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from Breakingviews:

Oracle deal provides partly cloudy forecast

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Oracle’s $5.3 billion deal for Micros Systems provides a cloudy forecast for shareholders in the database giant. Even if it’s the start of a new deal binge by Chief Executive Larry Ellison – which is possible – it’s not at a crazy valuation. But longtime partner Micros is more of an add-on than a way to supercharge Oracle’s effort in the cloud.

Ellison is paying $68 per share in cash for the maker of hotel and restaurant business IT systems, a 24 percent premium to the undisturbed share price. That’s about half the premium Priceline recently agreed to pay for restaurant reservations site OpenTable, as one example.

The deal, Oracle’s biggest since its 2010 purchase of Sun Microsystems, values Micros at about 26 times forecast earnings for fiscal year 2015. That’s no rock-bottom price, but it’s also hardly egregious considering bubbly multiples elsewhere in tech land. Cloud-based e-commerce competitor Demandware, for instance, trades on 1,400 times expected earnings.

from Breakingviews:

Samsung software bet rests on future beyond phones

By Robyn Mak 

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Samsung may be the world’s largest smartphone vendor, but the electronics giant is looking beyond phones. The company has launched the first smartphone that runs on its own operating system. Samsung is unlikely to challenge Google’s lead in handsets any time soon. But it may have more success with software that can control televisions, appliances and even cars.

from Breakingviews:

U.S. firms get caught in China spying crossfire

By Ethan Bilby

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It’s almost a year since U.S. President Barack Obama and his Chinese counterpart Xi Jinping held a cordial “shirt-sleeves summit”. When it comes to the two countries’ internet rivalry, however, bare knuckles have replaced bare forearms. Last week’s indictment by the United States of five Chinese army officers as alleged cyber spies has prompted a backlash against American companies. China’s weapon is shutting them out from future growth.

from Breakingviews:

Unicorns stampede through tech fantasyland

By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

There’s a new stampede in technology’s fantasyland: Unicorns. The single-horned stallion has made the leap from legend to run free through modern-day Silicon Valley, New York, London and the plains of central Israel as a term to describe the most successful startups. In a different and unintended sense, the trope couldn’t be more apt.

from Breakingviews:

Microsoft founders recede into middle distance

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Microsoft’s founding fathers are finally receding into the middle distance. Satya Nadella’s experience makes him a solid choice to succeed longtime Chief Executive Steven Ballmer. Better still, he will have greater room to maneuver as Bill Gates steps down as chairman. Nadella will need to grapple with his predecessors’ bad decisions, like the Nokia deal, and he’s unlikely to pursue a breakup. But he can focus on what the company does best.

While many candidates entered the frame, it was always going to be a difficult post to fill. Microsoft spans everything from its omnipresent operating system to enterprise software to consumer hardware. It’s also threatened by upstarts and a shift in technology away from PCs. Finding a manager that understands technology, all these markets and has skills in revitalizing a mature behemoth was close to impossible.

from Breakingviews:

Microsoft lucky to avoid Nokia’s India tax bill

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Microsoft is lucky to dodge Nokia’s tax bill in India. On Dec. 12, the Delhi High Court allowed the Finnish group to transfer its Chennai factory to the U.S. software giant as part of its planned $7.4 billion sale of its mobile handset business. While the overall deal wasn’t in doubt, Microsoft avoids Nokia’s hard-to-assess tax liability. If only Vodafone had been so fortunate.

from Alison Frankel:

Dueling cert petitions give SCOTUS choice on software patent review

On Wednesday, CLS Bank filed a brief opposing U.S. Supreme Court review of a spectacularly controversial en banc decision from the Federal Circuit Court of Appeals. You probably remember the Federal Circuit ruling from last May in the CLS case: The en banc court held that Alice Corp's computer-implemented escrow system is not eligible for patents, but couldn't muster a majority to explain why. The 10 appellate judges ended up writing six different opinions, none of which attracted enough co-signers to provide long-sought clarity on a standard for the patent-eligibility of abstract ideas that are implemented via computers. As Alice's lawyers at Sidley Austin explained in their certiorari petition in May, "The legal standards that govern whether computer-implemented inventions are eligible for patent protection ... remain entirely unclear and utterly panel dependent."

CLS's counsel at Gibson, Dunn & Crutcher didn't contest that assertion - the precedential muddle isn't really debatable - but argued that the Federal Circuit reached the right conclusion when it found Alice's escrow system ineligible for patenting. With three new judges on the Federal Circuit, CLS said, it makes more sense to give the new judges - Richard Taranto, a former senior partner at Farr & Taranto; Raymond Chen, the onetime solicitor general of the U.S. Patent and Trademark Office; and Todd Hughes, who most recently served in the Justice Department's civil division - a chance to consider computer-implemented patent eligibility. "The reconstituted court is capable of settling its own internal divisions," CLS's brief said. Gibson Dunn actually uses seemingly irreconcilable post-CLS Federal Circuit panel decisions in Bancorp v. Sun Life and Accenture v. Guidewire to underscore its argument that the discussion of software patent eligibility is still percolating healthily in the Federal Circuit so the Supreme Court needn't get involved.

from Breakingviews:

Big Blue’s earnings engine makes sputtering sounds

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

IBM’s earnings engine is making sputtering sounds. The tech giant missed projections for the first time in years last quarter. Big Blue characterizes these as mere speed bumps. And Chief Executive Ginni Rometty appears hell-bent on making $20 per share in 2015, by the company’s measure of earnings. That’s almost a third more than it earned last year. Pressing on the accelerator of job cuts, software acquisitions and select disposals has worked well so far. But some of the smartest money on Wall Street is betting the company has a bigger problem, with falling sales pointing to a hole in the gas tank.

from Breakingviews:

Is Microsoft the quiet villain of global finance?

By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Microsoft may be the quiet villain of global finance. Excel errors overstated pre-crisis structured finance ratings, dented JPMorgan’s risk management just as banks were on the mend, and tripped up influential fiscal policy ideas. The rest of the Office suite of “productivity” applications - the bulk of a division responsible for $24 billion in revenue in the last fiscal year - seems equally apt to court trouble.

from Jack Shafer:

Hey! You! Get off of Google’s cloud!

I've yet to meet anybody who used Google's RSS Reader more, or pushed it harder than I have over the  last eight years. I consult its aggregations on my desktop the first thing in the morning, even before retrieving my four daily newspapers from the curb. Later, like a donkey following a carrot on a stick, I nibble  on my iPhone feed as I walk to the subway. At work, I keep Reader open to follow blogs and news and , to the neglect of my children, it has  been my steady bedtime companion for some time.

So when Google announced last week that it was sending Reader to the software slaughterhouse on July 1, I took to Twitter to object. Knowing that Google was unlikely to give the service a reprieve, the next thing I did was export my Reader settings and shop the alternatives.

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