TechWeb, 6/26/03: Outsourcing IT: Is There a Downside?
By Judy DeMocker
Is there a downside to IT outsourcing? Not by the looks of this week’s news.
An executive at J.P. Morgan touted the success of a $5 billion outsourcing deal with IBM. Ericsson signed a deal with IBM to handle its software development, deployment, and maintenance. That’s on top of a deal it made with Hewlett-Packard earlier this month to run the telecom company’s IT infrastructure.
Businesses have long shipped labor-intensive services such as call centers and maintenance of legacy applications to regions like India and the Philippines, where technicians’ salaries are lower. Now cost-cutting pressures are pushing companies to consider outsourcing an ever-wider array of business processes—including accounting, marketing, creative services, and desktop publishing. A recent Gartner report estimates the market for human resources outsourcing alone will grow 18 percent this year, to $46 billion—the largest single business process being outsourced today.
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IT Management
CIO, 6/15/03: A Rash of IT Failures
BY SCOTT BERINATO
JOHN HALAMKA remains compulsive about his network for good reason. Having endured one of the worst health-care IT network outages ever last November at Beth Israel-Deaconess Medical Center, the CIO of CareGroup in Boston checks his entire network each night from home before he goes to bed. He does it again when he wakes up.
Since that network outage (see "All Systems Down"), Halamka has added some structure to the medical center's networking policies and has refreshed some of the staff's network management skills. But other than that—and a Slammer virus network infection on Jan. 25—Halamka continues to pursue new applications for patient care, and spreads himself as far and as thin as he possibly can with supply chain, asset management and other projects. "Our [new] application efforts are more intense than ever," he says.
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Wall Street Journal, 6/26/03: Thanks for Not Sharing
Employers Move to Prevent Workers From Using 'Peer-to-Peer' Software
By ANNA WILDE MATHEWS
Staff Reporter of THE WALL STREET JOURNAL
When real-estate firm Belz Enterprises LP experienced slowdowns on its corporate computer network several months ago, it traced the problem to an unexpected source: Two of its employees were swapping songs and photos using online file-sharing software.
James Rhodes, the company's network administrator, "went to the machines, found it, and promptly uninstalled it," he says. He told the employees: "You've got a CD player -- you can bring in CDs."
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Security
Internet News.Com, 6/25/03: Windows Media Services Flaw Fixed
By Ryan Naraine
Microsoft on Wednesday warned of a security flaw in the ISAPI extension for Windows Media Services that could lead to code execution on Windows 2000 systems.
In an advisory, Microsoft tagged an "important" rating to the vulnerability and urged systems admins to install a patch at the earliest opportunity.
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Optimism
Fortune, 7/7/03: There's Life Left in the Valley
Don't listen to Larry Ellison. If history is a guide, the seeds to the next boom are being sown now.
By Fred Vogelstein
When Regis McKenna, the noted high-tech consultant, author, and entrepreneur, gives speeches these days, he brings a devastatingly effective prop: a PowerPoint slide with four headlines—from 1980, 1983, 1985, and 1991—all forecasting the end of Silicon Valley as we know it. Under the caption "Deja vu," they read, Dreams of Striking It Rich Fading in Silicon Valley, Los Angeles Times, September 1991; Why Silicon Valley Is Losing Its Edge, Business Week, March 1985; Study Reveals Silicon Valley Beginning to Lose Its Appeal, Computer World, August 1983; and Why Success Is Choking Silicon Valley, Business Week, March 1980. With job losses at all-time highs, Oracle boss Larry Ellison declaring the "end of Silicon Valley as we know it," and the Harvard Business Review writing, "IT doesn't matter," it's hard to muster much optimism about the region's future. History, says McKenna, suggests that is a ridiculous notion.
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