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A CIO fights to keep his tech options open

Patrick Thibodeau | Nov. 4, 2014
Consolidation among tech vendors leaves users with fewer choices and less leverage at the negotiating table.

cwd04 news klossner
Credit: John Klossner

In today's IT market, vendors tell users that engineered, converged and highly integrated systems deliver the greatest efficiency. But some users believe a heterogeneous environment is the best path to savings.

Michael Spears is one of those users.

Spears is the CIO of the National Council on Compensation Insurance (NCCI), which gathers and analyzes data about the workers' compensation insurance market and offers products and services to help more than 900 insurance companies and nearly 40 state governments better understand risks, costs and industry trends. The Boca Raton, Fla.-based not-for-profit brings in about $160 million in revenue; the IT department accounts for about a third of the organization's expenses.

Highly customized
The NCCI's work is so specialized that most of its applications are custom-built. Of the 220 people on Spears' IT staff, around 150 are in development. The rest support infrastructure and handle quality assurance.

Spears isn't averse to consolidation. NCCI recently migrated off a System z10 mainframe running z/OS applications developed in Cobol and DB2, as well as z/Linux applications, because he believed that many of the applications on the mainframe could run on a less costly midrange system.

The midrange computers are Solaris systems based on Sun hardware, which is made by Oracle. Spears had initially considered using Oracle's Exadata platform, which includes data­base, proc­essing and storage components. But he believed that moving to that integrated platform would cost more in the long run.

By keeping processing and storage systems separate, Spears says he maintains leverage in contract talks. He can take the processing capability that runs on Sun and move it to an IBM system, if he chooses. That wouldn't be an option with an integrated system.

Long-term concerns
But Spears is worried about the long-term trend of highly integrated systems.

"Vendors that previously made options available -- Oracle Exadata versus Oracle Database plus Solaris -- are pushing hard to move customers to one preferred platform," he said.

It's happening in the software market as well, he added, citing Microsoft's drive to get customers to move to Office 365 instead of selling Office applications individually.

In the face of those trends, Spears said, "we try to work on creative solutions that would reduce cost and/or make us as portable as possible, so we can take advantage of better options."

The mainframe migration prompted other cost-saving moves. The mainframe used Tier 1 storage on an EMC system. Spears' team sought new bids for storage systems, and EMC came back with the best proposal -- one based on an entirely new tiered storage system that would save about $4 million over five years.

 

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