In the last three years, a languishing economy and flat revenue growth have made management downright zealous about scrutinizing expenses. And when a big cheese has asked, "How much bang did I get for my IT bucks?" the answers have been less than satisfying.
Part of that dissatisfaction is simply a matter of nomenclature; IT managers still talk about uptime, transactions per second and initiatives taken on. The executive response has been: "Just tell me how I saved money or gained new business by doing all this IT stuff." Pity the poor CIO with no hard numbers to offer.
The watchword is: "Prove your value and lower your costs." Corporate profitability depends on it. In fact, our poll found that a whopping 57 percent of senior managers say that IT costs too much. Some 35 percent added that IT is too slow to respond to business needs, and 31 percent said IT doesn't measure its performance with usable business metrics. Remember that we polled IT decision-makers, not senior business-line executives--it's a fair bet that a survey of non-IT types would show even higher dissatisfaction.
This, then, is the utility-computing mandate: Lower costs, make IT more responsive, and make it more accountable in its use of funds.
To take the pulse of the utility-computing trend, we spoke with a cross section of vendors about their definitions of, and plans for, utility computing (see "Vendor Doctrines," page 47). EMC, HP, IBM, Microsoft and Veritas Software claimed to embrace all three goals, albeit with varied emphasis and approaches. As you might expect, vendors as a whole are much more enthusiastic about helping to create a more responsive and accountable IT department than they are about reducing costs. When vendors did talk about reducing costs, they almost universally emphasized reducing human costs or using existing resources more effectively.
This makes sense. No vendor is going to develop a product strategy with the intent of shrinking its market share year over year. None of the five was even willing to confess that what it would lose in margin it would make up in volume. As far as vendors are concerned, if they are going to save you money, it's going to be for stuff they don't sell--read: human resources.
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