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Media & Entertainment Strategies
by Mike GoodmanEvent
On April 25, SES Americom, a division of Luxembourg's SES Global Company, announced that it filed a petition with the Federal Communications Commission (FCC) to offer consumers in the United States a new direct-to-home (DTH) satellite service, Americom2Home, offering video programming and high-speed Internet access.
Market Impact
Unlike Hughes' DIRECTV and EchoStar's Dish Network, which offer a subscription service to consumers, SES will lease capacity to content providers in order to offer programs and interactive entertainment directly to consumers. Some programming will be free to consumers and supported strictly by advertising, while other programming will be available on a pay-per-view or subscription basis. The new service is expected to launch in early 2004.
While DIRECTV and Dish Network, which together claimed 17.6 million subscribers at year-end 2001, are sure to note the new competition and regulatory issues cause the greatest concern. SES plans to launch a new satellite into an orbital slot recently licensed by the government of Gibraltar. The satellite will be located between existing Hughes and EchoStar orbital slots and be closer to those competing satellites than U.S. regulators have allowed in the past for fear of signal interference.
Conclusion
- DIRECTV and EchoStar are in a difficult position. In the past both DIRECTV and EchoStar have aggressively fought any new service that offered the slightest potential for interfering with their signal. However, a competitive satellite service would ameliorate monopoly concerns about rural markets in conjunction with the Hughes/EchoStar merger. Given these conflicting goals DIRECTV and EchoStar will not fight the entry of SES to the DTH market.
- Given SES's late entry, it will have great difficulty in attracting a significant subscriber base. By 2004 the Yankee Group estimates that the incumbent DBS providers will have 24.6 million subscribers in the United States and 1.3 million satellite broadband subscribers, leaving little opportunity for another provider.
- Will cable networks support à la carte programming? While à la carte programming is attractive to consumers, it severely undercuts a cable networks revenues. In addition to advertising revenue, basic cable networks receive a monthly carriage fee from cable operators and DBS providers for each subscriber. If these steady carriage fees are jeopardized, then à la carte programming becomes a threat, rather than an opportunity to the networks. Cable networks will not support a business model that completely undercuts their current revenue streams.
Convergent Communications Asia-Pacific, Japan Market Strategies
by Koji OkiEvent Summary
On April 23, Chubu Electric Power Company announced that this fall it will enter the fiber-to-the-home (FTTH) market via its fiber-optic networks deployed in the metropolitan Nagoya area. The electricity utility is targeting 100,000 households within five years after the launch of the FTTH business.
Market Impact
Chubu Electric Power will be the second electric utility to independently enter the FTTH market without establishing a subsidiary. The first was Tokyo Electric Power Company (TEPCO), which commenced FTTH service in part of the metropolitan Tokyo area at the end of March 2002. Other electricity utilities such as Kansai Electric, Kyushu Electric, and Chugoku Electric are also positioning to provide fiber-optic–based telecom services to the residential market either by themselves or through their affiliates. FTTH market entrants are attracted by the recent government decision to ensure lower leasing costs to telecom carriers for dark fiber deployed along rivers and highways, when compared to services currently offered by the incumbent NTT.
As was the case with TEPCO, in being granted the Type I facilities-based telecommunications license, the regulator will impose on Chubu Electric Power such requirements as:
- Prohibition of information sharing between its electricity business department and its telecom business department.
- Non-discriminatory treatment among its telecom business department and other telecom carriers in utilizing its electricity business facilities.
These regulatory arrangements are critical to ensure fair competition among the electric utilities that hold bottleneck facilities such as electric poles and access to end users through their electricity business and the others that do not.
Recommendations/Conclusions
- Going forward, Japan's FTTH market will be dominated largely by two giant players: the incumbent NTT and the electric utilities. The most efficient way for the utilities to penetrate the broadband market will be to open their networks to ISPs and conduct effective co-marketing and co-promotion strategies.
- As the FTTH services penetrate further across the nation beyond the current service coverage limited to densely populated cities, the ten electric utility companies operating in Japan will find it more efficient to form an alliance and share resources with their sister electric utilities to compete against NTT in the residential FTTH market, as they already do in the corporate segment.
- As dark fiber becomes more affordable to lease, local FTTH players can move into productive niche markets by offering services based on community-oriented information and online marketplaces.
Security Solutions & Services
by Matthew KovarEvent Summary
Sunnyvale, Calif.-based ArcSight announced on April 10 a $9.5 million second round of funding led by Kleiner Perkins Caufield & Byers. This announcement reflects continuing investor appetite and growth potential for offerings in the security event management (SEM) software space.
Market Impact
One of the top five predictions presented in the Yankee Group's March 2002 Report, "Security Industry Predictions 2002: Where the Money Will Go," was that next-generation enterprise security management systems and specifically security event management (SEM) products would evolve and be widely adopted by the mainstream in 2002. The Report estimates that the SEM market was $18 million in 2001 and will grow into a several hundred million dollar market by 2006. These products will become the platforms of choice for enterprises that are trying to manage their end-to-end security risk.
ArcSight's funding of $9.5 million brings its total to $25.5 million and will fund further product development and marketing as well as help assure prospects of its financial stability for the next two years, and also assuages the concerns of corporations that now regret having bought new but unstable technologies during the "dot-bomb" era.
This funding will bring to over $100 million dollars what has been directed at the SEM market and will help with the overall education of enterprise users that security events must be managed not only from firewalls and intrusion detection devices but also include the information from network equipment, applications, and authentication systems, which must be incorporated into the security analysis. These efforts will help other SEM vendors including Open Service, Micromuse, Intellitactics, netForensics, e-Security, Computer Associates, Tivoli/IBM, and Cyberwolf.
Conclusions/Recommendations
- Managed security services firms will turn to SEM products to help them reduce their costs of managing enterprise customers' risks and also to help them provide a higher grade of security solutions.
- Security product companies will continue to strategically align and integrate with SEM vendors. Performance management vendors such as Concord and NetScout have already started providing rudimentary security monitoring functionality as part of their solutions and they now also will need to align themselves with SEM vendors to provide a holistic security solution for the customers.
- The SEM market drivers, players, forecast, and future will be presented in a forthcoming Yankee Group Security Solutions & Services Report.
Consumer Technologies & Services
by Imran KhanTrend
In April 2002, SBC and Yahoo launched their co-branded dial-up Internet access in Connecticut, bringing to fruition their partnership announced in December 2001. The SBC–Yahoo dial-up service which will be available "nationwide" by mid-year followed by digital subscriber line (DSL) service in late summer.
Market Impact
SBC's plans to offer "nationwide" broadband access appear as a gleam of hope for Covad, its strategic partner for out-of-region DSL deployments. An SBC–Yahoo co-branded national DSL service will challenge the cable operators' hegemony over consumer broadband through its nationwide availability and strong content. For SBC, such an offering can leverage Covad's existing national footprint and will avoid extensive out-of-region network buildout. In addition, SBC–Yahoo will be well-positioned against national ISPs, such as AOL and MSN, which continue to lack a nationwide broadband offering. SBC's recent partnership with EchoStar, which owns stake in satellite broadband provider StarBand and is also bidding for Hughes the leading satellite-based high-speed provider, can further provide SBC–Yahoo with the opportunity to deploy broadband Internet access to rural markets both inside and outside the SBC footprint. SBC–Yahoo co-branded Internet access, has the potential of a true nationwide broadband service with superior content.
Conclusions
- In order to maximize asset utilization, access providers must continue to focus on partnering with content specialists to further broadband penetration and at the same time increase "stickiness" of their products.
- While the SBC–Yahoo dial-up product will be rolled out across the nation, the so-called "nationwide" DSL service will be available only in 13 states within SBC's region. SBC will not compete against other regional Bell operating companies (RBOCs) in the broadband arena. The deal is a defensive move against cable operators with no impact on other RBOCs.
- SBC's "nationwide" broadband Internet approach is not any different than its previous Ameritech merger promise to expand presence into 30 new out of region markets, one that never materialized.
- SBC's new Internet strategy should not be viewed as a blessing in disguise for Covad. Covad must continue to expand its DSL subscriber base, specifically focusing on partnering with Tier 1 national ISPs such as MSN and AOL that have constantly struggled to gain access to a national broadband infrastructure. This is Covad's best, if not the last, chance to reinvigorate its DSL growth. Its existing regional ISP retail channels are not sufficient for it to survive and remain competitive in the long run against the cable operators and the RBOCs.
Convergent Communications Europe
by Amy RodgerEvent Summary
On April 25, it was announced that an alliance of Spanish government bodies, including the Comunidad Autonoma de Madrid and the network access point (NAP) operator Terremark Worldwide, will jointly fund and launch a carrier-neutral NAP in Madrid. The NAP will serve growing IP demand in southern Europe and improve traffic exchange to Latin America. The parties have committed to invest $10 million in the project.
Market Impact
For Terremark, the new NAP will add to its portfolio of Ibero-American peering points, including NAP of the Americas in Miami and another major NAP in São Paulo, Brazil, which address the major traffic routes in the Latin American region. Between 2001 and 2006, the Yankee Group predicts a 76% CAGR in traffic between Europe and Latin America. Terremark aims to expand its NAP data centers throughout Spain, because it views the country as an important gateway into southern European and north African markets.
The Spanish governmental parties involved in the project include Comunidad Autonoma de Madrid, composed of 179 municipalities; the Madrid Chamber of Commerce and Industry; and national utility Red Electrica de Espana. Their objective is to modernize Madrid's Internet and communications infrastructure to attract more international traffic exchange. In addition, the project is hoped to increase Spanish involvement and advancement in global research and development initiatives. Terremark has worked with nonprofit organizations in the past, notably with the Brazilian research foundation FAPESP.
Another partner, Telvent Desarrollos, is providing the collocation space for the NAP at its CarrierHouse 2 facility in Madrid. This new professionally run NAP will aim to capture business from ISPs, taking service from HISPANIX, the existing Spanish NAP whose technical capabilities and quality-of-service commitments are under strain as demand grows in the region.
Recommendations
- There is a growing trend toward professionally run NAPs and peering points as the Internet matures. Many of Europe's existing NAPs are run out of university departments without the 24-hour monitoring, data protection, and fiber interconnectivity that ISPs increasingly require to deliver business-class IP services.
- Direct governmental involvement in NAP projects remains rare, but there are growing signs that city—rather than national—governments are taking the lead in directing more investment into telecom infrastructure projects in a bid to attract new businesses and safeguard local employment.
- The concept of regional traffic collection points—an idea that Terremark is currently considering for Spain—is not well developed in Europe, but may be attractive to both national and regional ISPs facing high backhaul costs for IP traffic.
Technology Management Strategies
by Carrie LewisEvent Summary
On April 22, EDS reported first-quarter earnings one penny above analyst expectations—$0.72 a share—but the upbeat news ended there. First-quarter revenue—$5.34 billion—rose 7%, but fell considerably below EDS's 13% revenue growth expectation. The company's first-quarter net income of $354 million also fell below last year's reported performance of $446 million. EDS has pinned this shortfall on the cumulative effect of an accounting principle change—a related one-time investment gain amounting to $178 million and a $33 million of goodwill amortization—that was excluded from last year's results. Accordingly, EDS reported that net income "on a comparable basis" was $354 million, up 18% from $301 million in first quarter of 2001.
Market Impact
EDS focused on sending a positive "big picture" view of its performance to its investors, customers, competitors, and the public, but—as they say—the devil is in the details. Using accounting "magic" to inflate 2001 first-quarter results worked well last year, but taking it away this year to deflate the impact of declining revenues does not. A closer look shows that EDS's performance is not unlike that of competitors such as IBM that are being impacted by the slowdown in business (see our April 10 Research Note, "IBM Warns Business is Down: Market Is Rattled but IBM's Need to Change Its Business Approach Should Be No Surprise"). While EDS's Information Solutions business (its traditional outsourcing business) is leading EDS's revenue growth (14% revenue growth), other lines of business including Consulting (i.e., A.T. Kearney) and Product Lifecycle Management (its integrated software and services offering) are experiencing revenue declines (15% and 11%, respectively). Additionally, while EDS continues to expand its pipeline of business—$7.2 billion in contracts were signed in first-quarter—the pipeline is slowing down.
Recommendations
- The good news for EDS is that outsourcing, which is currently the largest piece of its business, is EDS's core business offering. In 2001, outsourcing drove EDS's revenue growth. Of $21 billion in total revenues, outsourcing contributed $16 billion. Since outsourcing is a core business, it provides EDS with the advantage of focusing on managing a part of its business that is already a strength. Unlike some of EDS's competitors, it does not have work to strengthen a weak business unit, but it does have to manage the slowdown in outsourcing that every competitor is facing—"magic" accounting won't do the trick.
- The bad news for EDS is that revenues are on the decline and the pipeline of outsourcing business slowing. Moreover, EDS's return on net assets (RONA) is declining (down from 14.1% in first quarter of last year to 12.5% in first quarter of this year). Even if EDS keeps the pipeline moving and weathers the price war in outsourcing by lowering prices, the three to five-plus year deals they are signing today will be with them as the economy picks up. Again, while the news may sound good, it's not always as good as it sounds.
Networked Business Strategies Asia-Pacific, Japan Market Strategies
by James WalshTrend Summary
A number of Japan's leading cable Internet operators have recently made moves to diversify and introduce new offerings such as voice, in order to compete with ADSL providers. Tokyo cable operator ITS Communications has introduced a 30-Mbps downstream connection for $45 per month, as well as a lower-end 512-Kbps connection for $22 per month. Osaka's Kintetsu Cable Network will introduce a 30-Mbps (up- and downstream) connection as early as June, and Hachiyoji Telemedia is planning a corporate IP telephony service priced at a monthly rate of $19.
Market Impact
The number of ADSL subscribers in Japan overtook that of cable Internet users during the fourth quarter of 2001, and has been pulling away since. Since last September, new DSL subscriber gains have averaged between 200,000 and 300,000 per month, compared with around 60,000 for cable Internet. The cable environment is still very diffuse, with more than 250 companies operating throughout the country. Many are small stand-alone players that do not have the financial resources to upgrade their infrastructure to support high-speed Internet traffic, let alone to develop value-added services. By contrast, DSL operators can provision services more quickly and cheaply; and, as they expand service areas, they are increasingly competing head-to-head with cable operators. The new cable services outlined will enable operators to fend off the challenge from DSL (and FTTH, as this becomes more widespread), and reduce churn. We expect that other operators will make similar moves over the next few months.
Conclusions/Recommendations
- Cable operators should pursue horizontal alliances to share costs for network upgrades, headend operations, and development of content and applications.
- Cable operators have an advantage over ADSL players in that they are traditionally providers of content (through their broadcasting services). While IP telephony is one example of a value-added service, video-on-demand (VOD) may be a more suitable bundle for cable operators. To that end, operators should continue to strengthen ties with content providers and CDN operators to develop viable VOD business models.
- As cable operators continue to bolster infrastructure and roll out new services, there will be opportunities for a variety of players, from vendors of high-speed modems to providers of solutions for applications such as VoIP.
Customer Relationship Management Strategies
by Devon SheaEvent Summary
On April 29, at the company's Leadership Summit 2002 in Las Vegas, PeopleSoft unveiled several new business applications. For the CRM market, PeopleSoft announced additional industry solutions for government, insurance, energy, and high tech. The company also announced three new solutions focused on overall employee management, including enterprise learning, performance management, and incentive management.
Market Impact
As many software companies face the reality of dwindling licensing revenues, these announcements show PeopleSoft's desire to expand their vertical and enterprise offerings. Momentum behind learning and employee productivity solutions, specifically, has been building steadily due to the additional licensing revenue associated with being on every employee desktop. This is in opposition to a typical CRM deployment that only touches roughly 30% of an organization, or traditional HR applications that are reserved for mostly back-office functions.
Siebel will take notice of both announcements, as the company has a strong track record for being first-to-market in providing vertically relevant solutions in the CRM space, and more recently, has also ventured into human capital management (HCM) realm with the release of their Employee Relationship Management (ERM) solution. While Siebel's employee portal now covers a broad range of functions (including tools for e-learning and performance management), PeopleSoft has long been recognized as the leader in developing human resources and workforce management applications. Tight integration of CRM (and now HCM) solutions with their traditional HR and finance applications, such as accounting and payroll, enable an even more cohesive front-office and back-office offering.
Implications
- PeopleSoft will need to forge strong relationships with systems integrators to successfully bring both of these solutions to market. PeopleSoft has traditionally not had the incredibly strong ties to integrators that Siebel has, but SI expertise in vertical industries and growing practices devoted to human capital management will be very important going forward.
- By targeting industry segments that are not typically "early adopters" of CRM software, PeopleSoft will make up for lost time. Markets such as government and insurance are still largely untapped for CRM applications; therefore, there is no "de facto" solution. Particularly within government, PeopleSoft already has extensive client relationships.
- Well-known, established companies entering the performance management space will help to breathe new life into a struggling market. The learning space, in particular, has been hit hard by the economy, but these offerings from Siebel, and now PeopleSoft should help give more solid grounding to the larger market focused on overall employee effectiveness. Smaller, more niche vendors should look to partner with the larger providers.
Wireless/Mobile Europe
by Farid YunusEvent Summary
In a week that saw more gloom and doom emerging from the telecom industry, Orange provided mixed but generally encouraging news in its results for the first quarter of 2002. Its announcement on April 30 followed the release of Vodafone's preliminary figures on April 25, which also gave cause for cautious optimism.
Market Impact
With more than 140 million mobile users between them, Vodafone's and Orange's results are always eagerly awaited as benchmarks for the mobile industry as a whole. Both groups posted customer growth of 22% over the last 12 months, with first-quarter turnover for Orange up 16% on the same period in 2001. Vodafone has yet to release revenue figures, but with ARPU stabilizing and a 27% increase in turnover for the first six months of the year, a similar annual increase is expected. By comparison, group revenues at T-Mobile rose by only 10% quarter-on-quarter, with its user base growing by only 12% (excluding VoiceStream, which was only consolidated in 2002).
Efforts to improve the subscriber mix are yielding results, with the ratio of contract versus prepaid users increasing in most markets. Where doubts do arise is in the contribution made by mobile data to service revenues. For Vodafone, this rose by three percentage points in the year to March, bringing the group ratio to 11%. Orange reported a similar contribution in the UK but lower overall, as it lacks a Japanese presence (Vodafone's J-Phone posted 15% of revenues from data services). The bulk of data revenues is also still being generated by text messaging, with other services (e.g., WAP, GPRS access) generally contributing less than 1%. At the current rate, data will account for 17% of Vodafone's service revenues by March 2004, falling short of the company's stated goal of 20–25% by that time.
Conclusions/Recommendations
- Price erosion and declining average revenues have been a fact of the industry from its inception, so the mounting evidence of ARPU stabilization is heartening. While the first-ever increase in Orange UK's annualized ARPU, from £246 to £247 (US$356 to US$358), is too slim to completely rule out creative accounting as the main cause, the underlying trend is nevertheless unquestionable. It may not be the beginning of a hockey stick rebound, but it does mark the bottom of the trough.
- Criticism aimed at lower than anticipated new customer additions is myopic and misdirected. In most of Europe, the only way an operator can grow its customer base is through competitor churn. To expect the same historical levels of growth would require mobile penetration to go beyond 90%, which is obviously ridiculous (unless the 0–5 age group has become a viable target market). Investors should focus on how well mobile operators are performing relative to their peers and parallel industries, and not past performance.
- The fact that ARPU has declined so rapidly in the past, despite rising voice minutes and the use of text messaging, is a measure of existing competition in European markets. Market forces have and will continue to determine tariffs, and it is in a provider's interest to seek a profitable equilibrium between pricing and demand. So further regulatory pressure on roaming and interconnection charges is unwarranted, unless evidence of collusion can be found.
Internet Business Strategies
by Paul RitterEvent Summary
The Streaming Media West conference was held in Los Angeles April 23–26. Several new low cost products launched at the show have significant potential to speed up spending on streaming media–related communications in the corporate marketplace over the next 12 months by making streaming solutions more affordable to firms outside the realm of large enterprises.
Market Impact
Several streaming software packages launched during the show give significant control and in-house development capabilities to developers of corporate streaming media programming. These packages include Cauldron v.1.0, a software product from N.Y.-based Sorceron; a suite of turnkey streaming services from Calif.-based VitalStream; and a self-publishing software product line called Visual Communicator, from Calif.-based Serious Magic that costs between $100 and $150.
Cauldron, priced at just under $1,000, provides a means of creating and delivering high resolution streaming media communications and presentations at lower bandwidth than usually required. This is accomplished by encoding components individually rather than encoding an entire video presentation. Streaming provider Sorceron has partnered with VitalStream to provide smaller firms with a turnkey solution for both developing and delivering streaming media communications.
The impact of rich-featured, low-cost streaming software and Webcasting programs will now bring streaming media services to the desktops of both Fortune 5000 firms and thousands of small to medium enterprises that want to create and distribute rich media communications in-house.
Conclusions and Recommendations
- Creating streaming media presentations in-house can result in substantial cost savings for firms that have the resources and the personnel to do the videotaping, editing, and encoding processes required up-front when using do-it-yourself tools and software.
- Companies that develop multilingual streaming media presentations targeted to users in different countries should take advantage of self-publishing tools such as Sorceron's Cauldron product that allow content creators to develop modularized object-based content that allows video streams, text, audio tracks, and other content to be created individually and swapped seamlessly without having to encode dozens of separate in each language that cannot be re-purposed.
- Just 12 months ago affordable streaming solutions were not available for small companies. Now, there is a range of offerings that are cost-effective for smaller sized companies, provide the means to begin creating streaming media-enabled communications internally, resulting in lower bandwidth costs, and enhance productivity of developers. This will result in much faster adoption of streaming media services across a much deeper segment of the corporate market.
Networked Business Strategies Asia-Pacific
by Aditya PuriEvent Summary
Various ISPs in India have recently announced progressive increases in access rates, primarily on their unlimited dial-up packages. More notable among these announcements is the tariff hike announced by Satyam Infoway, India's first private ISP and currently one of the biggest as measured by number of subscribers.
Market Impact
As mentioned earlier, the most dramatic increases pertain to the prices for the unlimited access packages. While Satyam's customers could previously subscribe to a one-month unlimited package for Rs. 369 (US$7.50), they will now be charged Rs. 599 (US$12.24) for the same product, an increase of approximately 62%; unlimited access for a 12-month period will increase from Rs. 3,999 to Rs. 6,399 (US$81.73 to US$130.78)—a 60% price increment. It is important to note that this increase is on the heels of another price increase late last year.
Most ISPs, especially the more established ones, typically operate in lockstep and closely track and mimic tactics. This occurred when the last price increase was announced, and remains true this time around with definite hikes announced by CalTiger, another large ISP that has recently discarded the free-access ISP model.
Recommendations/Conclusions
- The hike in prices as well as a transition from a free-access model to a fee-based one illustrates the maturation of the access market. Call metering is still a material issue in the country, and in an attempt to draw neophytes to the Internet by offering an attractive price point, ISPs were forced to charge low or zero access fees. Now, with multiple waves of adopters proselytized, a critical mass has been created that will enable the imposition of higher charges with the incremental benefits achieved being significantly greater than the lost revenues attributable to the defectors.
- While there has been a price increase—in some cases, across all service options—the ISPs have been deft in ascribing the greatest increase to the unlimited packages. It is reasonable to assume that the "power user" segment of the market, for whom access is almost a necessity, would select the unlimited usage package. The probability of significantly eroding this customer base by charging higher rates is quite unlikely, since—from the users' perspective—the benefits foregone by abandoning the service considerably outweigh the additional monetary outlay.
Enterprise Computing & Networking
by Jamie GruenerEvent Summary
IBM unveiled its storage software roadmap for the coming year April 23 with a heavy emphasis on its virtualization strategy for both file- and block-level virtualization. The disclosure of this strategy came just a week after IBM agreed to collaborate on its virtualization efforts with storage competitor Hitachi in an alliance. The announcement is significant for the storage market because of IBM's positioning of storage virtualization, a technology that ultimately is supposed to assist end users in abstracting and simplifying the physical attributes of storage. IBM hopes to ship the new virtualization technology in 2003, split between a block-level virtualization engine and a file aggregation technology.
Market Impact
IBM has alluded to its "Storage Tank" virtualization technology for close to a year, and a further disclosure of its architecture signifies that it is getting closer to releasing it. The market impact of IBM's announcement could include helping the industry pinpoint a standard way to handle virtualization, and IBM has mapped this technology into joint efforts underway with Hitachi at the Storage Networking Industry Association (SNIA) to come up with a common way to do storage management. By joining with Hitachi to standardize virtualization as part of open storage management, IBM is pushing the hands of Compaq/HP and EMC to be more definitive about their virtualization strategies and how virtualization will end up being standardized at the industry level. IBM has become a strong advocate for Common Information Model (CIM) as the standard API for storage management, and will support CIM for its virtualization products. CIM is also gaining the support of other members of SNIA, including EMC and Sun. The IBM virtualization strategy involves to layers: block-level virtualization to provide storage pooling and file aggregation specifically offered via the Storage Tank technology. Both technologies will be based on Linux and be delivered to customers as server appliances that can be clustered together. Storage Tank is essentially a SAN file system that provides an abstraction layer between application servers and storage.
Conclusions
Enterprises should pay close attention to IBM's and others' efforts to standardize storage management using CIM. IBM has made the right moves in its work with Hitachi and SNIA to standardize both virtualization and storage management APIs. Customers must grill their preferred storage vendors about their strategies to adopt CIM, which could end up becoming the way customers ultimately can manage multiple storage systems and applications.
IBM's announcement on storage virtualization helps validate the growing role the technology plays in storage management. The Yankee Group forecasts the virtualization market to grow to $1.1 billion in 2005.
IBM's storage virtualization strategy lacks the context of a larger storage strategy similar to EMC's AutoIS and Compaq's ENSA visions. IBM still needs a clear vision to accelerate its growing success in the storage market. Little was stated about how this virtualization technology will be taken advantage of by its Tivoli storage management group.
Application Infrastructure & Software Platforms
by Robert PerryEvent Summary
On April 29, Macromedia announced ColdFusion MX, an update to the early Web application platform originally offered by Allaire. ColdFusion MX is a development platform that runs on J2EE application servers.
Market Analysis
The success of Java as a server development language has raised questions about the future of ColdFusion. ColdFusion was very successful as a development and deployment platform for Web applications. It was an early entrant and offered a easy to use scripting language that worked well for many developers. Today, it enjoys the support of a large developer community and a host of third-party applications. A 2001 Yankee Group survey showed that it remained a popular corporate application platform with 13% of respondents indicating they were running applications on ColdFusion.
Yet, it wasn't Java and everyone is talking about Java, .NET, and Web services. ColdFusion seemed destined to gradually fade away as these newer development platforms continued their momentum. ColdFusion MX not only breathes life into ColdFusion, it applies it strengths in ease of use and rapid application delivery to the harder to use J2EE platform. ColdFusion developers can transfer their skills to the Java platform seeing the benefits of its highly scalable architecture.
Conclusions/Recommendations
- The Macromedia MX rollout shows the company understands the needs of users by offering the tools to create rich applications that are easier to use while offering a more enjoyable interaction and the requirements of developers' tools to build these applications rapidly.
- Corporate IT groups wondering what to do with their ColdFusion applications and their ColdFusion developers can wonder no more. They should adopt ColdFusion MX and migrate their existing applications to the scalable J2EE platform.
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The Evolution of Price Modeling: From Billing to Dynamic Transaction Management
bpasv3n5, Report, April 2002, by Paul HughesCase Studies in Web Care Support: Evolving an Effective Customer Interaction Strategy
crmv4n7, Report, April 2002, by Devon SheaSecurity Event Management: A New Market Emerges for Solving Enterprise Security Management Headaches
sssv2n4, Report, April 2002, by Matthew Kovar, CFAInterconnection Software Solutions: Darwinian Dynamics Prompting Vendor Market Evolution
tssv1n6, Report, April 2002, by Sharon BallardWireless Corporate Account Programs: Carrier Efforts to Capture Business Users
wmsv3n6, Report, April 2002, by Roberta WigginsBack to Table of Contents
May 14, 2002
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Device Convergence: State of the Market Present and FutureMay 15, 2002
A Media & Entertainment Strategies Audio Conference
Digital Audio Broadcasting: Tuning into New Business OpportunitiesMay 16, 2002
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