Yesterday we received the very sad news that our great friend and wonderful colleague Julie Giera passed away earlier this week. Although we were well aware of the fact that Julie had been battling breast cancer for several years, I still find it difficult to comprehend the news – in particular since we had lost another great analyst colleague – Andrew Parker – only a few months earlier.
Julie was one of the great stars and a leading voice of Giga Information Group – the analyst firm later to be acquired by Forrester in 2003. She was instrumental in establishing and extending the Giga brand and influence across a wide community of different stakeholders, including many CIOs as well as the senior executives of many tech vendors. She later continued that fame with Forrester where she quickly became a thought leader around the broader IT services market change issues. Julie was one of the founding members of the vendor strategy research team and many of the key reports that she authored over the last years are still relevant today and represent key highlights of our team’s research portfolio. A lot of her great research can still be viewed and downloaded online, so check out the following:
Rumors became official on Tuesday: Siemens succeeded in finding a viable partner to buy its IT Solutions and Services (SIS) business. For all of us following the market in the past it wasn’t a surprise that ATOS ORIGIN is paying €850 million to take over Siemens’ IT business. This sum is a mixture of shares, bonds and cash, which will make Siemens a prime shareholder of ATOS for at least for a five-year period. In return ATOS will provide Siemens with Managed Services and System Integration worth €5.5 billion over a period of 7 years.
Question: What does this mean?
In the short run, even though this transaction will make ATOS the biggest European-headquartered IT service provider (with an expected combined revenue of approximately €8.7 billion in 2010 growing to an expected €10 billion in 2013) the direct impact for the IT user market will be minor. The mentioned outsourcing contract effectively represents one of the largest deals globally, but the impact on clients will be minimal as SIS delivers a significant amount of services to Siemens today. Second, ATOS ORIGIN is currently running a major restructuring program called TOP. And those projects combined with an acquisition of the mentioned size will be a challenge — at least. Thus meaning that ATOS ORIGIN’s focus will either be to finish the TOP program and then integrate SIS or extend TOP to include SIS. Either way the new organization will need some time to form — and so will the market impact.
Last week, as part of the debate on the 600B border security bill, Senator Charles E. Schumer from New York reportedly called the Indian offshore IT firms in general and Infosys in particular “chop shops” — a reference to the locations where criminals dismantle stolen cars for spare parts. As always, the Indian press has immediately reacted. But let’s not take the comment out of context; US Senator Charles Schumer calls Infosys 'chop shop' - India Business - Business - The Times of India. Senator Schumer is showing that in an election year, he is “standing up” for American jobs.
But that said, as we head into the midterm elections with 9.5% unemployment and very little job growth, there will be more comments like this unfortunately, and the Indian firms and NASSCOM need to be prepared with their own PR counterattack and story. Offshore customers would also be advised to take the same advice and have a clear PR plan ready to go at a moment’s notice in case they get raked over the coals as part of the rhetoric.
It's time for IT to get out of the business of running everything itself and move into the role of delivering technology value to the business. This is a core theme that runs through a large majority of Forrester's research and our advice to clients. But exactly how do you make this transition? Well, a good example can be found in Amylin Pharmaceuticals.
Well, it's been a whirlwind two days at the Infrastructure & Operations Forum here in Dallas! I know that not everyone has the opportunity to attend these events, so for all of you stuck at home (and not in sunny Dallas), I've summarized some of the keynotes (with help from Christian Kane and Lauren Nelson) for you to check out. There is also a great conversation about the forum on twitter , so you should definitely check that out as well.
Rob Whiteley kicks off the day with a preview of the next two days and some AC/DC music (the theme of the event is "Back in Black"). First up is Glenn O'Donnell:
The New I&O Landscape: Aligning I&O With Post-Recession Business Imperatives Glenn O'Donnell, Senior Analyst, Forrester Ha, this presentation is based on the book "He's Just Not That Into You" and it is about the love story between I&O and the business.
I&O, how can you win the love of the business?