News and analysis to 19th October 2006
YouGoogTube
Here we go again - Dotcom the sequel – a ‘never been
profitable’ company sold for $1.7bn.
Worse still the market likes it. That aside YouTube, a consumer video
site for hip and happening people, which by the way I like as well, will
provide Google with a customer base to which it can draw pay per click
advertising. But there are likely to be
some copyright infringement issues. It is about time that the issue of intellectual
property over the web is addressed. The coalescence of these best of breed
players is likely to accelerate this issue reaching a conclusion.
Tescosoft
Move over Microsoft, UK retail giant Tesco plans to eat
your lunch by launching a suite of desktop and security tools. Fortunately Tesco
has not redeployed its check out staff into product development, but has teamed
up with Formjet a UK software distributor. An interesting play as it will be
attractive to those who do not want to spend the big bucks required to own MS
Office, and that’s a lot of people. Once it gains momentum that should
accelerate investment in the products, which will then stimulate businesses
into taking an interest. One should never be complacent about one’s worst-case
scenario, so consider the possibility of this being one step towards
Microsoft’s attempt to enter the retail supply chain with its MS Tesco
solution. If Microsoft imposes its standards on the retail supplier then this
could represent a help desk opportunity for somebody, or should I say an ‘every
little help(s) desk’ (UK ‘joke’)?
The
HP CEO is not the CEO
HP has lost its way. The recent pre-texting corporate
spying scandal suggests that some of the founders’ values have been archived.
The move to introduce a Chief Ethics Officer to address such issues happening
again is worrying. Perhaps naively I thought that ethics and values should flow
down from the Chief Executive Officer. This suggests that there are perhaps
archive retrieval issues at the IT giant. On a more positive note HP has
recently won circa $440m worth of business from the US military. It is not
known whether the US military are interested in HP’s IT capability or its
expertise in covert ops.
FBI
plays tech stocks
No the FBI isn’t looking to maximise the return on its
seized proceeds from crime by having a punt on the Nasdaq. It is actually
investigating over 50 tech companies in respect of their not quite legal stock
options accounting practices. Much like backing a horse after the race has
started, some tech companies are backdating stock options for their staff so
that they receive a more favourable strike-price. The CEOs of Brocade Communications and Comverse Technologies have
been criminally charged on this matter. The CEOs of McAfee and CNet have quit
over the findings uncovered in their businesses. Let’s see how Steve Jobs fairs
given that Apple is also a member of this not so exclusive group of tech
players. Apple’s CFO has already fallen on his sword over this. The question is
whether the stakeholders are looking to turn the sword into a kebab, thus
requiring more executives to join the ex-CFO at the sharp end of the business.
IT’s
embarrassing
Indian IT service provider Infosys is impressing the
market with its revenue guidance of over $3bn for the year. This suggests that
western confidence in offshoring is rising. Interestingly, of Infosys’ 45 new
clients acquired this quarter not one has been made public. Possibly off
shoring is not seen as brand enhancing in some circles? Those working in
Western IT departments might want to ask their HR department whom they actually
work for. And get suspicious if the annual IT department conference takes place
in Bangalore.
Microsoft
SCO’s for IBM
Microsoft and IBM represent the two poles of the IT
magnetosphere. Though the analogy fails a little because it implies that they
should be attracted to each other, when in fact the opposite is true. In any
case these two giants are determining the course of the IT industry. So it is
not surprising that they clash from time to time. In keeping with the covert
theme running through the IT industry at the moment it transpires that
Microsoft has been sponsoring Unix vendor SCO Group to rattle IBM’s cage. SCO
Group’s business model appears to be based on suing members of the Linux
community rather than selling product. In order to not be seen as blatantly
trying to attack IBM and open source software, it has apparently been
influencing SCO Group investor BayStar. The thrust of it is that Microsoft
would backstop or guarantee BayStar’s investment in this basket case of a
business. This information has emerged through the proceedings of the ‘SCO
Group versus IBM’ court case. This should bring, what appears to be a vexatious
case, to a conclusion. Microsoft shareholders might consider whether such
investments might be better directed towards wooing customers than blocking rivals.
