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IT Channel News Briefs, May 30

Today's headlines: Dell profits increase. Nokia Siemens starts partner program. SAP takes on Gartner.

News for the week of May 27-30, 2008 -- in brief, updated daily, on topics important to the information technology (IT) channel.

Friday, May 30

Dell earnings surprise Wall Street

Dell shares rose 8% after the company posted higher-than-expected profit for its first fiscal quarter ending May 2, 2008.

Revenue for the quarter was $16 billion, up 9% from $15.6 billion for the year-ago quarter. Net income was $784 million, or 38 cents per share -- a 12% increase from $756 million, or 34 cents per share, compared to last year. Analysts had expected earnings of 34 cents per share for the most recent quarter.

Dell highlighted storage revenue, which rose 15%, and notebook unit growth, which was up 43%. The company cited lower operating expenses and strength in both commercial and consumer products and services. Dell's employee headcount is down 7,000 compared to last year.

Nokia Siemens launches partner channel

Nokia Siemens, which offers a portfolio of enterprise fixed and mobile integrated network technology, launched a channel partner program this week.The partner channel will be in addition to an existing in-house Nokia Siemens direct sales team. New partners will have access to online technical, sales, marketing and branding materials and support, as well as a training catalog. Partners will also work with Nokia Siemens sales support personnel.

One of the first partners in the Channel Partner Program is CommTel Network Solutions, an Australian systems integrator that works in advanced telecommunications systems.

SAP slams Gartner for slamming SAP

SAP is fighting back against a recent Gartner report that slammed its governance, risk and compliance (GRC) software suite. The findings in the report were "so far off, it's not even funny," SAP's Jim Dunham, group president of GRC solutions management, told our sister site this week. The Gartner report said SAP's GRC suite lacks a management application that lets internal auditors identify and remediate problems, but SAP said such a function is already integrated into its suite.

Enterprise telephony sales slow worldwide

The worldwide enterprise telephony market experienced only minimal growth in the first quarter of this year, but the strongest sales were in Asia, according to a study released this week by Infonetics Research.

The report, Enterprise Telephony Worldwide Market Share and Forecasts, shows that the worldwide enterprise telephony market grew only 2% in the first quarter, with time division multiplexing (TDM), pure IP and hybrid sales all showing low single-digit growth. However, the overall market is up 6% from the same period a year ago.

Asian revenue from TDM and IP private branch exchange (PBX) were up 26% in sequential growth. Of the top telephony vendors, including Nortel, Alcatel-Lucent, Avaya and Siemens, Cisco was the only vendor whose overall PBX share increased during the period.

Thursday, May 29

VMware to buy B-hive Networks

VMware said yesterday it will acquire B-hive Networks for its application performance management know-how. Privately held B-hive is based in San Mateo, Calif., with R&D in Herzliya, Israel. The acquisition will bring performance management and service-level reporting for applications running VMware virtual machines, VMware said. Terms of the deal, slated to close in the third quarter, were not disclosed.

Small Business Server RC0 released

Microsoft has posted Release Candidate 0 of Windows Small Business Server 2008. That means it's nearly done.

SBS 2008 features new setup and administration and more customizable reporting, according to a post on the Windows SBS blog. The premium edition of SBS 2008 adds SQL Server 2008 Standard Edition and an additional Windows Server 2008 copy, which both run on a second server. Partners can sign up for the public preview online.

Midmarket CIOs slow down software spending

Medium-sized businesses are cutting software spending because of a troubled economy and decreasing capital budgets, according to a new survey from ChangeWave Research, reported yesterday.

In the survey of nearly 2,000 CIOs, IT managers and programmers, 25% of respondents said they are spending less on software this quarter than they did in the first three months of the year. During a previous survey in January, only 9% of respondents said they were pulling back on software spending. Meanwhile, 12% of respondents in the current survey said they would increase software spending this quarter, compared with 26% in the January study.

Wednesday, May 28

Dell found guilty of customer deception

Dell deceived customers and engaged in abusive debt collection practices, a New York state judge ruled yesterday. The ruling stemmed from a 2007 lawsuit filed by Attorney General Andrew Cuomo, who had accused Dell of pulling the old bait and switch on customers regarding customer service, warranties, financing and rebates.

Under the ruling, Dell will have to pay restitution to customers and forfeit profits to the state. The amounts of those payments will be determined after further court proceedings. In a statement to CNN, Dell said, "We are confident that when the proceedings are finally completed, the court will determine that only a relatively small number of customers have been affected."

EMC extends Iomega deadline

EMC Corp. has extended the expiration date for its cash tender offer to acquire Iomega Corp. until this Friday at 5 p.m. Eastern, leaving time for the European Commission to complete its review of the deal. The commission must give a nod before the deal can go through. Shareholders of Iomega, a data storage company, can tender their shares until the extended deadline. EMC proposed the cash tender offer to acquire Iomega on April 24 at $3.85 per share.

Midmarket virtualization heats up

Virtualization will make a big play among midmarket companies this summer, reported this week.

CIOs will be faced with heavy decision making because Microsoft Hyper-V, as well as new products from Citrix Systems and Sun Microsystems, are expected out this season. VMware will do its best to remain the market leader, and IBM's IBM I and Power VM have found their place in the midmarket as well.

The good news is that companies are apparently ready to buy into virtualization. A recent survey of business software buyers conducted by ChangeWave shows an increase in companies considering using virtualization in their data centers. The survey found 70% of IT departments using virtualization are using VMware, 26% are using Citrix, 22% use Microsoft and 10% use IBM.

Tuesday, May 27

Microsoft Office ODF pledge gets EU scrutiny

European regulators last week said they will look into Microsoft's promise to put ODF support into the next version of Office, according to the Associated Press. Last Wednesday, the company said it will update Office 2007 next year so that users can save Word, Excel or other documents to the OpenDocument Format (ODF) being pushed by rival companies, including IBM. They can already save their work to PDF, HTML and other common, non-Microsoft-specific formats.

Microsoft's move was seen as an attempt to prove to the European Commission that it has changed the behavior that led to some $2.63 billion in fines. Critics say Microsoft's real game plan is to try to subvert ODF with its own Open Office XML (OOXML) formats, which would amount to customer lock-in. Microsoft says it is working with open source players on an OOXML-to-ODF translator.

Survey says virtualization spending is on the rise

Bucking the trend in business software, spending on virtualization has increased, according to a survey by ChangeWave Research. As reported by, 70% of the survey's 2,000 respondents said they plan to invest in virtualization over the next 90 days. That's up from 58% of respondents in the last survey, administered in January. By contrast, only 12% of respondents in the most recent survey said they planned to make software purchases.

No slowdown for consolidation

Executives at a global technology, media and telecom conference sponsored by Reuters last week said they expect to see further consolidation in the technology industry, despite credit markets in turmoil, Reuters reported. The executives said they expect to see mergers and acquisitions among companies that range from software and computer services providers to network operators.

Even with a slowdown in private equity for buyouts, the tech industry has seen high-profile deals so far this year, including Hewlett-Packard's agreement to buy Electronic Data Systems for $13.2 billion. Data from Dealogic shows technology companies globally have announced 1,991 merger and acquisition deals this year to date, a 16% increase from the same period last year.

Microsoft pulps book-scanning operation

Microsoft last week officially pulled the plug on its massive book-digitization effort, according to a posting to the Live Search blog. The effort, like Google's analogous attempt to digitize the published universe, was controversial given the copyright repercussions on authors and publishers -- although Microsoft agreed to stick to scanning works with the content owners' permission.

"Based on our experience, we foresee that the best way for a search engine to make book content available will be by crawling content repositories created by book publishers and libraries," blogged Satya Nadella, Microsoft's senior vice president of search, portal and advertising at Microsoft (and the man in the hot seat).

Microsoft said it had digitized 750,000 books and indexed 80 million journal articles. Some observers saw this move as a sign that Microsoft, at last, is reining in its wide-ranging search effort and focusing it more on more vertical, business-related fare.

Vodafone CEO resigns

Vodafone Group PLC -- the cell phone company with the highest sales worldwide -- will get a new CEO in July. Current CEO Arun Sarin, who has run the company for the last five years, is stepping down and will be replaced by his deputy, Vittorio Colao.

Sarin is credited with expanding Vodafone's operations in emerging markets, including Eastern Europe and India, through large acquisitions -- the most notable being the purchase of a controlling stake in Hutchison Essar, one of India's largest mobile phone groups. In a recent outlook call, Sarin said Vodafone would be looking at acquisitions in Africa and Asia, but he did not give details.

Colao began at Vodafone in 2006 as head of European operations and deputy chief executive of the company.

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