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Page 1: BI for the masses—again 8 - Brock Universityspartan.ac.brocku.ca/.../InformationWeek_04-19-2010... · 4/19/2010  · I can’t understand why people in general—let alone a big
Page 2: BI for the masses—again 8 - Brock Universityspartan.ac.brocku.ca/.../InformationWeek_04-19-2010... · 4/19/2010  · I can’t understand why people in general—let alone a big

BI for the masses—again 8 | SAS analyzes social networks 10 | IBM bulks up LotusLive 11 What the cloud won’t fix 40 | Don’t go back to business as usual 42

[Plus]

E-DiscovEryHow to avoid death by backup tapes p.28

nEw Data sEcurity LawSign of the scary times ahead for data holders p.34

tabLE of contEnts

Why aren’t we better at it by now?

By Michael Healey p.16

APRIL 19, 2010

A speciAl All-digitAl, green issueTHE BUSINESS VALUE OF TECHNOLOGY

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2 April 19, 2010 informationweek.com

<< Previous

<< Previous

COVER STORY

State Of OutsourcingCloud computing makesoutsourcing managementmore important than ever,but many IT shops aremissing the mark

16

10 QuickTakesBrand ChatterSAS launches service to track

and analyze what customers

are saying in social media

11 IBM Adds Cloud E-Mail OptionsLotusLive hosted e-mail is

integrated with Salesforce,

Skype, and other services

12 D.C. Buzz About BuzzWhite House official’s use of

Gmail raises questions

13 Apps Bow Amid ControversyAdobe’s Creative Suite 5

debuts while Apple continues

to thwart Flash apps

14 BofA Offers Cloud AdviceBank of America exec says

cloud computing isn’t just for

bleeding-edge pioneers

15 Virtual Analytics ProcessingVMware and ParAccel

establish benchmark for

data warehouse-style

analytics processing

CONTENTSTHE BUSINESS VALUE OF TECHNOLOGY April 19, 2010 Issue 1,263

This all-digital issue of InformationWeek is part of our 10-year strategy to reduce the publication’s carbon footprint

14

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April 19, 2010 3informationweek.com

Next >>

Next >>

4 LinksResearch And ConnectReports from InformationWeek

Analytics, events, and more

8 Global CIOBI For The MassesBy Bob EvansMicrosoft looks beyond BI experts

to 500 million knowledge workers

who could benefit from BI

40 Practical AnalysisThe Cloud Won’t Fix EverythingBy Art WittmannIt’s hard to tell if all the talk is hype

or just woefully misguided

42 Down To BusinessAre You Back To Business As Usual?By Rob PrestonAs we emerge from the recession,

we must look beyond merely

playing catch-up with spendingContacts & Feedback6 Feedback

44 Editorial Contacts46 Business Contacts

Where The Web Is HeadedWeb 2.0 Expo San Francisco brings together themovers and shakers who are shaping the next-genWeb. Register now: web2expo.com/webexsf2010

May 3-6 in San Francisco

upcoming events: Web 2.0 Expo

28

4

28 Better E-DiscoveryBackup tapes can kill an

e-discovery effort, so the

right tools and policies

are essential

34 States Target Data SecurityNew Massachusetts law

reaches beyond its

borders, with other

statutes on the horizon

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4 April 19, 2010 informationweek.com

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Resources to Research, Connect, CommentLinks

Google For BusinessIntensifying its pursuit of busi-ness customers, Google hasrewritten its online word process-ing and spreadsheet apps.informationweek.com/alert/googledocs

Cloud Contracts And SLAsWhen it comes tocloud computing, ITmust assess needs andhelp managers cometo good decisions,while balancing riskand flexibility.cloudsla.informationweek.com

IP Telephony In Healthcare SettingsUnified communications systemscan solve some challenges facedby medical centers. This reportidentifies best practices for se-

lecting and implementing voice-over-IP and unified messagingsystems.informationweek.com/analytics/healthtelephony

App MobilizationChallenges Application mobi-lization tools areboth more effectiveand more confusingthan ever. We pollednearly 700 business technologyprofessionals and interviewedmobile application experts forthis in-depth look.mobile-applications.informationweek.com

Virtualization ManagementIT teams are in for trouble if theydon’t focus more on managingvirtual environments, especiallyas virtualization moves beyondservers.virtualizationmanagement.informationweek.com

Fritz Nelson and David Berlind take sidesover the burning question: What’s better,the iPad or the Kindle?informationweek.com/video/ipadkindle

WatchIt Now

Kindle Vs. iPad:My portable device isbetter than yours[

InformationWeek AnalyticsTake a deep dive with these reports

[ ]

IN THIS ISSUE

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

What The Cloud Won’t Fix p.40

Table Of Contents p. 2

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April 19, 2010 5informationweek.com

Next >>

Next >>

Facebook, iGoogle, And MoreAccess our portfolio of socialnetworking tools, includingFacebook applications and fanpage, iGoogle widget, Twitterheadlines, and RSS feeds.informationweek.com/take.jhtml

Enterprise 2.0 WebcastLearn how to use enterprise socialnetworks to engage employees,drive innovation, increase businessagility, and improve efficiency. ThisWebcast happens April 28.informationweek.com/1263/enterprise2

Virtual Event: Anatomy Of The CloudInformationWeek editors andCloud Connect conference lead-ers join with experts and top ITpractitioners to demystify cloudcomputing. It happens April 20.informationweek.com/1263/cloud

Gov. 2.0 ExpoGet the toolsand trainingyou need toanswer the call for transparencyand cost containment at Gov 2.0Expo. It happens May 25-27 inWashington, D.C.gov2expo.com

[Take InformationWeek With You ]

[More InformationWeek ]

>> Cloud Cover: Managing Risk In A New ParadigmJust released

>> Enterprise Applications: Act Two Just released

>> Salary Survey 2010: IT ExecutivesJust released

>> Ensuring Portability Of Cloud Data Coming May 3

>> Mobile Device Management And Security Coming May 3

Subscribe to our portfolio of 700 reports at analytics.informationweek.com

Never Miss A Report

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Google Docs Takes Microsoft Office Head On Google’s strategy marks a huge bet on real-time collaborationand online-only software. —Thomas Claburninformationweek.com/1262/googledocs

I can’t understand why people in general—let alone a bigcompany—would allow Google to manage their mail anddocuments on the Web. Google can acquire enough infor-mation about you without you literally giving it every pieceof data it wishes. Oh, yes, its security is infallible and can’t behacked, as was shown in the recent incident in China. Why

not link your personal information with your business information aswell so when Google is hacked or a rogue employee decides to makesome extra cash, it’s a smoother process for him to take everything youown? Google can keep Docs. —Pete

Is everyone nuts? Are you going to trust your business to the whims ofthe Web? First there’s the security issue.Then, there’s this sentence fromyour article: “Access to the old editors and offline use will end sometimein May—Google’s promising to give enterprise customers a month’s no-tice.” Think what would happen when you’re running your business onthis thing and Google decides to pull the plug on you. You might noteven get a month’s notice! —Jim

No Raise For Typical IT ProThe pay freeze is the sign of the times, InformationWeek’s annual IT SalarySurvey of more than 20,000 IT pros finds. —Chris Murphyinformationweek.com/1261/raise

Yep, it’s still pretty tight out there for sure. I know several quite quali-fied people who are having trouble finding jobs or are employed be-low their normal levels. The IT world has matured technically ratherquickly and the need for higher-end people has dropped noticeably

6 April 19, 2010 informationweek.com

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feedback

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as a result. Of course, the economy is a major factor as well. But whenthe economy recovers, the knowledge/capability barrier will havedropped so low to deliver quality products that it really won’t be nec-essary to pay as much as in the past. A lot of people I know have al-ready switched to other fields. It’s not all bad news, of course, but tech-nology and science as a knowledge pursuit are unlikely to pay off ashandsomely as they once did for so many. —Another IT Person

IT salaries vary a lot depending on location and sector. One person couldbe making $70,000 in one part of the country and someone else couldbe making $100,000 or more doing the same job elsewhere. And, likeeverything in life, sometimes you need a little luck, too. —Lou

Why IBM CEO Palmisano Earned His $24.3 Million Layoffs, though unfortunate, helped IBM outperform most of the globalmarketplace as it prepares for continued growth. —Bob Evansinformationweek.com/1260/evans2

A lot of the people fired were really good people. I hired some in mygroup after last year’s layoffs. They all came with glowing recommen-dations and great track records. It was a great deal for me and mycompany.

It seems like many of the firings weren’t performance-based.They werebased on projects or geography.They were orchestrated to achieve purebottom-line impact at the moment of the decision. In that process, IBMlost a lot of very good people who could have been ofgreat use to its shareholders and customers in other ar-eas.That’s not leadership. —Anonymous

Palmisano should be paid a nominal amount for his annualliving expenses and the rest in IBM stock warrants thatcouldn’t be executed for, say, five years. He would then bemotivated to make the stock go up.—Anonymous

April 19, 2010 7informationweek.com

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IN THIS ISSUE

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

What The Cloud Won’t Fix p.40

Table Of Contents p. 2

Write to us at [email protected]

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Microsoft says it’s preparing to deliver business intelligencefor the masses with a new set of products that blend Excel’swidely known functionality with sophisticated analytical capa-bilities for an addressable market of 500 million prospects. Afterall, Microsoft figures, since that many people use Office, whycan’t that many get into BI?

For CIOs, the problem has been the complexity of many BItools: Aimed at sophisticated experts, many of today’s productsjust won’t scale to the levels needed if the democratization ef-fort is to be more than a slogan. And that’s precisely where Mi-crosoft comes in.

Few if any companies have shown the ability to drive robustapplications to scale the way Microsoft has with Office andother products, and now the company says it’s launching a BIinitiative that will blend the familiarity of Excel with the powerof SQL Server. On top of that, Microsoft says, it has configuredthe product in a way that will reduce the management and de-velopment burdens on IT rather than compound them.

“Managed, self-service BI: This is the big one for us,” saysHerain Oberoi, group product manager of Microsoft’s SQLServer Business Group. “We hear a lot about the need to de-mocratize BI, but then you have to ask, who are you democratiz-ing BI for?

“Right now, analysts say BI is used by somewhere between 3%and 8% of all computer users, and then you also have some Ex-cel power users and builders, and there are maybe tens of mil-lions of them worldwide. And then there’s the rest of us: 500million information workers worldwide—we’re comfortable

Microsoft Pushes BI For The Masses

8 April 19, 2010 informationweek.com

<< Previous

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Leveraging

SharePoint and

Excel, Microsoft is

looking beyond

hard-core BI experts

to 500 million

knowledge workers

who can benefit

from BI’s

capabilities

B O B E VA N S

globalCIO

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with that figure because that’s how many people use Office.”Now, I didn’t take Oberoi’s point literally to mean that he ex-

pects Microsoft to rack up 500 million sales of PowerPivot for Ex-cel. On the other hand, with an addressable market of that size, even 1%penetration gets you 5 million BI customers, and if Microsoft and itspartners can push that penetration level up to 5%, then it will havebrought BI democracy to 25 million information workers.

Given the potential benefits, those numbers seem feasible, particu-larly with the much greater visibility that BI has gained outside the ITcommunity in the past couple of years. As more businesses realize thestrategic need to engage effectively with customers, they realize thatdoing so will require more awareness, more information, and more in-sights—in short, more intelligence about their business.

“With PowerPivot for Excel, IT can get out of Web site developmentand report development and can get back to building and managing in-frastructure, which is its real job,”Oberoi says.“IT says,‘What about com-pliance and management?’And our approach is that, as with SharePoint,the key is that BI can now be ‘self-managed.’ With SharePoint, IT has fullinsight and oversight into what’s being built. As soon as a solution ispublished to SharePoint, IT knows—and in the same way with Power-Pivot for Excel, IT can then have an aggregate view of what’s being usedheavily, what’s not being used at all, and how resources should be jug-gled accordingly.”

The key to winning the trust and support of the IT organization is thatbuilt-in capacity for self-managed BI. “This allows IT to do all of its re-lated work on a consistent infrastructure level, monitoring and manag-ing, instead of on a project-to-project level, where it has todevelop and fix everything,”Oberoi says.

“We think it’s a game-changer and truly gets to the democ-ratization of BI.”

Bob Evans is senior VP and director of InformationWeek’s Global CIO unit. Formore Global CIO perspectives, check out informationweek.com/ blog/globalcio,or write to Bob at [email protected].

April 19, 2010 9informationweek.com

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IN THIS ISSUE

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

What The Cloud Won’t Fix p.40

Table Of Contents p. 2

G

L O B A L C I OG

L O B A L C I O

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Bringing some new twists to the burgeoning market for sentiment-analysis applications, SAS Institute has launched an on-demand socialmedia analytics service aimed at taking the technology challenges outof monitoring Facebook,Twitter, blogs, and public forums.

Hotels, airlines, fast-food restaurants, and other brand marketers aredeploying sentiment-analysis applications to monitor customer atti-tudes based the comment fields of CRM apps, customer surveys, forums,social networks, blogs, and news feeds. SAS’s Social Media Analytics serv-ice integrates CRM and internal systems with an archive of public-net-work and feed content.

Several companies, including IBM, Attensity, and Clarabridge, alreadyoffer cloud-based text analytics capabilities.The SAS service stands outwith integrated predictive analytics that can forecast future volumes ofsocial media conversations and predict their impact.This helps compa-nies allocate resources, create “what if”scenarios, and correlate market-ing metrics such as brand preference,Web traffic, online campaign effec-tiveness, and media mix, SAS says.

The service “lets you look at everything from Twitter and Facebook tonewswire feeds and blogs to track your customer sentiment over time,

tie it to what’s going on within your organization, andbenchmark it against the competition,” says SAS seniorVP and chief marketing officer Jim Davis.

Social Media Analytics includes access to a two-yeararchive of online social media data that SAS says willgrow over time. It also can deliver insight, by way of dash-boards, alerts, and metrics, to internal systems, includingmarketing campaign management systems.

—Doug Henschen ([email protected])

SENTIMENT ANALYSIS

SAS Service Tracks, Analyzes SocialMedia And Other Customer Chatter

10 April 19, 2010 informationweek.com

<< Previous

<< Previous

[QUICKTAKES]

IN THIS ISSUE

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

What The Cloud Won’t Fix p.40

Table Of Contents p. 2

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As IT teams increasingly consider onlinee-mail a serious enterprise option, IBM isbulking up its hosted e-mail by integratingit with Salesforce.com, Skype, Silanis e-sig-nature services, and UPS shipping data.

At the same time, IBM is offering an on-line package that weds e-mail and in-house social networking, starting at $84per user per year.The package is essentiallya combination of LotusLive iNotes and Lo-tusLive Connections that provides e-mail, file storage and sharing, activ-ity management, instant messaging, and social networking capabilities.

IBM’s idea is that letting people make Skype voice-over-IP calls and e-signatures within LotusLive, and access data on physical shipments will“simplify and improve business interactions,”says Brendan Crotty,directorof LotusLive at IBM. The Salesforce integration lets people launch theseservices,as well as Lotus features such as LotusLive meetings, from insideSalesforce’s online CRM software.

The new LotusLive features are available online, but IT administratorscontrol whether to trigger them for employees. ”The administrator hasthe power to turn these on for everyone or individuals,” Crotty says,“sousers don’t get exposed to technology that the administrator doesn’twant them to have.”

Competition for online e-mail is heating up.Google is starting a big pushfor its Google Apps suite of online e-mail and productivity software for$50 a user per year, and Microsoft just expanded its online Exchange e-mail and collaboration suite,dubbed Business Productivity Online Suite,soit’s available in 39 countries and regions.—Thomas Claburn ([email protected])

April 19, 2010 11informationweek.com

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Data: InformationWeek Analytics Business of Outsourcing Survey,February 2010

39%

31%

28%

19%

18%

14%

What SaaS Services Are You Using?

Web conferencing

Web hosting

HR functions

Sales force automation or CRM app

E-commerce operations

Main e-mail system

CLOUD COMPUTING

IBM Integrates Services Into Cloud E-Mail

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A potential gap in the White House’s e-mail retention policy has beenexposed, ironically by one of the officials overseeing that policy.

Rep. Darrell Issa, R-Calif., wants White House deputy CTO AndrewMcLaughlin to explain how messages sent to and fromWhite House staff via Web e-mail systems are pre-served. The scrutiny comes after McLaughlin appar-ently used Gmail for some of his own correspondence.

McLaughlin, who is deputy CTO of Internet Policy inthe Office of Science and Technology Policy (OSTP),signed on to Google’s recently launched Buzz service,only to realize that his e-mail and chat contacts wereexposed to public view in the form of a “followers” list.That list included some two dozen Google employees,which is notable because McLaughlin was Google’schief Washington lobbyist before joining the Obamaadministration.

That led to questions over whether McLaughlin, asdeputy CTO, had been using Gmail for work-relatedcorrespondence in lieu of the White House e-mail sys-tem. Of course, it’s also possible that McLaughlin usedGmail only for personal messages.

Issa, ranking member of the House Committee onOversight and Government Reform, is seeking infor-

mation on how the whole episode jibes with the requirements of thePresidential Records Act and the Electronic Message Preservation Act.Among the questions he wants answered:What is OSTP’s policy for en-suring that all messages to and from White House staff on private, non-governmental e-mail accounts are preserved according to law?

In January, White House CIO Brook Colangelo provided details on thearchiving system used by the Executive Office of the President for un-classified e-mail. At the time, he noted that White House staff don’t have

12 April 19, 2010 informationweek.com

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[QUICKTAKES]

THE GOOGLE CONNECTION

In White House, Questions Over ‘Buzz’

In a letter to Andrew McLaughlin,the deputy CTO of Internet Policyin the White House, Issa posesthese and other questions:

> What is OSTP policy for reten-tion of information posted onsocial networking platforms?

> What procedure exists forensuring messages sent to andfrom non-government e-mailaccounts are properly catego-rized as presidential records?

> Are these decisions made inconcert with the White HouseCounsel and National Archives?

What Rep. Issa Would Like To Know

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April 19, 2010 13informationweek.com

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Amid a firestorm of controversy surrounding its Flash platform, Adobehas announced Creative Suite 5, its latest suite of design and develop-ment apps.

CS5 comes in five editions. Among the new features are e-book cre-ation tools and interactive document capabilities in the InDesign app.

The controversy arises from months of disrespect from Apple, whichhas excluded Flash from its iPhone, iPod Touch, and iPad devices andjust recently changed the language in its iPhone 4.0 SDK developeragreement to forbid explicitly the use of programming languages otherthan Objective-C, C, C++, and JavaScript.

Apple’s rationale, as stated in an e-mail that’s attributed to CEO SteveJobs, is that “intermediate layers between the platform and the de-veloper ultimately produce sub-standard apps and hinder the pro-gress of the platform.” If Apple interprets its SDK agreement strictly,third-party makers of development tools will end uphaving to ally more closely with Google, as Adobe hasrecently done.

Apple’s use of contractual language to thwart Adobe’splan to offer a way to convert Flash applications to iPhonebinaries prompted outraged posts by Adobe bloggers.

Various editions of CS5 range in price from $1,299 to$2,599. Adobe plans to start shipping CS5 in about 30days. —Thomas Claburn ([email protected])

APPLE-ADOBE RUCKUS

Design Apps Debut Amid Controversy

IN THIS ISSUE

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

What The Cloud Won’t Fix p.40

Table Of Contents p. 2

access to personal e-mail accounts through the Executive Office networkbecause “all known Web-based external e-mail systems” are blocked.

That raises other questions, including:What’s OSTP’s policy regardinguse of Web-based mail systems by government employees? And, shouldInternet policy maven McLaughlin recuse himself from answering thatquestion? —John Foley ([email protected])

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There may still be IT execs whosee cloud computing as some-thing for small companies andbleeding-edge pioneers, but An-drew Brown isn’t one of them.Nonetheless, Bank of America’shead of strategy, architecture, and optimization says combining internaland external cloud capabilities will be a challenge for enterprise archi-tects over the next five years.

“You have to come up with the right blend of where you use the cloudand what you keep inside,” Brown said last week at a preview of Sales-force.com’s Chatter service in New York.

Brown laid out fundamental questions that enterprise architects mustanswer, including how much data to move into the cloud, service-levelagreements, cost, and data security.

Chatter is a free collaboration service that Salesforce plans to add to itsapplications and Force.com platform this summer. Nearly 50,000 of Bankof America’s 300,000 employees use Salesforce CRM, and the bank’s betatests of Chatter have been a success, Brown said. The service will bring

social-networking-style collaboration to existing Sales-force functionality and integrate with Facebook, Twitter,and other popular public social sites.

“As a customer-service company, whatever channelsour customers are using, we need to figure out a way tobe present there,” Brown said. “Chatter lets us collabo-rate in real time with our customers, and we’re able toclose a number of issues there.”

—Doug Henschen ([email protected])

14 April 19, 2010 informationweek.com

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[QUICKTAKES]

‘THE RIGHT BLEND’

Bank Of AmericaExec SharesCloud Advice

IN THIS ISSUE

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

What The Cloud Won’t Fix p.40

Table Of Contents p. 2

Key cloud questions still needto be answered, says Brown[

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April 19, 2010 15informationweek.com

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VMware and ParAccel have established a new performance bench-mark for data warehouse-style analytics processing—and they did sousing a virtual machine.

High-end analytics have been off-limits to virtual servers because ofwhat ParAccel CTO Barry Zane describes as a “fundamental hang-up,”the perception that VM overhead would knock down performance.VMware’s growth goals depend on data center managers moving moreprocessing, like data warehousing, into VMs.

The ParAccel Analytic Database, a parallel processing system that runson clusters of x86 hardware, ran a TPC-H benchmark against a terabyteof data.With 80 virtual servers in a cluster of 40 Hewlett-Packard blades,the test hit more than 1.3 million composite queries per hour. It usedVMware’s latest ESX Server 4.0, in which higher I/O throughput was oneof the key upgrades. —Charles Babcock ([email protected])

BUSTING BARRIERS

VMware Virtualizes Analytics Processing

ORACLE TOUTS MYSQLEdward Screven, Oracle’s chiefsoftware architect and head of itsopen source strategy, is out mak-ing the case—including at aMySQL conference last week—that MySQL is so distinct fromthe Oracle 11g database that Or-acle has reason to keep investing.“MySQL is small, it’s lightweight,it’s easy to install, it’s easy to getgoing with it,” he says. AndMySQL reaches customers that“Oracle doesn’t otherwise reach.”Now in beta, the commercial en-terprise edition of MySQL 5.5makes the InnoDB storage en-gine, bought by Oracle in 2005,the default storage module. Ora-

cle also improved tools to visual-ize MySQL data models.

MICROSOFT HIRES INFOSYSMicrosoft is turning over its in-ternal tech support to Infosysunder a three-year deal for helpdesk, infrastructure, and applica-tion support services. Infosys willopen a service center dedicatedto Microsoft services and usingMicrosoft software. Microsoft ex-pects the arrangement to resultin lower IT costs and added flexi-bility, since Infosys’ fee is basedpartly on how much money itsaves Microsoft. Infosys will pro-vide services from India andother centers around the world.

ULTRASOUND TRACKINGSaint Michael’s Medical Center isusing ultrasound infrastructureto track equipment and alertstaff when inventories are low.The $300,000 system from IBMwill track more than 2,000 piecesof equipment at the 350-bedhospital, from heart monitors toventilators, as well as track pa-tients from room to room.Thesystem uses ultrasound receiversand tags that communicate viaSaint Michael’s wireless infra-structure.The tags broadcast aunique identification signalwithout the risk of electromag-netic interference with othermedical equipment.

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As cloud computing grows and companies tap outsourcers

for higher-end skills, the onus is on IT to manage it all better

By Michael Healey

<< Previous

<< Previous

[COVER STORY]

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hen it comes to outsourcing, everyonehas a tale of woe. My favorite comes from asoftware vendor that outsourced a new de-velopment project: “They were amateurs

and couldn’t hit a deadline. It’s also why we switched from PHP to Java.It was the wrong platform to start.” Many will grumble in agreement,recalling their own horror stories.

However, bigger questions loom. Who picked the platform? (The un-happy customer did.) Did the customer check the work daily? (No.) Didit have automated status reporting? (It didn’t.)

Outsourcing is a key part of every modern IT group. Problem is, we stilldon’t seem to do it that well. Twenty-nine percent of the 530 businesstechnology professionals responding to the InformationWeek Analytics2010 Business of Outsourcing Survey have fired a vendor within the last12 months.You can blame the partner—or grab a mirror.

Two big trends jump out from this year’s survey of companies using IToutsourcing, and both speak to the importance of IT managing out-sourcing better.

One is the growth of cloud computing and software-as-a-service initia-tives—and the disturbing trend of IT trusting performance monitoringto the vendors. The other is the fact that IT outsourcing is moving upthe stack, as vendors take over increasingly strategic functions. Nearlysix of 10 IT shops outsource some critical function—management, engi-neering, or development; almost one-fourth keep executive and man-agement functions in-house but look to outsource every-thing else. As companies rely more on outsiders, a lack ofoversight, management, and even monitoring can havecatastrophic consequences.

Our survey shows a continued rise in all types of out-sourcing, everything from traditional hardware servicesand staffing to cloud applications and full-blown datacenter operations.

However, there are some serious levels of dissatisfac-

April 19, 2010 17

IN THIS ISSUE

BI For The Masses p. 8

Better E-Discovery p. 28

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

informationweek.com

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tion.With end-user support and develop-ment of customer-facing applications,more than half of survey respondents sayoutsourcing has delivered lower quality.Cloud computing and SaaS get more fa-vorable reviews, with the majority sayingit has delivered better quality and 44%planning to expand use. However, thereare problems there, too, with almost sixout of 10 respondents relying on theircloud vendors to monitor their ownperformance.

Most IT shops have set the right goals foroutsourcing: Freeing up staff for morestrategic initiatives is the most-valuedbenefit, just above cost savings and betteralignment of IT staff and costs with busi-ness trends.They’re also worried about theright problems: unforeseen costs, commu-nication problems, and the time requiredto manage subcontractors.

Cloud Growth Means ChallengesCloud computing blurs the lines be-

tween what had been conventional out-sourcing and internal operations, and it will test IT’s management and

control policies. But IT pros like what they’re getting sofar. Most companies (55%) using some kind of cloud com-puting or SaaS product think it’s delivering better qual-ity—with 37% citing that sweet spot of higher quality atlower cost. Interestingly, almost one-fifth say cloud/SaaSdelivers better quality but at a higher cost. That highercost story isn’t one cloud computing providers usuallytell, so it’s a trend to watch closely.

Compare those findings to the dissatisfaction with the

18 April 19, 2010 informationweek.com

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[COVER STORY ] OUTSOURCING

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BI For The Masses p. 8

Better E-Discovery p. 28

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

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more mature category of outsourced end-user support: 59% of surveyrespondents say it’s delivering lower quality than in-house support, in-cluding 13% who think it both costs more and provides lower quality.Just 28% say outsourcing improved support quality. So much for a greathelp desk. In customer-facing application development, over half thinkoutsourcing has lowered quality. Cloud’s relatively higher satisfactionhelps explain why it’s poised to grow.

Unfortunately, IT isn’t preparing properly for cloud’s growth, whichcould lead to some nasty surprises. Only 17% say they directly monitorthe performance and uptime of all of their cloud and SaaS applications.A quarter monitor only mission-critical items, and a shocking 59% relyon their vendors to monitor themselves. It would seem logical that ITleaders could take all they've learned in the past decade of conventionaloutsourcing and use it to police the cloud.The problem?

20 April 19, 2010 informationweek.com

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[COVER STORY ] OUTSOURCING

3.4

3.3

3.2

3.1

3.1

Data: InformationWeek Analytics Business of Outsourcing Survey of 366 business technology professionals at companiesusing outsourcing services but not providing them, February 2010

Staff free for more strategic initiatives

Cost savings

IT staffing and costs in better alignment with business needs and trends

Ability to deliver projects we couldn’t with in-house expertise

Access to industry-specific expertise

Ability to deliver projects more quickly

Ability to deliver better quality product

Smoother project delivery

3.0

2.7

2.6

How have these benefits been realized for your company through outsourcing?Outsourcing’s Benefits

1 Not at all Primary benefit 5

(Mean average)

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“We don’t see IT doing it all that well in the [conventional] outsourcingworld,” says David Rutchik, with the outsourcing consultancy Pace Har-mon. Rutchik says outsourcing vendor management is talked about alot, but it tends to be much more reactive than proactive.

Firing an outsourcing provider is the ultimate reaction—witness the29% of IT shops that have done it in the past year. But try firing a SaaSprovider after you’ve integrated the platform into your operations.Cloud can be a bit like a tick—a vendor can latch on easily to your or-ganization and then is a pain to get rid of.

Cloud monitoring and management are critical but in some casesshouldn’t be done by IT, Rutchik says. Sound like heresy? The reality isthat SaaS providers often have a relationship with business units first—our SaaS research earlier this year found that IT organizations are drivingthe decision to use SaaS only a third of the time. Rutchik is seeing IT be-ing brought it on the front end of SaaS deployments—to provide theproper governance framework, validate performance, and create inter-faces. The IT organization will make sure SaaS fits the company’s archi-tecture, from bandwidth to desktops. But once the app’s in a steadystate, the business unit may be the right one take over its management,he says, since they’re most affected by performance.

How To Manage The CloudTo make sure IT manages the cloud properly,we recommend looking at

the top concerns IT has about outsourcing in general, and then tailoringremedies for what’s unique about cloud services. The rise of SaaS andcloud computing often is assumed to relieve work on overburdened ITgroups, and it can, as our generally positive results show.But cloud computing extends vendor relationships fur-ther than ever for some companies, and customers muststretch their management practices to cover it.

What follows from our survey results are the top prob-lems that plague outsourcing in general, followed by stepsIT managers should take to protect cloud computing andSaaS projects from them.

Unforeseen costs: Organizations must factor in items

April 19, 2010 21informationweek.com

Next >>

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IN THIS ISSUE

BI For The Masses p. 8

Better E-Discovery p. 28

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

Page 23: BI for the masses—again 8 - Brock Universityspartan.ac.brocku.ca/.../InformationWeek_04-19-2010... · 4/19/2010  · I can’t understand why people in general—let alone a big

beyond the core service, including bandwidth requirements,security up-grades, and monitoring costs.

Communication problems: Typically,cloud projects don’t have a pointproject team or dedicated support reps from the vendor. You need topush for regular contacts before and after the project.

Lack of understanding of our industry: This can be a problem, espe-cially for SaaS initiatives,since the economics of the cloud lean toward one-system-for-all,not industry-specific systems.It’s critical to have a completebusiness requirements plan that can be matched to system functionality.

Time required to manage: Management of the cloud extends wellbeyond a functional team and should include security, network opera-tions, and application groups, as well as business unit reps taking newresponsibility, as Rutchik suggests.

Quality control and compliance: Extend your quality control beyondbasic checks to actively monitor vendors. Problem is, only 17% activelymonitor all their cloud/SaaS apps.

IT teams also should be involved in scrutinizing cloud deals beforethey’re signed. They’re different from conventional outsourcing agree-

22 April 19, 2010 informationweek.com

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[COVER STORY ] OUTSOURCING

Data: InformationWeek Analytics Business of Outsourcing Survey of 251 business technology professionalsat companies using cloud or SaaS services, February 2010

Do You Directly Monitor The Performance And Uptime Of Your Cloud Apps?

Separate monitoringfor all of them

No separate monitoring;rely on vendor to do so 17%59%

24%Separate monitoringfor most critical items

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ments—a hybrid of outsourcing, software, and leasing—but they’re stilla major contractual commitment, says Richard Austin, a former generalcounsel for EDS Canada who now has his own Toronto practice, AustinTechnology Law. “Don’t let the decision be made at a midlevel withinthe organization,”Austin advises.“Treat it as seriously as any other formof outsourcing.”

More than half of our survey respondents say their companies have nosystem for managing outsourcing requests for proposals. Furthermore,43% lack a contract management system once the contract’s awarded,and29% lack an online project management system.Can you say “Excel hell”?

Even companies with rigorous monitoring and measurement stan-dards for outsourcers often don’t use those measurements internally,says Mark Rosen, a specialist in Lean Six Sigma strategies who hasworked on internal quality programs at Fidelity Investments, externalquality programs for outsourcer Nadastra, and is now heading a qualityinitiative with a major U.S. retailer.“External vendors are often willing toprovide the details and metrics to win the business. Management thenfalls short by not forcing the practice to the internal teams, often avoid-ing obvious performance issues with their own staff.”

Companies need to be bluntly honest about the time and cost it takesto manage outsourcing, and then make that investment. Many aren’t.It’s critical not only for expanded use of the cloud, but also as outsourc-ing takes on ever-more strategic roles.

Well Beyond The BasicsAn “outsource the basics” approach is still followed by 30% of our sur-

vey respondents’companies—typically, tasks such as test-ing, app support, help desk, and discrete development.

However, we’re surprised to see how many companieshave moved outsourcing up the stack. Seven percentof organizations look to outsource the entire IT func-tion, including executive and senior management roles.Twenty-three percent keep executive and manage-ment functions but outsource everything else, includ-ing engineering and development roles; 21% keep en-

April 19, 2010 23informationweek.com

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IN THIS ISSUE

BI For The Masses p. 8

Better E-Discovery p. 28

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

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gineering in-house but outsource development. Added up, 59% ofcompanies outsource one or more of the strategic components oftheir IT operations.

With any outsourcing, but especially with higher-skill functions such asarchitecture and engineering, IT leaders have to ask this question: Canthey keep their competitive advantage with that knowledge outsidethe business? It puts added pressure on managers to push providersfor the innovation a company needs and its customers expect.

Consider data center operations. Many companies consider it non-core, and nearly half of our survey respondents outsourceits operation or support to some extent. Yet some of thebiggest strategic decisions in technology today center onthe data center—virtualization, next-generation operat-ing systems, and the mix of internal and external cloudcomputing. How aggressively is your outsourcing vendorpursuing these changes for you? Another area is the fast-moving nature of the Web. Only 10% of companies com-pletely outsource their Web site, but nearly half use some

informationweek.com

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[COVER STORY ] OUTSOURCING

Data: InformationWeek Analytics Business of Outsourcing Survey of 366 business technology professionalsat companies using outsourcing services but not providing them, February 2010

What’s Your Company’s Approach To Outsourcing?

Outsource as much workas possible, except for executiveand managerial roles

Don’t look tooutsource any work, but

open to sales pitches

23%

Outsource as much workas possible, up to and

including the entire IT function

Outsource only basic tasksand maintenance

11%

7%

8%30%

21%Outsource as much workas possible, exceptfor executive, managerial,and engineering roles

Outsource as much work as possible,except for executive, managerial,engineering, and development roles

24 April 19, 2010

IN THIS ISSUE

BI For The Masses p. 8

Better E-Discovery p. 28

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

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outsourced resources. Companies can’t expect outsourcers to have adeep enough understanding of your business in order to know whatcustomers expect from your site in terms of search, content sharing,content ranking, live chat, and integration with Facebook and other so-cial networking sites.Yet those things are vital to a vibrant Web site. Getthat wrong, and you’ll find your company tweeting in the dark.

The Outsourcing ThreatWhile most companies accept outsourcing as part of modern IT, it’s

important to acknowledge that 26% of our survey respondents saystaffers see outsourcing as a threat to their jobs.The only surprise is it’snot higher, given the fragile U.S. economy and high unemployment.

Companies of all sizes cut back across departments, including IT. Insome cases, IT leaders have used this downturn to drive strategicchange, like moving apps to a cloud model, that seemed too disruptivebefore. Even as the economy improves, some CIOs will continue to drivethis change, resisting hiring as long as possible, pushing the limits offlexible staffing models and exploring cloud-based approaches.

informationweek.com

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[COVER STORY ] OUTSOURCING

Data: InformationWeek Analytics Business of Outsourcing Survey of 251 business technology professionalsat companies using cloud or SaaS services, February 2010

What are your plans for using cloud and SaaS services over the next 12 months?Cloud And SaaS Services Gaining Ground

Not sure

27%

Decreasetheir use

Maintain status quo

28%

1%

44%Increasetheir use

26 April 19, 2010

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“It’s a gray moment for IT,”says Terrence Gaughan, a partner with Dev-Select, an outsourcing and IT staffing firm.“IT is getting charged withsolving a problem and even given money to do it.” However, CIOs will bereluctant to hire in a recovery that feels shaky. Says Gaughan: “It’s go-ing to be difficult to be the ‘first’ to rehire, especially for IT.”

Large companies have discreetly formalized this approach, setting afixed percentage of IT staffing as outsourced. One survey respondent’semployer has targeted a 40% outsourcing model. Grumble at the modelif you must, but there’s a humane element to it: It’s a lot easier to cutback a staffing contract than lay off one of your own.

To execute it, however, most teams must improve their managementof all outsourcing. The early productivity and cost-saving gains we’reseeing with cloud and SaaS initiatives may vaporize if companies don’tinvest in integrated monitoring and management systems. Break/fixoutsourcing, app dev, and simple Web conferencing are still large partsof the outsourcing picture, but our survey shows the biggest growth isin outsourcing of more complex engineering tasks and broader cloudsystems that must be tightly integrated into your ecosystem.

Outsourcing has always had the potential to produce competitive ad-vantage—anything most companies struggle with,and some do well,sep-arates winners and losers.Our data shows that even in the category whereIT outsourcing is most successful, only 37% of companies hit that magicalquadrant of “lower cost, higher quality,” while in the worst category it’s17%. Expanding outsourcing to higher skill levels and into more sophisti-cated cloud computing initiatives will only raise the potential to gain ad-vantage,and ramp up the stakes for effective outsourcing management.

One respondent summed it up well: “We regularly lookto outsourcing at different points to move us forward,assuming certain responsibilities if it makes sense interms of our overall business. We think of it as an evolu-tionary process.” Remember, though, what drives evo-lution: Only the fittest survive.

Michael Healey is president of Yeoman Technology Group. Write to us [email protected].

informationweek.com

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IN THIS ISSUE

BI For The Masses p. 8

Better E-Discovery p. 28

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

April 19, 2010 27

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Many organizations are sitting on stockpiles of dangerous ma-terials. No, we’re not talking about hazardous chemicals or un-stable explosives. We mean backup tapes, which are routinelyincluded in requests to produce electronically stored informa-tion (ESI) as part of potential or ongoing litigation.

The e-discovery realm is rife with cautionary tales of organizationstripped up by backup tapes. For instance, in 2009 a judge fined a defen-dant more than $1 million for failing to retrieve information stored onbackup tapes. In the same year, the government’s Office of FederalHousing Enterprise Oversight was compelled by a court to search itsoff-site disaster recovery backups for ESI, a search that ended up costingthe agency $6 million—a jaw-dropping amount for a single discovery

exercise.What’s even scarier is that the agency wasn’t even aparty in the lawsuit; it had simply been subpoenaed for

documents in litigation involvingFannie Mae.

This article examines the chal-lenges that backup tapes pose. Italso discusses strategies organiza-tions can use to reduce the num-ber of tapes that get stockpiled,

E-Discovery:Avoid Death By Backup

Backup tapes cankill an e-discoveryeffort with costsand complications.Fight back withsmart policies andthe right tools.

By Behzad Behtash

28 April 19, 2010 informationweek.com

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and it outlines technologies and services that help reduce the cost andtime it takes to retrieve ESI from tape.

Backup tapes have been used for decades to store data.Today, Linear-Tape Open (LTO) Ultrium and its earlier generations are the primaryformat. Backup tape cartridge characteristics, including large storagecapacities (1.5 TB raw and 3 TB compressed per LTO-5 cartridge), ro-bust transfer rates, and low power consumption make them an idealbackup medium, even with the emergence of disk as analternative.

While tape may be suitable for backup and disaster re-covery, it’s rarely a good choice for archiving. Unfortu-nately, many companies have unintentionally adoptedtape for that purpose, often because they lack proper me-dia management policies, or they inherit large stockpilesof backup tapes from mergers and acquisitions.

Several factors make tape a particularly difficult

April 19, 2010 29informationweek.com

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IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

How Long Do You Keep These Types Of Data?

State_of_Storage_chart 4

Data: InformationWeek Analytics/Network Computing 2010 State of Storage Survey of 331 business technology professionals, November 2009

4%

8% 17% 21% 7% 25% 22%

46%20%5%9%11%9%

25% 21% 16% 5% 20% 13%

33%19%5%11%14%18%

11% 13% 12% 4% 18% 42%

49%12%7% 3%12%17%

14% 25% 14% 30% 13%Enterprise database or data warehouse information

Less than two years

Office and SharePoint documents

CAD and GIS files

E-mail

Rich media (video, audio, and image files)

R&D data sets

Web data (wiki and blog posts)

Two to four years Five to seven years Eight to 10 years Indefinitely No policy

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medium to deal with for e-discovery. First, most organ-izations only have a vague idea of what might be ontheir backup tapes.To find out, the information on thetapes must be run through the backup application thatmade the tape, or even restored to the application thatgenerated the data. Contents of backup tapes may bein proprietary formats requiring older—and typicallydifficult to locate—versions of backup and businessapplications.

An organization may have to set up an entire applica-tion environment, such as Microsoft Exchange, to re-store data on backup tapes.This process can be costlyand time-consuming. Recovery costs—the amount anorganization has to spend to get usable informationfrom backup tapes—are estimated to be in the rangeof $500 to $1,000 per tape.

Tale Of The TapeJeffery Fehrman,VP of forensics and consulting at In-

tegreon, which provides e-discovery and legal servicesto corporations, recounts that on one job, his team re-stored 4 TB of e-mail from almost 500 backup tapes.Those 4 TB then had to be indexed, deduplicated, andsearched for relevant ESI. The bill for the entire job,which took nearly two years: $8 million.

Discovery of tape can be complicated by other factors. Many tape for-mats are now obsolete, making compatible drives difficult to obtain.Another problem is the high level of duplication on many tapes, forcingorganizations to sift through large piles of irrelevant data to find rele-vant ESI.

Organizations should take a two-pronged approach to addressing e-discovery on backup tapes: One is based on company policies and prac-tices around retention and disposition; the other is technological.

On the policy front, organizations must understand that there are sig-nificant differences between backing up and archiving information.

30 April 19, 2010 informationweek.com

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Backup systems, including tape, should be used only for disaster re-covery and business continuity. That means backups should be keptonly long enough to enable specific recovery point objectives—that is,how many hours’ or days’ worth of data a company wants to be able torestore. Some companies may require as little as 14 days of retention,while others may need six months or longer.

By contrast, an archive is designed for the retention of critical infor-mation—business records, contracts, e-mail—that companies may needto preserve for significantly longer periods. Archives tend to live on diskand often have built-in features such as classification andsearch that make it easy to identify and produce informa-tion that may be relevant to discovery or other investiga-tions. Archives also provide IT with the tools to retain in-formation long enough to meet rules and regulationsand then dispose of that information once it reaches theend of its retention period.

The second prong to addressing e-discovery on backuptapes is technological. Tools are available that are de-

April 19, 2010 31informationweek.com

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IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

Under evaluation or pilot

Use widely44%

Limited production use

No plans for immediate use

Wouldn’t use

15%

22%

12%

7%

Data: InformationWeek Analytics/Network Computing 2010 State of Storage Survey of 331 business technologyprofessionals, November 2009

Disk-To-Disk-To-Tape Popular For Backup

1

23

4

5

67

89

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32 April 19, 2010 informationweek.com

<< Previous

<< Previous

[E-DISCOVERY AND TAPE]

>> PULL IT AND LEGAL TEAMS TO-

GETHER—NOW E-discovery is a complex

process that has intricate technological and

legal requirements. That’s why it’s essential

that your IT and legal teams coordinate

their e-discovery efforts. For instance, IT may

assume that legal wants every electronic

file saved forever. It doesn’t. Meantime, the

legal department may assume that IT has

some Google-like capability to magically

produce relevant information. It doesn’t.

The sooner you move beyond these as-

sumptions, the sooner these two groups

can design and implement effective e-dis-

covery processes.

>> FOLLOW (AND ENFORCE) YOUR

POLICIES When it comes to your organiza-

tion’s ability to find and produce electroni-

cally stored information, opposing counsel

and cour t judges wil l probe for—and

pounce on—operational practices that de-

viate from written policy. For example, if

your policy is to overwrite backup tapes

every two weeks, but in a deposition your

storage manager says there are boxes and

boxes of old tapes that were never over-

written, you can bet opposing counsel is

going to ask for those tapes to be searched.

>> SEPARATE BACKUPS FROM ARCHIVES

Backup tapes are best suited for disaster re-

covery and business continuity, in which case

an organization stores data for a relatively

short period of time, from a few days to sev-

eral months. For longer-term information re-

tention, an archive is the smartest approach

because it can help an organization classify

data, apply appropriate retention periods,

dispose of data safely, and search and re-

trieve ESI as necessary.

>> DON’T CREATE A LITIGATION TARGET

Deciding what not to keep is just as important

as what to keep when it comes to archival and

related e-discovery concerns.You should keep

certain documents, such as tax or environ-

mental records, contracts, or specific project

files, for business and legal reasons. But to re-

duce the size of the target you present to po-

tential adversaries, avoid storing everything.

>> PURGE OR RECYCLE TAPES Carefully

examine and eliminate tapes that don’t con-

tain anything subject to litigation or reten-

tion requirements. This process needs to be

carefully documented. Keep in mind, the best

time to do this is when there’s no pending

litigation and you have no reasonable antici-

pation of litigation. —Behzad Behtash

5 Musts For E-Discovery And Backup Tapes

GET IN LINE

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signed specifically to help organizations get ESI from backup tapes.Products and services from companies such as Index Engines, Renew-Data, and eMag Solutions let companies scan, catalog, and restore datafrom tapes without many of the burdens of traditional methods ofrestoration, such as re-creating the application environment. There arealso products for specialized environments, such as Bus-Tech’s VTL line,which is for large financial institutions and other organizations that runmainframes and operate in highly regulated markets.

Index Engines sells appliances that can access a variety of tape for-mats without requiring access to the legacy backup application or evena recovery environment for databases and e-mail servers.The applianceindexes data on the tape, making all the data searchable.When relevantinformation is found, the appliance can also copy it to another medium.“It can get a single message and pull out that message without us hav-ing to build an Exchange environment,”says Integreon’s Fehrman, whouses Index Engines and other tools. A single 6-TB Index Engines appli-ance can scan and index about 50 to 70 TB of tape data. But at a cost ofabout $150,000, the appliance isn’t cheap.

RenewData’s eDiscovery Acceleration Platform is provided as a service,so customers don’t have to make any supporting capital investments.Customers can use it to restore one tape or thousands. RenewData takesprecautions to avoid inadvertent data spoliation—that is, destroying oraltering data so as to make it inadmissible in court.The vendor can alsotestify on behalf of clients as to the defensibility of its data.

Technologies and services such as these make data restoration frombackup tapes less painful and costly than traditional methods. However,these improvements also make it harder for parties to alawsuit to argue that they shouldn’t have to producebackup tapes. That’s why it’s essential for organizationsto have retention and disposition policies on the books—and the mechanisms in place to enforce those policies.

Behzad Behtash is an independent IT consultant who previously served asCIO of Tetra Tech EM and VP of systems for AIG Financial Products.Write to usat [email protected].

April 19, 2010 33informationweek.com

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IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

New Data Security Law p. 34

Post-Recession Business p. 42

Table Of Contents p. 2

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The new Massachusetts data security law, 201 CMR 17.00, is a prime ex-ample of the increasingly aggressive role states are taking to protecttheir citizens. More than 40 states have data breach notification laws al-ready on the books—a trend that started with California’s SB 1386 butcertainly didn’t end there. Much like those other laws, Massachusetts’has impact beyond the state’s borders and could spur similar legisla-tion in other states.

Federal action is also a distinct possibility.If you hold personal information on a Massachusetts resident, you

were on the hook as of March 1. The question for security groups is,How do we comply with the myriad state-mandated data security lawswithout putting an undue burden on the business? And comply you

must, because CMR 17.00 raises the stakes in terms ofpotential penalties. The law will be enforced, quiteliterally, in the breach, and companies can potentially befined $5,000 per violation and per record lost. Onestolen laptop loaded with a database containing thenames and Social Security numbers of 200 Mass-achusetts residents puts you in the hole for a coolmillion.

The Massachusetts law isn’t remarkable in its overall re-

Move ToMassachusetts’ tough new data protection law reaches beyond

its borders, and other statutes are on the horizon.

Are you ready?

34 April 19, 2010 informationweek.com

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IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

Better E-Discovery p. 28

Post-Recession Business p. 42

Table Of Contents p. 2

States’RightsSecurity

By Randy George

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quirements, but it is special in two areas. First, it requires businesses toattest that they have a working data security program in place to pro-tect any personally identifiable information (PII) they’ve collected fromstate residents. Companies must maintain a comprehensive written in-formation security program (WISP) that includes “technical, administra-tive, and physical safeguards” to protect PII. Covered businesses range

April 19, 2010 35informationweek.com

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ServicerInternet Internet

E-mail with form details

Web form committedto database and mailedto HR

Employee completes Web form

Noncompliant Process

E-mail forwarded by HR with PIIis detected, captured by e-mail encryption

Compliant Process

HR originally captures employee health benefit change on corporate Internetand forwards it unencrypted to servicer. Process is brought into compliance with the addition

of encryption prior to forwarding to servicer.

Business Process Redefined

HR employee

Servicer

E-mail with form details

Web form committedto database and mailedto HR

Employee completes Web form

HR employeeUnencrypted e-mailwith PII forwarded

to servicer overthe Internet

Encryption appliance detects

e-mail with PII, encrypts it, and

forwards to servicer

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from neighborhood dry cleaners to Fortune 100 companies, but the lawstipulates that the program be appropriate to the size and resources ofthe business.

The Massachusetts law also stands out by mandating encryptionof data in motion and at rest, including on laptops and otherportable devices like smartphones, USB drives, and MP3 players.That’s going to be a sticking point for many shops; our Information-Week Analytics State of Encryption survey found we’re still movingin fits and starts despite the momentum that compliance frame-works like PCI have generated. While 86% of the 499 business tech-

nology professionals responding to that poll em-ploy some encryption, 31% of those respondentssay it’s just enough to meet regulatory require-ments. Only 14% characterize their encryption aspervasive, and just 38% say they encrypt mobiledevices.

That puts a majority of respondents on a collisioncourse with CMR 17.00.

Other directives cover, in fairly general terms,most of the areas you’d expect: secure authenti-cation and access controls; firewalls; up-to-datepatching and endpoint anti-malware protection;and user training in the technologies, policies,and proper handling of personally identifiableinformation.

In addition, an individual or a team must benamed the official data security coordinator. Thisperson is charged with the plan’s initial implemen-tation, training of those involved, as well as with on-going testing and evaluation of the WISP to ensureit evolves as business realities change. The coordi-nator also must assess third-party service pro-viders’ ability to comply.

With any compliance mandate, IT’s goal shouldbe to implement a program that doesn’t impose

36 April 19, 2010 informationweek.com

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[DATA SECURITY LAWS]

Get This And All Our Reports

Become an InformationWeek An-alytics subscriber: $99 per personper month, multiseat discountsavailable. Subscribe and get ourfull report on the new Massa-chusetts Data Privacy law atinformationweek.com/analytics/massprivacy

This Strategy Session reportincludes 15 pages of action-oriented analysis.

What you’ll find:

> A three-step plan for gettingon top of 201 CMR 17.00

> Sample business processesthat could come back to biteyou—and how to fix them

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onerous changesto the way busi-ness is done. Butthe fact is, somebusiness processesmay need to beadjusted to meetcompliance re-quirements. End-user training is acritical, and oftenoverlooked, com-ponent as wel l .These are the peo-ple on the f rontlines. Skimping on education could cost you.

The best approach is to break up your compliance effort into threephases: assessment, execution, and management and monitoring.

Phase 1: AssessmentData security laws can be difficult to decipher, so take your time and

understand the new rules—and yes, that means meeting with corporatecounsel.

Next, identify the stakeholders who’ll be affected. Pound the carpetand schedule meetings with business leaders responsible for de-partments that handle personally identifiable information. Ask lotsof questions about what information is being con-sumed and disseminated, and how.

Finally, chart out all processes that involve PII. See whatchanges you’ll need to make, if any, to the way you dobusiness. In our experience, a thorough analysis of corpo-rate practices will yield surprising results. At best, you’llneed to tinker around the edges. At worst, you’ll discoveregregiously insecure business procedures.

The table on p. 38 provides examples of the types of

April 19, 2010 37informationweek.com

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Next >>

IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

Better E-Discovery p. 28

Post-Recession Business p. 42

Table Of Contents p. 2

Compliance _chart14

Data: InformationWeek Analytics Regulatory Compliance Survey of 379 business technologyprofessionals, June 2009

5%

16%

22%

31%

36%

36%

38%

59%Fear of possible legal repercussions

Fear of negative audit results from a future third-party reviewer

Fear of negative publicity

Strong, internal desire to implement a comprehensive security program

Addressing the need to fix findings from a previous audit

Proactive push to satisfy business partner needs or expectations

Other

Proactive push to satisfy customer needs or expectations

Primary Drivers For Compliance Initiatives

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38 April 19, 2010 informationweek.com

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[DATA SECURITY LAWS]

Four Processes To Watch

Department

HumanResources

HumanResources

Sales

Marketing

Business Process

Additions andchanges toemployee flexiblespending plan

Medical benefitchanges such as adding adependent orchanging an HMO plan

Taking customerorders over thephone for softwarepurchases

Annual customerappreciation event

Comments

Discovered that the Webportal for capturingchanges to employee flexspending plan benefits istransmitting over HTTP.

Employee completes aWeb form that’s e-mailedto HR. Then HR forwards itunencrypted to thehealth plan servicer.

Inside sales reps routinelytake orders, recordingcustomer credit cardnumbers in Excel spread-sheets for batch process-ing. Spreadsheets aresaved on an open fileshare and on sales stafflaptops.

Marketing manages thisouting held at a resort.Airfare is centrally coordi-nated, but attendee PII iscollected for airlinesecurity purposes via aWeb form and posted to adatabase. The form is SSLenabled, but fields con-taining PII are storedunencrypted.

Plan Of Attack

Demand that thevendor or developeradd SSL capabilities tothe portal.

Use an e-mailencryption applianceto intercept outbound e-mail that contains PIIand encrypt it.

Let customers registervia externally facing,SSL-enabled site. Repscan register customersusing the same site.Add database encryp-tion, and use DLP toolsto protect network andendpoint content.

Develop an SSL Web-based form for the salesstaff to manage thispromotion. Ensure SQLdatabase fields with PIIare encrypted. Employendpoint DLP whereverlocal files are used tocapture data.

Possible Technology

None is required.

Options includeMcAfee Secure EmailGateway, CiscoIronPort, Postini.

SQL Server supportsencryption out of thebox; network andendpoint DLP suitesfrom McAfee, RSA,Symantec, andothers can findinstances of PIIstored in plain text.

SQL Server encryp-tion is free; endpointDLP possibilitiesinclude Ascend andGuardian Edge.

Some types of business operations need adjusting to be compliant

processes you’ll want to document as you make your way across thebusiness.

Phase Two: ExecutionSensitive data is everywhere: on file servers, in databases, in your in-box,

and sitting on your printer. It’s on removable media, on laptops and desk-

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tops, and on smartphones. And compliance mandates keep piling up. Ascant minority of the 379 respondents to our June 2009 InformationWeekAnalytics Regulatory Compliance survey are wrestling with just one stan-dard,compared with the almost 80% who are dealing with at least two reg-ulatory requirement sets simultaneously—and since March,maybe more.

Clearly,defining cross-regulatory security controls is crucial.Whatever pro-tections or processes we put in place should address multiple needs and beas extensible as possible.To that end,plan how to overlay technology on theat-risk processes you flag in your analysis. Pilot test with key personnel. Ofcourse, you’re not going to go purchase and implement expensive tools,especially for something as complex as encryption,without getting buy-infrom the business,when you’re changing the way they do business.

The last step is staff training and moving changes into production. Ed-ucate users on how to handle PII in tandem with training them in theuse of the tools that will ensure compliance.

Phase Three: Monitoring And ManagementDevelop and enforce alerting and reporting policies. Say you have DLP,

encryption, and log management deployed—how will you actually siftthrough and react to all of the alerts and other information that you’rereceiving? It’s vital to assign someone the responsibility of monitoringand responding, and make it a top priority.

Continually review policies and strategies. Threats evolve, users comeand go, and the rules of the compliance game change. Some regs, likeMassachusetts’ data security law,explicitly require businesses to conductannual reviews of their compliance programs. As the threat and legisla-tive landscapes shift, you need to adapt.

Finally, engage in regular penetration testing.This is justgood security practice, regardless of whether you’re sub-ject to compliance mandates. Aim to find system vulner-abilities that may lead to data leakage—and that couldland you in court and cost you big.

Randy George is an InformationWeek and Network Computing contributor.Write to us at [email protected]

April 19, 2010 39informationweek.com

Next >>

Next >>

IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

Better E-Discovery p. 28

Post-Recession Business p. 42

Table Of Contents p. 2

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I can’t tell whether all the talk about cloud computing, andthe benefits attached to it, comes from talkers who are fox-likeclever or just woefully misguided. Hype is hype, and there willalways be those who make excessive claims about whateverthe new hot thing is. Cloud computing won’t cure the commoncold, even if someone somewhere claims that it will.

The first excessive claim was brought to my attention by col-league John Foley,who puzzled over an analyst note pointing outthat federal data center useful storage rates are a pathetically low12% and, you guessed it,claimed that cloud computing is the fix.

At the same time, we just got the results of our survey of fed-eral government workers and contractors on their plans forcloud computing.There’s a lot of interest, planning, and, for lackof a better word, hope for cloud computing.The feds do like toplan—but not every plan becomes reality and not every envi-sioned benefit pays off. Here, the comments from our survey re-spondents are instructive. One contractor bemoaned the ef-forts of federal overseers to quash any effort he made toimprove efficiency or save money. He wanted to spin up a newservice for FEMA in Amazon’s Elastic Compute Cloud, but wastold he needed to do it in a Department of Homeland Securitydata center, where, he noted, the lead time to allocate a newserver was one year.

While it isn’t hard to imagine why EC2 might not be an appro-priate place for a FEMA application, that 12-month provisioningtime is enough to stop you in your tracks. I can imagine a back-log of requests, and I can imagine some lag time introduced bythe need to coordinate server, storage, and networking consid-

What Cloud Computing Really Means

40 April 19, 2010 informationweek.com

<< Previous

<< Previous

If cloud adherents

are using the

technology as a

means to drive

the hard work

of process

reengineering,

then bravo. But I

don’t give them

so much credit.

A R T W I T T M A N N

practicalAnalysis

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erations, but I can’t imagine those things adding up to a year’s delay.Knowing that it’s DHS, I can imagine that applications have to be pro-filed and assessed for security and privacy before any resources are allo-cated. My point is that the actual provisioning might take days or weeks,but there’s another 40 to 45 weeks of stuff going on here that probablyhas nothing to do with provisioning. So if the feds were 100% cloud to-morrow, how much would this provisioning problem actually change?Saving 10 to 12 weeks is nothing to sneeze at, but there’s other systemicbureaucracy that’s a far bigger deal.

The storage issue packs the same problem. It’s not technology thatcauses a 12% utilization rate; it’s organizational policies, and procedures.Sure, technologies like storage virtualization, thin provisioning, and datadeduplication could help here (note that cloud computing isn’t on mylist), but the real issue is that storage needs to be managed differently.

While the federal government can be a poster child for waste and inef-ficiency, it exhibits just a more extreme set of maladies common in non-governmental organizations as well.For server provisioning, the majorityof the delay from request to delivery won’t be fixed by cloud computingper se; it’ll be fixed by changing the way IT looks at the job of provision-ing services. The problem is that most organizations have no stomachfor reengineering their procedures to wring out the waste and delay, butthey can get excited about a new technology like cloud computing.

So if the fox-like clever adherents of cloud computing are using thenew technology as a means to drive the really hard work of processreengineering, then bravo. The thing to remember, especially for largeorganizations, is that the process mapping and engineering need tocome first. If you implement technology without knowingyour process, you can bet you’ll be reworking that technol-ogy almost immediately.

Art Wittmann is director of InformationWeek Analytics, a portfolio of decision-suppor t tools and analyst repor ts. Sign up or upgrade your membership at analytics.informationweek.com/join. You can write to Art at [email protected].

April 19, 2010 41informationweek.com

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IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

Table Of Contents p. 2

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Things are looking up in IT. Forrester Research just raised itsU.S. IT spending forecast for 2010 from 6.6% growth to 8.4%,pre-dicting particularly strong spending on PCs,peripherals,storage,operating systems, and business applications. U.S. companiesadded 26,000 IT jobs in the first quarter,according to the Bureauof Labor Statistics, the first time in close to two years that thosenumbers are up for two straight quarters. Most IT vendor execu-tives have a positive outlook about their business for the next sixmonths, according to the latest CompTIA survey.

So goes the cyclical roller coaster that is the IT industry andeconomy. But as we emerge from the worst recession in 30years, are business technology organizations making any struc-tural changes? Or are they simply preparing to catch up—de-vote their time and resources to most of the same old strategiesand stuff now that money is a tad looser than it was a year ago?

For an idea of where business technology organizations shouldbe putting their emphasis, consider my colleague Bob Evans’top 10 CIO issues for 2010. No. 2 on Bob’s list—and perhaps theoverarching priority—is to start reversing the 80/20 rule bywhich typical organizations spend about 80% of their IT budgetson maintaining systems and only 20% on new applications.Once CIOs commit to attacking that spending mix, they’ll getmoving on most of the other urgent post-recession priorities:

>> Evaluating alternative IT models with an eye toward improv-ing service delivery and tapping new sources of expertise. In arecent interview with my colleague Chris Murphy, David Footeof advisory firm Foote Partners said employers are more focusedon the skills they need and not so much on the jobs they need to

Are You Back To Business As Usual?

42 April 19, 2010 informationweek.com

<< Previous

<< Previous

Businessdown tofrom the edi tor

As we emerge

from the worst

recession in 30

years, we must

make some

structural

changes and not

just play catch-up

with the spending

we put off

R O B P R E S TO N

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fill, so they’re looking at models that blend contractors,cloud-based soft-ware and infrastructure, and new hires. “Resistance to this level of orgchange is natural,”Foote says.“The recession has been successful in break-ing down a certain amount of this resistance,and this volatility we’re see-ing is being driven by employers taking advantage of the window of op-portunity to think through it and move things along to new models.”

>> Focusing more on growing revenue and engaging customers andless on cutting costs.The CIO who comes into the CEO’s office to thumphis chest about the $10 million he extracted from the IT budget won’tget a warm reception.The CEO will view that $10 million as money thatshould have been extracted—and put to better use—last year. IT’s truevalue is in what it produces. Hewlett-Packard CIO Randy Mott, a cost-cutter in his own right, is savvy enough to quantify all big IT initiatives interms of the “revenue of IT,” the result of an annual planning processwhere HP business unit, finance, and IT teams agree on the benefitseach project is supposed to deliver. As organizations move in this direc-tion, CIOs are looking to negotiate “outcome-based” contracts with keysuppliers tied to revenue gains and other business goals.

>> Applying analytics to your vast content stores to divine new in-sights about customers, partners, and employees. So what if your com-pany manages 100 TB of data: How is it going to act on that data tomove the business needle?

>> Getting rid of those apps that have ceased to provide value but con-tinue to hog capacity and money or, as former Chase CIO Denis O’Learyonce put it,“have now become the equivalent of corporate cholesterol.”

>> Paying more attention to what makes your organization special—people. One of the findings of our U.S. IT Salary Survey is thatas the economy improves, the stars will start looking else-where if they’re undervalued. A freeze in spending for spe-cialized IT skills has “thawed,” Foote says. Do you have a tal-ent-retention plan as the warming trend continues?

Rob Preston is VP and editor in chief of InformationWeek. Write to Rob [email protected].

April 19, 2010 43informationweek.com

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IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

Table Of Contents p. 2

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REPORTERSCharles Babcock Editor At LargeOpen source, infrastructure, [email protected] 415-947-6133

Thomas Claburn Editor At LargeSecurity, search,Web [email protected] 415-947-6820

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CONTRIBUTORSMichael Biddick [email protected]

Michael A. Davis [email protected]

Jonathan Feldman [email protected]

Randy George [email protected]

Michael Healey [email protected]

EDITORSJim Donahue Chief Copy Editor [email protected]

ART/DESIGNMary Ellen Forte Senior Art Director [email protected]

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Copyright 2010 United Business

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Print, Online, Newsletters, Events, Research

IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

Table Of Contents p. 2

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April 19, 2010 45informationweek.com

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UBM TECHWEBTony L. Uphoff CEO

John Dennehy CFO

David Michael CIO

John Siefert Sr.VP and Publisher,InformationWeek Business TechnologyNetwork

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IN THIS ISSUE

BI For The Masses p. 8

State Of Outsourcing p. 16

Better E-Discovery p. 28

New Data Security Law p. 34

Table Of Contents p. 2

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