VideoWhen Bobby Lie, now a senior vice president for enterprise architecture at Fidelity Investments, was in charge of usage-based billing, he had the largely thankless task of hitting up the financial-services company's many business units for their respective shares of network expenditures. With network usage increasing sevenfold every two years, divisional CFOs weren't happy about receiving an ever-higher bill, especially since the company's practice of billing by head count struck many as unfair.
Turns out it was. Using technology from Evident Software (known as Apogee Networks at the time; the company changed its name in July 2003), Fidelity was able to analyze network traffic, with a particular focus on the bandwidth taken up by data-intensive applications. "We published a list of the top 100 'talkers' as part of our effort to allocate costs by actual usage, not simply head count," says Lie. That was useful, because such a shift in chargeback inevitably results in winners and losers, and divisions that saw their bills rise were not happy about it. Fortunately, the Evident software not only reveals who's using how much bandwidth but also helps identify faulty software and hardware designs that cause far more data to flow through a network than is necessary.
"Our applications development efforts became much more disciplined about writing programs that made better use of bandwidth," says Lie. Fidelity was able to slow the growth in network traffic and actually shrink costs by almost a third, saving an estimated $90 million to date. That still left some units digging far deeper than they once did — the applications development team itself went from paying 2.5 percent of network costs to 13 percent because it's such a heavy user. But Lie says the pain was mitigated by the belief that everyone will save over the long term.
Evident describes its market space as "IT business analytics," although "IT asset optimization," "IT asset management," and similar terms are invoked by competitors. To date, it's a fragmented market in which various vendors address facets of IT infrastructure, although many are racing to expand from their initial areas of specialization to a broad analysis of IT asset use. Analysts (and vendors) caution, however, that IT asset management is largely about process, not technology. Lie says the success of the software at Fidelity hinged on support from the CFO and senior finance people at the divisions, who "helped to sell it and get the consensus we needed. This was a culture change that needed buy-in."
Safety, in Numbers
What price security? Somewhere between $110 and $334 per employee, depending on the size of your company.
Economies of scale allow larger companies to spend less per employee, while companies in certain industries (transportation, high tech, and telecommunications, as well as federal and state governments) spend far more heavily per employee than companies in the medical, retail, and manufacturing sectors, according to the ninth annual Computer Security Institute/FBI Computer Crime and Security Survey. When asked about security spending as a percentage of their overall IT budget, nearly half of the 494 respondents pegged it at 1 to 5 percent, 15 percent put it at 6 to 10 percent, 8 percent indicated that security accounted for more than 10 percent of all IT expenditures, and 14 percent said they didn't know.
Asked about the metrics applied to security spending, fully one-third of the respondents stayed mum. Of the 320 who did respond, slightly more than half said security spending decisions were subject to ROI analysis, while the other half was split between net present value and internal rate of return. Outsourcing of computer security has yet to take hold to any meaningful degree: nearly two-thirds of the respondents said they don't outsource any aspect of security, and less than 1 percent said they outsource all of it. Slightly more than one-fourth of the respondents said they have signed on for some form of cybersecurity risk insurance.
Time to Unload Old Gear?
"Out with the old, in with the new" is never an easy decision in the IT world, particularly if companies hope to get some residual value from obsolete PCs, laptops, PDAs, and other kinds of hardware. Environmental regulations and concerns about data security can make it costly to simply dump old machines, with some observers predicting a growing crisis regarding such "E-waste." With IT asset management now receiving more attention (see "Look Who's Talking," above), a company called PlanITROI is encouraging its corporate clients to manage the back end of the procurement process and part with that gear while it still has some value.
There is no shortage of vendors in that space. IBM, Hewlett-Packard, and others now often address that final phase of the equipment life cycle when they strike deals, but PlanITROI brings an E-business model to the task. Its Valuator is a Web-based calculator and asset manager that allows companies to enter details pertaining to the gear they want to get rid of and find out with a mouse click what it's worth. The Valuator will also walk companies through the process of deciding when to get rid of old equipment for maximum gain. Whether a company uses this service or not, keeping a detailed record of all hardware — from manufacturer, model, and serial number to add-ons, options, and current condition — is key to any effort to salvage some value from aging equipment.
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