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Michael Hickins is off today.
Good morning. Every profession from psychiatry to lawyering has a body that establishes best practices and industry standards, and CIOs ought to have one too–especially at a time when business technology is being reinvented, and the market seems a little crazy. The Technology Business Management Council wants to be that group. Led by CIOs such as Cisco‘s Rebecca Jacoby, the group launched itself on Thursday with a teleconference for 500 members. (See more below.)
The need for professional standards is a point that we’ve made before, and it is worth making again. As Columbia University’s Art Langer has said in his columns for CIO Journal, CIOs as a group suffer from “insufficient professional standards.” That’s not good for CIOs, who like anyone in a position of authority, must command the respect of others in order to lead. CIOs must have a clear sense of how to manage disruption. Going forward, it may be possible for anyone in an organization to procure the technological tools of business, especially over the cloud. But when things go wrong–and they will, they will–it will be the CIO’s job to fix things and make them right. As regulators in the U.K. start enforcing rules that require companies to get permission to track user behavior online, they are turning to CIOs as their compliance contacts. (More on that, too, below.)
Anyone can offer to console a mildly distraught friend or relative, but when heartfelt sharing isn’t enough to help a chief marketing officer with an acute case of cloud anxiety disorder, who ya gonna call? Dr. CIO.
New nonprofit group develops best practices for CIOs. “The business thinks it can procure anything on the open market and have it up and running for free. We all know that’s not true, but that’s the perception we’re dealing with,” says Cisco CIO Rebecca Jacoby. That’s why her department sends regular “bills” to Cisco employees, explaining just how much IT service and equipment they have consumed—and how much it costs. Jacoby made her remarks to a new non-profit group, launched Thursday during a videoconference attended by over 500 members. The new group, the Technology Business Management Council, is an outgrowth of IT optimization services vendor Apptio, and inherits the vendor’s methodology for managing IT organizations, as CIO Journal’s Michael Hickins reports. Its mission is to help CIOs by developing best practices and benchmarks they can use. Jacoby is on the governing council along CIOs such as First American Financial’s Larry Godec and Clorox’s Ralph Loura.
U.K. rules force global CIOs to warn users about online tracking. “The challenge for CIOs is they will have to ask very direct and tough questions of vendors. What are the ways in which you are using cookies? Are they really necessary? What is happening with the data collected?” Jonathan Armstrong, an attorney at Duane Morris, told CIO Journal’s Joel Schectman. U.K. regulators have sent letters to 70 corporations, from Facebook to Tesco and HSBC, asking them to explain just what they are doing to comply with new rules that require them to get permission from users before they track the activity on their websites. The rules—similar to ones being implemented across the EU and under discussion in the U.S.—went into effect last month. They apply only to U.S. companies with physical operations in the U.K., but some believe that could be interpreted to include any business with a web site that operates there. The CIO is the first person regulators want to talk to about compliance.
CIOs will deploy Windows 8 tablets right away. “IT departments will see Windows 8 as the opportunity to deploy tablets on an OS that is familiar to them and with devices offered by many enterprise-class suppliers,” IDC analyst Carolina Milanesi told CIO Journal. That’s why she and other analysts believe that Microsoft Windows 8 tablets will be deployed by corporate IT departments as soon as they are released this fall. Windows 8 notebooks might not be deployed for a year or more, partly because support software won’t be ready. Windows 8 tablets also will be cheaper: $ 500 to $ 700, compared with $ 700 to $ 800 for the notebooks.
TECHNOLOGY NEWS
Business software IPOs face tough market. Data-analysis software company Tableau Software and developer tools maker Atlassian are among several small, business software firms preparing to go public in the next 12 months, hoping a growing market for cloud computing will shield them from the aftermath of Facebook’s botched IPO and Europe’s woes, Reuters’ Nadia Damouni and Olivia Oran report. Sources familiar with the situation said others include: AppSense, whose user virtualization technology allows people to use different devices; Marin Software, which offers an online advertising management platform; Rapid7, which makes network security software; Rally Software, a provider of project management tools; and CollabNet, which offers web-based software development tools.
Apple buddies up with cheaper wireless partners. Sprint said on Thursday that the iPhone would become available this month on Virgin Mobile USA, its service for prepaid plans, where customers pay for the service as they use it. The cost will be considerably less than the fees contract customers pay monthly to use an iPhone — once you get past the upfront price of the phone itself, says the New York Times’ Brian X. Chen. Customers who opt to buy an iPhone with a prepaid plan will have to spend $ 650 for the iPhone 4S, or $ 550 for the older iPhone 4. But the baseline $ 30 monthly fee includes 300 minutes, unlimited data and unlimited text messages. By contrast, AT&T and Verizon no longer offer unlimited data plans, and their contract customers pay upward of $ 90 a month to use an iPhone.
Samsung gets new CEO. Electronics manufacturer Samsung Electronics named the head of its component business CEO after Choi Gee-Sung stepped down yesterday. Lee Kun-hee will wield less power than his predecessor as the company moves to create more separation between its consumer and component businesses. As WSJ’s Evan Ramstad and Jun-Ah Lee note, customers of its chips and component businesses often compete against Samsung’s consumer business units.
Flame: ‘World-class’: Cryptographers are tipping the hat to whoever wrote the Flame cyber-espionage malware that infected computers throughout the Middle East. “The design of Flame is partly based on world-class cryptanalysis,” wrote Marc Stevens from Amsterdam’s Centrum Wiskunde & Informatica in an email to a cryptography discussion group. Stevens’s compliments come from an analysis of how the Flame malware used a sophisticated method called “collision attack” to fool machines into thinking it came from Microsoft. Stevens is considered a leading authority on the method, reports Ars Technica’s Dan Goodin.
Password thefts hit Last.fm, EHarmony. One day after professional social networked LinkedIn admitted to a password breach, music site Last.fm and dating service EHarmony reported the theft of user passwords. Both companies have asked users to change their passwords, reports Bloomberg’s Andy Fixmer. Meanwhile, the Irish Data Protection Commissioner’s Office may investigate the security failure that led to the LinkedIn breach. An Irish official told Bloomberg’s Aoife White that privacy regulators can levy fines because LinkedIn bases its operations outside the U.S. in Dublin.
CA announces hunt for new CEO. With CA CEO William McCracken’s contract to end in March, the company is launching a search for a successor. The business-software makers plans to use an executive search firm, reports the WSJ’s Joann Lublin.
Apple files to stop Galaxy sales in U.S. Apple filed a lawsuit in a California court requesting a U.S. sales ban of Samsung Electronics latest smartphone, the Galaxy S III. The action, which accuses Samsung of infringing on user-interface patents, comes just a few weeks after the CEOs of both companies met in a court-ordered session aimed at ending a patent war that has touched upon courts worldwide, the WSJ’s Jung-Ah Lee reports. Samsung launched its flagship phone last month in Europe and the U.K. It plans to release the Galaxy in the U.S. later this month.
Is there anything iPads can’t do? (cont.) Some Airlines are saving in fuel costs by shedding their fleet’s “thousands of pounds” of equipment and wiring that go into seatback entertainment in favor of renting out iPads to their customers. But that has not stopped traditional makers of in-flight entertainment gear who are working to make systems lighter and more compact, Businessweek’s Justin Bachman reports.
Flame off. Symantec researchers say the creators of the cyber-espionage malware late last week ordered infected computers to download and run a program that removes all traces it. While the malware already contains a self-erasing feature called “Suicide,” reports IDG’s Lucian Constantin, the newer program goes one step further, overwriting the diskspace occupied by Flame with random characters.
Game over for Vivendi? France media company Vivendi is set to decide whether to sell its 61% stake in Activision Blizzard next month, reports Bloomberg. Maker of the best-selling Call of Duty franchise, the Santa Monica, Calif.-based game maker is Videndi’s fourth-largest business with 2011 sales of $ 4.76 billion.
B&N disagrees with DOJ’s price-fixing terms. Book retailer Barnes & Noble said in a letter to the Justice Department that a proposed settlement in a government price fixing lawsuit against some big publishers would lead to “higher overall average e-book and hardback prices and less choice,” writes the WSJ’s Jeffrey A. Trachtenberg. The Justice Department alleges that five publishers conspired with Apple to adopt an e-book pricing model where publishers set the retail prices and retailers receive 30%. Barnes & Noble said that it was “losing substantial money” competing with Amazon‘s more traditional pricing model of allowing retailers to set the price.
Bye bye Best Buy guy. Best Buy founder Richard Schulze has resigned as chairman, a move that could help the next CEO reinvent the troubled retailer, a BB&T Capital Markets analyst tells the WSJ’s Joan E. Solsman and Kristin Jones. ”The chief will no longer have this overhang with a larger-than-life figure weighing in on strategic direction,” analyst Anthony Chukumba said. His departure follows the April resignation of CEO Brian Dunn triggered by board investigation into his “inappropriate relationship” with a female employee. So fare this year Best Buy has seen share prices drop 20%.
Larry Ellison still has one tweet. Last we checked, Oracle CEO Larry Ellison has one tweet, an “Ellisonian” rip on rival SAP delivered Wednesday in celebration of Oracle’s cloud product launch.
WHAT YOUR CEO IS READING
Every week, CIO Journal offers a glimpse into the mind of the CEO, whose view of technology is shaped by stories in management journals, general interest magazines and, of course, in-flight publications.
Meet your next IT consultant, the venture capitalist. With startups like Box or Workday introducing many cloud computing innovations, CIOs looking for advice are finding venture capitalists more helpful than consultants or even established vendors like Oracle, writes Businessweek’s Sarah Frier. As enterprise software companies burn up venture-land—there were with 573 deals in 2011–backers, who get the first looks, are considered the best guides to new technology, Frier explains. Also helpful is the practice of many of today’s venture-funded companies to offer free versions or lower-priced monthly rates, taking away the financial risk of experimenting with startup technology. “We need to be experimenting, because the next 10 years are going to be defined by these little breakthrough companies,” said Flextronics CIO David Smoley.
The Amazon Effect. In the mid-1990s few young e-commerce entrepreneurs understood like Jeff Bezos the Internet’s power to banish geography and allow online merchants to collect vast troves of shopper data. As Steve Wasserman writes in The Nation, it was to be to the misfortune of the publishing business that Bezos’s Amazon.com venture would first target books–as Bezos saw bookselling as the “best way to get big fast on the Internet.” In a long, anecdotal and occasionally rambling essay Wasserman chronicles the messiness of an industry in disintermediation, complete with clueless stakeholders pushing a “dogged and likely doomed defense,” brick and mortar closings, and a buying public reprogrammed to “want their (book) fix at the lowest possible price.”
March of the robots. In less than a decade the U.S. military has become heavily reliant on pilotless drones. Just ask Al Qaida’s number two. Oops he was killed by a drone last week. As was his predecessor…and what seems like a half-dozen number threes. While in all cases drones are remotely controlled by human beings, the Economist reports that experts are at least talking about the next step: automating robots to decide when to kill. That brings up a whole mess of “knotty ethical quandaries” previously discussed in Hollywood-fare like “Battlestar Galactica.” The Economist surveys new developments—a robot that jumps like a flea, a robot that can identify and track individuals—and even talks to a roboticist who is working on “ethics software” for robots that could, for example, crunch data to help determine secondary damage of an attack. While the story doesn’t answer when that first robot kill will take place, the survey does underscore that since reaching the Rubicon, it’s but a short hop to cross it.
EVERYTHING ELSE YOU NEED TO KNOW
No QE3 hints from Bernanke. Fed Chairman Ben Bernanke said that Europe poses “significant risks” to the U.S. financial system, but he didn’t give any hints about new stimulus measures during his appearance on Capitol Hill. When asked whether the Fed is planning to take more measures to boost growth, Mr. Bernanke said he and his colleagues “are still working” on that question ahead of their June 19-20 meeting. The main question they need to answer, he said, is whether the economy will be strong enough to make material progress on bringing down unemployment, the WSJ reports.
Are corporate cash piles shrinking? In its latest quarterly “flow of funds” report, the Fed sharply revised its estimates of how much cash companies are holding on their balance sheets. The bottom line: Corporations have nearly $ 500 billion less cash on hand than previously believed, the WSJ’s Real Time Economics blog reports. Before the revision, the Fed showed companies continuing to accumulate cash, with liquid assets rising nearly every quarter since the recession ended and reaching a record $ 2.2 trillion at the end of last year. Now, it looks like corporate cash piles grew rapidly through 2009, then leveled off. Companies aren’t spending their cash, but they aren’t holding more of it, either. So what’s going on? If you take into consideration heightened buybacks and dividends, the figures might make sense. But we’re going to take a closer look at the numbers today, so check back with CFO Journal later for more.
Spain to request bank aid. Spain is expected to ask for European aid for its banks over the weekend, becoming the fourth and biggest country to seek assistance since the euro zone’s debt crisis began, Reuters reports. Two senior EU officials said finance ministers would hold a conference call on Saturday to discuss a Spanish request for an aid package, although no figure had yet been set. “The announcement is expected for Saturday afternoon,” one of the EU officials said.
Tom Loftus contributed to this article.
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