Title: IDC White Paper: Linux Adoption in a Global Recession
Date: March 2009
Source: IDC, commissioned by CA
Abstract: According to this study, companies see Linux as a way to cut costs. During times of crisis such as the current downturn, this translates into greater opportunities for Linux in the corporate environment. Our previous newsletter mentioned various efforts being made to reduce the costs of public administration by adopting open-source solutions. Now, a recent study from IDC also refers to the opportunities presented by this strategy, not only in public administration but private companies as well, and predicts rapid growth in that area. The study is based on a survey of 330 organizations, "looking primarily for IT decision makers familiar with Linux usage and adoption plans,” from companies around the world with over 100 employees. Among the respondents, 55% said they are currently running Linux servers, 39% use Unix and 97% use Windows servers. It also shows that over half of the companies surveyed are bolstering their plans for deploying Linux-based servers (68%) and desktop applications (72%). Also, 49% of those surveyed believe that in five years Linux will be their primary server system, an upward trend that the authors say is a response to the expectations of lower support costs and plans for adopting Linux-based virtualization solutions. "Given the severity of the current economic downturn...Linux is in a desirable competitive position to emerge from this downturn as a stronger solution,” say IDC sources.

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Google's world domination has made the search company a target for criticism, as we saw before with IBM and Microsoft and could see again soon with Oracle. "The initial buzz that tends to accompany all major successes is also starting to affect the firm in Palo Alto,” explained Sandra Sieber in "Google and the Temptations of Maturity," a feature included in our September newsletter. In this context, the always controversial Nicholas Carr opened a new front last year with his article "Is Google Making Us Stupid?" The piece, which to a certain degree rekindles the traditional intellectual controversy among the apocalyptic and the integrated, focuses on one key question: Is the Internet undermining our ability to concentrate? According to Carr, many people share his experience, saying that: "the more they use the Web, the more they have to fight to stay focused on long pieces of writing." The American essayist, author of several controversial works, such as Information Technology and the Corrosion of Competitive Advantage, includes the testimonials of others. One of these is from a blogger who has stopped reading books altogether and asks himself whether it is, "because the way I think has changed?" Carr also supports his argument with a study of online search habits conducted by the University College of London, which refers to the emergence of new forms of reading whereby users "browse horizontally through titles, contents pages and abstracts going for quick wins."

The Internet is becoming the universal medium, the conduit for most of the information that flows into our minds. However, as Carr points out, we learned from McLuhan that media not only inform us but in fact shape the way we think. Carr wonders if the Net is reprogramming us, placing his primary focus on the role of Google, its most prominent company. He says that the extremely ambitious role that the search giant wants to play in the information society is strikingly similar that of Taylorism during the industrial revolution. Nevertheless, after reviewing how the advent of writing and printing press were originally received with criticisms that were partly on the mark but could not foresee the future benefits to result from those breakthroughs, Carr concedes that the Internet could end up spurring on "a golden age of intellectual discovery and universal wisdom." But, he says, with the current, click-based business model, "The last thing these companies [like Google] want is to encourage leisurely reading or slow, concentrated thought. It’s in their economic interest to drive us to distraction." The article has been published in multiple languages and the debate it has sparked in the blogosphere is far from winding down.

Articles in The Atlantic, Campus Technology, Discover Magazine, and Revista Telos (spanish)

The practice used by American technology companies of sending production activities to countries with cheaper labor may be reaching an impasse. This is one of the findings from this year's annual survey by BDO Seidman. Conducted in January of this year, the study points to a decline in the number of companies with outsourcing plans for 2009. The survey of 100 chief financial officers at U.S. technology companies, 22% of the participants prefer to invest domestically, followed by China (16%), India (13%), Latin America (7%), Western Europe (6%), Canada (5%) and Eastern Europe (3%). Nearly a third of the respondents say their primary concern regarding the economic and political uncertainty of the destination countries. Others cite such aspects as tax regulations, currency risk, intellectual property risk and exploitation and training of international employees.

Michel Ktitareff explains in Les Echos that while labor costs in the U.S. have not gone up, they have in China, as has unemployment in the United States, which offers more qualified workers who are also willing to relocate. Ktitareff bases that conclusion on data from the Manufacturing Institute that helps to explain this rethinking of outsourcing: in 2006, the difference in production costs between United States and China was 31% but in 2008 fell to 17%.

Other factors that could explain this possible decline in offshoring include the considerable investments in high-tech that are reinvigorating the competitiveness of U.S. technology companies and, as cited by BusinessWeek, the fact that President Obama wants to exclude companies that engage in outsourcing from the $787 billion stimulus package.

Articles in BusinessWeek, Reuters, Offshoring Times, Les Echos (french), and BuisnessWeek
 

When asked to predict major technology trends in 2009, most analysts agree that Cloud Computing is closely followed by the rise of social networking and Web 2.0 tools in the enterprise sphere as the most dominant themes. This feedback strongly supports IESE's belief that online collaboration is starting to play a key role in driving business model innovation and, with it, an organization's competitive advantage.To gain a better understanding of this trend, Prof. Sandra Sieber and Prof. Evgeny Káganer are spearheading a global research study that will explore how firms use social media tools to foster collaboration across organizational boundaries. To learn more about the study and to sign up for participation please visit the project’s website.