on a variety of technology and business related topics. The Web-based survey included multiple choice and essay responses. In addition, ITIC and Sunbelt conducted two dozen first person customer interviews to validate the survey responses. ITIC and Sunbelt received no vendor sponsorship for this research. Additionally, no vendors had any influence or input into the survey or the results and none of the survey respondents received any remuneration for their participation. Approximately 85% of the respondents came from North America; the remaining 15% came from 20 countries including Europe, Asia, Australia, New Zealand and South America.

Virtualization Results

Virtually Yours: Server Virtualization Still a Top Priority in the Datacenter

Virtualization remains a high growth technology area, and the survey found that the market leaders – VMware, Microsoft and Citrix are all consolidating their positions. The survey also showed that while desktop and application virtualization will play a pivotal role for businesses – particularly enterprises with > 500 end users, the market will not materialize as quickly as it did for server virtualization. Among the survey highlights:

  • VMware remains the market leader but Microsoft’s Hyper-V is closing the gap. In response to a question in which we asked customers to select ALL the virtualization products they plan to use/deploy in 2009, nearly 60% said they plan to deploy VMware’s ESX Server (29%) or the free VMware Server (30%) . However, 52% of the respondents indicated they will use Microsoft’s Hyper-V or the older Microsoft Virtual Server; 37% of respondents indicated they will opt for Hyper-V compared with the remaining 15% who said they will use the older Virtual Server. This percentage is double the number of survey respondents who indicated they would use Microsoft hypervisor solutions when we polled users in a 2007 survey.
  • When it comes to Application Virtualization solutions, Microsoft’s App-V is the market leader, clearly beating VMware’s ThinApp by a 2-to-1 margin, which also came trailed Citrix’s XenApp 5.0. That said, it must be noted that thus far, only about 15% of the survey respondents have fully virtualized their applications across the entire enterprise.
  • It’s still very early in the game for the emerging application virtualization market: nearly two-thirds — 62% — of businesses have not yet even begun to deploy application virtualization in production environments (though pilot networks abound) or even chosen an application virtualization vendor.
  • Interestingly, in spite of cost constraints and pressures on IT budgets, only 7% of the survey respondents said they had attempted to renegotiate the terms and conditions of their virtualization licensing contracts to get better deals. Another 27% said they were studying the issue but had not yet made any definitive attempts to renegotiate and 66% said “No.”

Microsoft Vista: Most Users “Surprisingly” Satisfied

On the Windows desktop OS front, the ITIC/Sunbelt survey respondents gave Microsoft’s much maligned Vista operating system surprisingly high satisfaction ratings. We say “surprising” because Vista has gotten a lot of bad ink, much of it undeserved. Overall, 59% of the survey respondents said Vista was “Excellent”, “very good” or “good.” Despite these grades though, 45% of those polled said they would skip Vista and go directly to Windows 7 when that desktop OS ships in early 2010. Drilling further into the Vista responses:

  • To date, only 10% of the 700 survey respondents’ organizations have deployed Vista.
  • Windows XP is the primary desktop OS for 88% of the respondents.
  • Vista seems a victim of Windows XP’s success: Among the 45% of survey respondents who indicated they’ll skip Vista, the main reason(s) cited were cost constraints and the prevailing feeling that Windows XP is more than adequately meeting corporations’ business and technology needs.
  • The Vista experience was much better than anticipated for the 10% of companies that use Vista is their primary desktop OS: 27% rated Vista’s performance, reliability and security Excellent or Very Good; another 32% rated it “Good”, 19% said it was “Satisfactory.” Only 19% gave it an “Unsatisfactory” rating, mainly due to application incompatibility problems.

One recurring theme among the survey respondents was that since Windows XP is getting the job done, there’s no compelling business reason to upgrade to Vista.

“Windows XP, Windows 2003 and our other applications are more than adequate for now,” said one network administrator. “That means we will be investing very little in new infrastructure for the next couple of years. The constant upgrade progression for the sake of “keeping current” is dead for now,” he added.

The Vista desktop OS – all six flavors – is generally solid. The biggest impediment facing large enterprises deploying Vista is application incompatibility. This problem is especially acute in large enterprises that have dozens of third party applications associated with specific vertical markets. Consider the case of one such enterprise based in the Northeast with over 3,000 end users.

The company’s IT manager said his firm was 65% deployed onto Vista Business but, he noted, two of his crucial application vendors “have not yet migrated their products.” One is a financial application and the other is a GIS application. “They [the ISVs] have promised compliance by the end of 2009 so we plan to be 100% deployed on Vista by Q1 2010. At that time we’ll be ready to continue our normal replacement cycle (30% per year) deploying Windows 7 Service Pack 1 in late 2010!”

Apple Macintosh Enterprise Usage Continues to Grow

And finally, Apple Mac and OS X 10.x continue to make inroads in the enterprise.

  • Over two-thirds of the 700 survey respondents – 68% — indicated they are likely to allow their end users to deploy Macs as their corporate enterprise desktops in the next 12 months.
  • Almost one-quarter or 23% have a significant number of Macintoshes (> 50) present in their organizations. Apple Macs have long been a favorite of company executives, but the survey responses clearly indicate that Mac usage has filtered down to rank and file knowledge workers across the enterprise.
  • Half of all the survey respondents – 50% — said they plan to increase integration with existing Apple consumer products such as the iPhone to allow users to access corporate Email and other applications. This augurs well for the iPhone to establish itself as a viable alternative to Research In Motion’s (RIM) as a mobile device that allows users to access Email and other collaboration applications.

In summary, the ITIC/Sunbelt survey responses show that businesses will find themselves challenged to do more with fewer resources. The respondents also exhibited their practicality and resourcefulness in extending the lifespan of still-useful technologies like Windows XP. However those who have the need and the budget, will get an able assist from emerging technologies like virtualization – and for those that correctly configure and deploy them – Vista and the Mac and OS X 10.x

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New 2009 Global IT and Technology Trends Forecast

ITIC Reports & Surveys / By

Mac Enterprise Usage Will Increase in 2009; Over two-thirds of businesses are open to letting end users deploy Macs as their corporate desktops; 50% of corporations will expand the integration between Macs and iPhones

BOSTON, MA (December 9, 2008) — The latest independent joint ITIC/Sunbelt Software survey found that Apple Mac hardware and Mac OS X 10.x continues to shine and steadily increase its presence among corporate enterprises.

The latest data, derived from an ITIC/Sunbelt Software Web-based survey that polled over 700 C-level executives and IT managers worldwide indicates that four-out-of five businesses have Macs present in their environment.

Apple Macintosh Enterprise Usage Continues to Grow

  • Over two-thirds of the 700 survey respondents – 68% – indicated they will allow their end users to deploy Macs as their corporate enterprise desktops in the next 12 months. This is double the 34% of companies that responded to this same question in the 2008 ITIC/Sunbelt Global IT and Technology Trends Survey.
  • Half of all the survey respondents – 50% – said they plan to increase integration with existing Apple consumer products such as the iPhone to allow users to access corporate Email and other applications. This indicates that customers perceive the combination of the Mac and the iPhone to be a viable alternative to the rival Research in Motion (RIM) Blackberry as a mobile device running key corporate applications.
  • Seven out of 10 businesses – 70% – rated the security of the Apple Mac and OS X as Excellent or Very Good.
  • An 82% majority of corporations rated the reliability of the Mac hardware and OS X 10.x as Excellent or Very Good.
  • Approximately 30% of the survey respondents are using Macs as the hardware platform to virtualize Microsoft’s Windows XP or the Vista operating system on Macintosh hardware in a virtual environment.

“Corporations are deploying Macs and the Mac OS X 10.x at a rate not seen since the late 1980s,” said Laura DiDio, principal at ITIC who conducted the survey. “If Mac hardware and OS X 10.x deployments continue at this rate – and we believe they will – Apple could realistically double its market share from its current rate of about 5% to 10% or more by 2011,” she added.

Survey Methodology and Background

The Web-based survey included multiple choice and essay responses. In addition, ITIC and Sunbelt conducted two dozen first person customer interviews to validate the survey responses. ITIC and Sunbelt received no vendor sponsorship for this research and none of the survey respondents received any remuneration for their participation. Approximately 85% of the respondents came from North America; the remaining 15% came from 20 countries including Europe, Asia, Australia, New Zealand and South America.

About Information Technology Intelligence Corporation (ITIC)

ITIC, founded in 2002, is a research and consulting firm in suburban Boston. It provides primary research on a wide variety of technology topics for vendors and enterprises. ITIC’s mission is to help its clients make sense of the technology and business events and provide tactical, practical and actionable advice. For more information visit ITIC’s website at https://itic-corp.com.

 

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Microsoft Pulls Out all the Stops for SQL Server 2008

Laura's Insights ITIC Blog / By

Microsoft is pulling out all the stops to support SQL Server 2008 and keep the momentum going for its latest enhanced database offering. On September 29, the company will launch the SQL Server 2008 Experience, a year-long series of in-person events designed to introduce “350,000+ customers, partners and community members” to the new features and benefits of its database offering.

Additionally, Microsoft is touting the merits of SQL Server 2008 on a new Website: http://www.moresqlserver.com. And it also just released the results of the new Transaction Processing Performance Council (TPC) performance benchmark tests for Microsoft SQL Server 2008. The TPC ranked Microsoft SQL Server 2008 #1 on price/performance on servers using Intel’s new Dunnington x64 processors, and as the top performance leader using IBM’s new System x3950 M2 server.

There’s no doubt that SQL Server 2008 boasts greatly improved features, functions, scalability, security, management and reliability compared to the 2005 version, and a more powerful, robust and manageable SQL Server 2008 is a must for Microsoft. The company is going head to head with industry powerhouses including IBM’s DB2 and Oracle’s 11g database running on Linux. So 2009 is shaping up to be an extremely competitive and crucial year for database vendors and their respective customers.

At this point, Microsoft is a strong number three behind Oracle and IBM in the database arena, according to both Gartner Group and IDC. The latest statistics show Oracle with approximately 42% market share; IBM second with about 21% and Microsoft with an estimated 19% of the database market. The financial stakes are also high: Oracle’s database revenue is well over $7 billion; IBM realizes close to $3.5 billion from database sales and Microsoft SQL Server generates close to $3 billion in annual sales.

In order to retain its existing installed base and increase its presence – particularly among SMBs and large enterprises, Microsoft must hit the ground running with SQL Server 2008. There is no margin for error from either a technical or a marketing standpoint. Hence, Microsoft is marshalling all its forces.

SQL Server 2008 incorporates a slew of new management capabilities such as: policy management; configuration servers; data collector/management warehouse and a multiple server query capability. Such features are crucial for database administrators, particularly those in large enterprises who are charged with overseeing complex and geographically dispersed database environments that may include hundreds or thousands of physical and virtual servers encompassing tens of thousands of databases.

The SQL Server 2008 Policy Management feature enables database administrators to create and execute configuration policies against one or more servers while the Data Collector facility obviates the need for managers to create custom solutions to cull data from their database server environments.

Data Collector lets administrators utilize the SQL Server Agent and SQL Server Integration Services (SSIS) to create a framework that collects and stores data while delivering a detailed history of error handling, auditing, and collection.

Just as important as SQL Server 2008’s new management functions are the accompanying documentation and training that Microsoft is making available for the database platform via its Website, TechNet and its Software Assurance maintenance and upgrade program. Vendor rivalries aside, the chief impediments to users upgrading to any new software platform are the cost and complexity of the migration. These factors are even more crucial when weighed against the cost constraints of the current economic downturn. Microsoft’s TechNet provides SQL Server 2008 customers with ample, “at-your-fingertips” documentation and troubleshooting tips as they prepare to upgrade.

In addition, customers who have purchased Microsoft’s Software Assurance will be able to get significant discounts on training as well as access to Elearning tools. The combination of TechNet and Software Assurance can save IT departments and the corporation untold thousands to millions in capital and operational expenditures and cut upgrade time by 25% to 65% depending on the size and scope of the deployment. And in the event that any significant bugs or performance glitches arise, Microsoft must move quickly and decisively to publicly address the problems and issue the necessary patches without dissembling or temporizing.

Overall, Microsoft has assembled all of the necessary technology and business components to make SQL Server 2008 a winner. The latest Microsoft database has the performance, scalability and management to make the upgrade path easy. The excellent documentation and technical support offered by TechNet is also a plus. Companies worried about budgetary constraints (and who isn’t?) will also find monetary relief from the inherent value of the myriad Software Assurance benefits.

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