News and Analysis to 6th April 2004
Sun shines on Microsoft
Sun Microsystems and Microsoft have never been the best of
friends. In fact only Larry Ellison of Oracle exceeds Sun’s Scott McNealy in
terms of anti-Microsoft sentiment. So it is perhaps a surprise to see the two
technology clients skipping off into the horizon together. Recently Microsoft
paid Sun nearly $2bn to settle long running patent disputes and to get the
latter ‘off the former’s back’. This sum makes the proposed antitrust EU fine
seem like peanuts. But Microsoft isn’t worried about the money. It hopes that
the payment to Sun will encourage the EU to reconsider the non-financial
penalties, which could cause Microsoft a lot of pain. At a more technical level
this deal will be good news for the Java community.
Offshoring news
The idea of outsourcing your IT function and/or elements of
your business (aka BPO) to a foreign land where the costs are lower is both
gaining traction and creating a political storm in the US. Recent examples show
that cheapest is not always best value. Financial services company Capital One
has cancelled a call centre outsourcing deal with Indian supplier Wipro after
it transpired that circa 30 of the telesales staff had been offering Capital
One’s US customers additional credit over and above the authorised limits.
Lehman Brothers at the end of last year brought its computer helpdesk back
inhouse after complaints of poor quality of service. Similarly Dell has stopped
using its Indian call centre after corporate customers complained of poor
service. These examples show that offshoring can be both financially risky and
brand damaging.
From email to Gmail
In the run up to its initial public offering, Google has
released news of its new ‘killer app’, to be known as Gmail. But Gmail is just
email and the market for potential new email users would appear quite low,
given that most people in the Western world have at least one email account.
But Gmail is different. Unlike rival email services from the likes of
Microsoft, Yahoo! and AOL (combined user base of 100m) it will provide users
with a whopping 1GB of free space. Deleting fond memories (eg. photograph
attachments of loved ones) because of a lack of memory will no longer be an
issue. Strategically this looks as much to do with hurting rivals as pleasing
users. Yahoo! in particular uses its email service to initiate what will
hopefully one day be a paid subscriber relationship.
Microsoft takes first open source
steps
Microsoft
once saw open source as a joke. More latterly it recognised it as a threat.
Just recently it has taken the plunge by making some internal elements of
Windows available as open source. Microsoft justifies the move by saying that
this will help it engage better with customers (it would seem that your views
on Windows Installer XML toolkit are apparently of interest to Microsoft). It
will also demonstrate to the EU antitrust brigade that Microsoft is not such an
evil empire. At the very least Microsoft deserves credit for having the
Darwinian agility to simply change its stance if that increases its chances of
survival.
