Overrated Tech, Underrated Tech

When 2004 goes down in the books, it might mark the year companies spent deciding where to invest next. An oversupply of worldwide IT talent led many executives to move programming and other tasks offshore, but underselling their own staffs' ability could make the cost savings short lived. More companies adopted open-source software, but the trend could be undermined by lawsuits that threaten those who use it. Among tech companies, the Google guys were overexposed, but most people underestimated Larry Ellison's ability to snare PeopleSoft.

Overrated Adversary: OFFSHORE OUTSOURCING
Underrated Adversary: SHORTSIGHTED EXECUTIVES
As hot-button IT issues go, offshore outsourcing probably gets top honors for 2004. While companies hoped to embrace the advantages of shipping IT work to low-cost countries such as India and China, the public reacted with legitimate questions about the relationship between U.S. layoffs and the use of foreign workers, and politicos parlayed the angst into election-year rhetoric.

But the smoke generated by the offshoring debate obscured the big picture, which has to do with an increasingly global economy and the changing nature of technology work. And short-sighted executives, bent on offshore outsourcing for bottom-line reasons only, may risk trading innovation and competitive advantage for short-term gains. Wal-Mart Stores Inc., the world's biggest retailer--and arguably the most tech-savvy company in any industry--does all software development in-house. "We'd be nuts to outsource," says CIO Linda Dillman (see "Wal-Mart's Way," Sept. 27, 2004). Outsourcing in general, including offshoring, is a valuable business-technology strategy. But it needs to be employed for the right reasons.
--John Soat ([email protected])

Overrated Money Saver: OPEN-SOURCE SOFTWARE
Underrated Money Saver: COMMERCIAL SOFTWARE

Many open-source software products can be downloaded free over the Net, while some commercial software licenses ring up in the millions of dollars. Both are true, but also an oversimplification of software's real cost.

Compare Red Hat Inc.'s midtier standard price for Linux with tech support ($799) to a roughly comparable Windows Server 2003 license from Microsoft ($999), and you begin to see how the numbers really crunch. And those are just list prices. Among the revelations to surface in the Justice Department's failed attempt to block Oracle's proposed takeover of PeopleSoft Inc. was eye-opening evidence of deep discounting. Penny-pinching CIOs can play Red Hat against Microsoft, Microsoft against Oracle, and Oracle against SAP.

In addition, there are costs associated with open-source software that aren't always obvious. Yankee Group analyst Laura DiDio reports that in-demand Linux system admins can command salaries 20% to 30% higher than Windows staffers. In addition, third-party tools and intellectual-property insurance can jack up the overall cost of open-source environments even more. So, here's how to do the math. Add up all the costs to run an open-source stack. Subtract thousands of dollars in concessions from proprietary-software vendors anxious to negotiate. The difference might be less than you think.
--John Foley ([email protected])

Overrated New Media: FLY-BY-NIGHT BLOGS
Underrated New Media: CREDIBLE JOURNALISM
According to this year's election hype, freewheeling bloggers rewrote the rules of journalism. If that were true, it would be a shame: Fairness and accuracy aren't really concepts in need of revision. While getting people to agree about what constitutes fair coverage may be impossible in an era when "fair and balanced" is a marketing slogan, accuracy can be better measured--and, here, too many blogs fall short.Most are echo chambers--only as accurate as the publications they cite. They start with stories posted by news organizations--the kind that do original reporting and confirm details with sources--then add opinion. Without that journalistic seed corn, most blogs would be barren. There are, of course, outstanding exceptions, and some of these involve current or former journalists. But the rise of a handful of insightful, well-written, original online publications doesn't reduce the value of fairness and accuracy. Rather, it reinforces their importance.

"Journalism always has been a vast field with a wide range of quality and standards," says Stephen Burgard, director of Northeastern University's journalism school, in an E-mail. "Generally speaking, more information is better. But since the new wave of opinion writing online hasn't been accompanied with a corresponding expansion of the 24-hour day, the burden falls more heavily than ever before on the reader to find good, trustworthy sources who think twice before firing."
--Thomas Claburn ([email protected])

Overrated E-Commerce Execs: THE GOOGLE GUYS
Underrated E-Commerce Exec: MEG WHITMAN
There are Sergey Brin and Larry Page, lounging around those giant multicolored yoga balls in their whimsical corporate headquarters, the Googleplex. Here are Page and Brin in matching black suits, looking like a weirdly geeky version of the early Beatles. The Stanford guys made good, becoming insta-billionaires on the strength of Google Inc.'s high-flying initial public offering. Google isn't just sitting on its search-engine laurels. But that $170 stock still might be inflated. Google could be next in line to get Netscaped by Microsoft.

Meanwhile, eBay Inc.--that other Bay Area E-commerce company--reported the same third-quarter revenue ($805.9 million) as Google, and nearly as much net income ($182.3 million versus $195 million). CEO Meg Whitman has presided over eBay since 1998 and was a manager at old-line companies Hasbro Inc. and FTD Inc. when Google's presidents were still writing code in the dorms. While slow and steady doesn't always win the race, which Seattle-area company would you rather compete with: Amazon or Microsoft? Now who's feeling lucky?
--Aaron Ricadela ([email protected])

Overrated E-Mail Cure: SPAM FILTERS
Underrated E-Mail Cure: FREE E-MAIL ON THE WEB
Remember when your romance with E-mail was new as a field of daisies? It was hard to think of anything else, wasn't it? What will it say today? What will I learn from it? I can't go to lunch; I might miss an E-mail.

But E-mail changed. It became a stranger, an impudent acquaintance demanding your attention and giving you gifts you neither asked for nor wanted. For practical purposes, we can't divorce ourselves from E-mail, but we can filter its contents. We blacklist or white list our correspondents, giving us something new to do with our time: drawing up lists of friends and foes. We segregate questionable messages in a folder we're forced to shovel often. We clog our in-boxes with warnings about suspect notes in the folder. Among the 800 spammy messages lurks a missive from your boss--and you'd better not miss it!

So you do anything to avoid E-mail. Wash windows. Wash your neighbor's windows. Except now people are signing up for free E-mail from Google, Microsoft, Yahoo, and others. Now E-mail is no longer surly. The old, bad habits haven't caught up with you on the new service. The fields again teem with daisies ... so far.

--Jim Nash ([email protected])

Overrated Lawsuits: SCO GROUP VS. THE WORLD
Underrated Lawsuit: U.S. VS. ORACLE
OK, give us one good reason why a company would want to run Unix on Intel machines instead of Windows or Linux. SCO Group apparently couldn't think of any, either, so it's trying to make money the old-fashioned way: in court. The vendor has filed high-stakes lawsuits against AutoZone, DaimlerChrysler, IBM, and Novell--the buyers and sellers of server-side Linux. SCO claims they've either violated its Unix intellectual-property rights or interfered with its ability to do business. (A Michigan judge tossed out most of the DaimlerChrysler suit in September.)

SCO's litigious ways had little tangible effect on IT buying this year. On the other hand, its suits have pointed out some genuine risks companies take when they run open-source software.

Even if SCO loses all of its lawsuits, it has people thinking about a key issue: intellectual property in the digital age.

The courtroom has been friendlier to Oracle CEO Larry Ellison, who capped his year-and-a-half-long pursuit of PeopleSoft this month by snaring the company for $10.3 billion. A September ruling by a federal district judge against the Justice Department--which sought to block the deal by arguing it would hurt industry competition--paved the way for Oracle's success. Now Oracle is the largest U.S. business-apps vendor, second only to SAP. And Justice is 0 for 2 this decade against the country's largest software vendors.
--Larry Greenemeier ([email protected]) with Aaron Ricadela

Overrated Tech Toys: CELL PHONES
Underrated Tech Toy: iPOD
We know, it's hard to call underrated a product that 4 million people are expected to buy this quarter alone. But Apple Computer's omnipresent iPod--who didn't catch U2 rocking out with one in that TV commercial?--makes a far better tech toy than our even more ubiquitous friend, the cell phone.

It's a matter of plugging to stay unplugged. We're tired of being tethered to work (and friends) no matter where we go: on the bus, in a restaurant, in the restroom. And that's not to mention the annoyance factor when someone's boss, boyfriend, or best buddy rings up for a detailed chat aboard mass transit, and we're forced to share the enclosed space.

Here's a suggestion: Set the cell phone on silent, and slip on a pair of those dreamy white earbuds. Instead of being held captive to the conversational whims of your social and business circle, and making a captive audience of everyone around you, you'll soon be within your own head, with your own music, far away from that looming deadline and nagging boyfriend. Twenty-Gbyte iPod? $300. Stopping the chatter? Priceless.
--Aaron Ricadela ([email protected])Editor's Note: Here is an expanded list of overrated and underrated technologies that appear exclusively on InformationWeek.com:

Overrated communications technology: INSTANT MESSAGING
Underrated communications technology: VOICE OVER IP

R U IMing? Y? Instant messaging is one of those technologies that seems to fascinate the media, perhaps because it provides a window into a subculture--teenagers--that's hard to understand. For most IT managers, though, IM is an overhyped technology that has yet to prove its worth.

Tech managers can be a conservative bunch, especially when new technology starts out as a forum to discuss homework and dates.Only about 18% of Fortune 500 companies have deployed IM, according to Nucleus Research, and it's not hard to understand why. It's intrusive, elevating the sender's time over the recipient's, and promotes a lot of non-work-related conversations. Then there are the security and legal risks that can result from unmonitored communications. C Ya, IM.But tech managers should overcome their conservative nature when it comes to another new communications technology, voice over IP. Yes, phone calls are the lifeblood of many companies, and managers don't want to risk disruption. Plus, most businesses have a phone system that's paid for and works well.

But VoIP's benefits--lower costs, easier management, unified communications tools, and new apps--would seem to make it an easy decision. Just the ability to call and reach a person, rather than calling a location where that person may or may not be, should be sufficient reason to make the move.

There are enough companies using VoIP to gain a variety of benefits that it shouldn't be considered an emerging technology anymore. Perhaps more companies will decide it's time to dial a new number.
--Paul Travis ([email protected])

Overrated Schmoozing Skill: ONLINE SOCIAL NETWORKING
Underrated Schmoozing Skill: CALLING IN FAVORS
Toward the end of last year, social networking appeared to be ready to take off. Friendster, LinkedIn, and Spoke Software received venture funding. Everyone, it seemed, wanted to be your online friend. But how many of your friends--the nonvirtual ones--ever got a job or landed a contract that way?"I thought this was going to be the year of social networking, and it kind of just fizzled," says Denis Pombriant, managing principal of Beagle Research Group, a technology market-research firm. Social networks turned out to be six degrees of stagnation.

John Challenger, CEO of outplacement firm Challenger, Gray & Christmas Inc., says personal endorsements may be more valuable. The social networking sites have some value for job seekers, he says. But having your friends' friends go to bat for you is better than following a thicket of links to get to that key contact.

Moreover, for the gatekeepers everyone wants to reach--those offering jobs, money, or companionship--participation in online social networks can be more of a burden than a benefit. Maybe what's needed isn't more connections, but more filters.

--Thomas Claburn ([email protected])

Overrated travel perk: E-MAIL IN THE SKY
Underrated travel perk: GETTING YOU THERE RELAXED AND ON TIME
Many of us already think of airplanes as second offices. Now the airlines want to coddle us a little more by adding wireless Internet access in the sky. We can't wait.Continental Airlines, United Air Lines, and U.S. Airways already offer limited Web access on some flights for a small fee. Lufthansa, Japan Airlines, and SAS Scandanavian Airlines offer full on-board Web surfing and E-mail. Asiana Airlines, China Airlines, Korean Air, and Singapore Air are expected to join the club next year.

But Internet access in the sky just ratchets up the stress of business travel--especially when the guy in front of us reclines into the screen of our laptop. The only fruit it's borne so far has been occasional access to E-mail, says Forrester Research travel analyst Henry Harteveldt. We need that like a hole in the head after prowling the long-term parking lot for a space, shuffling shoeless through security, and elbow-jockeying our seat mate for a share of that inch-thick armrest. Now there's the expectation that we'll be caught up on E-mail when we land? "That's where the stress comes from," Harteveldt says.

Here's an alternative for the airlines. Bag the tech investment and buy a few more of those seats with lower-back support. Improve the on-board food. Devise a saner boarding method, so groups one, two, three, and four don't all end up queuing in the Jetway. And would more pillows and blankets be too much of a stretch?

But perhaps the most important productivity enhancement for business travelers is this: Leave the laptop in its case and treat yourself instead to a good book and an in-flight nap. Your boss and therapist will thank you. Besides, you'll already be spending plenty of time on E-mail at the hotel.
--Tony Kontzer ([email protected])

Overrated retail technology: RFID
Underrated retail technology: RFID
Radio-frequency identification is the hottest technology to hit supply chains in years. Wal-Mart Stores, German retailer Metro AG, and the Defense Department have all plumped for the little electronic tags. Then Target Corp. and the Food and Drug Administration jumped aboard, requiring suppliers to paste RFID tags on all the goods they ship by the end of next year.

But the hype may be a touch premature. Most companies are simply slapping tags on goods right before they're shipped out, and that gives manufacturers little insight into their supply chains. But slap-and-ship is the most affordable method for these companies: RFID tags can cost between 35 cents and 70 cents, which can add up to millions of dollars a year. Count on more when you add in the cost of installing new equipment and making software changes. Office-products-maker Avery Dennison Corp. says it spent $12 million on RFID this year, for example.

Plus, many experts say it could take years for RFID technology actually to save companies money. For that to happen, business apps need to be re-programmed so they can interpret the data culled from tags. And tags would have to be applied to cases and pallets much earlier in the process, which could cost a large company more than $100 million a year, according to Forrester Research.

But don't despair; RFID's impact could also be underestimated. The technology went from being water-cooler conversation for engineers to the "it" technology of '04 in relatively short order.

With big retailers and government agencies pushing hard, this is one technology that won't likely fall through the cracks. And its potential is pretty cool: Imagine Nabisco being able to transmit an order for sugar the minute Wal-Mart runs low on Oreos.Companies that aren't investing in RFID could lose out on doing business with the world's biggest customers. If a manufacturer doesn't have RFID capabilities soon, Wal-Mart, Target, and the military will find other suppliers that do.
--Beth Bacheldor ([email protected])

Overrated Security Fix: I.T. SPENDING

Underrated Security Fix: COMMON SENSE
Companies opened their coffers this year to buy firewalls, intrusion-detection systems, antivirus software, and other products to ward off the seemingly endless march of computer viruses and worms. But addressing that old IT bugaboo--"user error"--may be an even better defense.

Market researcher Yankee Group estimates businesses worldwide spent about $13 billion on IT security products this year. According to an InformationWeek Research survey, 59% of U.S. companies upped their security spending this year.

But most successful virus attacks and phishing scams work because an unwitting end user falls for a ruse. The majority of successful hacker attacks are enabled by people mistakes, too, such as unpatched systems, misconfigured servers, and obvious passwords. And 30% or fewer of companies offer security training for low-level IT staff and end users, according to the InformationWeek survey. Perhaps it's not the technology that needs fixing, but the people.
--George V. Hulme ([email protected])Illustrations by Michael Klein