News and analysis to 26th September 2002
Sun to take a bite out of Microsoft
If
Microsoft has a power base it is the PC, and only the very brave would
challenge it. However market dynamics have contrived to make this a punt worth
taking. The combination of intense market cost-consciousness coupled with
Microsoft’s ‘shareholder friendly’ software licensing model is for some as
auspicious and rare as the alignment of the planets. PC shippers HP and Dell
have opted for WordPerfect’s software on their consumer PCs. Now Sun
Microsystems intends to offer a PC-like device based on Linux and
StarOffice. Is this a punt too far?
There has never been a better time to try.
Dell dining on 3Com
PC vendor Dell seems to have a problem in making itself attractive as a
reseller. Recently both HP and Cisco ceased their relationship with Dell on the
basis that the PC vendor was encroaching on their turf. 3Com recently joined
the ranks of those concerned. Who knows where Dell’s foray beyond the PC will
end? Look out soon for sleek black Dell ‘plug and play’ desks!
SchlumbergerSema courts disaster
The
IT services arm of oil and gas giant Schlumberger is ramping up its disaster
recovery business with the recent purchase of Belfast based recovery services
provider, Restart Ireland. In the same week it purchased a 65,000 square foot
site in Cumbernauld in Scotland, which can house up to 900 recovery positions.
Perhaps being New York based, SchlumbergerSema has some insights into the
dialogue between the United Nations and the US government. Have the bags packed
and sat by the door should its disaster recovery purchase rate exceed two per
week.
Scott McNealy – Marquis de Sun
Despite a recent 15%
drop in sales in the third quarter, Scott McNealy, CEO of Sun Microsystems,
stated that he intends to ramp up the spend on R&D and acquisitions even
though it will hurt. During the keynote speech at Sun’s Networks conference he
told conference delegates “It has been tough...for shareholders. I feel your
pain”. Let’s hope Mr McNealy’s philosophy does not extend into the CRM
marketplace.
Share plummet watch
IT
all rounder Xansa saw its share price descend 49% after a recent profit
warning, which stated that full year results would be less than expected.
Similarly EDS shares fell 52% and then fell again when it became apparent that
the world’s second largest IT outsourcer had taken a big hit on its derivatives
related investments. Maybe it should outsource its treasury operation.
Bon voyage
Michel Bon, CEO of France Telecom has walked le plank in the light of
the impressive debt the struggling telco is carrying ($68.3bn). A large part of
the problem was not Monsieur Bon’s leadership. France Telecom’s main
shareholder is the French government, which wanted the company to become more
international, but was unwilling to allow its ownership to be diluted. Thus
Monsieur Bon had to pay cash for purchases made at the height of the dotcom
frenzy.
Microsoft’s feeling peckish
Who
would expect a successful ‘write once sell many times’ software house such as
Microsoft to get involved in the mucky world of ‘write once change many times’
enterprise applications (EA)? Its acquisition of Great Plains and Navision,
coupled with a number of other strategic alliances, all appear to have happened
‘below the market radar’. Recently Microsoft announced its intentions to take
on the EA marketplace, which is very likely motivated by the fact that this
market lends itself to Microsoft’s strategic vision of ‘applications on tap’.
To avert the formation of the AEVBM club – (Any Enterprise Vendor But Microsoft
(can join)), which could soak up critical resources in yet another turf war, it
is targeting the SME marketplace. Though its definition of a small or medium
sized enterprise is one that sits in the $1m to $1bn revenue band!
