Outsourcing
Strategy+Business, Q3 02, Why Outsourcing Is In
By Anne Chung, Tim Jackson, and Tim Laseter
Once used largely for nonessential, tactical activities, partnering now covers core operations, transforming entire industries.
Earlier this year, IBM entered into a $5 billion manufacturing outsourcing arrangement with the Sanmina-SCI Corporation, an electronics contract manufacturer. Straightforward financial reasons justify the outsourcing — but, more important, the agreement supports overall business strategy at both companies. The deal also offers an archetype of a broader trend: strategic operations outsourcing.
In the past, outsourcing focused on tactical, nonessential activities such as payroll processing or manned security stations. But the focus is shifting. Strategic operations outsourcing encompasses core activities — such as manufacturing or logistics — that could substantially affect a business if not performed well. The best companies pursue it through a critical reevaluation of their positions along industry value chains, aiming to improve financials in mature businesses. When multiple companies in or around an industry come to the same strategic conclusion, a reinforcing cycle of strategic outsourcing can initiate a fundamental restructuring of entire industries. Understanding the motivations that drive strategic outsourcing and the appropriate way to apply it positions your company to drive such restructuring in your industry, rather than merely react to it.
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Microsoft
Infoworld, 7/25/02: Microsoft Exchange Server flaw uncovered
By Brian Fonseca
MICROSOFT AND INTERNET Security Systems (ISS) teamed up to issue a warning to computer users on Thursday to address a remote buffer overflow hole found within Microsoft Exchange Server Version 5.5.
By taking advantage of a flaw associated with how the server's Internet Mail Connector (IMC) interprets responses to the "EHLO" command within Simple Mail Transfer Protocol (SMTP) service, assailants can launch an attack and crash Exchange by blocking bi-directional e-mail traffic or could seize total control of the machine, said Dan Ingevaldson, X-Force research and development team leader at Atlanta-based ISS.
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Reuters, 7/25/02: Microsoft to Pump Up R&D, Hire 5,000
By Reed Stevenson
REDMOND, Wash. (Reuters) - Microsoft Corp. said on Thursday it would boost spending on research and development by 20 percent and hire nearly 10 percent more workers this year, buoyed by strong sales of Windows XP ( news - web sites).
Bill Gates ( news - web sites), Microsoft's chairman and chief software architect, said the software giant would make "aggressive" investments as it prepares to bet the company's future and its mainstay, the Windows operating system, on Web-based services.
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Outsourcing
Computerworld, 7/24/02: Hertz extends IT outsourcing contract with IBM
By Juan Carlos Perez, IDG News Service
IBM has driven out from Hertz Corp. headquarters with an early extension to the IT outsourcing relationship the companies have had since 1993.
Hertz, the world's largest rental-car company, will pay $154 million over six years to have IBM continue to provide a variety of IT services, the companies announced today. The contract extension comes about one year before the current contract was set to expire.
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PC Industry
ZDNet, 7/26/02: Do we really need that new PC?
By Patrick Moorhead
COMMENTARY--Considering all the "evident" benefits offered by personal computing devices, you might naturally assume that more people would want to enrich their lives with new technologies. Therefore, I'm surprised by the slowdown in technology adoption that many pundits are now blaming on the economy.
But I believe that conclusion misses a more fundamental reason. What if the rate of home and business technology innovation is outpacing its relevance to many consumers, leaving them to wonder if they even need the latest in technology? At that point, are the "evident" benefits of computing really so evident?
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