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New Micro Focus Study Reveals Corporate Failure to Safeguard Business-Critical Core IT Assets

“Ticking Time Bomb” as business fails to invest in vital IT skills in recessionary markets * Recession reality demands re-focus on ‘core’ systems - nearly two thirds (60%) of CFOs in US and Europe say skills to modernize core IT assets are the most valuable in a recession * Core IT assets identified as most business-critical but internet-based technologies receive bulk of recruitment budget and organizational focus * Less than one in seven (13%) CFOs convinced that skills exist to maintain core IT assets into the future

NEWBURY, England - December 01, 2008

Micro Focus® (LSE.MCRO.L), a leading provider of enterprise application management and modernization solutions, today reveals that global organisations are not devoting enough time, budget and commitment to safeguard the vital skills required to maintain and exploit their most valuable IT assets.

Results of the global study – “Safeguarding the Corporate IT Assets” - by Micro Focus, in conjunction with leading international business school INSEAD, carried out amongst CFOs, CIOs, and HR Directors across five countries (France, Germany, Italy, UK and US) highlight how the vital skill-sets to manage and maintain core IT assets are being marginalized by the world’s leading companies. Many of these organizations are focusing on IT skills for newer Web 2.0 technologies at the expense of the crucial skill-sets required to future-proof the core systems that are most business-critical to the successful execution of operations.

Micro Focus research, carried out in 450 companies with revenues from $100m up to over $1bn, shows that nearly two thirds (60%) of CFOs, CIOs and HR Directors from organizations across the globe stated that core systems and databases are business critical, compared with just over a third (38%), who felt the same about systems using new technologies. However, despite reinforcing the importance of core IT assets to business success, respondents revealed that it is the newer technologies which are receiving budget when it comes to recruiting skilled IT professionals. Over half of all those polled (56%) confirmed newer, web-based technologies are the skills being recruited for the most today.

According to the research, less than one in seven (13%) CFOs are very confident that the knowledge and skills exist within their organizations to maintain core IT assets into the future. Despite this, nearly two thirds (60%) of CFOs surveyed highlight that in a recession, skills to modernize core IT assets are the most valuable, rather than skills to implement new replacement technologies.

This new extensive research follows an INSEAD/Micro Focus study in October 2007 which revealed less than half of CFOs and CIOs from leading companies ever try to quantify the financial value of their core IT assets. This latest research includes a number of important findings.

“Ticking Time Bomb”

The research identifies a concerning lack of a drive to recruit specialists in technologies which typically form the bulk of core IT assets (e.g. COBOL, PL1, CICs). Less than a third of CIOs (29%) polled believed their organization was recruiting enough of these professionals, even though they state they recognize the value that these assets bring to their businesses. Only one in six (16%) CIOs have any confidence that the right recruitment strategies for the vital skills and knowledge required to maintain core IT assets are in place.

International Viewpoints

German CFOs are the least appreciative of the business-criticality of systems using newer technologies, whereas their US counterparts are more easily impressed by the impact these technologies have had on their business. Only 27% of CFOs in Germany say systems using newer Web 2.0 and social networking technologies are very business-critical or the most business critical to the success of business operations, compared with 56% of US respondents, 40% of the UK sample, 31% of Italians and 31% of French Finance Heads.

Harnessing Talent

IT is in most need of recruitment according to most UK HR Directors (67%), yet a tiny number of UK CIOs (13%) hire people with specialist skills and an understanding of IT/ business alignment. The majority hire on the basis of technology skills alone!

This independent research1 surveyed 450 respondents from multiple organisations across France, Germany, Italy, UK and US, comprising 33% CFOs, 33% CIOs and 33% HR Directors. Respondents surveyed were from manufacturing, financial services, and retail sectors, amongst others. Micro Focus also today announces that it will be producing a report to investigate this failure to safeguard business-critical core IT assets. The report will be available in December and include comment by INSEAD business school.

Executive quote

“Last year, Micro Focus highlighted that IT was the forgotten corporate asset. The important step now for global organizations is not to be completely entranced by shiny new technologies,” said Stephen Kelly, CEO of Micro Focus. “They must also ensure they are recruiting the professionals that will maintain and develop the lifeblood of their IT – their core systems and information. Failure to safeguard these assets is tantamount to a ticking time bomb for global business. Organizations must quickly adjust their IT investment strategies to deal with recession realities. Everybody knows that Web 2.0 solutions have huge potential to transform all types and sizes of organizations but their development shouldn’t be at the expense of protecting and developing the IT assets at the heart of the business.”

“In this tough economic climate, where the spotlight is firmly focused on business fundamentals, it’s ironic that global organizations are failing to maintain the skills that are most fundamental to their business – their core IT assets,” continued Kelly. “If organizations continue to look for skills in the newer technologies, and fail to safeguard their core IT assets, they leave themselves susceptible to potential disaster when those with these latter skills reach retirement.”

About the company

Micro Focus provides innovative software that allows companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernization and Management software enables customers’ business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk. For additional information please visit www.microfocus.com.

Micro Focus is a registered trademark of Micro Focus. All other products and companies mentioned in this announcement are the trademarks of their respective owners.

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New Micro Focus Study Reveals Corporate Failure to Safeguard Business-Critical Core IT Assets

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