Round Table: 2009 in the rearview mirror, Part 4

Rafael Ruffolo (Staff Writer, ComputerWorld Canada): Brian put forward  Globalive being the biggest story of the year, and Dave, you put the Oracle/Sun deal, but one of the biggest tech stories that affected everyone, and even people on the moon, too, if there were people there, is Conficker. For a good three or four months, it was Conficker-mania. Every press release I got had something to do with Conficker, and, as scary as it sounds, just a couple of days ago, I got a little new wave of Conficker press releases and pitches from some of these vendors. “Conficker has just finished its first stage: the worm has now infiltrated the world, and Phase 2 is going to appear sometime in this year!” Was it just really overblown? Was it manufactured by the security vendors?

Kathleen Lau (Senior Writer, ComputerWorld Canada): They made a lot of noise for a long time, but it was only really dangerous for the first few months, and I know by January there was a still a lot of news and fear but nothing really happened, and in hindsight, people realized that nothing really happened and we were afraid for a really long time and it was unnecessary.

RR: Maybe it parallels to the H1N1 virus.

Dave Webb (Editor, ComputerWorld Canada): These attacks that are all software I don’t think are nearly as dangerous as they’re made out to be. The one’s that are dangerous are the ones that are software and social engineering, and the ones that are targeted — the ones where there is an actual criminal, not a bot. Those are the ones that are actually dangerous. Not to be cruel or anything, but if you’re stupid enough, anti-virus software and anti-malware software is not going to do a damn thing for you.

Jeff Jedras (Senior Writer, Computer Dealer News): What is definitely the biggest tech story of this year is the death of Nortel networks, the Canadian technology giant that had been around for a thousand years. It was part of every Canadians’ investment portfolio in the year 2000.

RR: The thing is, we could’ve talked about that in 2004, 2005, 2006, 2007, 2008…

DW: Now it’s just official.

JJ: This is part of the national cycle of boom and bust in the technology industry, and, as Nortel is broken up for pieces, it goes to Avaya, and it goes to Ericsson, and to other players. You’re also going to see many of the employees leave and start their own start-up business.

KL: Which is a good thing in the whole cycle of businesses, right? You’ve got large companies that very rarely get broken up, and you’ve got small companies that emerge and become larger ones — it’s a whole cycle. But the good thing is that, although Nortel Networks is now dismembered, the intellectual property continues to live on among the new entities, so it’s not a bad thing entirely.

DW: Well, Nortel is still hanging onto all those patents, and essentially, when the dust is settled, there will be a patent licensing outfit. I disagree with it being the natural cycle of boom and bust. It was horribly mismanaged.

JJ: Those companies that suck, it’s the survival of the fittest. They’re picked off by the stronger of the herd and their blood and bones are tilled into the soil and they become the fertilizer and nutrients for the next generation.

Brian Jackson (Staff Writer, Nortel is like the sad story of the year, if wireless competition is the good story of the year in Canada. Nortel is the sad story because it was such a missed opportunity for Canada to have, frankly, a global leader. Nortel was ahead in a lot of ways in its network technology, and also the jobs that have been lost. Up until 2009, all we heard about the IT job sector was how there was a skills shortage out there and then suddenly, as soon as the recession hit, companies can’t get rid of their IT workers fast enough, and here you have one of the largest technology employers in Canada just offloading all their employees, their pensions are in doubt, and they’re hard-strapped to find a replacement job right now. It’s certainly an irony.

DW: Canada now has a trade deficit in high-tech products, whereas, I believe, not too many years ago, we had a trade surplus in high-tech products, and I think a substantial chunk of that was purely Nortel product.

RR: That’s definitely a sad story, but that’s the way it goes, really. Even if you look at other big companies that, in my opinion, are really started heading down that same path that Nortel did, like if you look at Yahoo this year, they haven’t gone out of business, but Yahoo has essentially given up being that search giant and made that agreement with Microsoft, so Yahoo isn’t really a company anymore, and it was a pioneer in the tech industry not too long ago.

JJ: But it will birth other bigger players. Netscape used to be the dominant browser and the competitor to Microsoft, and it faded away, and then Firefox came out.

DW: And then you can’t mention Yahoo without mentioning Google. The company that’s a verb.

RR: And with Google you’re really getting into cloud computing. I think everyone has just heard that buzzword over and over again all year, and you have companies like IBM basically wanting to be a cloud provider where they go into your organization and they build your private clouds out, and then you have public clouds like Amazon and Google does, and you have cities actually saying, ‘We’re not going to run our office productivity apps anymore. We’re just gonna let Google run it.’ L.A. is the biggest example, but I’m sure that Canadian cities will start to look at that if it works out and go the same way because it’s just a lot more convenient to let Google do it.

KL: I think maybe the reason why we didn’t talk about cloud too much [last year] was because there was a lot of apprehension around the whole subject, and there still is. But I think vendors and users are becoming a bit more comfortable. When I was at the SAP Influencer Summit, they talked about launching their existing tools in an on-demand option, so that’s kind of interesting for a company like SAP.

RR: A lot of enterprises are still confused over what the cloud is, and how much they want to put into it, and where they actually want to operate in the cloud.

KL: I think that part of the confusion is the fact that people still see a bit of a security issue around the cloud. People don’t know if it’s safe to store their data in the cloud, and, if so, what kind. They tend to want to keep their sensitive data on-site. For 2010, we’ll see more cloud vendors pairing up with security vendors and try and offer more confidence to customers.

BJ: Security isn’t the only issue, though. Privacy and jurisdictional concerns are also a big part of it, right? I’m sure a lot of Canadian companies are not totally comfortable still with their data being in the U.S. because there’s a perceived privacy risk there with laws like the Patriot Act still being in effect. It’s pointed out that these companies could have their data rifled through by the FBI and never even told about it. In fact, it would be illegal if they were even told about it. So whether there’s more of a privacy risk or not with having your data there, there is definitely a perceived risk and that’ll be a barrier for at least larger enterprises, and definitely for public organizations putting their data in the cloud until Google (or whoever it may be providing those services) can assure them that their data stays inside of the borders.

RR: When Steve Ballmer was doing the Windows 7 launch in Toronto, someone asked him about their cloud services and he basically said, we’re going to have to build data centres in Canada because you can’t have the data going to the States if companies are confidently going to want to invest in this. So that’s going to be a big issue. There needs to be investments, though, from some of these big vendors in Canada, so we’ll see if that happens.

JJ: I have to take a bit of a contrarian view on cloud computing. I think we’ve been talking about this for 10 or 15 years; we’ve just been calling it something else, just as software-as-a-service was called something else 10 years ago. We decided now to call it software-as-a-service, so now everyone calls it software-as-a-service, whether it’s software-as-a-service or not. I think cloud marketing has become the big buzzword. There have been tweaks to the concept, and it has been a big trend, but I don’t think it’s necessarily new. The biggest joke is this concept of the private cloud. I’m sorry, but that’s just ridiculous. It doesn’t make any sense. A private cloud? It’s an oxymoron. It’s just called offsite storage. Haven’t we had that for years?

DW: Private cloud. The other word for that is “data centre,” isn’t it?

KL: Your own data centre.

RR: For huge companies, they have offices everywhere. It’s the fact that you can run one big mega-data centre and have that be your private cloud feeding into all the others.

KL: What makes it private is the fact that you aren’t going to a cloud infrastructure provider and having your data put on the same server as someone else’s, and that’s what makes it private.

DW: Let me throw this out, with respect to cloud computing: everybody’s trying to sell you cloud computing. Does IBM post any of its applications in a public cloud? Do you think any of these big companies are willing to do what they’re asking enterprises to do?

RR: They’re asking certain enterprises to do that. For the mega-enterprises, they’re not fooling anyone. They’re not recommending them to go to a public cloud and put your information in there. They want to do what Jeff said, which is this idea of the private cloud, whether that’s a new concept or not. I think this is more for the small businesses and mid-market businesses that would be up for going to a public cloud. You’re not going to see banks going to Amazon to store their data.

DW: What about the hybrid model? Do you think that has legs?

KL: It depends on the application. For example, certain applications work best in the cloud. I think, for example, supply chain apps is one particular vertical where the apps would work rather well on-premise and on-demand. But not for all apps. At least not now.

BJ: I think the hybrid model does have legs because Microsoft favours it, and, let’s face it, they’re the dominant software player in the enterprise market, so if they say it’s good, then companies will probably believe them.

RR: Stuff like anti-virus software is a perfect example of just going to the cloud. It may even be more effective if it’s based in the cloud. A hybrid model works.

JJ: I think they’re choosing to call it security-as-a-service, speaking of buzzwords.

RR: One other story is with Dell. They’re in the storage business now; they really want to be the IT infrastructure provider.

JJ: I think Dell has embraced the channel over the last few years in a large sense. They’ve really moved away to the heavy customization builds in the factory model to rely a fair bit more on the channel. As well they’ve bought some companies. Dell will become much more of a player in the enterprise than they perhaps have been in the past. People tend to think of them as the cheap laptop guys, but they are really starting to build out their play in the enterprise and data centre through partnering and through acquisition, and, of course, to do that successfully, they will need the channel.

DW: One constant historical criticism of Dell has been the minimal amount of R&D that they do. They wait for somebody to show them something works, then Dell does it more efficiently and cheaper.

KL: Microsoft is criticized for being that way as well. They don’t usually pioneer. They wait for somebody else to conquer and then they start copying. They go in and they start eating everyone up.
Next: Our predictions for 2010

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