Nemertes Impact Analysis: June 13, 2008

Nemertes Impact Analysis

Expert Insight On How Recent News Affects You

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Privacy Breach: Redact Rather Than React

This week, privately held Informative Graphics announces Redact-It Enterprise
Server for redaction of sensitive information. Though historically a
legal/litigation function, the need for redaction ties directly to archive,
retention and enterprise content management (ECM) policies to protect personally
identifiable information (PII). This requirement is highlighted in Nemertes'
benchmark, Security and Information Protection, in which 52.6% of
participants say that the most costly regulations to comply with are the
privacy-related regulations: HIPAA, FERPA, GLBA, PCI and CA SB1386. PII that
isn't needed should be redacted.

Impacts:

Enterprises: Redaction should be considered for PII in archived personnel
records to mitigate risk in an intentional or inadvertent breach.

Vendors: ECM, email archiving and even data leak prevention vendors should
look closely at redaction technology as a potential value-add.

Investors: As redaction becomes part of ECM, there will be consolidation.
Likely candidates include, privately held: Informative Graphics, Computing
Systems Innovations, CT Summation and Onstream Systems.

http://www.nemertes.com/products_services/research/benchmarks/nemertes_benchmark_security_and_information_protection [3]

http://www.infograph.com/press/Redactit_Server_Ent.htm [4]

Ted Ritter, Research Analyst

 

The iPhone Grows up

With their announcement of the third-generation (3G) iPhone, AT&T (NYSE:
T) and Apple (NASDAQ: AAPL) have signaled that the iPhone interface, which has
been so popular in the consumer market, has a similar appeal in the business
market. In fact, AT&T is clearly hoping that that popularity will serve to
drive demand for its new 3G wireless network.

Nemertes' benchmark, Advanced Communications Services,identifies a
growing trend of businesses supporting mobile data devices, especially RIM's
BlackBerry. iPhone's superior user interface will likely erode the BlackBerry
portion of the business market, but will increase demand for data capable
devices overall.

Impacts:

Enterprises: Prepare yourself. The iPhone is very desirable and your users
will want you to support it.

Vendors: Mobile data devices typically have low margins. Expect the iPhone to
increase the pressure on lower end business devices.

Investors: Expect an enthusiastic response to the 3G iPhone. This will
certainly help both AT&T and Apple.

http://www.nemertes.com/benchmarks/nemertes_benchmark_acs_nextgeneration_wireless [5]

http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=25791 [6]

Mike Jude, Senior Analyst

 

And Then There Were...

Verizon's ( NYSE: VZ) potential acquisition of Alltel (held by TPG Capital
and Goldman Sachs Capital Partners) will reduce the competitive field for
wireless providers and make Verizon the largest domestic carrier, ahead of both
AT&T (NYSE: T) and Sprint (NYSE: S).

What is at least as significant is that, by acquiring Alltel, even more
weight is thrown behind the LTE standard since it is likely Verizon will force a
conversion of the CDMA based Alltel to that standard.

Impacts:

Enterprises: The implication is clear: mobility plans should be based on the
assumption that LTE will be pervasive, with nearly ubiquitous domestic coverage.

Vendors: CDMA based carriers should consider following Verizon's example and
make the commitment to LTE.

Investors: The future belongs to LTE. Invest in technology firms that support
that standard.

http://www.nemertes.com/market_analyses/nemertes_market_analysis_mobilitywireless [7]

http://www.eweek.com/c/a/Mobile-and-Wireless/Verizon-Wireless-Buys-Alltel/ [8]

Mike Jude, Senior Analyst

 

Time Warner Cable Brings the Tiered Internet One Step Closer

Time Warner Cable (NYSE:TWC) announced trials of a metered Internet service
for residential customers. The plan sets monthly upload/download allotments, and
implements extra charges for use above the limit. This move underscores the
growing concern about the ability of Internet infrastructure to meet growing
end-user demand.

In the Nemertes' research study, The Internet Singularity Delayed, Why
Limits in Internet Capacity Will Stifle Innovation on the Web, we note the
growing gap between bandwidth demands and investment in new bandwidth, leading
to an environment where service providers could move to end "all you can drink"
Internet access. TWC's plan represents the first tangible move in this
direction.

Impacts:

Enterprises: Pay careful attention to net neutrality debates and the
evolution of tired Internet services. Understand the impact on both work-at-home
employees, as well as on public-facing web-based services

Vendors: Look to deliver solutions that optimize end-user computing
experiences to maximize bandwidth efficiency.

Investors: Expect to see continued growth in products that reduce bandwidth
demands from vendors including Blue Coat (NASDAQ:BCSI) and Citrix (NASDAQ:CTXS).

http://www.nemertes.com/internet_singularity_delayed_why_limits_internet_capacity_will_stifle_innovation_web
[9]

http://ap.google.com/article/ALeqM5jwm8wu3jZWZLcKfIlycqFqFegknwD9126HN8A [10]

Irwin Lazar, Principal Research Analyst

 

Data Center in the Cloud: Terremark Offers IT Utility

Hosting provider Teremark (NASDAQ:TMRK) announced Enterprise Cloud, or
datacenter resources delivered as a service. Customers buy processor, storage,
and network capacity within which they can then provision servers and services
as they please.

By providing sophisticated portal-based control of resource pooling and
server provisioning, services like this will open the agility benefits of
virtualization and other technologies, as discussed in Nemertes' issue paper,
"Next Generation Computing Strategies," to small and medium-sized
companies, and allow them to supplement or replace their own data centers.

Impacts:

Enterprises: Small- and medium-sized companies will especially benefit from
options like this, with the ability to get the kind of performance and
availability possible in high-end data centers even for moderate work loads;
enterprises should evaluate such options as they come on line and mature.

Vendors/Service Provides: Data center providers should expect their
competitors to move in this direction; if you aren't set up internally to offer
this kind of services, define your growth path, migration strategy, or
partnership plans soon.

Investors: Data center hosting providers may partner with professional
services companies to provide this kind of service as an option, rather than
develop the gamut of services themselves; watch companies like Sun (Nasdaq:JAVA)
and Novell (Nasdaq:NOVL) compete for the space, and expect pool- and
datacenter-orchestration tools vendors, such as QLayer and Cassatt (both
privately held), to partner in as well.

http://phx.corporate-ir.net/phoenix.zhtml?c=120545&p=irol-newsArticle&ID=1162175&highlight= [11]

http://www.nemertes.com/issue_papers/nemertes_issue_paper_nextgeneration_computing_strategies_0 [12]

John E. Burke, Principal Research Analyst

 

Will Work For Free...

Adobe Systems Inc ( NASDAQ: ADBE) announced it will offer a free
Web-conferencing service for very small-end use, as part of its free on-line
applications suite now in beta, called Acrobat.com. This service allows up to
three participants to share screens, files, whiteboards, chats and meeting
notes.

There is large interest in hosted conferencing services. Sixty-one percent of
organizations are either using, or plan to use hosted Web conferencing this
year, and another 8% are in the evaluation phase, according to Nemertes'
benchmark, Advanced Communications Services.

Impacts:

Enterprises: Very small businesses should evaluate this offering as an
alternate hosted solution. It uses Flash technology so no additional software
downloads are required for most companies.

Vendors: Organizations -especially small ones- are looking for cost
effective, easy-to-use collaboration tools that require little to no additional
software or IT support.

Investors: IT is rapidly shifting away from technology to services. This is
one more indication that technology companies without a services play may be
left behind.

http://www.nemertes.com/benchmarks/nemertes_benchmark_acs_organizational_best_practices_and_key_trends_0 [13]

http://www.voip-news.com/feature/adobe-free-web-conferencing-060308/ [14]

Katherine Trost, Research Analyst