News and Analysis to 11th May 2005
BT Disconnects Marconi
UK Telecoms box shifter and stock market phoenix Marconi has
been taught a lesson by erstwhile UK Telecoms incumbent BT, namely that one
should spread risk, particularly in respect of one’s client base. Marconi has
recently discovered that BT was not a ‘sure thing’ in respect of the latter’s
$20bn 21st Century Network project. Consequently Marconi’s share
price has tumbled, and it is in danger of being eligible for a liquidator
loyalty card. It does not seem right that on the eve of this demonstration of
poor governance, the Director’s should be walking away with such large
performance bonuses. Discuss.
Indian offshoring – Risky business
Well that’s what the UK’s Financial Services Authority
thinks. The FSA researched around a dozen offshore operations in India and
found that a lack of management oversight and controls coupled with a high
staff turnover rate constituted a material risk to UK firms. There also
appeared to be little attention given to disaster recovery. However the FSA did
note that there was no evidence to suggest that there were consumer data
related risks, as the security measures in place were of a high level.
IBM’s DQ 13000
This unfortunately is not the name of IBM’s latest mid range
server. The DQ stands for ‘Dole Queue’ and 13,000 is the number of ex-IBMers
who will be joining it thanks to a major restructuring exercise after the IT
services giant missed its recent financial targets. Its share price has dropped
circa 25% this year and Wall Street has expressed concerns that IBM’s sales
growth is regressing to a crawl.
Google – The Web Stargate
Google has come up with an ingenious ‘game over’ web
offering. It has just released a beta version of its own ‘plug in’ browser that
will deliver web pages to the user’s desktop at lightening speed. The only
issue is that users will not be surfing the web, but Google’s web database. ‘So
what’ you might ask. Well this will enable Google to monitor your every move,
which is a little creepy, but will also make it easy for Google to sell your
profile to advertisers given its intimate understanding of your ‘web habits’.
Shiver me e-timbers!
Two American entrepreneurs, backed by the former assistant
secretary of defense Barry Shillito are promoting a novel (naval?) concept in
offshoring to ease fears over job migration. They intend to refurbish a ship as
a massive IT department with a crew of 600 software engineers and dock it in
international waters three miles off the Californian coast. The crew will be
mainly from India and they will work 4-month shifts with an average salary of
$1,800 per month. Perks include accommodation. The company SeaCode claims that
in providing low cost outsourcing services in this manner, they will alleviate
concerns over job migration away from the US. Though why they think this is
unclear unless they feel that by employing overseas labour in slave-like
conditions on their boat, they are freeing up other slave-based opportunities
on the mainland.
Symantec feeling insecure?
Antivirus vendor Symantec stepped up the rhetoric by
announcing that they can beat Microsoft, a relative newcomer to the market. CEO
John Thompson goaded the software giant by recommending that it is in
Microsoft’s best interests to partner with Symantec rather than compete. Whilst
this may be a correct statement it is probably not a smart one to make.
Attempting to influence Microsoft’s business intentions is not dissimilar to
attempting to influence the dietary habits of a Spinosaurus (which are known to
unnerve even the mighty T-Rex).
HP – EMC ‘courtship’ over
These two storage vendors decided to end their long running
patent disputes out of court, with HP paying EMC a considerable $325m. HP
inherited this dispute by acquiring StorageApps, which EMC claimed infringed
its replication patents. EMC zapped HP’s investment by winning an injunction
that forced HP to withdraw its StorageApps CASA product from the market. The
amicable ‘no blame’ resolution will also see HP reselling EMC’s technologies.
All in all quite a result for EMC.
