News and Analysis to 1st November 2005
Google
shines through summer
The irrepressible Google defied
analysts for its summer quarter by delivering $381m profit compared to $52m a
year earlier. Quite impressive given that it is fairly dependent on selling advertising
to primarily northern hemisphere countries, where users are more likely to be
soaking up the sun than surfing the web during this quarter. If this becomes an
issue in the future it will no doubt offer free sunglasses (g-lasses?), where
the user is exposed to context sensitive advertising based on what the wearer
is observing.
Unisys
3600 problem
Much like many children born of
famous parents, Unisys, the love child of Sperry and Burroughs, has had a
troubled life. One might be forgiven for thinking that the 3600 is one of their
high-end Linux servers. Unfortunately it is a reference to the number of staff
they will liberate as part of a planned restructuring exercise. Having said
that the Linux servers form part of the problem. As does a joint venture, iPSL,
with a number of UK banks. It needs to buy in some expertise, or even staff,
from IBM, to help it make the transition from box-shifter to service provider.
e-Price
fixing
The world’s largest memory
chipmaker and global electronics device giant Samsung pleaded guilty to
conspiring to fix the price of chips with its rivals. This directly impacted
HP, Dell, Apple, IBM and Gateway. The associated case in the US resulted in
Samsung being fined $300m, the second largest ever in US antitrust history.
Infineon, Hynix and Micron are known to be co-conspirators. Samsung operates in
48 countries so there is a possibility that other jurisdictions will follow
suit.
Gartner
– Mixed messages
Industry analyst and astrologer
Gartner has taken a look into the future and predicted a 5.5% rise in IT
spending in the US. Staffing needs will focus around project management,
systems and network management. Looking at two extreme categories: service
companies’ spending will rise by 11%, whilst banking and financial institutions
will rise by only 3.4%. Revenue growth in general will outpace IT budget
growth, which will lead to IT spending in effect declining relative to revenue.
So we may have to wait another year or two for the next wave of dotcomish over
exuberance.
Ericssconi?
Despite speculation that wounded
UK telecoms manufacturer Marconi was heading east to China’s Huawei
Technologies, the adoption papers have been handed to Swedish telecoms giant
Ericsson. In fact only 75% of the family is destined for Sweden. The remaining
25% will be spun off as a separate company to be called Telent, which will
provide telecoms services. Telent is probably a mythological name. Maybe an
Anglo-Saxon (talking) phoenix that convinced the Vikings that the future was in
hardware and not services, which in turn led to their fall.
Microoosoft
Bill Gates recently told the BBC
that Microsoft plans to ‘eat Google’s lunch’, or something to that effect. It
certainly has the financial reserves to do that in a number of different ways.
Google should of course take note. When your business is aligned with Bill’s
sights, it is usually just a matter of time before your business plan needs a
complete overhaul. Though Microsoft has similar battles on a number of
different fronts including: phone, TV, digital music, games, operating systems,
development tools, open source and enterprise applications. Whether it has the
resources to deal with all of these, only time will tell.
The
Open (source) University
Magnanimous Google has provided
Oregon and Portland universities with a grant for $500,000 to encourage open
source hardware and software development. This will probably lead to open
source getting a disproportionately high level of attention on their curricula,
and will in turn get the venture capitalists all excited about the hothouse
possibilities. This is the type of ‘butterfly wing’ event that could trigger
the next wave of technology euphoria! Will Microsoft respond by directing its
benevolence towards sponsoring a closed source/highly proprietary software
research centre? Or will it sit back and let nature take its ‘course’.
