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A glitch too far for furious firms |
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Business
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Written by Peter Warren
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Tuesday, 02 May 2006 |
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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