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10/19/2001
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IT Confidential

Companies scramble to adjust as IT personnel begin to receive call-up notices.

Who says you need to job-hop to get ahead? In the wake of a merger, Linda Burkett was named VP and CIO of AmerisourceBergen, the combination of pharmaceutical distribution companies AmeriSource Health and Bergen Brunswig, in late August. Burkett joined Bergen's IT group in 1969, moving up through the ranks to become CIO. Now she'll lead the IT operations for a combined entity that does about $36 billion in annual sales. Topping the priority list is migrating AmeriSource's operations over to Bergen's IT environments-a critical process for a company in which nearly 100% of orders come in electronically and where orders arriving as late as 10 p.m. still have to ship the next day. The former AmeriSource's VP of IT, Jeff Roberson, will continue in that role with the combined companies. Burkett's appointment means she'll be moving from Southern California to the combined company's headquarters in Valley Forge, Pa.

IT research firm Zona Research went belly-up in July, but it's been reborn as the Sageza Group. Sageza's first report, available on its new Web site (www.sageza.com), takes Sun Microsystems chairman, founder, and CEO Scott McNealy to task for "swimming against two essential industry currents: Itanium and Linux," saying the company's hardware and operating-system strategy is behind the times. The group questions whether McNealy, "like Julius Caesar in his final moments, [is] feeling the awful, sharp caress of daggers probing for a fatal weakness." Sun isn't dazzled by the imagery. Shahin Khan, Sun's chief competitive officer for computer systems, says the company has contributed nearly 10 million lines of code to the open-source community. He contends that Itanium is the risky choice at this point. "Sparc is a very safe bet for at least 10 years," Khan says. If nothing else, Sageza is as snippy as the old Zona used to be.

Ariba and Commerce One are certainly struggling to leave behind their association with the not-so-hot space of platforms for public Internet marketplaces. Commerce One was center stage last week with news that it's cutting its staff by almost half-1,300 people-while running up a $54 million operating loss. It's eliminating 700 jobs; the rest of the reductions will come from spinning off its service operations. Rival Ariba is quietly laying off about 200 people this week. But the company is sending a message that it's looking to put its financial side on stronger footing. New CEO and president Robert Calderoni, appointed last week to replace founder Keith Krach, is steeped in the numbers side of businesses: He's the former CFO for Avery Dennison, controller for Apple Computer, and CFO of IBM's $8 billion-a-year storage systems division.

All this turmoil doesn't do much for stock prices, but it sure makes the job of former Stanford University CIO Raman Khanna easier. Khanna left Stanford last year to co-found Diamondhead Ventures, which last week put $11 million of its $140 million fund behind FirstRain, a startup that makes information-management software. Khanna is enjoying his job in part because he got lucky with timing: He and his partners raised the fund in early 2000, when venture capital was still available, but didn't do their first deal until December, when the valuations on startups had plummeted. So he's buying low with a good 18 months to wait for a market upturn. As far as the career move, following Khanna's leap to the VC world might be harder today for an IT exec. "My feeling is that the venture community is going to shrink," he says, "so in that sense there will be fewer opportunities."

IT executives' obsession with return on investment these days is getting stronger with every poor quarterly earnings report. It's all about squeezing value out of those E-business systems paid for during last year's binge or buying something that can pay off by Christmas. Just how tough is the ROI pressure? Daniel Dokmanovich, CEO of Centrifusion, a small E-business consulting firm with a big-shot client list, describes it this way: "We're not going in with PowerPoint presentations these days. We're going in with spreadsheets."

When consultants start turning in their PowerPoint slides, we're living in a new world. Got an industry tip that helps explain it all? Send it to jsoat@cmp.com or phone 516-562-5326 or fax 516-562-5036. Or meet me at InformationWeek .com's Listening Post: informationweek.com/forum/johnsoat.

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