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A glitch too far for furious firms

Exasperated British companies are set on a collision course with the computer industry after many years of suffering the disastrous effects of shoddy software. They are signalling that ‘enough is enough’ and calling for the IT establishment to get its act together and operate to the same rigorous standards as other industries where failure can have catastrophic consequences, such as aviation and pharmaceuticals.

The unprecedented demand, from the Corporate IT Forum, representing the computer interests of more than half the companies in the FTSE 250 index, follows growing exasperation at the cavalier methods of the computer and telecoms industry. Practices seen as unacceptable range from releasing software that is unfinished to providing software that simply does not work.

Still painfully fresh in many corporate memories is the $100m (£60m) earnings loss suffered by US sportswear company Nike two years ago following the installation of software from supply chain specialist 12 Technologies, a loss each company has blamed on the other.

According to some members of the forum, which includes household names such as British Airways, Tesco, Rolls-Royce and John Lewis and annually accounts for £20bn in UK IT spend, the shortcomings of the software industry are now unsustainable.

‘Irritation is increasing fast because the approach of a lot of companies buying IT equipment is very different from that of computer software vendors. In avionics and pharmaceuticals, you are not allowed to sell products that don’t work. This is more fundamental than giving them a laundry list. We want a root-and-branch reform of the industry,’ said chairman Jonathan Mitchell.

The warning comes at a time when the technology market is under pressure to deliver return on investment and is a sign that the once all-powerful computer industry is beginning to lose its stranglehold over businesses that once saw software acquisition as an ‘arms race’ against competitors rather than an intrinsic part of their business.

Many companies have been questioning the benefits technology delivers. This scepticism is reinforced by the patches being out by companies such as Microsoft to shore up insecure software programs.

Worldwide costs

‘For the computer industry, it makes it look as though its products are rushed out and unfinished,’ said Michael Gubbins, editor of industry paper Computing, which recently raised the issue. ‘For customers, it represents an ongoing cost at a time they are trying to keep within budget.’

Companies already worried about keeping computers running have the additional problem of checking the patches to make sure they do not just make the problem worse. ‘The global spend on IT is now $1.3 trillion and the cost of fixing bugs and flaws is now $65bn a year,î said the IT director of one multinational.

The worldwide costs of crashes on Windows operating systems alone are estimated to be £1.1bn a year. The cost in productivity for medium-sized companies for all computer software crashes has been estimated at between £62,000 and £620,000 a year by the US Department of Labor. British companies are now demanding that their IT suppliers help maintain existing computers rather than installing new operating systems.

‘Our driver is to make better use of our assets,’ said Tesco chief technology officer John Clarke. ‘We are trying to build systems that we want to keep for a number of years.’

Already Microsoft is seeing a marked reluctance to invest in licences for its new XP operating system over concerns upgrading might lead to extra expense.

‘Until now, the industry has been allowed to break up the road behind it and sell new kit while not maintaining the old,’ said Mitchell. ‘We cannot have critical systems built on shaky software.’

Ironically, many companies burnt by the techno revolution are moving back to tried-and-tested mainframe technologies such as the IBM AS400. Some companies even question the value of some of the software available.

Going backwards

‘What is the use of bringing out release after release if you don’t use the functionality of what you’ve got?’ asked Frank Cordrey, head of development support at John Lewis. Tesco’s Clarke said: ‘We do feel that IT has actually gone backwards. There is more fragility in some systems now than 20 years ago.’

The strength of feeling is such that even Microsoft’s Bill Gates has responded by announcing a six-month moratorium on software development to ensure codes are adequately tested – one of the reasons for the rash of patches that has led to the howls of anger from big business.

The days when IT geeks operating unreliable software could effectively hold company chief executives to ransom may soon be over.

Failing to gain confidence

The fear caused by computer failure is forcing technology companies to respond at lightning speed to head off panic about product reliability.

This fear recently prompted an immediate response from online database back-up company Veritas when details emerged of an incompatibility between its products and Microsoft Server 2003, a new operating system for the internet.

Conscious of the threat any doubts over the reliability of its computer code could have for a company specialising in duplicating essential business records, Veritas persuaded Microsoft to rush out a patch to correct the problem.

However, according to the chief information officer of a large British company, damage has already been sustained by Veritas as a result of the Microsoft software problem.

‘Six patches have already been issued to 2003 and they are about to issue a new service pack. If you are using software and there appears to be a problem, you are going to have to think twice about trusting vital records to it,’ said the executive, who declined to be named due to the sensitivity now surrounding the relationship between computers and big business.

In its defence, the computer industry points out that it is unfair to compare it with other industries. Computer systems, the industry claims, are not like the products of plane, car and drug manufacturers, and involve having to work with many different hardware and software configurations.

‘There is a lot of complexity in this environment,’ said Judi Feeley, UK managing director of Veritas. ‘There are a lot of different platforms, making it all work is a challenge.’

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First appeared London Evening Standard, 2nd of May, 2006.