S&P Downgrade Of US Debt And Related Financial Market Distress Mean Slower Growth In US And Global Tech Markets

Andrew Bartels

The financial news from the US and Europe – the messy resolution of the US debt ceiling impasse and the related downgrade of US government securities, the sharply higher prices for Spanish and Italian debt after inadequate response to the latest Greek debt crisis, and the big drops in stock markets on Monday – will certainly weaken the economic growth prospects of both the US and Europe. We anticipated much of this two weeks ago, both before the US debt ceiling was raised at the 11th hour along with a makeshift deficit reduction plan (see my blog on July 28, 2011) and after the news of much lower US economic came out on Friday (see my blog on July 29, 2011). In fact, the resolution to the debt ceiling issue was slightly better than we expected (no default, and in interim deficit reduction that cut only $21 billion in fiscal year 2012 starting in October 2011) while the US economic outlook in Q2 2011 and earlier was quite a bit worse. The big surprise was S&P's downgrade of US securities from AAA to AA+. While that downgrade was not copied by the other rating agencies and in fact had no impact today on the prices of US treasury securities, it had a big psychological impact. Along with the bad news coming out of Europe after interest rates on Spanish and Italian debt spiked, the S&P downgrade triggered the 600 point or so drop in the Dow Jones Industrial index today, following a 500-point fall on Friday. The result of all these events at best will mean very weak growth in both the US and Europe in the rest of 2011 and well into 2012; at worse, it increases the risk of a renewed recession.

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Venices (And Singapores) Of The World: Imitation And Innovation

Jennifer Belissent, Ph.D.

We often hear of city comparisons.  In my many years in Russia, I must have heard that St. Petersburg was the Venice of the North hundreds of times.  Another is Paris.  How many times have you heard “[Insert city] is the Paris of the [insert region]”?  Actually, a quick search reveals that there are at least 11 cities that are “the Paris of the East.”  Some are quite surprising:

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GPU Case Study Highlights Financial Application Acceleration

Richard Fichera

NVIDIA recently shared a case study involving risk calculations at a JP Morgan Chase that I think is significant for the extreme levels of acceleration gained by integrating GPUs with conventional CPUs, and also as an illustration of a mainstream financial application of GPU technology.

JP Morgan Chase’s Equity Derivatives Group began evaluating GPUs as computational accelerators in 2009, and now runs over half of their risk calculations on hybrid systems containing x86 CPUs and NVIDIA Tesla GPUs, and claims a 40x improvement in calculation times combined with a 75% cost savings. The cost savings appear to be derived from a combination of lower capital costs to deliver an equivalent throughput of calculations along with improved energy efficiency per calculation.

Implicit in the speedup of 40x, from multiple hours to several minutes, is the implication that these calculations can become part of a near real-time business-critical analysis process instead of an overnight or daily batch process. Given the intensely competitive nature of derivatives trading, it is highly likely that JPMC will enhance their use of GPUs as traders demand an ever increasing number of these calculations. And of course, their competition has been using the same technology as well, based on numerous conversations I have had with Wall Street infrastructure architects over the past year.

My net take on this is that we will see a succession of similar announcements as GPUs become a fully mainstream acceleration technology as opposed to an experimental fringe. If you are an I&O professional whose users are demanding extreme computational performance on a constrained space, power and capital budget, you owe it to yourself and your company to evaluate the newest accelerator technology. Your competitors are almost certainly doing so.

The Business Architect Cometh

John R. Rymer

[Forrester Principal Analyst Alexander Peters, PhD. and I collaborated on this research.]

You may have heard the term "business architect" in your travels; if you haven't, you soon will. A significant number of our clients are searching for these new leaders. Broadly, BAs are responsible for developing and managing an organization's business model and business technology (BT) agenda. The business architect fills the gap between business management and IT management. One way to bridge the gap is to make it someone's responsibility to do so.

In our research, we spoke to individuals occupying this crucial role in a large European agency, a large financial services firm, a regional healthcare provider, a diversified energy provider, and a logistics firm. The need for BAs is most acute in organizations that are in the midst of transforming their businesses and information systems.

The need for business architects is manifest, but what's less apparent to these firms is how this role should be structured, who should occupy it, and what a BA's responsibilities should be (as illustrated by wide variations in job ads for the position). In our research, we found two established models for the BA role:

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Why Do We Let Software Sales Reps Behave Like Tourist Souvenir Hawkers?

Duncan Jones

I’ve just had a negotiation lesson from Number-one-Daughter, who has been studying in China for a year. I’ve just returned from beautiful, vibrant Beijing  (北京) where my wife and I met her, to see the city and to help her get her luggage home (which explains the 6 pairs of ladies’ shoes in my suitcase and makeup in my carry-on — at least, that’s my story and I’m sticking to it).

Chinese souvenir stall

Author and wife on the Great Wall of China

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US Q2 2011 GDP Report Is Bad News For The US Tech Sector, But With Some Silver Linings

Andrew Bartels

The US Department of Commerce released preliminary Q2 2011 GDP data this morning (National Income and Product Accounts -- Gross Domestic Product: Second Quarter 2011 (Advance Estimate); Revised Estimates: 2003 through First Quarter 2011), and there was not much good news in the numbers.  First, US real GDP growth came in at a weaker than expected 1.3% (see Table 1).  Equally bad, prior quarters' growth was revised downward -- Q1 2011 down to 0.4% from 1.9% earlier, and Q4 2010 down to 2.3% from 3.1% earlier.  Given the negative impact of the deadlock on raising the US Federal debt ceiling -- even if a default is avoided at the last minute -- it is hard to see US real GDP growing faster than 2% in Q3 and Q4 2011, and very possibly not much more than 1.5%.

Table 1, US Real GDP Growth Rates, Before and After July 29, 2011 revisions

 

Real GDP, annualized growth rate from prior quarter

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

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BI Vendors Have To Eat Their Own Dog Food

Boris Evelson

Would you trust a car salesman who’s not driving the type of car he’s trying to sell you? Would you trust a nutritionist or a dietitian who’s not in a good shape? Probably not. There are two things that I suggest we all ask of BI vendors. Ask if they:

  • Use their own BI tools to run their company. Next time you interview a BI vendor, ask for a proof that their own CxOs and all other strategic and tactical decision-makers are using their own tools. I know of some cases where they don’t. How can a vendor convince you to buy its solutions if it hasn’t convinced its own people?
  • Adhere to the same best practices they suggest you implement using their tools/solutions. Transparency is one of them. One of the top use cases for enterprise BI is transparency: full visibility into companies processes, people, policies, rules, and transactions.
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Standalone Knowledge Management Is Dead With Oracle's Announcement To Acquire InQuira

Kate Leggett

Its exciting news to see Oracle announce its intention to acquire InQuira. We have been waiting for this news for a long time. The reasons are multifold:

  • Today’s contact center ecosystem is complex, and comprised of multiple vendors who provide the critical software components. Read my blog post on what these critical software components are. Customers are looking for a simpler technology ecosystem to manage from both a systems perspective and a contractual perspective.
  • Suite solutions, available from unified communications (UC), CRM, and workforce optimization (WFO) vendors, are evolving and include comprehensive feature sets. These vendors have either built these capabilities out or acquired them via M&A activity. And we expect more M&A to happen.
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Forrester Will Lower Its Tech Market Forecast By One-To-Two Percentage Points, Depending On Federal Debt Ceiling Outcome

Andrew Bartels

On Tuesday, we were ready to publish our mid-2011 global IT market forecast.  It projected 7.4% growth in the US IT market in 2011, and 10.4% in 2012.  Global growth in US dollars was forecast at 10.6% in 2011 and 7.6% in 2012, with the dollar rebounding in 2012 from its weakness in 2011;  measured in local currencies to eliminate currency fluctuations, growth was projected to be 7.8% in 2011 and 9.1% in 2012.  Our definition of the IT market included business and government purchases of computer and communications equipment, software, and IT consulting and outsourcing services -- it did not include their purchases of telecommunications services, which are declining in the US and growing slowly globally.

Our forecast did recognize three threats to economic growth, and thus three risks to our forecast: 1) a failure to reach a sensible resolution to raise the US debt ceiling and start on a path to lower budget deficits; 2) a failure of European governments to reach a sensible resolution to the Greek debt crisis that lowered the Greek debt burden and reduced the risk of a broader debt crisis that included Italy and Spain; and 3) overreaction by China and India to rising inflation that reduced their growth. 

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Is Marketing The Biggest Opportunity For IT Since The Internet?

Nigel Fenwick

In today’s fast-paced global economy, examples of how empowered customers and citizens use social technology to influence everything from brands to governments are all around us. The Arab Spring clearly shows the ability of technology to empower people. In this new digital age, marketing teams must react at the speed of the market: Product development life cycles that used to last many years are compressed into months or weeks; customer service expectations have moved from same-day response to instant response; public relations snafus must be handled in minutes rather than days; marketing campaigns are adjusted in real time based on instant feedback from social media. In this new era, mastering customer data becomes the key to success and, in my opinion, represents the biggest opportunity for IT to impact business results since the dawn of the Internet.

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