Spending Report Less Cheerful Than Advertised
By Tony Kontzer
Recruitment specialist Robert Half Technology cheerfully reported this week that a recently commissioned survey of 1400 CIOs revealed that seven out of 10 say their companies will invest in IT initiatives over the next 12 months. The press release trumpeting the findings starts with the mantra of today's business messaging, "Despite a challenging economy..." and admittedly, on the surface, it sounds like positive indicator. [See a slideshow about the spending report here.]
But look closely at the five most frequently cited investments--come to think of it, you don't even really have to look closely, a quick perusal will do--and a different story emerges. This isn't the early 2000s, when IT priority lists were filled with risky investments in things like huge enterprise application deployments, network infrastructure upgrades, and new toys like collaboration and content management systems. Today it's all about locking down security threats, cutting costs, reducing long-term capital expenditures, and making whatever's already in place more efficient.
In other words, this exciting list of investments may not be reason to celebrate. So let's open target practice and start shootin' holes in those suckers one by one (because let's face it, shootin' them down makes for a lot more interesting reading than blindly declaring the second coming of the Internet economy):
1) Information Security
Some 43 percent of the CIOs with planned investments said they were going to shore up their security architectures to protect the confidentiality, integrity and availability of information. Of course, in a post-9/11 world where financial shenanigans threaten global economic stability, anyone who's NOT investing in security hasn't been paying attention. This is a reflection of the times, not evidence of enthusiasm.
2) Virtualization Cost pressures mandate that data center managers squeeze more efficiency out of infrastructure investments, and virtualization is one of the quickest ways to increase server utilization, reduce server counts, and improve data center power and cooling efficiency. It's a technology tailor-made to succeed in a slowdown, which is why nearly 40 percent of companies with 500 or more employees are planning to invest in it.
3) Data Center Efficiency See: Virtualization. Just expand that strategy to include investments in the latest power management and cooling distribution technologies. The environmentally sensitive aspect of this only makes it more chic for lean times, as the world tries to squeeze more out of its limited resources. Which explains why the data center strategies at companies like Google and Amazon.com are so revered.
4) Voice over IP Let's see, the No. 1 reason companies invest in VoIP is to lower their telephone costs. No. 2? Enabling unified messaging, reputedly making employees more efficient in their message retrieval. Sense a pattern here?
5) Software-as-a-Service (SaaS) This is the highest-ranking item on the list that once could argue is a take-no-prisoners, risk-taking type of IT investment. Still, the primary reason companies are looking into it, and the larger category known as Cloud Computing, is the promise of lower application and infrastructure costs by renting computing power from a third party. (Whether the long-term costs of SaaS are lower than those of traditional applications remains to be seen.)
If you ask me, these investments are the building blocks of a more mature IT paradigm, not a strategy for innovating and pushing the envelope of what IT can do. This is not to criticize--CIOs are doing exactly what they have to do in a time that calls for a certain level of conservatism and patience. But the truly forward-thinking CIOs will have their organizations poised to take risks sooner than their competitors, because when the next big economic spurt hits, iron-clad security and streamlined data center operations won't provide the competitive advantage companies will be looking for.