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10/22/2009
04:08 PM
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Alternative IT

Cloud Computing. SaaS. They're such over-used marketing words that they've become the butt of jokes (Larry Ellison on YouTube, anyone?). But hopefully the hype machine hasn't generated too much noise to drown out the fact that there have been some significant, permanent changes in how CIOs view software. At InformationWeek, we call it Alternative IT.

Cloud Computing. SaaS. They're such over-used marketing words that they've become the butt of jokes (Larry Ellison on YouTube, anyone?). But hopefully the hype machine hasn't generated too much noise to drown out the fact that there have been some significant, permanent changes in how CIOs view software. At InformationWeek, we call it Alternative IT.And our hope is that Alternative IT doesn't become another shallow term that can mean just about anything. (For example, I recently got a press release in my inbox with "SaaS" in the headline, and it turned out to be a Web-based service for storing digital photos. I mean, where will it end?) But we know, from talking to the CIOs who spend billions of dollars a year on IT, that a grinding recession, paired with new choices in terms of online software, mobile computing, outsourcing, open source, and more, has opened the door to alternatives in IT.

In particular, CIOs are rethinking significant parts of their software strategies, considering alternatives to conventional licenses, maintenance, and fee structures, as well as alternatives to lengthy internal development cycles, complex customization, and long global rollouts and upgrades.

This isn't trendy, it's reality. In fact, Bill Louv, CIO at pharmaceutical company GlaxoSmithKline, bristles at the idea that his company is chasing the cloud trend. "The evolution here isn't, 'Gee, let's do something in the cloud or SaaS,'" Louv told me in an interview. "Our Lotus Notes platform was getting to end of life. The question came up innocently that, given we'll have to spend a lot of money here, is there something we can do that's smarter?" What he decided is to move all 115,000 employees worldwide to the online, monthly subscription Exchange and SharePoint offerings.

Microsoft calls it SaaS. Or cloud computing. Louv calls it a 30% savings on total cost of ownership over five years compared with comparable licensed software. And while that might sound suspiciously like a Microsoft marketing pitch, let me remind you that Microsoft would probably make a lot more money off of Mr. Louv in licenses and consulting fees if he bought on-premises versions of Exchange and SharePoint. IT vendors love to latch onto words that help them sell products and make them appear relevant. That's understandable. But break away the hype, and we can see that alternative approaches to IT are gaining ground. And this is being driven by CIOs and their businesses, not the software community.

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