The Bloor Perspective: The CSO, Dell and Cisco at home

Robin Bloor and his team this week consider the need for a chief security officer (CSO), the differences between Dell and its rivals and Cisco's purchase of Linksys...
Written by Bloor Research, Contributor

Robin Bloor and his team this week consider the need for a chief security officer (CSO), the differences between Dell and its rivals and Cisco's purchase of Linksys...

Accompanying the growing focus and investment on the security and integrity of systems is demand for a new corporate species, the chief security officer (CSO). The CSO is a corporate reaction for guarding an enterprise against external attacks on data and systems, though it is reported that as many as 20 per cent of organisations have no means of identifying whether information systems have been subject to external attack. This raises the whole issue of corporate governance. In the US the knee jerk reaction to corporate scandal embodied in the Sarbanes-Oxley Act requires the unfortunate CEO and CFO of each listed company to be personally accountable for corporate financial data, not just its integrity but the security of the financial systems. This adds to the requirement for a CSO. So how does the role shape up? It has emerged from being primarily a technical role to being one that seeks to addresses the business issues. A broad range of issues require analysis and judgement. Information and data is not of uniform value or importance. Regulatory and operational requirements set some of these priorities but judgement and evaluation of the requirements of the business will determine where the organisation focuses its investment and effort in security and, critically, reduction in security risk exposure. Against this backdrop the CSO has to promote the value and business benefits of investment in security in an unsettled economic environment where cost controls and reductions are de rigeur. Most importantly, if the CSO role is to be seen as bringing real benefits to the business, its reporting line must be outside the IT division: to the chief operating officer (COO) or, if the role exists, the chief information officer (CIO). *Dell - the opposite of IBM?* According to the statistics, Dell is the market leader in the desktop market, the notebook market and the workstation market. It lies second in servers. In terms of market sectors it leads in the public market (education and government) and lies second in the large business and the SME markets. By any metric Dell is a serious competitor which nowadays is likely to grab a respectable share simply by entering a market. It is entering the printer market and has entered the PDA market so we can "watch this space" on both. Also worth keeping an eye on is the server market where Dell clearly wishes to be number one. At the moment its Linux offering looks significantly less expensive than the Unix competition and it is giving Sun a hard time in what is its primary market. Its advantage here saw Oracle making overtures towards it. Larry Ellison is nothing if not quick to spot a trend and the resulting Oracle-Dell alliance makes sense to both parties. For Oracle it provides an advantage over DB2 and for Dell it just adds to the corporate credibility. This alliance has now reached the point where Dell salesmen are able to sell Oracle directly. The unique advantage that Dell has is its highly efficient manufacturing capability. Nowadays this advantage gives it the ability to enter a new market at a competitive price and, in all probability, to remain profitable if prices fall. Given this edge and its business model, it is unlikely that its two major server competitors (IBM and HP) will ever be able to stop it. Dell now has the same economies of scale as both of these well established competitors. The Dell business model has never involved direct innovation in the market. It watches markets it has a potential interest in, waiting for the products to standardise sufficiently for it to enter with a highly standardised but semi-customised offering. When it thinks the curve is right it enters the market. However, once it has a product to work with, Dell does innovate, usually by taking notice of customer requests and complaints and adding relevant features to address them. Dell is all about focus, and to compete with it will require the same kind of focus from the competitor. In a way it is the exact opposite of IBM. IBM's business model is all about value add, whereas Dell's is all about essentials and price performance. Cisco has come to be intimately associated with networking. The company recently announced details of a planned acquisition designed to extend its reach in the burgeoning small office and home environments. Cisco has reached an agreement to acquire the business of a privately held company, Linksys Group, based in California. Linksys is one of the leading suppliers of home networking products and supplies a wide range of networking systems, both wired and wireless, for the SOHO market and domestic users. This move marks a new departure for Cisco. The Linksys Group currently offers more than 70 products including wireless routers and access points for simultaneous sharing of broadband internet connections, wireless network adapters and wireless print servers, along with traditional wired products such as Ethernet routers and cable modems, unmanaged switches and hubs, print servers and network attached storage. Cisco has announced that it intends to operate its $500m acquisition as a separate division within the company with the products being offered for sale under the Linksys brand name using its existing channels. Cisco's own sales infrastructure will be used to bring Linksys' products to an international market. Many reports have highlighted the SME and consumer markets as areas that are faring better than large enterprises in the current economic climate. Indeed, home networking is expected to grow robustly over the next few years as broadband connections become widely deployed and as more and more people use IT technology at home for both business and pleasure. While the acquisition is clearly in line with Cisco's stated strategy to broaden its portfolio into newly formed, high-growth markets it does mark a major leap for the company into the consumer sector. There is no doubt that Cisco should be capable of integrating the acquired technology with relative ease. The big question is one of how well Cisco will be able to translate its experience, and that of its extensive channel partners, of selling into the corporate sector, to the SOHO and home user? If it can make this acquisition work it is likely that many people may find themselves going home to Cisco. Bloor Research is a leading independent analyst organisation in Europe. You can find out more at www.bloor-research.com or by emailing mail@bloor-research.com.
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