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1 >>>Service Name*** >>>2nd Line Service Name*** >>>3rd Line Service Name*** >>>IGG*** >>>UFN*** E. Younker Article >>>Date*** Inside Gartner Top View This document provides the title and a brief summary of each of the four main articles contained in the 14 May 2003 edition of the Inside Gartner newsletter, along with the At Random section in its entirety. Access to the four articles and to the Inside Gartner PDF is also provided. Articles: "Management Update: A Conceptual Evolution, From Process to Web Services" (IGG ) Many CIOs and other enterprise executives are looking for insights on how Web services will affect business and consumer-facing applications. "Web services" are not the same as "things done over the Web." To clarify the definition, Gartner tracks the evolution of manual processes over time into Web services. By Matt Hotle "Management Update: Many Vendors, Two Leaders in Search Engine Magic Quadrant" (IGG ) Gartner's Search Engine Magic Quadrant has many vendors, with two Leaders, six Visionaries and 13 Niche Players addressing enterprise needs for locating information. New vendors in the perennially volatile search engine market contribute to price pressure, confusion and variety. By Whit Andrews "CIO Update: IBM's DB2 on Windows and Unix Still in Catch-Up Mode" (IGG ) Most CIOs are highly interested in analysis on the leading vendors' database management systems, because those systems usually run mission-critical applications. Although making steady progress, IBM's DB2 on Windows and Unix lags behind Oracle in proven, high-end online transaction processing implementations and in market share for non-ibm platforms. By Kevin Strange "CIO Update: Gartner's Windows Server Road Map, New Ways to Deliver Code" (IGG ) CIOs are very interested in projections of how leading vendors' servers will evolve over the coming years. Moreover, enterprises want at least three years between operating-system upgrades. Microsoft wants to incrementally deliver new function because of competitive and development issues. The solution will be focused "server feature packs." By Thomas Bittman At Random: Invensys' Plan to Sell Baan Increases Uncertainty for Customers. On 15 April 2003, Invensys said it would sell off 70 percent of its businesses, including Baan. Invensys is talking with several suitors and expects to announce a sale by mid-july Baan will retain its ERP, supply chain management, customer relationship management and product life-cycle management products, and Gartner 9999 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.
2 claims it will continue with all of its plans, including the launch of Gemini, its next-generation product, in 2H03. The revised Invensys Production Management division will focus on process manufacturing and will retain the process manufacturing products Prism and Protean as well as the asset management product Avantis. This announcement adds to the uncertainty Baan customers have faced for the past few years. Invensys said it can no longer afford to invest in Baan. Most likely, another software vendor will acquire Baan. Since purchasing Baan in 2000, Invensys claims to have invested $100 million in the development of Gemini. Thus, a buyer will get improved technology at a lower price. (Baan will less likely become a stand-alone company or be acquired by an investment firm or system integrator.) The shape of Baan's future will depend on who buys it, what Baan products are retained and what products are phased out over time. Different customers should react to the announcement in different ways. With an acquisition announcement due within three months, enterprises do not need to take immediate action: Baan IV comprises the vast majority of Baan's 6,500 customers, mostly midsize discrete manufacturing enterprises. The size of this customer base offers protection, especially for customers on version IVc4. They should wait to see who buys Baan and then evaluate plans from there. Triton customers should make plans to upgrade to Baan IVc4 to maximize support and protection provided by that customer base. Baan IV customers in process industries face the greatest risk; they should begin to search for alternatives as Baan clearly focuses on discrete manufacturing. Baan V customers should develop contingency plans in case a new owner focuses solely on the Baan IV installed base the exception is large, globally branded enterprises. Enterprises expecting to upgrade from Baan IV to Baan V should place those plans on hold, pending the acquisition and subsequent product visions, unless the business case for the migration is overwhelming. The eventual acquirer of Baan will likely spin off the CAPS Transportation and Logistics applications, so these customers should be patient until post-acquisition plans are announced. The uncertainty caused by the announcement will hurt marketing for Baan's product life-cycle management offering, but otherwise it should not affect these customers. Analytical sources: Brian Zrimsek and Karen Peterson, Gartner Research U.S. Lowers Threat Alert, But Enterprises Shouldn't Relax. On 16 April 2003, the U.S. Department of Homeland Security announced that it has lowered its official terrorism threat advisory level to "yellow" (elevated) from the previous "orange" (high). Enterprises must not base their security strategies on intrinsically imperfect risk assessments, such as the U.S. government's color-coded threat advisory system. The perception of the threat from terrorists shows how flawed these risk assessments can be. The 10 years after the first Gulf War saw terrorist attacks on the World Trade Center, the U.S. embassies in Kenya and Tanzania, and a U.S. warship in Yemen. The threat peaked on 10 September 2001, the day before the attacks on the World Trade Center and the Pentagon. Nonetheless, the alert system now in place would have rated that day "yellow" (elevated) but would have designated the day after when intense security made the actual threat much lower "red" (severe).
3 Significant changes in the political landscape present long-term consequences for enterprises' security organizations and may increase enterprises' risk levels permanently. Enterprises operating in the United States, Britain, Australia and other countries associated, even indirectly, with the war in Iraq should recognize that the threat of physical attack against their facilities and personnel and of cyberattacks against their networks has increased, not decreased, as a result of the war. These enterprises should immediately: Plan for continued investments in critical personnel screening, enhanced physical security measures and incident response capability Ensure that their mailrooms follow established procedures for protecting against biological and other attacks through the mail system Focus on testing for, and closing, all Internet-exposed vulnerabilities through intrusion prevention strategies Analytical source: John Pescatore, Gartner Research Intel Remains Well Positioned Despite Tepid First-Quarter Financial Results. On 15 April 2003, Intel issued its financial results for 1Q03. In the quarter, the company reported revenue of $6.75 billion, compared with $6.78 billion in 1Q02. Intel posted earnings per share of $0.14, unchanged from 1Q02. Intel s results reflect continued sluggishness in the PC market. Flat revenue and slightly higher costs led to another tepid quarter. Capital investment has trended down from recent levels by about $1 billion a year; the reduced spending rate has also meant reduced depreciation costs. However, Intel's capital investment and R&D still total almost $8 billion a year as the company pursues its aggressive technology and manufacturing plans. These investments remain aggressive and reflect Intel s fundamental belief in its ability to deliver value from technology. Intel designed its Pentium M and Centrino products to sustain short- and long-term growth in the notebook market, and its Itanium processors are gaining credibility in the market. However, the tepid results will likely continue until the PC market starts to recover. Gartner s preliminary estimates show that 1Q03 delivered betterthan-expected growth in the PC market, but Gartner remains pessimistic in its forecast and does not expect strong growth until the end of Intel is well positioned in the PC microprocessor market, which it dominates with 90 percent revenue and 80 percent unit share ( Rival Advanced Micro Devices' (AMD s) Athlon processor shows signs of age as the Pentium product line continues to scale up in performance. However, the Athlon family will get an aggressive upgrade with the introduction of AMD s Hammer architecture to the product line. If the upgrade falls short of expectations, Intel will likely enjoy a subtle lift in revenue and profit. In addition, Intel's stability and performance strategies will offer increased value to corporate buyers, manifested in the Centrino and 875P product lines. These platforms allow enterprises to extend system image life for at least a year. Enterprises should review products based on Intel s newly announced Centrino and 875P chipsets for system upgrades, possibly truncating existing contracts to synchronize with Intel s life-cycle plans. Analytical source: Martin Reynolds, Gartner Research 1Q03 PC Unit Shipments Increase, Mobile Sector Doing Well. On 17 April 2003, Gartner Dataquest released its preliminary results for PC unit shipments worldwide:
4 Worldwide PC unit shipments grew 5.5 percent in 1Q03 compared with 1Q02, but declined 8.6 percent from 4Q02, in line with normal seasonal patterns. U.S. unit shipments for 1Q03 increased 7.7 percent over 1Q02, declining 8.6 percent over 4Q02. Dell Computer regained the No. 1 worldwide position among vendors from Hewlett-Packard. PC market growth exceeded expectations during the first quarter of The U.S. market performed ahead of expectations; Europe, the Middle East and Africa and Japan performed in line with expectations, and Latin America showed stronger-than-expected growth. Economic factors, including the war in Iraq, continued to be the most important influence on PC shipment growth patterns. Worldwide, the market felt some effects from the war's outbreak in March, following betterthan-expected performance in January and February. However, Gartner believes the war will give way to fundamental economic issues in determining the outlook for most regions. Gartner continues to recommend a strong emphasis on scenario-based planning. Gartner's forecast for 2003 calls for 6.6 percent growth worldwide. Vendors should anticipate more growth in the mobile area but need to understand the distinct dynamics of the private and professional segments of this market. Analytical sources: Mikako Kitagawa and Charles Smulders, Gartner Research IBM/Lexmark Partnership Flourishes, but Dell Looms. On 15 April 2003, IBM announced five new workgroup laser printers: Infoprint Color 1357, 28 pages per minute (ppm), starts at $3,624; Infoprint 1312, 20 ppm, starts at $289; Infoprint 1332, 35 ppm, starts at $790; Infoprint 1352, 40 ppm, starts at $1,090, and Infoprint 1372, 45 ppm, starts at $1,543. IBM also announced two options for upgrading the last three models to multifunction products (MFPs). All will become available on 25 April 2003, except for Infoprint 1372, which will become available on 15 August. This announcement shows that the partnership between IBM and Lexmark is strong. The vendors announced it in June 2001 as IBM agreed to sell relabeled workgroup monochrome and color laser printers. Based on Gartner s U.S. Printer Quarterly Statistics, IBM printer shipments year over year have grown 74 percent for monochrome printers and 12 percent for color printers. In April 2002, IBM expanded this partnership to include multifunction options. All of these products except the Infoprint 1312 can be upgraded to an MFP. The partnership enables both IBM and Lexmark to focus on their core competencies. IBM can focus on the total solution sales approach that will include systems, software, output and services. Gartner expects printer and copier sales methods to change from selling hardware units to selling value for the enterprise as a whole in the form of device consolidation, workflow improvements and implementation of e-forms. This transition plays to IBM s strengths in system re-engineering, analysis and process improvement. Lexmark has gained a valued partner to help it reach customers that purchase only from IBM. Lexmark products also gain the IBM stamp of approval, validating that Lexmark understands what customers want today and tomorrow from printers and MFPs. In addition, Lexmark gains economies of scale from higher unit shipments. However, a key challenge looms for the IBM/Lexmark partnership. Lexmark has a new alliance with Dell Computer, which resells relabeled consumer and small workgroup products through its direct sales model. The new Dell printers started shipping in March IBM's low-cost Infoprint 1312, offered only through its Web site, competes with Dell's P1500. A conflict could potentially arise if Dell
5 also starts reselling Lexmark's complete line up of high-end workgroup printers and MFPs. A greater threat to IBM lies in the possibility that Dell may eventually buy Lexmark to secure its own position in the printer market. Enterprises should rationalize their output fleets; the best way to start is with a comprehensive assessment of output needs and resources. Analytical source: Peter Grant, Gartner Research (IGG )
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