IT Channel News Briefs, July 18

Microsoft and others report earnings. Juniper celebrates 10th anniversary of JUNOS.

News for the week of July 14-18, 2008 -- in brief, updated daily, on topics important to the information technology (IT) channel.

Friday, July 18

Microsoft profits miss target

Microsoft's revenue surpassed $60 billion for the fiscal year, but its profits for the last quarter fell just short of analyst's expectations. The company's annual revenue increased by 18% over last year. Quarterly revenue was $15.8 billion, and profits were 46 cents a share -- shy of the 47 cents Wall Street anticipated. Microsoft expects revenue in the range of $67.3 billion to $68.1 billion in the next fiscal year.

Google, IBM and Nokia also posted their earnings yesterday. The Wall Street Journal reported that the tech sector is weathering the economic slump better than other industries, although performance is still not as strong as investors had hoped. The companies are sustaining revenue growth due in large part to the growing use of the Internet and mobile devices in emerging markets. Still, executives at these companies all noted that the tech industry isn't immune to further economic slowdown, and both Google and Microsoft gave notes of caution.

Juniper's OS turns 10

Juniper Networks' JUNOS operating system marked its 10th anniversary this week. The company says it's celebrating a decade of on-time, consecutive quarterly releases of JUNOS to more than 30,000 carrier, enterprise and public-sector customers worldwide. This year, Juniper has repeatedly stressed that it would move all of its network components onto the shared OS. The company has also opened the OS to outside developers to design customized applications.

Thursday, July 17

AOL talks with Microsoft and Yahoo

Time Warner Inc.'s AOL Internet division has discussed a possible sale or merger with Microsoft or Yahoo, according to Reuters. Details of an AOL deal with either Microsoft or Yahoo are undisclosed, but talks have escalated in the days leading up to Yahoo's Aug. 1 shareholders meeting. A deal with Microsoft could mean selling AOL, while sources believe Yahoo would merge with AOL, the Web pioneer, and grant Time Warner a minority stake in the arrangement.

For Microsoft and Yahoo, the addition of AOL would boost the companies' Internet power position, where Google currently rules. Yahoo pursues AOL to show that it could expand without Microsoft, while Microsoft seeks to enhance its Internet display and weaken Yahoo and Google's tough grasp on the Web. Microsoft recently sought to acquire Yahoo, but pulled its proposal in May. Yahoo has now reached an under-review, nonexclusive search advertising deal with Google.

SAP to increase maintenance fees

SAP maintenance fees will rise for about 17,000 customers on its lower-end Basic Support program that are moving to enhanced Premium Support. That will cost 22% of their net licensing fees by 2012, instead of the current 17%, SearchSAP.com reported Wednesday.

Customers will receive some of the extra features in Enterprise Support, like enhancements to Solution Manager, this month, but increases won't start until January. Those increases will take place on a fixed schedule -- 18.3% in 2009, 19.8% in 2010, 21.4% in 2011, ultimately reaching 22% of net licensing fees by 2012. SAP first revealed in February that it was eliminating its lower-cost support option and replacing it, as well as Premium Support, with Enterprise Support. At the time, SAP said the change wouldn't affect existing contracts.

Intel faces more antitrust charges

Intel will face new antitrust charges in Europe for allegedly giving major European retailers inducements not to sell computers that use chips from rival Advanced Micro Devices (AMD), The Wall Street Journal first reported.

Intel is currently under investigation by the U.S. Federal Trade Commission, but charges have not been pressed yet. Last year, Intel was charged in Brussels for slashing prices on chips and offering customers rebates to illegally undercut AMD. AMD filed a lawsuit against Intel in 2005, alleging that the company abused its dominance in the market. A spokesman for the European Union antitrust commissioner told the paper the Intel probe is "ongoing".

Wednesday, July 16

Microsoft attacks Google-Yahoo ad deal

Microsoft's top lawyer told Congress's antitrust subcommittees yesterday that an advertising deal between Google and Yahoo would drive up prices, reduce competition and raise serious privacy concerns.

Brad Smith, senior vice president and general counsel, testified before the Senate Judiciary Committee Subcommittee on Antitrust and the House Judiciary Committee Antitrust Task Force. He told lawmakers that the proposed deal -- under which Google would run Yahoo's online advertising -- would give Google a level of control over advertising unprecedented in any medium.

"If that happens, Congress won't need to enact a federal privacy policy," Smith said. "We will already have a national privacy policy -- Google's privacy policy."

Microsoft of course is trying to acquire Yahoo, or at least its online search and advertising business. Yahoo is pursuing the Google deal to thwart that takeover.

Gartner: Hosted security will triple by 2013

Hosted security services are expected to more than triple by 2013, according to Gartner Inc. Use of Salesforce.com, Google Apps and other cloud-based services has already swelled, allowing customers to avoid the corporate network and necessitating security controls between mobile users and hosted services. Hosted services represent 20% of 2008 messaging security controls revenue; in 2013, it will likely increase to 60%.

Gartner analysts say that Software as a Service (SaaS) will allow security controls to reach customers in more cost-effective ways by new providers. Fresh approaches to hosted security services will include proxies that secure cloud-based IT services. Increased hosted services will also allow enterprises to access security controls at short notice for unexpected or unusual threats.

Gartner warns, though, that inexpensive peer-to-peer hosted services could heighten vulnerability to low-cost brute force attacks. Reliable security providers that extend their services to embrace SaaS, while reducing security controls costs and tackling future security challenges, are the best bet for successful cloud computing.

Salesforce.com dumps Sun for Dell

Sun's relationship with Salesforce.com is over. Salesforce.com is replacing the Sun Fire E25K servers in its data centers with servers from Dell, according to The Register. Salesforce.com CEO Marc Benioff told The Reg that Dell offered the best quality-to-cost ratio and dramatically declared, "The Sun has set at Salesforce." He declined to say what Dell servers Salesforce.com will use or what operating system they will run.

Microsoft to acquire data quality vendor

Microsoft will acquire Zoomix, an Israeli data quality company, to incorporate its software with SQL Server, SearchDataManagement.com reported today. The integration is part of Microsoft's continuing efforts to make the relational database management system "a complete data platform for all data management needs," the company said in a statement. Microsoft will need the Zoomix features to compete with SAP and IBM, according to Ted Friedman, a Gartner analyst. Freedman also said Microsoft "had very little competency with its own technology," so the acquisition of data quality technology "makes perfect sense."

Blade servers steal spotlight

Blade servers are surpassing their rackmount counterparts in memory and performance with the ability to run virtual machines and heavy applications, SearchSeverVitualization.com reported Tuesday.

The latest blades come with multicore processors and the same amount of memory, network interface cards and host bus adapters as rackmount servers, said Barb Goldworm, the president and chief analyst of Focus Consulting in Boulder, Colo. Early blades were criticized for significant heat issues, but newer versions have cooling technology and monitoring that sharply decreases that problem. So this year a host of companies -- including Dell, Sun Microsystems, Hewlett-Packard, IBM and Verari -- have introduced blade servers with high-density memory and dual- and quad-core processors that can run virtual machines and hefty applications.

Tuesday, July 15

Icahn, Microsoft dispute Yahoo's story

The Microsoft-Yahoo-Icahn melodrama continues apace just weeks away from Yahoo's Aug. 1 board meeting. Financier Carl Icahn and Microsoft dispute the way Yahoo characterized their latest offer, according to several reports. In a statement posted Monday, Microsoft said Yahoo mischaracterized its most recent proposition.

"Microsoft's proposal did not include changes to Yahoo's governance," the statement said. In its enhanced proposal, "Microsoft asked that Yahoo! confirm whether it would agree that the enhancements were sufficient to form the basis for the parties to engage in negotiations over the weekend on a letter of intent and more detailed term sheets. This discussion has been mischaracterized as a take it or leave it ultimatum, rather than a timetable in order to move forward to intensive negotiations. Yahoo! informed Microsoft on Saturday that it had rejected the proposal."

Microsoft is reportedly no longer seriously considering an outright buy of Yahoo -- the option many Yahoo shareholders would like. Citing unnamed sources "familiar with" Microsoft's thinking, The Wall Street Journal reported that Microsoft wants Yahoo's search business only. Icahn wants to head up what remains of Yahoo after that.

MSPAlliance introduces leasing program for MSPs

The International Association of Managed Service Providers, known as the MSPAlliance, launched a new service and leasing program for MSPs on Monday. The MSPAlliance Managed Services Leasing Program aims to provide MSP clients with hardware and services at fixed cost levels. Program benefits include custom rates for MSPAlliance members with shared leasing profits, discounts for qualified MSPs and a variety of options and flexibility for MSPs in this lender-neutral leasing program. Available only to MSPAlliance members, the program will also grant extra benefits to companies who have passed the Managed Services Accreditation Program exam. Varilease, a financer with more than 20 years and $2 billion of IT leasing experience, will support MSPAlliance's new service/leasing program.

Oracle updates BEA network gatekeeper

Oracle yesterday announced Oracle Communications Server Gatekeeper 4.0, the new version of what had been called BEA WebLogic Network Gatekeeper. The software is based on open standards, and it is designed to help communications service providers manage their delivery and development platforms. Features include policy enforcement, partner relationship management and network access control. Oracle announced its plans to acquire BEA Systems in January.

IBM claims fastest 1 TB drive

IBM says its new TS1130 tape drive is the world's fastest 1 terabyte storage tape drive. The system, which uses IBM's Giant Magnetoresistive (GMR) head design, can store up to 1 TB of uncompressed data per cartridge with a native data rate of 160 megabytes per second (MB/s). That means backups can be done 54% faster than older drives, IBM claims.

The drive will be available in September and start at $39,050 for new users. Customers can upgrade from existing models for $19,500 with backward media compatibility.

Cognos chooses Novell SUSE Linux for mainframe

Cognos has chosen Novell SUSE Linux for its debut of Cognos 8 business intelligence software on the mainframe, SearchEnterpriseLinux.com reported Monday. Cognos, which was acquired by IBM last November, bypassed three IBM operating systems (z/OS, z/VM and z/VSE) and chose IBM System z for Linux in addition to SUSE. An IBM mainframe version for Red Hat Enterprise Linux is also in the works.

Cognos 8, which is already available on IBM systems p and x, Windows and Unix, consolidates all business intelligence functions in one platform. The latest version of the business intelligence application is 8.3. Linux will get the latest version in the next point upgrade.

Monday, July 14

Microsoft, Icahn talk tough to Yahoo

Yahoo rejected yet another buyout proposal last week, this one made by Microsoft and it its new ally, Carl Icahn, according to The New York Times. Microsoft and Icahn demanded the replacement of Yahoo's board -- and a response within a day -- as prerequisites for continued talks.

In a statement, Yahoo chairman Roy Bostock rejected the bid, characterizing it as a "ludicrous … odd and opportunistic alliance" between Icahn and Microsoft that continues to undervalue Yahoo. Yahoo said it repeated its own offer to sell itself to Microsoft for at least $33 per share and to discuss a transaction involving only Yahoo's search business, and that Microsoft rejected both offers.

Microsoft launched a $31-per-share bid for Yahoo in January and pulled it back in May. Microsoft wants Yahoo to accelerate its already costly efforts to build a dominant Web search and online advertising business to compete against Google.

Citrix promotes channel VP

Citrix Systems has promoted its channel leader to senior vice president of sales and services. Al Monserrat will take over for John Burris, who left Citrix to become president and CEO of Sourcefire. Monserrat has also led Citrix's North American sales and global field services divisions in his eight years with the virtualization vendor.

Citrix did not immediately name a new channel vice president. Monserrat spoke to us in May about the Synergy '08 conference and the partnership between Citrix and Microsoft.

Gartner cuts cell phone market projections

Cell phone sales are slowing with the global economy, so Gartner lowered its market growth forecast for handsets Monday. The move came after a flurry of industry vendors decreased their revenue or growth expectations over the past couple of months.

Gartner cut its forecasted annual growth for the cell phone market to 10% to 11%, down from the 10% to 15% it originally expected. Last year the cell phone market grew 16%. In April, Nokia warned the value of the cell phone market would decline in 2008. Then, in June, Sony Ericsson warned it wouldn't make any profit in the April-June quarter because of weaker demand. And this week Salcomp, the leading maker of cell phone chargers, warned its 2008 operating profit would be lower than last year.

Storage VARs say sales prospects good, others unsure

Storage equipment resellers have a positive sales and revenue outlook for the coming quarter, but conflicting reports show there may be trouble looming, SearchStorage.com reported Friday. A survey of storage resellers shows that most providers still consider storage a strong spot, despite overall "subdued" sales for the second quarter, which ended June 30. In fact, those surveyed said they expect a slight upturn in sales in the third quarter, according to the report by Robert W. Baird and Co.

However, a storage industry earnings preview issued by Pacific Growth Equities said second-quarter spending went about as expected, but this quarter "may be ugly."

In Baird's survey of 57 U.S. and international enterprise resellers, 27% said they were above their expectations for the quarter, 43% were on plan and 30% were below expectations. "These are the weakest results we have seen since we began the survey in 2004," Baird analyst Jayson Noland wrote in his report on the results. He added that prospects looked slightly better for this quarter, with 33% of the VARs expecting improvement and 50% expecting conditions to remain challenging.

VMware brings Fusion to Leopard

VMware has added support for the Mac Leopard operating system to VMware Fusion, its Mac virtual machine offering. Fusion already allowed Intel-based Macs to run x86 and x86-64 guest operating systems -- including Windows, Linux, NetWare and Solaris -- as virtual machines simultaneously with the Mac OS X host operating system. Now it can run Leopard Server in a virtual machine as well.

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