News and analysis to 25th January 2007
Microsoft sells Linux to Wal-Mart
As part of Microsoft’s fiendish alliance with Novell, it
has to push SUSE Linux out to its customers, which in itself is nothing less
than unbelievable. Well it has happened. Microsoft has sold an undisclosed
number of so called ‘Linux vouchers’ to no less than retail giant Wal-Mart.
What they are going to do with them is also unclear. Possibly they will give
Linux vouchers away when customers spend over $50? It would certainly attract
their open source customer base. They cannot be a major segment of their
customer community, but I guess when you are Wal-mart’s size you have to have
highly focused marketing in order to keep the share price growing.
SCOing under?
Market nuisance and occasional Unix vendor SCO Group is
looking increasingly like a vexatious litigant in the long running court case
against IBM over the alleged infringement of the former’s intellectual
property. Judge Brook Wells dismissed SCO’s claims that IBM destroyed critical
evidence, according to reports. This should accelerate the trial to a
conclusion. SCO’s business model looks flawed and its use to Microsoft as an
open source / IBM beater appears to be coming to an end. The honourable thing
would be to fall on its sword or more romantically make its last act the
donation of its SCO Unix source code to the open source community.
India soaring
India’s fifth largest IT services company HCL announced
record second quarter profits up 61%. Exceeding those of Infosys (52%) and Tata
(47%). Satyam, the fourth largest player saw its share price suffer after it
reported a 24% dip in profits. It would appear that higher salaries have eroded
the margin as Satyam attempts to reduce staff attrition. There is a talent-war
taking place in India and the staff are winning. This will eventually hit all
the Indian companies and then the allure of cheap IT services will lose its
lustre.
Sap takes market beating
Sap’s share price took a 10% beating when the enterprise
applications giant missed its fourth quarter revenue targets. What concerns the
analysts is poor performance in respect of new licence deals, as these are an
indicator of future support contract revenues. Oracle suffered in this respect
in its last quarter. And its share price suffered again on Sap’s news. Clearly
new enterprise applications licences are not seen as the must-give Christmas
gift. Sap has the consolation that it grabbed three percentage points of market
share in 2006. Oracle makes no mention of this in its aggressive advertising
campaign.
iDon’t think so
The pre-pre-launch of Apple’s iPhone was dampened by
Cisco’s move to sue the official hi-tech purveyor to the fashionista brigade
for trademark infringement. The world’s favourite router maker has owned the iPhone
trademark since 1999. Cisco should lighten up a bit. Perhaps there is a
collaboration to be had? Teaming up with Apple is an objection-free
route-to-wallet play. Cisco only has to create a range of routers in pastel
shades, along with accessories that allow for example fashion victims to wear
the router attached to their upper arm. The benefits include being able to run
with your router, but best of all it detects where the nearest like-minded
router-wearers are located, so that one can first home in on them and then jog
past whilst studiously ignoring them. Ingenious.
Apple bruising
Apple shareholders have taken out a lawsuit in relation to
the stock options accounting irregularities dreamed up by Apple’s ‘creative’
finance division. Their concerns relate to the fact that: stock options were
backdated to dates when the share price was lower in order to improve the
potential returns; some stock options were granted the day before Microsoft
sunk $150m into Apple; Steve Jobs cashed $300m of Apple shares the day before
the Wall Street Journal broke the news on this widespread tech sector practice.
Apple has already conducted an ‘internal’ probe and broadly cleared Jobs. The
shareholders appear to want the CEO’s blood. Given his iconic status and him
being the architect of Apple’s resurrection, morality aside, the shareholders
may well be chopping off their nose to spite their face.
Suntel servers on horizon
Sun’s on-off relationship with Intel is definitely back
on. This latest alliance will see Sun use Intel chips in a number of its
desktop and server products. Intel in turn will endorse Sun’s Solaris operating
system, which given Intel’s marketing muscle is something of a result. Sun
seems to be getting big on alliances. Other high profile bonding has occurred
with both Google and Microsoft. One can’t help but think that Sun should focus
on refocusing its business away from hardware. In the same way that IBM shifts
tin through outsourcing or NCR shifts tin through data warehousing, Sun needs a
Trojan horse. Given its acquisition of Storagetek it might consider content
management or storage service provision as its flag ship offering.
