September 2011 Archives

IT insolvencies increase but things could be worse

By Billy MacInnes on September 30, 2011 3:27 PM | No Comments
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There's an interesting quirk in the latest monthly insolvency figures from Experian. While the number of insolvencies in August as a whole were the lowest since February, the figure for the IT sector was 9% higher than in August 2010. 

But this is actually good news (!!) because the figure for the IT sector is lower than the average figure of insolvencies for all sectors of almost 12.4%. Other industries which witnessed even more significant increases in insolvencies were leisure & hotels, business services and motor traders.

The figures also showed that in terms of total insolvencies, Scotland and the North East suffered hefty increases in company failures.

While it's not quite a cause for rejoicing that IT company failures were up 9% in August, relative to the overall figure, it's not quite that bad either. In these times, that's probably better than nothing.

Yah boo sucks, that's enough Oracle and Autonomy!

By Billy MacInnes on September 29, 2011 4:23 PM | No Comments
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I love a good spat as much as the next person but am I alone in thinking there is something incredibly childish in the current very public row between Oracle and Autonomy?

It's pretty unseemly for one company to accuse the CEO at another of having "a very poor memory" at best or of "lying". Of course, Oracle is nothing if not keen to have a pop at HP whenever and wherever it can and this particular contretemps arose from the database giant's assertion that it had been offered Autonomy for $6bn and rejected it as too expensive months before HP put in its offer of $10bn.

Quite what Oracle expects to achieve is open to question. Perhaps it is seeking to capitalise on the turmoil at its rival in the wake of the ousting of CEO Leo Apotheker, especially as he is so closely identified with the decision to buy Autonomy in the first place. But there must be more grown up ways of going about it.

Autonomy has retorted that any approach to Oracle offering the company for sale was not authorised and questioning Oracle's version of events. It accused Oracle of being "a little confused about the sequence of events and origins of the data it has received, something that would suggest it needs better management of and insight into the unstructured data on its internal systems. We would be delighted to help".

Yes, it's amusing in its own way and humour may well be one of the only ways to deal with Ellison and Oracle's particularly aggressive way of doing business, but I sincerely hope this is the end of the matter and that if Oracle comes back again we don't get into one of those long drawn out arguments where each party is desperate to have the last word. Fat chance!

Business attacks on Miliband speech miss the point

By Billy MacInnes on September 28, 2011 10:06 AM | No Comments
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It's amazing how quickly the pro-business lobby came out against Labour leader Ed speech attacking predatory businesses and asset strippers.

In his speech, Miliband stressed that the choice in politics wasn't between being "pro-business or anti-business" because "all parties must be pro-business today". Instead, he argued, politicians were faced with choosing to be on the side of the wealth creators 
or asset strippers, producers or predators.

miliband.jpgBeing pro-business, he added, was being "on the side of small businesses who can't get a loan...on the side of high-value manufacturing that can't build its business because of the short-termist culture...on the side of the British company losing out to its competitors when their government steps in and our government stands aside".

I fail to see how any of those assertions can meet with much argument from businesses up and down the country or their representatives. So there was something both ultra-defensive and ultra-aggressive in the way so many tried to spin it as an anti-business speech. Why so? People are quick to draw a distinction between the "deserving" and "undeserving" poor, why can 't they be allowed to do the same for "good" and "bad" businesses?

Miliband's speech seemed to be setting out the framework for a set of values that all parts of society, from individual citizens to the biggest businesses, could subscribe to. If individual citizens are censured when they fail to live up to those values, why shouldn't businesses and executives be treated the same? The predictably hostile reaction from business groups suggests they have some way to go before they understand that as an integral part of society they are subject to the same values as the people who work for them.

Does the Web makes us all more angry and abusive?

By Billy MacInnes on September 27, 2011 4:45 PM | No Comments
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Should we be surprised by a US poll that shows 56% of people in their teens and early 20s have been the target of online taunting, harassment or bullying? I'm not. You only have to look at the level of discourse on the web, the vitriol and abuse poured out on people for their political views, even something as minor as their technological preference (Apple v Microsoft for example), or the football team they support, to see this is a much wider problem.

There seems to be something in the human psyche that effectively gives us carte blanche to write and say whatever we think and in the harshest of terms when sitting in front of a screen with a keyboard. Or perhaps it's just that the web allows people normally confined to the margins of debate to have a much more prominent profile. Whatever the reason, it's starting to spill over into general behaviour. 

The ugly confrontational mood infecting US politics where people can boo a serving soldier risking his life for his country because he announces he is gay or shout "yeah" when asked if  someone in a coma without medical insurance should be allowed to die, to my mind, shows that some of the ugliness and violence of web-based discourse is rippling out into the wider world.

With adults setting very public examples of apoplectic rage, abusing and bullying those they don't agree with and shouting them down, why should young people behave any different? If the adults won't behave like grown ups, why should the children? 

HP keeps the strategy, replaces the man who thought it up

By Billy MacInnes on September 23, 2011 11:14 AM | No Comments
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Farewell then, Leo Apotheker. You were the CEO at HP who introduced a software-based strategy on 18 August by simultaneously announcing plans to acquire Autonomy and (with the full authorisation of the board) to look at a strategic options for the PC business, including a spin-off.

Now, with the full authorisation of the board, you have been dismissed and replaced by Meg Whitman, former eBay CEO and the woman who spent an estimated $45 for every vote she got in the last year's California gubernatorial contest - and still lost.

According to HP's executive chairman Ray Lane this is not the board that hired you because five people joined in January. In fact he even stated it quite categorically, according to one report. "This board, good or bad - I don't think we ought to be going back in history - did not select Leo," he said in his conference with analysts and journalists yesterday. 

But he did add that this board had "made a decision in Meg Whitman to lead us". So if she turns out to be a dud, the board will have to accept responsibility for that - unless HP changes the members again next January.

In light of your dismissal, might we expect some soul-searching at HP and re-examination of the strategy which you announced? Er...maybe not. 

Lane confirmed that whatever the controversy over HP's decision to examine future options for the PC business, the board had "carefully considered the decisions made on August 18 to help augment HP's business". And Whitman's first comments as HP CEO in the same conference call were to reiterate the commitment to the strategy. 

I wonder if they'll call it the Apotheker strategy if they stick with it? Or will they only call it that if they decide to cancel it? Or if they go ahead with it and it fails?

Red Hat: on track to become a billion dollar open source software company

By Billy MacInnes on September 22, 2011 2:36 PM | No Comments
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Amid all the reports about Red Hat's very strong performance in the second quarter ending 31 August, only one site seems to have picked up on an intriguing comment made by the vendor's CEO Jim Whitehurst in the statement accompanying the results announcement.

Slashdot quite right draws attention to Whitehurst's suggestion that Red Hat will have reached an important milestone by the end of its current fiscal year (end of February 2012). "We believe Red Hat remains well positioned to finish fiscal 2012 as the first billion dollar open source software vendor," he stated.

Sounds pretty impressive all right and a concrete endorsement of the open source software philosophy. The next big question, assuming Red Hat makes it, is who will do it next? Assuming, that is, anyone else can.

Strategy, schmategy: could there be more disruption at HP?

By Billy MacInnes on September 22, 2011 12:48 PM | No Comments
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So the biggest technology story doing the rounds today (22 September) is that the board of HP have had a meeting to discuss whether they should get rid of CEO Leo Apotheker, the man they appointed to run the company less than a year ago.

Apparently, it's partly down to the fall-out from the announcement concerning the future of HP's PC business and the hammering the company's share price took as a result. Whatever the merits of the strategy, I'm left wondering why the board members have even discussed the matter. 

Here's what puzzles me. When HP announced it was looking at the future of the PC business on 18 August, the press release stated unequivocally in the very first paragraph: "HP today announced its board of directors has authorised the evaluation of strategic alternatives for its Personal Systems Group (PSG), including the exploration of the separation of its PC business into a separate company through a spin-off or other transaction."

If the story about getting rid of Apotheker is true then it would appear that, in the space of just over a month, the board of directors has changed its mind. So now I'm wondering if Apotheker does go, why are the board going to be allowed to stay after endorsing, nay authorising, the strategy? Perhaps they didn't understand what they were authorising when they agreed to the plan but if that's the case, you have to ask whether they really are qualified to oversee the company.

But if they are allowed to stay (which is highly likely), the next question is who would want to work with a group of individuals that could agree to your plans and authorise your strategy in a meeting, let you launch it and then turn around and give you the chop if the market reacts badly? What kind of way is that to run a company?

 

Can Microsoft explanation for Office 365 and Windows Live outage reassure cloud customers?

By Billy MacInnes on September 21, 2011 1:50 PM | No Comments
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The explanation as to why Microsoft suffered an outage of three and a half hours to its Office 365 and Windows Live services on 8 September might not be too reassuring for those people out there tempted to move to the cloud. According to a blog post by Arthur de Haan, vice president for Windows Live test and service engineering, it's all the fault of a pesky corrupted file in Microsoft's DNS service.

The file corruption was "a result of two rare conditions occurring at the same time". I won't go into technical detail here but it does seem extraordinary that such a high profile example of cloud computing services should be derailed by such a small thing. 

According to de Haan, Microsoft has "identified two streams of work" to improve service around monitoring, problem identification and recovery and is "further hardening the DNS service to improve its overall redundancy and fail-over capability". All well and good but if I was one of Microsoft's customers, I might feel it should have done a bit more work on Office 365 and Windows Live services, such as Hotmail and SkyDrive, before it started promoting them more widely. 

From a customer perspective, I'm not sure de Haan's explanation will help assuage concerns about the stability of cloud computing services, especially when the file corruption resulted in a global outage.

If I was a cloud services provider, I might be torn between a positive view of the Microsoft outage as an opportunity to promote rival services and a negative view of the loss of service as an all-too public demonstration of the potential pitfalls of using cloud-based services. And I'd probably start getting used to saying "Yes, it's a cloud computing service, but it's not like Office 365 at all..."

Who else thinks resellers can thrive in the cloud era?

By Billy MacInnes on September 20, 2011 4:31 PM | No Comments
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I'm a bit confused by the Channel Transformation Alliance, the body which has been set up to promote and further the spread of cloud computing and managed services in the channel. 

It's not that I don't think it's a good idea. After all, who could argue with its aims of promoting education around cloud, managed services and emerging technologies based on the belief that the channel will be operating more heavily in those areas in the future. Not me.

I'm also broadly in agreement with Jason Beal, Ingram Micro EMEA senior director for services and cloud computing, that the reseller channel should remain the primary route to market and that resellers will "thrive in the era of cloud computing and IT-as-a-Service".

The list of members of the alliance appears pretty impressive on first viewing, with the likes of Microsoft, HP, Symantec, CA Technologies, Kingston, APC and SNIA Europe. But I can't help thinking that as we're talking about a Channel Transformation Alliance there ought to be quite a few more vendors and distributors on that list. After all, what reason would any vendor selling through resellers (or distributor supplying them) have for not joining?

So I'm left wondering if more companies are going to join the alliance over time. I hope so, otherwise I'd have to conclude that the current members are the only people in the IT industry who truly believe resellers will "thrive in the era of cloud computing and IT-as-a-Service". I hope more companies join. And soon.

What if Samsung's Kubrick Defence had succeeded?

By Billy MacInnes on September 19, 2011 10:13 AM | No Comments
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Samsung's attempts to use 2001: A Space Odyssey in its defence against Apple in a German court have come to naught. The Korean giant had sought to overturn an injunction against the sale of its Galaxy Tab devices in Germany by arguing a sequence in the film which showed characters eating a meal and looking at a flat screen device constituted prior art for Apple's iPad.

A lot of companies are probably sad that what MacObserver dubbed The Kubrick Defence didn't succeed. If it had, everyone would have been given a free hand to just rip off any invention or technology immediately after it appeared. Instead of employing large pools of engineers, companies would just let them all go and bring in people with an encyclopaedic knowledge of science fiction films who could dig out a blurry image of someone using something that looked slightly like the invention they were trying to rip off.

Instead of shortages of people with technical skills, the world would suddenly suffer from a famine of geeks who had spent far too much of their youth watching old sic fi movies. Companies would get into bidding wars over their services. CVs would include huge lists of films prospective employees had viewed. Universities would overnight establish business courses devoted to the study of science fiction movies, good and bad, to prepare graduates for careers in the corporate world.

Mind you, if things depicted in movies could be established as prior art, might the film makers have a valid claim for a patent on such devices? They wouldn't need to have done any actual engineering or to have created something that actually works. Somehow, I feel that's the most important point Samsung missed in deploying the 2001: A Space Odyssey defence. Just because something's in a movie that doesn't make it real.

PCs in retreat as market prepares for tablet invasion

By Billy MacInnes on September 8, 2011 1:43 PM | No Comments
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Poor old PC. Things are not looking good. After all the furore surrounding HP's decision to retreat from the PC arena, we now read that Gartner has downgraded its PC market forecast for 2011, suggesting the PC is "not a particularly compelling product" and arguing younger people "are not buying PCs as their first, or necessarily main device"

Those are the words of Gartner research director Ranjit Atwal and he's a man who should know what he's talking about. Unit sales are increasing but not as much as they are supposed to for this year or for next. Indeed, the new forecast for 2012 of 404 million units is the same figure that Gartner originally predicted for 2011.

Atwal's colleague, George Shiffler, argues that tablet computers have "dramatically changed the dynamic" of the market. Worse still, he adds that "vendors' tried and true business models are failing... vendors only seem to be flailing as they look for quick fixes [and] the resulting chaos is creating more confusion across the supply chain". Hard-hitting words but accurate too.

Is anyone else out there amazed at just how quickly the PC market is beginning to fragment in the face of the relatively new onslaught from tablets and smartphones? I know we had the rise of the netbooks a couple of years ago, but their impact was nowhere near as pronounced (and profound). It also seems to me that, unlike netbooks, tablets are here to stay and will continue to affect the PC market even if, at the moment, most PC vendors are struggling to come up with something viable to compete with Apple's iPad.

Usage of PCs in the home is likely to decrease. The home PC could well become a background home sever device or hub called on occasionally to provide the added firepower required to handle certain tasks beyond the capabilities of tablets or smartphones. In which case, is there really any requirement to buy a new one every two or three years? It's also possible such a scenario may not come to pass if home users are able to outsource heavy duty processing to the cloud.

What does this mean for all those people in the PC supply chain? Probably not as much as it would have five years ago or so. The fact is the PC is only a part of the overall IT supply chain and the solutions the members of that chain sell to their customers. It shouldn't be too hard for them to incorporate tablets and smartphones to plug any gap left by the PC's retreat.

The post-PC future is on the horizon and it's heading this way. It won't be long until it arrives. "Maybe not today, maybe not tomorrow, but soon..."

Why did Yahoo's CEO get the boot by phone?

By Billy MacInnes on September 7, 2011 10:12 AM | No Comments
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So Yahoo has fired CEO Carol Bartz. Whatever the reasons for her sacking, I'm intrigued by the way Yahoo chose to fire her. 

In an email to Yahoo employees, Bartz wrote: "I am very sad to tell you that I've just been fired over the phone by Yahoo's Chairman of the Board."

Now, I know we're moving to a new unified communications world where face to face meetings can be replaced by other means of communication but really, firing someone over the phone? Am I alone in thinking the least the Chairman of the Board could have done was to tell Bartz she was fired in a face to face meeting.

Alright, maybe Yahoo is getting too modern for doing stuff face to face with two people in the same location. But if that's the case and it was serious about the unified communications way of doing things, the Chairman of the Board should at least have done the deed by video conference. I mean, a phone call? That's so passé.
 
I'll concede that as the phone call is pitched somewhere between face to face and email, it's not as bad as sacking someone by email. Perhaps the big part of Bartz's sacking is that it provides public evidence of a new protocol for modern business when it comes to firing staff. After all, lots of staff at companies have already been laid off by email, some have even been made redundant by text message. 
 
But here's my question: if a CEO only merits a phone call, who on earth would be worthy of a video conference or, heaven forbid, a face to face meeting?

Global services sector takes a big hit in Q2

By Billy MacInnes on September 5, 2011 3:32 PM | No Comments
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Ouch. Things aren't looking great in the services sector right now. Ovum has revealed that the value of global IT services sales in the second quarter of 2011 was 40% (yes, that's right, 40%) down on the same quarter in 2010.

There were no deals worth more than $1bn in the quarter while the overall number of deals was down 20%  declining for the fourth quarter in a row.

"After a disappointing start to the year, things went from bad to worse in the second quarter of 2011 with this very weak performance in contract signings," said Ovum analyst Ed Thomas.

One of the reasons for the big fall was that public sector deals weren't around this quarter to pick up the slack in private sector contracts. Nevertheless, despite the big fall in the second quarter, Ovum still believes annual growth will be 4.4% between 2010 and 2015.

It's going to be interesting to see where that growth will come from. And how quickly it materialises. After all, if the private sector is being cautious and public sector spending is being squeezed, where will the contracts come from? 

Where MeeGo now if Intel shifts to Android and Windows Phone 7?

By Billy MacInnes on September 2, 2011 10:57 AM | No Comments
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I confess to knowing very little about MeeGo apart from the fact it used to be Intel and Nokia's next generation OS for smartphones and tablets. Most of the time when MeeGo has impinged on my consciousness it's been for negative reasons, such as Nokia abandoning it a while ago in favour of developing phones for Windows Phone 7.

Continuing the trend, MeeGo has got my fleeting attention again because, according to reports in DigitTimes, Intel plans to "temporarily discontinue development" of the OS to focus on hardware products that will work with Android or Windows Phone 7. This is partly because handset and PC vendors don't seem very interested in MeeGo right now.

I wonder just how "temporary" that discontinuation will prove to be. If Intel is very successful with Android and Windows Phone 7 what would be the incentive to go back to MeeGo?

So where is MeeGo heading? Only Intel knows, but right now, Intel appears to be going somewhere else.

PS Another confession: Part of my interest in writing about MeeGo was the headline potential it offered.

Why is HP "pleasantly surprised" people will pay £89 for a TouchPad?

By Billy MacInnes on September 1, 2011 3:42 PM | 2 Comments
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Let's play a game of spot the link:

1) HP says it is going to discontinue making the TouchPad and slashes the price by £260 for a 16GB model from £349 to £89 and cuts the 32GB model price from £429 to £115 (a reduction of £314!!). 

2) HP TouchPad stocks sell out.

The company was guilty of stating the bleeding obvious when it noted in a blog post that "since we announced the price drop, the number of inquiries about the product and the speed at which it disappeared from inventory has been stunning", adding that it was "safe to say we were pleasantly surprised by the response".

Really? You cut the price of your product by almost 75% and you're "pleasantly surprised" when people buy it. Put it this way, if you cut the price of a Ford Focus from £15,995 to £3,998 and lots of people bought it, would you really be surprised?

The problem, of course, is that Ford can't sell the Focus at £3,998 and HP couldn't sell the TouchPad at £89 and £115 if it was a viable product.

The trick which HP didn't manage to achieve was to have a product like the iPad that sells in big numbers even at a price of £399 for the 16GB version and £479 for 32GB.

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