Sun software is the tail wagging the dog
– Eric Auchard is a Reuters columnist. The opinions expressed are his own —
When Oracle agreed to buy Sun Microsystems for $7.4 billion in April, the headlines made much of the software maker’s decision to enter the computer business 30 years late. At less than 10 per cent of sales, Sun’s software business seemed an afterthought.
But Sun’s software is now center stage after European competition regulators said on Thursday that they would withhold approval for the deal until they finish probing the impact of the Oracle-Sun merger on the database software market. The decision means the transaction faces at least a four-month delay, pushing it into early next year.
Any delay is costly for Oracle. Sun’s sales have plunged as key financial, government and communications customers have held back purchases of computers and storage until Oracle is able to clarify its long-run commitment to Sun hardware and software products.
The commission is debating whether, or under what conditions, to allow Oracle to acquire Sun’s MySQL database software. Given that the business brings in only $100 million in quarterly revenue, less than 1/25th of Sun sales, the easy way out would be for Oracle to jettison MySQL. However, that would be a mistake.
MySQL is a free, or low-cost, database that powers the vast majority of the world’s hottest Web sites, blogs and open-source businesses, including Facebook, Google, YouTube and Wikipedia. At issue is the fact that Oracle is already the world’s biggest supplier of database software, the underpinning for many of the world’s biggest information storehouses.
MySQL is the alternative to Oracle and its main rivals, IBM and Microsoft, which between them generate most of the world’s database sales.
Can sleeping giant Skype reinvent itself?
– Eric Auchard is a Reuters columnist. The opinions expressed are his own –
Do once-hot Internet start-ups who miss a date with destiny ever truly get a second chance? History says no, even for once-great names like Netscape, AOL and MySpace.
Skype hopes to be the exception. On Tuesday, a group led by top Internet financiers in Silicon Valley and Europe agreed to pay eBay $1.9 billion in cash for a 65 percent stake in the one-time web calling sensation.
The deal values Skype at a face-saving $2.75 billion, well above the $1.7 billion at which it has been valued on the ecommerce giant’s books. Ebay also stands to keep a 35 per cent stake in the company.
But that overlooks the humiliating $1.4 billion eBay has written off on the original deal. Four years ago, eBay promised to pay up to $4.3 billion for Skype, but it later scaled back the total payout. All told, it makes Skype one of the biggest value destroyers of any Internet merger since the last days of the dot.com era.
EBay’s justification for the Skype deal in 2005 was how its chat and calling services could serve as an online customer service platform connecting consumers directly into eBay merchants. That never happened.
Instead, product innovation slowed and business setbacks, such as a corporate ban on Skype’s network-hogging software inside companies, were allowed to fester, rather than becoming new business opportunities.
WHAT “AXE” DOES THIS GUY HAVE TO GRIND WITH SKYPE…DON’T KNOCK PHENOMENAL SUCCESS..SKYPE’s A BEAUTIFUL THING!!!!
WHATS MORE IS THE PHONE COMPANIES HAVE HAD YEARS OF
“RIP OFF” RATES…SKYPE SIMPLY VERIFIED THEIR EXCESSES!!
Forget Microsoft, Yahoo’s value is overseas
– Eric Auchard is a Reuters columnist. The opinions expressed are his own –
The fate of Yahoo Inc has become intertwined in the public’s imagination with the success or failure of its dealings with Microsoft Corp in recent years.
That’s despite the fact that as much as 70 percent of the value investors put on Yahoo’s depressed shares are tied up in its international assets or cash holdings — factors that have nothing to do with Microsoft.
Yahoo’s operations trade for just $5 to $6 per share out of its current $15 share price, once you exclude its Asian investments and the value of its cash. Its hidden assets in Japan and Chinese affiliates — Yahoo Japan Corp and China’s Alibaba Group — alone are worth around $6 to $7 per share.
The trouble is that Yahoo needs to find a way to cash out of its increasingly rocky relationship with Alibaba Group, in which it holds a 39 percent stake after it pulled back from operating its own business in China in 2005.
Yahoo’s best chance here may come next year if Alibaba succeeds with a second IPO of its Taobao.com consumer ecommerce site, building on the success of the 2007 IPO of Alibaba.com, now valued at more than US$13 billion on the Hong Kong exchange.
Truth be told, Yahoo’s huge success in building the biggest U.S. Internet media destination never translated very well overseas, despite the early foray into Asia that left it with lucrative assets in Japan and China. These passive investments came to substitute for a global operating strategy.
Say it ain’t so – Yahoo is Big In Japan?
Unfortunately, all the growth areas cited here are notorious fad markets.
If it’s in trouble regaining lost ground in Europe, as signs are, Yahoo needs to rebrand, ditch the amateurish logo, stop tagging all its email with smarmy little ads and emerge (if it can) as a truly impartial, value-perception driven community of record instead of just whatever mental teenagers who hadn’t read Gulliver’s Travels once happened to be using for the time being.
Maybe then…
HP has to look beyond cost cuts soon
– Eric Auchard is a Reuters columnist. The opinions expressed are his own —
The stock price seems to be the only thing growing at Hewlett-Packard, the world’s largest computer company. HP shares have risen 75 percent this year, despite few signs of a revival in technology spending.
The company, best known as a supplier of computer printers, has suffered a 19 percent drop in sales of hardware and ink supplies. In good times, this produced the bulk of HP’s profits, but it’s the financial engineering under Mark Hurd, the company’s chairman and chief executive, that seems to be the main driver now.
So far, he has cut 16,000 of the planned 25,000 redundancies. It has taken roughly $3 billion in restructuring charges. This has masked underlying sales and profit weakness in its personal and corporate computer divisions.
Excluding the impact of the acquisition of computer services company EDS nearly a year ago, the company’s remaining businesses declined nearly 20 percent during the fiscal third quarter ending in July.
Hurd remains vague about when the recession may hit bottom.
“We’re encouraged by the stability that we’re beginning to see in the market but not yet at a point that we’re ready to call it a turn,” Hurd told investors on a conference call following HP’s quarterly report.
For a company who’s motto is ‘Invent” I don’t see any Inventions going on worthy of note, only acquisitions. HPQ and Mark Herd are just a HERD of sheep quietly being led off the cliff they have created themselves. “INVENT” NOT !!! Heck, I have an invention for them that would sell at least a $$$Billion… Yet they do not let Outside Inventions in because their R&D didn’t think it up first ??? HP and Mark Please Note, Sometimes you have to think OUTSIDE your box and Let Inventions in from the outside. The problem with current R&D departments is they are a closed loop Old Boys and Girls Club. Yes it is possible those of us toiling out here in our GARAGES ( where HP began) do have INVENTions worthy of note.
China’s Web filtering starts in the West
– Eric Auchard is a Reuters columnist. The views expressed are his own –
The Chinese government has backed away from mandating filtering software on all personal computers in China, in a move that averts a dangerous escalation in its censorship powers.
But however controversial and unworkable China’s plan to require Internet filters on PCs proved to be, Western firms have largely themselves to blame for creating and selling such filters in the first place.
The danger rears its head whenever technology created to solve some specific security problem is put to new and unintended use, not just in repressive regimes like China, Iran or Saudi Arabia, but professed freedom-loving countries in Europe or the USA.
“What is good and what is evil?” asks Mikko Hypponen, chief research officer at Finnish anti-virus software company F-Secure Corp. “It is really a very basic problem that security people face.”
A computer password cracker in the wrong hands is considered malicious, of course. But corporate network administrators rely on the same tools to recover lost documents when employees forget computer passwords. Voice recognition software used in corporate call centres to automate and improve customer service can be used by police to wiretap suspects on a grand scale.
On Tuesday, China’s official news agency reported that a government ministry had abruptly backed down from requiring that every PC sold in China include a censorship program called “Green Dam-Youth Escort”.
So… because the Internet exists, so does the security censoring software tools required to censor the porn and malicious code… therefore, the Internet shouldn’t have been built…. right? It’s all our (the West’s ) fault. What a ridiculous article. Anybody with a brain knows that with great power comes great responsibility — just ask Spiderman. The real issue here is the cowardly Chinese government who can’t be faced with their own corruption and power-hungry dweebs, so they do whatever they can to “save face” and stop any possible route for political progress or taking responsibility. The “porn” blocking is merely a front they hoped the rest of the world would accept as reasonable — that’s why they stole the code — they didn’t write that part, they wrote the part which spies on their own people in order to squash anything threatening their comfortable nation-robbing lifestyles.
BlackBerry’s biggest rival may be itself
– Eric Auchard is a Reuters columnist. The opinions expressed are his own –
Research in Motion officials do their best not to laugh when asked if they fear the rise of a BlackBerry-killer, some theoretical device that does everything its coveted e-mail phone does, only better.
But BlackBerry’s biggest threat may come from itself. As the company’s latest quarterly results suggest, there is a gulf between its pricey corporate phones and price-sensitive consumer models that are cutting into margins.
When a loyal Research in Motion (RIM) customer such as a corporate IT manager discovers he’s paying more than twice the price at work that his the 16-year-old daughter is paying at retail, he feels ripped off. That in a nutshell is the crisis RIM faces.
Of course, RIM’s crown jewel remain its corporate business. Its franchise there stems from the thousands of company network managers who rely exclusively on RIM’s e-mail management software to ensure corporate communications are securely delivered to their intended recipients. Companies pay a premium for this reliability. Those investments lock customers into BlackBerry services and prevent other competitors from breaking in. However, this is changing.
After years of failures, Microsoft and Nokia now have secure e-mail systems that offer credible alternatives. They give these away to corporate clients, putting longer-term pressure on BlackBerry’s corporate franchise.
The success RIM has achieved in consumer markets has defied all analyst predictions. But consumer success has come dearly in terms of profit margins and falling average selling prices. Eighty percent of its new users in the quarter ended in May were non-enterprise, retail customers rather than mainstay corporate clients. The key difference between corporate and consumer markets is that RIM lacks the customer control over consumers it has had in offices.
I bought my first blackberry in 2008. I can’t live without it! And since that happens all my birthday present for my family and closest friend have been a Blackberry! I really don’t care if they are expensive or if I find out that I am paying twice or whatever. But I think I am this loyal because I’m from Venezuela! I think we’re one of the principal consumer or something like that! But it’s unbelievable how Blackberry became one of our first necessity!
Dell’s retail detour starts to look smart
– Eric Auchard is a Reuters columnist. The opinions expressed are his own – Dell Inc’s move into retail sales might seem poorly-timed, discretionary spending being what it is. In fact, the world’s No. 2 personal computer maker looks like it’s making the right choices that can get its long-struggling consumer business rolling again.
Dell is gearing up to feature several refreshed lines of consumer PCs in 30,000 stores around the globe. The company’s consumer retail chief Michael Tatelman has set aggressive growth targets for the business.
These targets come despite predictions by market research firm Gartner Inc that the PC industry this year will suffer a nearly 12 percent decline, its biggest-ever unit sales drop.
But Dell appears to have learned the right lessons from its historic build-to-order approach to making PCs and is well positioned to take advantage of some of the few positive trends at work in a PC industry facing relentless commodity pressure.
Dell’s ambitious retail strategy can be traced to Tatelman’s background as president of Motorola Inc’s mobile handset business. As PCs shrink into handheld devices with built-in mobile connections, there are fewer differences to phones.
And its latest products stand out from other PC boxes by their brightly colored designs from prominent graphic artists. What’s impressive about the new line-up is Dell’s ability to translate the thinness and sleekness of its top-of-the-line Adamo into its more affordable Inspiron notebook line. Dell’s strategy could help it win some fanatical followers and even steal back some of the elusive “cool factor” of Apple Inc’s ultra-thin Macbook.
Turning computers into lifestyle accessories makes sense. Dell looks smart to be acting like a cellphone marketer with hundreds of custom design options rather than a stodgy PC seller living on old glories with only a handful of models to offer.
Bracing for black shoots in tech markets
– Eric Auchard is a Reuters columnist. The opinions expressed are his own –
Pundits have been talking endlessly about the possible green shoots of recovery in the ravaged world economy.
But early shoots are not always green. They might want to consider the problem of black shoots. These false starts are familiar to lily growers, when a temporary rise in soil temperature occurs after a cold period.
In the technology world, recent signs of restocking have been proclaimed as evidence of green shoots. Investors wanted to be persuaded and this has helped propel global tech indices 50 percent higher in the past three months.
But a collection of many of the world’s largest wholesalers of technology attending the Global Technology Distribution Council’s annual European conference are bracing for tough times rather betting on any early recovery. They are in the black shoots camp, rather than the green one.
These electronics distributors sit between buyers and sellers and are among the best positioned to know whether inventory from computer chips to phones to PCs are moving.
Far from seeing inventory restocking, they are planning ahead for years of slack growth, tight technology budgets and higher credit risks from customers.
How Apple can take bite of business market
– Eric Auchard is a Reuters columnist. The opinions expressed are his own –
Apple Inc is taking steps to make its computers run on corporate networks, but these moves fall far short of ensuring Mac users win equal standing in business.
Full corporate access for Apple computers inside businesses remains years away. If and when it comes, acceptance is more than likely to be the result of broad trends reshaping the office computer market, rather than Apple’s own product genius.
This week, the reigning consumer king of computers, music players and smartphones showed off a new operating system, dubbed Snow Leopard, with a handful of tantalizing features built for business.
The new software, due out later this year, will connect Macs to Outlook e-mail systems running Microsoft Exchange — the way that most office workers manage their e-mail, calendars and contacts.
In doing so, Apple is addressing a key issue in the classic Mac vs PC debate over whether its machines are practical for office tasks.
Of course, multimedia-rich Macs already predominate among graphic artists and many Web software designers. And Apple computers are popular with small and medium-sized businesses with skeletal technical staffs.
We have a Mac at home and like it. My wife is having to fill in an online accounting form to the state government because of her business. The state government is requiring the procedure use Access which only works with PCs, not Macs. It is things like this that will make it extremely hard for Apple to make inroads to the business world.
Bing just shows Microsoft still needs Yahoo
– Eric Auchard is a Reuters columnist. The opinions expressed are his own –
Microsoft Corp’s new Web search service Bing is a far cry from the general-purpose tool the company must build or buy to compete effectively with rival Google Inc.
Microsoft would do far better helping users find the emails, documents and Web pages that users of Outlook, Office and Internet Explorer rely on every day.
But competitive restrictions appear to prevent the desktop software giant from doing what it knows best. Microsoft operates its business under oversight from U.S. regulators after it settled antitrust charges in 2002 that it abused its market dominance in personal computer operating systems.
Barring that, Microsoft needs to come to terms with Yahoo over Web search. A deal has eluded them for 16 months but Yahoo remains Microsoft’s best chance for competing with Google on the consumer Internet.
Microsoft offered to pay up to $47.5 billion for Yahoo early last year but was rebuffed by Yahoo’s former leadership. They have been in talks in recent months but no deal has emerged.
Rather than trying to be all things to all people, Microsoft’s latest reboot of its Internet strategy helps consumer dig deeply and find what they are after quicker, but only in a selected set of categories. Type in the name of an automobile and Bing assumes the user is thinking about buying or repairing a car. For example, the left frame of the search results page for “hyundai sonata” links to reviews, repairs, used cars, dealers, videos, images and reference manuals. A search for “diabetes” turns up health-related categories.
It would be nice if ANYTHING from Microsoft worked. Needing a Yahoo deal to deliver a reasonably decent product is proof again that Microsoft cant develop any software which works, for any application. Run for cover – bloated Windows 7 is on the way to replace the failed Vista O/S, XBox has to be revamped, now Bing ….. wasn’t their last stable product DOS 5.0 !! Give your head a shake J.R. Harris……
It always seemed odd that Google didn’t buy Java, and I suppose MySQL.