News and analysis to 21st May 2008
HP Data Systems
HP has finally entered the premier league in respect of IT
services with its planned acquisition of EDS for $13.9bn. It was simply a
matter of time before HP made a move into the IT services space. Acquiring EDS
suggests a boldness that will reshape the lucrative world of out sourcing. At
the very least it will provide the first serious challenge to number one player
IBM. It will take a while for the implications of this to impact the market.
Dell is likely to feel some pain, but its deep relationship with EDS will take
a few years to be flushed out. I would expect this move to be the first of many
service company acquisitions.
Yahoo plays hard to get
Microsoft’s intentions in respect of Yahoo are well documented.
The software giant needs the online services player to take on the might of
Google. Microsoft walked away from the deal when it decided that Yahoo’s $37
per share offer was too much. Or at least it felt that the disparity with its
$33 per share offer ($47.5bn) would be too face-losing to bridge. As if by
magic activist investor Carl Icahn attempted to displace the Yahoo board with a
Microsoft-compliant one. That didn’t go to plan so Microsoft has tiptoed back
to the table with a view to resuming the acquisition whether in full or in
parts. This is an important step for Microsoft and the online industry,
particularly as Google has expressed an interest in Yahoo. The Yahoo board has
appeared to play it just right.
Happy birthday Spam!
Digital Equipment Corporation (DEC) was a major player in
the IT industry before it made a couple of misjudgements, including ‘why would
anybody want a computer at home?’ and ‘Unix is nothing more than snake oil’.
Those mistakes aside it gave IBM a run for its money in the hardware market.
Thirty years ago it also dispatched the first ever spam. Gary Thuerk, a DEC salesman sent out a
message inviting circa 400 Arpanet (the text based predecessor of the Web)
users to a demo of the new Decsystem-20.
Recipients were not impressed. The Arpanet chief of the US Defense
Communications Agency sent a return message calling it a ‘flagrant violation’
of the network. Little did the Chief know that you should never acknowledge
spam. In any case spam as an industry took a further decade to evolve. Today it
occupies circa 85% of all inboxes. Circa 120 billion spam messages are sent
each day.
Green is good
Almost half of UK CIOs are willing to pay at least a 10%
premium for goods and services from sustainable suppliers, according to a Cisco
study. A quarter are willing to pay up to 50%. One in four CIOs have
responsibility for developing sustainability policy and they expect their spend
on such projects to increase by up to 25%. 13% of respondents stated that they
would not work for an employer that didn’t have a green policy in place. This
is a golden opportunity for the IT industry to improve its reputation in the
eyes of its customers by showing that it cares for the planet and not just the
latest tech gadgets.
IBM goes 3D
Virtual worlds are becoming more popular. Not just amongst
those that prefer such environments to the real world, but for those that see
the virtual world as another channel for communication and sales. Corporates
have reservations about virtual worlds, particularly the lack of security,
control and stability. It’s like the Wild West only wilder. Residents have been
known to launch terrorist-style attacks on virtual estate agents (realtors)
using virtual bombs and even flying genitalia.
IBM and Second Life creators Linden Labs have got together to secure
parts of the virtual world. Thus enabling staff to communicate within the
corporate firewall so to speak. The world appears to be going crazy. It’s time
for my avatar mates and me to spend some quality time on my recently purchased
virtual holiday island.
Sorry wrong person
Voice over IP has played an important role in reducing one’s
telephony spend. But its online nature opens users up to eavesdropping and
identity fraud. There is now a market
for stolen VOIP usernames and passwords. Today the going rate is about 50%
higher than for credit card details. This suggests that VOIP fraud is likely to
grow rapidly over the next few years.
Cruel cyber boyfriend
A woman in the US allegedly used a fake MySpace profile to
pose as a sixteen-year-old boy. Apparently ‘she’ befriended a thirteen-year-old
girl and then broke off the virtual relationship with a series of cruel
messages including ‘the world would be better off without her’. Subsequently
the girl committed suicide. Social
networking appears to have extended the weaponry used by bullies. Parents,
teachers and children need to be aware of the dangers (as well as the fun)
associated with social networking. The social networking companies need to play
a role in alerting the appropriate parties if communications take a sinister
turn.
