CIOs Considering Tech, Sourcing Overhauls

Susan Nunziata, Director of Editorial | 3/24/2014 | 17 comments

Susan Nunziata
Are you planning to change your enterprise technology and sourcing relationships in the next two to three years? There are a variety of forces -- both technological and geopolitical -- that point toward many CIOs making wholesale changes in the near future.

Research firm Gartner is predicting that 70% of CIOs worldwide will change their technology and sourcing relationships in the next two to three years. This is a result of the degree of change with which IT leaders are struggling within their own organizations, according to a prepared statement released March 19 from Gartner.

Eric Rocco, managing VP at Gartner, said that CIOs "are strongly considering changing the providers they work with as part of responding to this change. Market share will shift to service providers able to help clients respond to the business and IT opportunities and challenges that are overwhelming more than half of organizations today."

Dramatic changes in businesses' technology are definitely part of the picture. As Rocco noted in Gartner's statement:

Digital business is an unstoppable and irresistible catalyst for change -- change that will affect the fundamental foundations and baseline assumptions of every business, Mr. Rocco said. The digital business revolution is underpinned and enabled by the macro technology forces of cloud, social, analytics, mobility and the Internet of Things. Not every business fundamental will need to change to the same degree, nor will every technology driver have a role to play in every business scenario; however, businesses that decide to "wait and see" are likely to become irrelevant.

However, there are other significant forces behind this shift that can't be ignored, most notably the geopolitical conundrum raised for many multinational corporations in the wake of the NSA surveillance revelations last year by Edward J. Snowden. According to a March 21 article in The New York Times, revelations of NSA spying could cost US technology companies $35 billion by 2016.

According to the article:

Though it is hard to quantify missed opportunities, American businesses are being left off some requests for proposals from foreign customers that previously would have included them, said James Staten, a cloud computing analyst at Forrester who has read clients' requests for proposals. There are German companies, Mr. Staten said, "explicitly not inviting certain American companies to join."

A March 22 article in the New York Times titled "N.S.A. Breached Chinese Servers Seen as Security Threat," reveals further information about the NSA's reach.

According to that article:

The agency pried its way into the servers in Huawei's sealed headquarters in Shenzhen, China's industrial heart, according to N.S.A. documents provided by the former contractor Edward J. Snowden. It obtained information about the workings of the giant routers and complex digital switches that Huawei boasts connect a third of the world's population, and monitored communications of the company's top executives. One of the goals of the operation, code-named "Shotgiant," was to find any links between Huawei and the People's Liberation Army, one 2010 document made clear. But the plans went further: to exploit Huawei's technology so that when the company sold equipment to other countries -- including both allies and nations that avoid buying American products -- the N.S.A. could roam through their computer and telephone networks to conduct surveillance and, if ordered by the president, offensive cyberoperations.

Is your organization going to join the technology and service provider overhaul predicted by Gartner? What are the major drivers behind your organization's technology and service provider decisions? Are the NSA revelations affecting your choices when it comes to purchasing IT products and services? Tell us what you think in the comments below.

— Susan Nunziata, Circle me on Google+ Follow me on TwitterVisit my LinkedIn pageLike EnterpriseEfficiency on Facebook, Director of Editorial,

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eethtworkz   CIOs Considering Tech, Sourcing Overhauls   4/27/2014 12:31:32 PM
Re: "N.S.A. Breached Chinese Servers Seen as Security Threat,"

A number of American Companies are actually offering such Services in the Cloud today[Microsoft is just one leading example].

If you don't want to host your Data in America you very can today.
kstaron   CIOs Considering Tech, Sourcing Overhauls   3/31/2014 3:31:31 PM
Sooner than later
I always figured that tech has a quick life cycle that's only getting shorter, but with the NSA revelations, i can see why it might make some companies to overhaul sooner rather than later.
Umair Ahmed   CIOs Considering Tech, Sourcing Overhauls   3/28/2014 10:37:44 AM
Re: "N.S.A. Breached Chinese Servers Seen as Security Threat,"
@ nasimson: This make sense. I am surprised at completely opposite reactions of individuals & businesses, when their security or privacy is breached. Do you think it would be rational for the individuals to react the same way as Huawei did (complete silence) to avoid future troubles?
nasimson   CIOs Considering Tech, Sourcing Overhauls   3/26/2014 10:18:43 PM
Re: "N.S.A. Breached Chinese Servers Seen as Security Threat,"
> In fact,I won't be surprised that they decide to go totally independent
> and free of American interference in Hardware/Software.

US was leading the world in computing. Then came web. US also created a leadership in domains & web hosting. Then came cloud. US became leader in cloudspace too in form of Amazon Web Services, Cisco InterCloud, IBM Smart Planet etc.

Now all this is at risk.

I can understand if European choose to host their data elsewhere. But have you seen an American enterprise shifting its data away from American soil?
eethtworkz   CIOs Considering Tech, Sourcing Overhauls   3/26/2014 8:46:30 AM
Re: Sourcing overhauls

You need not just speed for change but also a degree of Stability and Predictability in place.

Otherwise the massive pace of change in IT can and will overwhelm most IT Departments(and even Enterprises as we speak).

Believe me this is precisely how this will happen today if you are not prepared for this eventuality.

eethtworkz   CIOs Considering Tech, Sourcing Overhauls   3/26/2014 8:37:15 AM
Re: "N.S.A. Breached Chinese Servers Seen as Security Threat,"

It works both ways(frankly Speaking).

Even the American Companies are very scared of the extent of NSA Spying and its after-effects on their Business in Russia and China today.

In fact,I won't be surprised that they decide to go totally independent and free of American interference in Hardware/Software.

The consequences for the Market Value/Profits of American IT firms?

Catastrophic in more ways than one!!!
eethtworkz   CIOs Considering Tech, Sourcing Overhauls   3/26/2014 8:30:46 AM
Re: CIOs Considering Tech, Sourcing Overhauls

A Most excellent post!

I must say that when one looks at this Whole BYOD Revolution (which is sweeping and Troubling the Entrenched IT Mindset in most Enterprises);one sees why Employees are constantly preferring to go their own Way[BYOD/BYOS,etc].

Its not really that hard to figure out.

Is'nt this also why whenever you see a Major Transistion in a company(at senior Levels in IT);the new Guy not just brings his own people in at Key Positions but he/she also ends up shaking the whole Enterprise IT Infrastructure also?

The CIO wishes for a lot of things to happen in his Enterprise.

Does he always get his own way?

Not really.
eethtworkz   CIOs Considering Tech, Sourcing Overhauls   3/26/2014 8:22:34 AM
Re: Sourcing overhauls

That is one way to put it.

The other is there no real Innovation coming from these companies.

You have to make the Tough Decisions to seperate the Wheat from the Chaff!

That's how you earn your Security Spurs.

Is'nt it?

eethtworkz   CIOs Considering Tech, Sourcing Overhauls   3/26/2014 8:18:51 AM
Re: trust that has been compromised.

There is one very simple way to rebuild the Trust(the way America seems very keen on following today);Its called WAR!

See the current mess in Ukraine/Crimea?

What do you think started it?

America deciding to put up Missiles in Russia's backyard(Ukraine) in 2008.

More here

See pages 9 onwards specifically.

Now America has got all the Europeans banded up behind them to "Protect " them against the Big Bad Russians!

The NSA and its instransigences? Forgotten.


None of this is really surprising if you look at past History.

SaneIT   CIOs Considering Tech, Sourcing Overhauls   3/26/2014 8:13:56 AM
Re: Sourcing overhauls
The real trick is finding these companies.  Many look to be shifting their focus on the surface but when you get right down to it they are just repackaging their old offerings and you end up right back where you started.  Many VARs have started offering a wider variety of solutions and brands but you'll find that some of those keep pushing the same old products because that is what they are comfortable with.
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