IT Spending Trends: Data Is King

FRAMINGHAM (03/27/2000) - Enterprise databases and storage-area networks (SAN) are the two most crucial buying decisions facing information technology managers this year, according to an exclusive Computerworld survey. Other priorities this year, ranked in order according to the number of times they were cited by survey respondents, include replacing older desktop PCs, providing high-speed Internet access for telecommuters, implementing security and managing Web content.

Computerworld surveyed 223 IT managers who plan to acquire technology products this year and asked them to name the three most important purchasing decisions they'll make.

Those surveyed support an average of 3,578 users at an average of 62 sites and have an average IT budget this year of $16.7 million.

Enterprise database projects topped nearly everyone's list. Respondents say they need database applications that can scale dramatically, function as part of e-commerce sites with ease and support capabilities that may not have existed a decade ago.

Rochester Gas and Electric Corp. (RG&E), for example, is considering upgrading its existing databases this year to better support a planned geographic information system (GIS), says Paul Ruganis, vice president of information services.

People and Pipelines

The Rochester, New York-based utility will use GIS technology to help track personnel and equipment. "We have a substantial network of gas and electric pipe and wire facilities and a very mobile workforce," says Ruganis. "Now that Y2k is behind us, we can concentrate on finding better ways to allocate that workforce and manage data for customer support."

Ten years ago, an ice storm wreaked havoc with RG&E's data systems. Finding no single commercial software package that could cope with its wide-ranging demands, the utility built its own Sybase Inc. applications that interface with a combination of IBM DB2, Saga Software Inc. and Microsoft Corp. SQL Server database applications. Now the company needs to trim down to one database platform that can scale to levels unheard of a decade ago.

"This is a major, major undertaking that will take 25 to 30 months and come in north of the $10 million level," says Ruganis.

Corporate data keeps growing and must be stored somewhere. So SAN purchasing decisions made the second spot on the list of IT spending trends.

"As more companies try to enable their network infrastructure for e-commerce, they're finding themselves with data management problems [and] load balancing issues, and they move into an area that is pretty unmanageable without something like a SAN," says Jon Kronick, an IT manager at Purdue Pharma LP, a pharmaceuticals company in Norwalk, Connecticut.

Scalability, Performance

Purdue Pharma will be choosing SAN vendors and components within the next three months and will base its decisions on products' scalability, performance and ability to support network-attached storage, Kronick says.

Those factors are also important to Shahri Moin, manager of information systems and technology at IntraNet Inc., a Newton, Massachusetts-based company that builds electronic-payment systems.

Moin's group will start small with its SAN, a system from Sunnyvale, California-based Network Appliance Inc. that will support 60GB at first and grow as its capabilities are proved.

"Cost and reliability were very important considerations for us," he says, "but even more important was Network Appliances' multiplatform support."

IntraNet has taken a do-it-yourself approach to replacing desktop PCs, the third-hottest item on IT shopping lists this year. Moin's team assembles its own PCs using top-line motherboards and components, currently building 500-MHz systems based on chips from Sunnyvale-based Advanced Micro Devices Inc. The PCs have 128MB of RAM, 10GB hard drives and 50-speed CD-ROMs. They cost about $500 apiece, not including the monitor.

"Similar systems from Dell or IBM would cost us $1,000," Moin says. "It takes us 15 minutes to put one together, and we're able to control quality, reliability and maintenance that way."

Quality control and reliability were a common thread among survey participants.

All of them said a vendor's reputation for reliability was an important factor in choosing a system, as was the quality of support after the sale.

Data management via the Internet tagging language XML may turn out to be the answer to "the biggest question I have this year: What is B-to-B?" says Jay Leader at Nypro Inc. "But then, of course, I have to ask the question, ‘What's XML?' And I don't have the answer to that one - yet."

"Right now, we're creating personalized extranets for our customers to give them order information and share critical knowledge between engineers," says Leader, the director of application development at the Clinton, Massachusetts-based manufacturer of injection-molded plastic components. "We're being proactive, so we have the luxury of luring customers to our Web site to view information in our formats. But pretty soon, they'll demand we come to their sites" or e-mail specific data in a specific format at a specific time, he adds. "XML gives us a way to do that relatively painlessly."

But Leader says his team faces a number of obstacles: "Let's say we settle on a DTD [document type definition] for the plastics industry. Now we can talk to other people doing XML for plastics. But we sell to customers in health care and PC manufacturing; how do we integrate with their industry DTDs? That problem makes Unix standards look like a picnic."

Fast Remote Access

Supporting telecommuters with high-speed Internet access such as cable modem or Digital Subscriber Line connections was the fourth most frequently mentioned item on the list of survey respondents' purchasing priorities.

Several managers say the scarcity of qualified programmers, support technicians and network administrators has been pushing all forms of telecommuting up the priority lists.

Problems involved with connecting securely and cost-effectively with telecommuters, satellite offices and overseas facilities have boosted reliance on connecting via the Internet through virtual private network (VPN) technology at Nypro, says Leader.

"We're trying to do a global VPN right now, and it's not easy," he says. "The U.S. is a layup; anyone can get connected here if they have enough money. But doing it effectively in Europe, China [or] South America, where the local providers aren't that great - now that's a different proposition." And it's one that will occupy Nypro for the greater part of a year.

Purdue Pharma's Kronick says he agrees that VPNs will be a hot topic. "VPNs, firewalls, PKI [public-key infrastructure] - anything security will be big, big, big, big for us this year," he says. "With a secure VPN, for example, our employees in China don't have to know much to set up a secure connection."

Security Is Another Priority

Security is a chart-topper this year for Ruganis at RG&E. "We have home-baked network security that will be updated this year," he says. "We're trying to decide between building it internally, outsourcing it or using commercial packages. Commercial security can have problems because everyone knows it. But what if the guy who builds your homegrown security gets hit by a bus?"

Kronick's teams must cope with a mountain of federal regulations that mandate strict security procedures. In response, they're putting together a sophisticated PKI network that will safeguard a network of 3,400 users at 25 sites worldwide, using a fingerprint-based authentication system and smart cards.

Finishing up a Windows 2000 deployment is the one thing that won't happen this year, Kronick says. Although his company fully intends to deploy the operating system early next year, right now it "just has too many bugs and too few people who are skilled enough in Windows 2000 to do the work," he says. And despite Microsoft's additions of Kerberos/PKI, smart cards and biometrics support to Windows 2000, he says, "We're having problems getting Windows 2000 to support our PKI system."

While it didn't appear on Computerworld's initial survey checklist, several respondents pointed out that localization of computer systems will become more important as the year progresses.

"You really can't demand that your overseas employees and customers speak, read and write perfect English," warns Leader. "The more we automate our systems, the more stuff we put on the Web, the more we'll have to supply it in local formats."

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