The Insider's Guide to Next-Generation BPM
By John McNulty, Chairman and CEO, Secure Computing Corp. , 12/17/2007
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Global businesses are consolidating their data centers. Chief information officers are striving to standardize on fewer, more robust architectures. And IT vendors themselves are buying one another. Big networking companies are acquiring point security products and dabbling in the security market. But point-product acquisitions don’t qualify as comprehensive security solutions. For CIOs, the wisest path is to work with an IT solutions provider that offers staying power, innovation and a tireless focus on integrated security solutions.
But be careful. There are more than 800 IT security companies competing for your dollar, and more than 90 percent of them have less than $15 million in annual revenues. A few of those companies will surely succeed and grow. But common sense suggests that most of those companies will either die or get acquired. For every company that achieves triple-digit revenue growth and strong customer loyalty, there are thousands of failed startups.
In the months ahead, it will be even more difficult for security startups and mid-tier providers to prove their worth. Gone are the days when businesses deployed dozens of different solutions in dozens of data centers across the world.
Skeptical? Consider the situation at Hewlett-Packard Co. After recruiting Dell’s former CIO to join its executive ranks, HP announced plans to consolidate 85 data centers down to six. The consolidation effort will save HP $1 billion annually in expenses. It’s a potential win-win for shareholders and HP’s internal operations.
This march toward simplicity impacts how CIOs choose and work with IT vendors. Instead of working with dozens of vendors, CIOs increasingly work with a handful of strategic partners. For instance, a Fortune 500 manufacturer in Detroit [FYI: Ford] spends the bulk of its IT acquisition budget on five strategic suppliers. Likewise, security projects in Europe, the Middle East and Asia must adhere to corporate IT standards set by headquarters in Detroit.
Choose Your Partners Carefully
Along with such standardization processes, we are also seeing rapid consolidation in the IT security market. But be careful. When it comes to IT security, CIOs don’t want to risk their business on point products that are thrown together through acquisitions, or big networking vendors that focus part-time on only one or two pieces of the security puzzle.
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