News and Analysis to 1^st July 2004

Microsoft – Asia specific

Microsoft plans to sell a ‘cut down’ version of its Windows operating system for the Asian market, given the traction Linux is gaining. The stakes are high given the rate of economic growth in Asia. Even if Microsoft decides to give Windows away to recapture market share, it will still need to address its undocumented ‘security features’ if it is to displace Linux.

Oracle – Planning for endgame

The Oracle-PeopleSoft antitrust case is certainly high drama. Recently we heard how Microsoft was planning to merge with (read acquire) Sap. Now it transpires that Oracle plans to purchase high profile companies in the areas of business intelligence, applications services, and infrastructure software. This should bolster the price of companies such as Cognos, Iona Technologies and perhaps even PeopleSoft.

Microsoft  - That’s settled then

Microsoft’s antitrust court case concluded in 2002 with essentially a mild rap on the knuckles. However a number of US states regarded the settlement as too lenient. The last of the objections was laid to rest recently when the US Appeals Court for the District of Columbia rejected an appeal from the Massachusetts Attorney General. This removes one major risk from Microsoft’s ‘risk register’ and now allows it to apply its $9.3bn cash on balance sheet to either a big shareholder payout or a market consolidating shopping spree. Look out Oracle!

Sun flares up on industry rivals

‘On the ropes’ Sun Microsystems was in recalcitrant mood at its JavaOne Conference in San Francesco. Rather than detail its recovery plan, it chose to provoke Microsoft and Red Hat, for not being members of the Java Community Process, and IBM for its approach to open source software and its endeavours to wrestle control of Java from Sun. Hopefully Sun’s strategy is not solely based on the fortunes of Java and open source. Though there are rumours that it has its eye on Cray, the supercomputer builder.

Microsoft – Avoids euro penalties…for now

Unlike the England football team, Microsoft will not face penalties (for now anyway) in respect of the European Commission’s monopolies court case. Microsoft is appealing against the decision for it to provide a version of its Windows operating system that does not include Microsoft’s media player software. And against it having to share some aspects of its source code with third parties. Microsoft has asked that the penalties be delayed until the appeals process has concluded. The appeals process can take up to 5 years, which in ‘IT industry time’ will be another geological era. It’s worth paying that little extra to have the best lawyers.

IT budgets set to rise

According to a survey carried out by Bank of America on 100 corporate buyers, 70% expect their application budgets to increase over the next 6 to 12 months. Over half have increased budgets for new application projects. Business intelligence and compliance software rank highly. Clearly corporate governance and the risk of board members going to prison is having some impact on IT’s corporate profile.

“What do we want?” “Stock options!” “When do we want them?” “In a pre-emptive real-time paradigm”

Such chanting is to be expected as over a thousand of Silicon valley’s techies gather outside Palo Alto city hall to protest about the proposed regulation to ‘expense’ employee stock options, thus making them a less attractive incentivisation tool for employers. The so called ‘geek rally’ will coincide with a meeting of the US Financial Accounting Standards Board.