-------------------
Client Server
NEWS
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New York and London
16-20 February, 2004 Issue 535
Competitive Intelligence & Observations about Servers, Storage and related
Phenomena
HEADLINES
CSN 535-01 Mainsoft .NETs Java & Bridges the Great .NET/J2EE Divide
CSN 535-02 Yamhill, aka CT, aka Clackamas, is Nocona
CSN 535-03 Egenera Hires JD Edwards' Former CEO
CSN 535-04 Co-founder Returns to Sun
CSN 535-05 Sun Vows To Put its Shoulder to the Opteron Wheel
CSN 535-06 Solaris 10 Previews
CSN 535-07 W3C Standardizes Semantic Web Specs
CSN 535-08 HP Launches New Itanium, PA-8800 Servers
CSN 535-09 HP Says Q1 Results Are on Track
CSN 535-10 Dell Beats Estimates
CSN 535-11 Microsoft Server Unit Lost $204m in December Quarter
CSN 535-12 Microsoft, Disney Ink Digital Media Deal
CSN 535-13 Corel Dumps its XML Interests
CSN 535-14 Oracle Bid for PeopleSoft on Life Support
CSN 535-15 Budget Surplus from Last Year: Gartner
CSN 535-16 Opera To IPO
Drive Bay
CSN 535-17 After Software Binge, EMC Returns to Hardware
CSN 535-18 Brocade Losses Widen
CSN 535-19 Maranti Rakes in $26m
CSN 535-20 Storactive Upgrades LiveBackup
CSN 535-21 3Par Raises $32m; Eyes Profitability in '05
CSN 535-22 Intel Debuts New Optical Transceivers
CSN 535-23 DBassociatesIT Gets Funding, New CEO
CSN 535-24 Aplus.Net Upgrades Online Storage Service
Linux Watch
CSN 535-25 Lindows Case Halted in Mid-Stream so Microsoft Can Appeal
To Protect Windows Trademark
CSN 535-26 SCO Now Wants $5b from IBM
CSN 535-27 SCO Ignores Novell Ultimatum
CSN 535-28 Novell Seeks To Get SCO Suit Thrown Out
CSN 535-29 Linux Tax Evasion
CSN 535-30 Red Hat Taps Israeli Distributor
CSN 535-31 Evans Counts Open Source Developers
CSN 535-32 Red Hat Carts Off German Win
CSN 535-33 German Ministry Goes Linux
CSN 535-34 RTLinux Tests F-35 Fighter Engine
Mail Bag
CSN 535-35 Attention, Conspiracy Theorists
BillyGrams
CSN 535-36 Linux Rates a Tiny Corner of the Desktop
CSN 535-37 StarOffice Loses its Corner on the Office Challenger
Market
CSN 535-38 SGI in Talks To Sell Alias
CSN 535-39 Sun Debt Rated Junk
CSN 535-40 So, Let's See What Gates Learned
CSN 535-41 Sun Spent $224m on Acquisitions
CSN 535-42 Fedora on Linux 2.6 Out
CSN 535-43 MyDoom Juiced
CSN 535-44 Anti-Spam Law a Joke
CSN 535-45 Washington Watch
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CSN 535-01 Mainsoft .NETs Java & Bridges the Great .NET/J2EE Divide
By Maureen O'Gara
Mainsoft Corporation is about to show off an application development
tool called Visual MainWin for the J2EE Platform at the chi-chi Demo
2004 that's unlikely to make either Microsoft or its great enemy Sun
Microsystems very happy.
See, the widgetry, a first anywhere, makes it possible for millions
of Microsoft developers out there to create pure Java 2 Enterprise
Edition (J2EE) enterprise web applications and web services from
inside the Visual Studio.NET framework without ever touching the
decidedly complex Java programming language.
Mainsoft has basically taken the monoglot Java and made it
understand C# and VB.NET.
So Sun won't be pleased that Java is being sidestepped and Microsoft
certainly won't be pleased at the prospect of its prize developer
base writing Java-based web services and large-scale Java enterprise
applications.
Presumably Microsoft's nose will be more out of joint than Sun's
because what Mainsoft is doing solves the acute Java developer
shortage that's been afflicting the enterprise and in the process
driving down galloping development costs by overcoming conflicting
standards.
Gartner figures the Java developer shortage is bad now and is going
to get worse over the next three or four years.
There are believed to be some three million C# and VB.NET developers
in the world. There's supposed to be something like 1.8 million Java
developers, but, according to Gartner, the average developer's
skills aren't up to complex mission-critical apps.
Mainsoft CEO Yaacov Cohen claims Visual MainWin will let IT shops
make deployment decisions based on business needs rather than
resource constraints.
With Visual MainWin, enterprise CIOs with Visual Studio developers
should be able to tap into the scalability and flexibility of the
J2EE application servers without replacing or attempting to retrain
their Windows developers, he said, while large-scale IT shops with
both .NET and Java developers can accelerate the development process
significantly by co-developing Java and .NET apps.
Cohen imagines companies co-developing multi-tiered applications and
setting their VB.NET and C# developers to write the front-end of an
application in Visual Studio, while their Java developers provide
the back-end business logic and J2EE components.
Java is a new tack for Mainsoft, which is used to moving Windows
applications to Unix. It's been working on the Visual MainWin
technology, which it's got a patent pending on, for the last two
years. Along the way, it's tied up with ECMA, where Microsoft
standardized its Java-like programming language C#, and Mono, the
open source .NET project, to get a better handle on .NET, C# and
Microsoft's Intermediate Language.
Although Mainsoft was always one of those rare creatures with access
to Microsoft source code before Microsoft was forced to open up
more, there's no Microsoft code in its new product. As a matter of
fact, its ADO.NET (database) and ASP.NET (web services) components
come from Mono, whose work Cohen praises.
After a .NET developer writes code in VB.NET or C# within the
comfortable drag-and-drop Visual Studio.NET environment, Visual
MainWin compiles the so-called Microsoft Intermediate Language
(MSIL) source code and, poof, standard Java bytecode is produced.
The Visual MainWin output is fully compliant with J2EE standards,
Cohen said. It is a native J2EE application and can be deployed and
managed just like a standard J2EE program. No one can tell that it
wasn't written in Java, he said, as a developer wouldn't have to
know he was actually writing a J2EE application.
Since the complete Visual Studio development system experience is
preserved, developers can develop, run, debug and deploy their code
directly within the Visual Studio system.
Cohen says the real war zone for Java and .NET lays in projects with
50 to 1,000 concurrent users. Anything less automatically goes to
Microsoft, anything more goes to Java.
Cohen expects to aim Visual MainWin at the Fortune 500 and Wall
Street, which are presumably not caught up in the religious wars.
Visual MainWin was beta'd at Reuters, Merrill Lynch and a number of
big banks.
Mainsoft is going to charge $5,000 per developer for Visual MainWin
and won't tack on any run-time charges. Reportedly Siebel, one of
Mainsoft's existing customers, will use Visual MainWin internally
and resell it.
Mainsoft estimates that a billion dollars worth of software
applications currently run on its stuff.
CSN 535-02 Yamhill, aka CT, aka Clackamas, is Nocona
The so-called Yamhill chip that Intel is going to demo in a few days
at the Intel Developer Forum is Nocona, the server version of the
Prescott, according to sources briefed by Intel.
Intel has been telling people that it expects to productize the
thing in the third or fourth quarter.
Apparently Intel licensed some technology from AMD and expects
Yamhill's 64-bit extensions to be virtually compatible with
Opteron's.
The suggested timetable has Intel playing catch-up with AMD a lot
sooner than a lot of industry and Wall Street folk thought. There
has been speculation, for instance, that Intel wouldn't have 64-bit
extensions compatible enough with Opteron until the Prescott follow-
on Tejas next year.
It is still unclear, however, how much Intel's move will be gated by
the availability of a Microsoft operating system. Although Linux is
available for the thing, Intel sees Yamhill, and by extension the
Opteron theoretically, as a Windows play and a recent report
suggested that the server version of Windows meant to support 64-bit
x86 extensions has been slipping into Q1.
Intel is expected to low-key Yamhill as a means of damage control.
Reportedly it has yet to tell all its salespeople that the long-
rumored thing actually exists.
At a guess, Intel CEO Craig Barrett will doubtless touch on Yamhill
in his IDF keynote Tuesday and unleash a flood of negative press
about Intel's only intended 64-bit entry, the Itanium, often jeered
at as the Itanic.
Intel is likely to position Itanium for high-end servers and Yamhill
for low-end servers and express a good deal of confidence in
Itanium's future. Enterprise VP Mike Fister's keynote is Wednesday
and, for the first time, IDF has been "segmented" into the
traditional systems conference and a newfangled solutions
conference. What with Intel president Paul Otellini mumbling
recently that any prospective Yamhill would need an ecosystem, it's
likely Yamhill will turn up over on the solutions side. - MOG
CSN 535-03 Egenera Hires JD Edwards' Former CEO
Egenera, the high-end blade start-up, which said a month ago that
it's being courted to go public, has hired Bob Dutkowsky, the former
president, CEO and chairman of JD Edwards, the guy who sold it to
PeopleSoft, the move that spooked Oracle and got its march on
PeopleSoft started last year.
Dutkowsky will be now Egenera's president, CEO and chairman,
succeeding company founder Vern Brownell, who became president and
CEO again when Debbie Miller, who he previously recruited for the
job, left the company a year ago after a year of commuting coast-to-
coast. She is now CEO of SAN switch house Maranti Networks Inc.
Brownell will be executive VP and CTO again.
Dutkowsky said that he has been brought in to "take the company to
the next level" and realize its "real potential," which may mean, he
acknowledged, "going public." He has to see, but says Egenera has
all the earmarks of making it big - the disruptive technology, the
revenues, the infrastructure, the products, the marquee accounts.
Meanwhile, he'll see what can be done about growing profits,
tightening up the development cycle and improving customer service.
When Egenera took in a $30 million fourth round a month or so ago,
its CFO Tom Sheehan indicated it would take the company another
three or four quarter to turn profitable. The $30 million, by the
way, raised total investment in Egenera to $124 million,
In the most dismal IT environment known to man, Egenera grew 200%
between the end of '02 and the end of '03, making it the "fastest-
growing server-based company ever," Dutkowsky said.
Being privately held, Egenera, which identifies itself with utility
computing, likes to keep its numbers quiet, but, it says, that
compared to companies like Sun and Network Appliances and SGI and
Cisco and McData and scads of other brand names it ticks off,
Egenera is far and away ahead of where any of them were two years
into their revenue stream. Most of them were 50% below where Egenera
is now, Sun was something of an exception and was only 25% below
where Egenera is, according to Egenera VP of product marketing and
management Susan Davies.
Egenera, which runs on both Windows and Linux, claims to have more
mission-critical customers on Linux than IBM and Dutkowsky licks his
chops over that "huge backlog of projects" that were postponed with
the spending freeze. It's thawing now.
Dutkowsky and Brownell apparently became friendly when Dutkowsky was
executive VP of worldwide sales and marketing at EMC and Brownell
was CTO of Goldman Sachs and pioneered the use of Sun and EMC on the
trading room floor. One of Brownell's goals for Egenera was to
displace Sun.
While Dutkowsky was responsible for EMC's sales they went from $2
billion to nearly $9 billion a year. Before EMC, Dutkowsky was with
IBM where he was VP of product marketing for the old RS/6000, S/390
and AS/400, graduating to VP of distribution for IBM Asia Pacific
and then executive VP of worldwide sales and marketing for the Unix-
based RS/6000. After EMC he was top dog at GenRad, which merged with
Teradyne and lead him to take the job at JD Edwards in 2002.
As enamored of the Egenera move as Dutkowsky, he says his wife is
even crazier about it. They live in Massachusetts, JD Edwards was in
Colorado and he was there 108 out of the 110 weeks he was with the
company, he said. By comparison Egenera is just down the road. - MOG
CSN 535-04 Co-founder Returns to Sun
Sun CEO Scott McNealy went to a reunion-style meal with the now
scattered founders of Sun, Bill Joy, Vinod Khosla and Andy
Bechtolsheim, and when he got up from the table he had bought
Bechtolsheim's latest stealth-mode start-up Kealia Inc, a company
whose web site only gives directions to its offices in Palo Alto.
The last company Sun bought off Bechtolsheim was the German outfit
that wrote StarOffice.
Now the inventor of the workstation - for those too young to
remember Sun and Unix cut their teeth on workstations - is returning
to Sun to design boxes, both Sparc and Opteron widgets, largely
Opteron. After nearly 10 years away, his return is practically
Homeric. Like Odysseus returning to Ithaca.
Since leaving Sun Andy's adventures have included starting an outfit
called Granite Systems, selling it to Cisco for $220 million,
running the gigabit Ethernet switch piece of Cisco and leaving there
a few months ago to join Kealia, which, by all reports, was supposed
to be doing some kind of big fat convergence-style distributed video
server and storage. It now appears it may have been using Opterons.
Scott and Andy sidestepped public questions about what Kealia's been
up to at Sun's quarterly product debut on Tuesday, where Scott
paraded his latest acquisition.
McNealy raved about the "power and elegance" of Andy's workstation
and single-board designs and suggested he would produce 1Us, 2Us and
4Us and an Opteron workstation.
Sun is putting together the low-end Opteron servers that it's
supposed to start delivering next month out of "industry-standard
components." Bechtolsheim's designs will replace them. How quickly,
however, remains a mystery. McNealy credited Andy with making
"Ferraris out of off-the-shelf parts."
Andy was persuaded to scoff at Intel's Itanium "1% market share
compared to the Sparc" and Scott remarked about Bechtolsheim's
contempt for Itanium that Andy "seldom guesses wrong." Andy is
supposed to be very committed to the Opteron as are many Sun people
apparently.
Once the Kealia deal closes sometime between now and the end of
June, the 58-man Kealia, which in real life is a site in Maui, will
become the Advanced Systems Technology Group inside Sun's Volume
Systems Products unit. Bechtolsheim will become a senior VP and
chief architect of Volume Systems Products, reporting to executive
VP Neal Knox. Bechtolsheim will also join Sun's Executive Management
Group led by McNealy.
Terms of the acquisition were not disclosed but it's supposed to be
a stock deal.
With Bechtolsheim back, Opteron box designer Newisys' future
possibilities, which were once thought might include Sun, are kinda
what one might call "limited."
CSN 535-05 Sun Vows To Put its Shoulder to the Opteron Wheel
Sun CEO Scott McNealy readily admits that he treated the Intel x86
like the bubonic plague and that he was flat out wrong. To make up
for it, Sun has lined up with AMD's hybrid Opteron chip. McNealy
says he doesn't usually make the same mistake twice and that Sun
isn't "going to be six years late this time."
Sun claims to have the "premier position" with the Opteron and says
that no one else - though IBM is selling Opteron boxes and HP is
supposed to - will be as aggressive with it. The Opteron, in Sun
marketing speak, is supposed to complement the Sparc. It's still an
incremental revenue proposition although Sun claims it's an answer
to customer demand.
Sun said Tuesday that it would start selling its first two-way 64-
bit Opteron box, called the Sun Fire V20z, in April for a base
uniprocessor price of $2,795. For the money it would have 1GB of
main memory and a 36GB disk drive.
McNealy called it the "lowest-cost, highest-performance 64-bit
server on the market." The price tag, Sun noted, is lower than what
IBM is charging for its Opteron box.
There is to be an entire line beyond the initial entry and Sun is
promising to port all its software to the Opteron at the same time
it lands on the Sparc. It suggests that there are 600 ISVs porting
to the Opteron. It claims it's going to define and promote a 64-bit
Unix-Linux ABI with the Linux community. Unix and Linux applications
will be able to run natively on any that operating systems that
support the ABI.
In a world awash in free software, Sun, playing the contrarian, is
offering a free Opteron box to folks who are part of Sun Developer
Network who spend $1,499 a year for three years on its software. The
promotion, which Sun compares to the cell phones that are given away
with cellular subscriptions, will run through June 30. (See
http://www.sun.com/developers.)
The Sun Fire V20z is a 1U rack-mounted two-way server that supports
both 32/64-bit Red Hat and SuSE Linux and 32-bit Solaris x86.
A 64-bit Solaris x86 is supposed to follow along in the second half.
With Sun's employee number one Andy Bechtolsheim coming back to
design Opteron boxes Sun's schedule for adding four-ways and eight-
ways is unclear.
The new widget can support up to 16GB of PC2700 ECC main memory and
two 73GB Ultra320 SCSI drives. It has a CD-ROM. Sun will sell the
thing up against Xeon boxes claiming comparatively better
performance.
Bear Stearns is of the considered opinion that shipping Opteron
boxes does nothing for Sun's "challenged financial model." Bear
thinks that among other thing Sun has a "significant" restructuring
problem that it isn't addressing.
Anyway, also on the x86 front, Sun announced a new, albeit belated,
two-way Xeon-based blade server that it calls the B200x. It can plug
into the same 3U BL1600 chassis as Sun's existing Athlon XP-M-based
B100x uniprocessor blade. It's shipping now for an entry-level price
of $3,790. Sun claims it's 34% cheaper than a similarly configured
blade platform from HP. The thing supports both Solaris x86 and
Linux.
On the software side, Sun trotted out an enhanced N1 Grid
Provisioning Server 3.1 Blades Edition, the thing that's supposed to
manage physical devices such as blades as a pool of virtualized
resources. The upgrade is reportedly twice as fast as the old cut
and is supposed to reduce server deployment to minutes. It expands
support for x86 blades and the Sun Fire b10n Content Load Balancing
Blade.
Closer to Sun's heart are its new top-of-the-line proprietary
systems, due next month, that are based on the new UltraSparc IV,
aka Jaguar, Sun's first dual-core chip bring it in line with what HP
(since Monday) and IBM (since 2001) are doing with their RISC chips.
Intel, meanwhile, is working on dual-core Itaniums.
The new chip is basically two UltraSparc III cores on the same die.
Sun doesn't call the IV a dual-core. Nope. It calls it a single
processor with two threads evidently to keep per-processor pricing
down, especially since it typically takes a lot more Sparcs than IBM
needs Powers to do the same thing.
UltraSparc IV widgetry is supposed to perform 80% better than Sun's
previous generation for roughly 30% more. The chips clock in at
1.05GHz and 1.2GHz. Although the chips are not pin-compatible - Sun
would have liked them to be - UltraSparc IV boards can run in the
same box as UltraSparc III boards.
The parts are going into a Sun Fire E25K that can be configured with
72 UltraSparc IV chips and has a starting price of $825k.
Other upcoming systems will top out at 12, 24 and 32 chips priced at
between $99k and $640k.
CSN 535-06 Solaris 10 Previews
Sun is previewing Solaris 10, its answer to Linux, and Windows for
that matter. Naturally it's the next version of its Unix operating
system scheduled to hit both its Sparc and x86 boxes at the end of
the year. Early access copies are due this summer. It's supposed to
have 600 new features. The most important ones seem to be connected
with N1 Grid Containers, which is a partitioning scheme, predictive
self-healing technologies à la IBM and security enhancements.
CSN 535-07 W3C Standardizes Semantic Web Specs
The World Wide Web Consortium (W3C) has standardized the first two
specifications connected with the next-generation Semantic Web.
The consortium is absolutely thrilled with itself.
Although the notion of the Semantic Web, a W3C hobbyhorse, has been
largely ignored by business, the organization figures the standards
milestone signals the technology's transition from a five-year-old
R&D project to a broad-based commercial-grade platform offering more
flexible access to structured data on the web.
The Semantic Web is particularly dear to the heart of W3C director
Tim Berners-Lee, who says that "It's not unlike the early days of
the web, when once people saw how it worked, they understood its
power. We're entering that phase now, where people can see the
beginnings of the Semantic Web at work at the enterprise level."
The two new standards are the revised Resource Description Framework
(RDF) and the Web Ontology Language (OWL). They provide a framework
for asset management, enterprise integration and sharing and reusing
data on the web.
The idea is to make searching and reusing information easier and
more reliable. The two standard formats for data sharing span
applications, enterprises and communities. In other word, different
kinds of users can share the same information even if they don't use
the same software.
RDF is a way for simple descriptions to be made. What XML is to
syntax, RDF is to semantics. RDF Schema then provides a way for
those descriptions to be combined into a simple vocabulary.
Use would include library catalogs, worldwide directories,
syndicated and aggregated news, software and content and personal
collections of music, photos and events. W3C says XML would be used
as the interchange syntax and RDF as the framework for supporting
knowledge exchange on the web.
The consortium's RDF Working Group anticipates users and
applications combining information represented in RDF in ways that
"until now have been inconceivable."
OWL is layered on top of RDF. W3C says it's a way to develop
subject- or domain-specific vocabularies, which is what a non-
metaphysical ontology does. It defines the terms used to describe
and represent an area of knowledge. It includes computer-useable
definitions of basic concepts in a domain and the relationships
among them. It encodes knowledge in a domain and knowledge that
spans domains, making the knowledge reusable.
OWL is the language for defining structured web-based ontologies
that deliver richer integration and interoperability of data among
descriptive communities. It uses URIs for naming and the descriptive
of the web that RDF provides to give ontologies:
· The ability to distributed across many systems;
· Web-style scalability;
· Compatibility with web standards for accessability and
internationalization;
· Openness and extensibility.
OWL also adds vocabulary for describing properties and classes,
stuff like relations between classes, cardinality (e.g. "exactly
one"), equality, richer typing of properties, property
characteristics (e.g. symmetry) and enumerated classes.
OWL is based on the DAML+OIL language developed by an international
team funded by DARPA and the European Commission's Information
Science Technologies (IST) program.
W3C's Ontology Working Group figures OWL, the maturation of the
DAML+OIL work, is a "major step forward in representing and
organizing knowledge on the web." It's supposed to strike a balance
between what industry needs and the restrictions of computer
science.
The RDF and OWL Working Groups have each produced six primers, use
cases and test suites to propagate the standards.
W3C says earlier languages used to develop tools and ontologies for
specific communities, particularly the sciences and corporate e-
commerce applications, weren't intended to be compatible with the
architecture of the World Wide Web in general or the Semantic Web in
particular.
The twin technologies, the foundation of Semantic Web applications
and built on XML, are already finding their way into mass-market
products and services such as content creation programs, tools for
web site management and cross-application data reuse:
· Adobe's Extensible Metadata Platform (XMP) is based on RDF.
· Boeing is doing R&D on semantics-based applications.
· Fujitsu Laboratories of America has made OWL an integral part of
its "Task Computing" project, which is supposed to integrate the
Semantic Web and web services.
· HP has open sourced Jena, a Semantic Web developers' framework
that implements both new standards.
· IBM has released SnoBase on Alphaworks. It's a framework for
loading ontologies from files and using the Internet for locally
creating, modifying, querying and storing ontologies. It's both a
programming interface for interacting with vocabularies produced by
RDF, RDF Scheme and OWL and a mechanism for querying ontologies.
· Mozilla uses RDF to represent the different structures it uses to
organize the various kinds of information it handles. The Mozilla
Foundation says it's important to a browser because of web logs and
news feeds based on RDF is a developing trend.
· Sun says its internal enterprise ontology management solution is
based on RDF and associated Semantic Web technologies.
The RDF Working Group includes HP, Nokia, IBM, Agfa, the ILRT
Institute for Learning and Research Technology at the University of
Bristol, the International Webmasters Association (IWA) and the
University of West Florida.
The OWL group includes Agfa, Daimler Chrysler Research and
Technology, DARPA, the Defense Information Systems Agency (DISA),
EDS, Fujitsu, Forschungszentrum Informatik (FZI), HP, Ibrow, INRIA,
Ivis Group, Lucent, the University of Maryland, Mondeca, Motorola,
the National Institute of Standards and Technology (NIST), Network
Inference, Nokia, Philips, the University of Southamption, Stanford
University, Sun, Unicorn Solutions and invited experts from the
German Research Center for Artificial Intelligence GmbH (DFKI), the
Japanese Interoperability Technology Association for Information
Processing (INTAP) and the University of West Florida.
Microsoft is noticeably absence from the effort.
CSN 535-08 HP Launches New Itanium, PA-8800 Servers
Hewlett-Packard expanded its server line with a bunch of new boxes
running the Itanium 2 and its own new dual-core PA-8800 processor.
HP is also supposed to be on the threshold of wheeling out Opteron
servers that are bound to cast some doubt on what's in store for
Itanium considering HP is its biggest booster.
Anyway, on the Itanium side, HP introduced a new entry-level
Integrity server, the rx1600, and new models of the rx2600.
The 64-bit rx1600 features up to two low-voltage Itanium chips and
is aimed at clustered and scale-out environments running Linux or
HP-UX in telecommunications, commercial database, web services and
high-performance technical computing environments. It's a 1U design
that can fit up to 40 servers in a two-meter rack. Pricing for the
rx1600, which is scheduled to ship in March, starts at $2,800 for a
server with one 1GHz Itanium2 processor, 512MB memory and one 36GB
disk.
HP is now offering a lower-priced version of the rx2600 with a
single 1GHz Itanium 2 processor, 1GB of memory and a 36GB hard disk
starting at $5,700. It will also be offered as a node in HP's XC6000
Linux cluster, which scales to 512 nodes.
HP executives claim that over 1,500 applications are available for
Itanium servers and expect that number to double by this summer.
On the PA-RISC side, HP introduced 9000 Series servers powered by
the new PA-8800 chip.
The PA-8800 servers reportedly boost performance by 50% over PA-8700
servers with the same number of processors.
The 9000 Series include a 128-way Superdome, a 32-way rp8420, a 16-
way rp7420, an eight-way rp4440, a four-way rp3440 and a two-way
rp3410.
Except for the Superdome, the other servers are shipping.
The Superdome has a starting price of $309,000 with four PA-8800
CPUs, 4GB of memory, the chassis, motherboards and I/O.
The 32-way rp8420 starts at $93,000 and includes two 8800 chips, 2
GB of memory, the chassis, cell boards and I/O.
The 16-processor rp7420 starts at $40,000 and comes with two 8800s,
2 GB of memory, the chassis, cell boards and I/O.
The eight-processor rp4440 starts at $21,000 and includes two 8800
processors, 1 GB of memory, and one 36GB disk.
The four-processor rp3440 starts at $7,000 and includes two PA-8800
The dual-processor rp3410 starts at $4,000 and includes two PA-8800
processors, 1 GB memory, and one 36 GB disk.
Existing HP 9000 customers are supposed to be able to upgrade their
PA-8700 servers by replacing the processors with the PA-8800. Since
the systems share common components, customers should be able to
upgrade to the Itanium 2 Integrity servers and the PA-8900.
HP also launched a beta version of OpenVMS 8.1 for the Itanium, with
the final version slated for later this year.
Itanium-based NonStop servers that support up to 1,024 processors in
a cluster and up to 4,080 processors in a WAN are scheduled to debut
later this year. Stock exchanges, banks and telcos use NonStop
systems.
HP rolled out a pay-per-use financing program for its StorageWorks
Enterprise Virtual Array family including the EVA3000 and EVA5000
arrays for small and mid-sized companies. The pay-per-use scheme
uses metering to track capacity usage and lets customers pay for
only what used.
CSN 535-09 HP Says Q1 Results Are on Track
Seeking to end speculation about its performance, Hewlett-Packard
said Wednesday that revenues for its fiscal first quarter ended
January 31 would come in at $19.5 billion, the high end of its
guidance.
In November, when it posted its fiscal Q4 results, HP said it
expected Q1 revenues to come in between $19.1 billion and $19.5
billion with a non-GAAP EPS of 35 cents.
In line with its forecast, HP still expects a non-GAAP EPS of 35
cents. GAAP EPS is expected to be 30 cents or 31 cents.
The Street's projections were for 35 cents on revenues of $19.4
billion.
In a research note, Merrill Lynch's Steven Milunovich said that
although the results were as expected, "Investors may be
disappointed given recent revenue and earnings upsides from IBM, EMC
and Sun."
HP will report its actual Q1 results on February 19.
CSN 535-10 Dell Beats Estimates
Dell turned in a classic Dell quarter in its fiscal fourth quarter
ended January 30. It earned $749 million, or 29 cents a share, on
revenues up 18% year-over-year to $11.51 billion.
In the corresponding period last year, Dell made $603 million, or 23
cents, on revenues of $9.74 billion.
On a conference call with analysts Thursday, Dell executives said
they were seeing signs of recovery in corporate spending. "Without a
doubt the condition of the [IT] industry has improved," Dell
president Kevin Rollins said.
Overall units were up 25% in the quarter while desktop units grew
21%.
Dell said enterprise revenues were up 32% in the quarter and up 31%
for the year. Enterprise revenues accounted for 22% of total
revenues for the year.
Shipments of PowerEdge servers grew 40% year-over-year in Q4 while
storage revenues were up 47% for a $1.8 billion run rate at the end
of the quarter. Dell said storage performance was strong across all
regions and product lines.
Service revenues were up 35% for a $3 billion run rate at the end of
the quarter.
Printer shipments reportedly almost doubled sequentially. Dell said
total printer units sold since last March exceeded two million.
Dell has $11.9 billion in the bank.
In the fiscal year, Dell earned $2.65 billion, or $1.01 a share, on
revenues of $41.44 billion compared to a net income of $2.12
billion, or 80 cents a share, on revenues of $35.4 billion in fiscal
2003.
Dell CFO Jim Schneider is forecasting 28 cents on revenues of $11.2
billion this quarter. Product shipments are expected to rise by more
than 20%.
CSN 535-11 Microsoft Server Unit Lost $204m in December Quarter
It's fascinating what you can find out from reading SEC filings.
According to the one Microsoft sent to the agency last Friday, its
server and tools operations wound up losing $204 million on $2.1
billion in heightened revenues in the December quarter, a situation
it attributed to stock-based compensation costs and headcount costs
coupled with operating expenses that were up 10%. A technicality,
perhaps, but there you have it.
For the same period in 2002, the unit earned $234 million. The
unit's operating income in the first six month was cut to $166
million. It had been $526 million the year before.
Microsoft does not release profits and loss of each of its segment
until it tells the SEC.
Operating income for the client unit, which includes Windows
desktops, rose modestly from $1.95 billion to $2.07 billion during
the quarter on revenues that were up to $5.87 billion from $5.34
billion.
Quarterly operating losses at Microsoft's Business Solutions unit,
its business applications widgetry, were cut to $69 million from $87
million year-over-year on revenues up to $190 million from $135
million.
The Office unit, otherwise know as the company's Information Worker
interests, was flat at $1.67 billion in earnings on revenues up from
$2.3 billion to $2.9 billion.
MSN's operating losses dropped from $197 million to $79 million and
Xbox losses were trimmed from $412 million to $394 million.
Mobile and embedded losses were up from $75 million to $112 million.
CSN 535-12 Microsoft, Disney Ink Digital Media Deal
Fresh from a public rift with digital media mogul wannabe Steve
Jobs, the Walt Disney Company cut a multi-year pact with Microsoft
to work together on some digital media initiatives.
Money wasn't discussed. The deal sounds like the one Microsoft cut
with Time Warner last year when they settled the Netscape antitrust
suit.
The agreement is aimed at sending Disney's digital content - movies
and TV programming - to consumer PCs connected to TVs and handheld
devices.
Microsoft and Disney have identified three areas of cooperation:
* Creation and secure delivery of high-resolution digital content.
* Overall acceleration of digital content flow to consumers over
networks and on optical media and devices.
* Ensuring the seamless flow of secure content between devices,
whether at home or on portable devices.
Disney is to license Microsoft's Windows Media Digital Rights
Management software to deliver secured content to consumers.
The agreement comes on the heels of an acrimonious parting between
Disney and Jobs' Pixar Studios, makers of some profitable animation
movies. Disney has been Pixar's distributor but Jobs, also the head
of Apple, stalked out after months of negotiations failed to produce
the new kind of deal that would have been more generous to Pixar,
which will fund its own movies from now on.
Disney has been wary about releasing its content in digital form
because of piracy. It recently set up a venture called MovieBeam to
deliver video-on-demand (VOD) to the home not by the web but by
sending video signals over the unused TV broadcast spectrum to a
TiVo-like device where the movies would be stored. Disney appears to
believe that the web isn't ready for prime time because of problems
delivering high-quality content at today's slow broadband speeds.
CSN 535-13 Corel Dumps its XML Interests
You remember when Microsoft dropped $135 million into Corel, a move
that saved its Office competitor's bacon, and how in gratitude Corel
in a very hazy charter was supposed to .NET its products and support
XML and SOAP? And then two years ago, what Corel was doing with XML
was supposed to insure its future?
Well, under the company's new masters at VC Vector Capital that
notion has disappeared. They've sold off the Corel's XMetaL Division
and with it the company's XML assets to New York-based Blast Radius,
a professional services house. Corel's XML document creation
technology is supposed to complement Blast's XML-based collaboration
products.
There's no hint of price.
XMetaL's customers include such as Continental Airlines and Texas
Instruments and Blast is promising to continue developing it and
support emerging XML standards such as XBRL. Corel acquired the unit
when it bought SoftQuad Software in 2001. It was seen as competitive
with Adobe.
Without XMetaL's web services leaves Corel with its graphics
operation, where it started, and its Word Perfect interests, which
it may wish it had never bought.
XMetaL is Microsoft-oriented widgetry that uses what it calls XMetaL
for ActiveX as an editing interface that developers can embed into
any ActiveX-compliant Windows application. An XMetaL Developer piece
is a centralized development environment for creating XMetaL
customizations and applications that's designed as a plug-in for
Microsoft Visual Studio .NET and a third piece called XMetaL Central
provides a server-based XML environment management tool that's
supposed to simplify the deployment and maintenance of customized
XML applications across an organization. It uses SOAP to access XML
customization files like style sheets, scripts, CSS and templates.
CSN 535-14 Oracle Bid for PeopleSoft on Life Support
PeopleSoft said late Tuesday that Justice Department investigators
told it that they were going to recommend to antitrust boss Hugh
Pate that the agency block Oracle's hostile bid to acquire
PeopleSoft. Pate is supposed to make the final decision by March 2.
Oracle brazened it out and claimed it still has a shot. It trotted
out one of its lawyers to say that there have been many instances of
the Assistant Attorney General bucking his staff.
Oracle spokesman Jim Finn blamed PeopleSoft CEO and ex-Oracle
executive Craig Conway.
"The initial proposal to merge PeopleSoft's applications business
with Oracle's applications business," Finn's statement said, "came
from PeopleSoft CEO Craig Conway, who proposed that he was the best
person to run the combined companies' applications business and
never mentioned any antitrust concerns. However, when Oracle
countered by proposing to buy PeopleSoft, Conway said that he
wouldn't sell at any price. He then began a long and intensive
lobbying effort aimed at persuading the Antitrust Division of the US
Department of Justice to block the deal. PeopleSoft's lobbying
resulted in complicating and prolonging the Justice Department
review of the merger. While no decision has yet been made, Oracle
believes this merger will eventually be approved."
The market thinks Oracle's dreaming. Otherwise everybody appears to
be betting that Oracle is going to arm wrestle the Justice
Department for the privilege of buying PeopleSoft or take the agency
to court.
One might at this point reflect on the fact that Oracle CEO Larry
Ellison was one of those to set the antitrust dogs on Microsoft and
that he now has to fend one off himself. Conway evidently sold the
DOJ investigators on a narrow definition of the market and the
chance of higher prices.
Right before the DOJ news, the PeopleSoft board had its usual knee-
jerk reaction to Oracle's sweetened offer of $9.4 billion, $26-a-
share, and turned it down claiming, as it has before, that it's
worth more than that and, anyway, it's anticompetitive.
Barring Pate turning thumbs down and an Oracle retreat, PeopleSoft's
unqualified rejection leaves Oracle with its plan to grab control of
the PeopleSoft board at the stockholders meeting on March 25. The
hurdle after that would be PeopleSoft's poison pill and the growing
noise that Oracle is paying way too much.
If it got the company, it would evidently have to pay, maybe, $1.5
billion to cover those refund liabilities PeopleSoft has run up so
the real price is more like $11 billion.
According to First Call, Oracle's $26 bid, which Oracle claimed last
week was the highest it's willing to go, is in line with what Wall
Street on average thinks PeopleSoft will be worth in a year. A few
of the more optimistic brokers think it could go to $30, while the
pessimistic think it could drop to $17.
Given that PeopleSoft shares haven't moved above $23 since Oracle
upped its offer, it's assumed the market figures the deal is dead.
In rejecting Oracle's bid, PeopleSoft claimed that its stock is
trading at the low end of its historical value based on forward
earnings because of the uncertainty that Oracle has created. With a
historical multiple based on its 2004 earnings, PeopleSoft claimed
the company's true value "far exceeds the offer price."
"Don't underestimate the significant additional value PeopleSoft can
create once the disruption from Oracle's hostile activities has
ended," PeopleSoft said in a statement. It didn't venture to say
what multiple its conjectures were based on. It did say that it
believed Oracle was out to damage PeopleSoft to acquire it at "an
unreasonably low price."
Oracle, in turn, defended its price saying, "Given PeopleSoft's
uncertain future as a standalone company and the fact that, for the
first quarter, PeopleSoft guided analysts below the consensus
estimates, Oracle believes that its offer is full and generous." It
told PeopleSoft stockholders to think for themselves and tender
their shares.
PeopleSoft said its bankers Citigroup Global Markets and Goldman
Sachs thought the Oracle offer was "inadequate."
An Oracle deal would be worth something like $200 million to
PeopleSoft CEO Craig Conway.
PeopleSoft's stock dropped 2% to $22 and change when the news of
PeopleSoft's continued rejection hit.
CSN 535-15 Budget Surplus from Last Year: Gartner
Gartner says that companies didn't spend their whole 2003 IT
budgets, in other words there was no budget flush, and are prepared
to spend at or above their 2004 IT allocations. It thinks this is
particularly true in the public sector, IT
manufacturing/communications and health services. It figures money
will be spent on maintaining existing software with some increases
for personal productivity and information management software. New
spending will go new versions and higher maintenance fees as with
SAP and JD Edwards. Hardware spending doesn't show much increase,
Gartner said, but unit sales will be higher. Desktop PCs and storage
spending is trending down. More ought to be spent on mobile devices
and notebooks.
CSN 535-16 Opera To IPO
Nine-year-old Opera Software ASA, the Norwegian browser house whose
small footprint is popular with mobile phones and PDAs, says it's
going to go public on the Oslo bourse. It's going to send in its
application next month. It's hoping to raise $10 million-$20
million. The company says it made about $190,000 last year on
revenues of $11.5 million compared to losing $3.1 million on sales
of $7.5 million the year before.
Drive Bay
CSN 535-17 After Software Binge, EMC Returns to Hardware
The news out of EMC lately has been dominated by software but Monday
morning it was its old self and rolled out a slew of hardware
products and upgrades spanning its high-end, mid-tier, NAS and
content addressed storage lines.
The upgrades include a new Symmetrix DMX-2 system, new Clariion CX
systems, Celerra NAS gateway and native mainframe connectivity to
the Centera CAS boxes. Everything is shipping.
EMC's executive VP of storage platform operations Dave Donatelli
boasted on a conference call that, "This is the most comprehensive
product launch in EMC's history."
In the last quarter, storage systems contributed 51% of EMC's $1.86
billion in revenues, followed by software and services with 24%
each, so hardware is still central to the business.
Describing the new products as the fruit of the money EMC has been
putting into R&D, a massive 11.5% of revenues, something like $720
million, CEO Joe Tucci claimed new product cycles had shrunk from
24-36 months to 12-18 months.
Exactly a year after the Symmetrix DMX line was introduced, EMC is
rolling out the DMX-2 series for very demanding applications. The
DMX-2 storage array is supposed to provide twice the processing
power of the DMX and 30% more performance. Global memory has been
doubled to a maximum of 256GB and the array supports faster 73GB,
15,000 RPM Fibre Channel disk drives.
The company told analysts that the gross margins on the DMX-2 were
similar to the older DMX'.
While touting the DMX-2's capabilities, Donatelli acknowledged that,
"Most customers will continue to be satisfied with today's DMX."
The DMX-2 can be had as an upgrade to an existing DMX installation.
It costs 20% more than its predecessor.
EMC also launched new AutoSwap software so mainframe customers can
redirect storage workloads without disrupting application
processing, and a RAID 5 option for existing DMX customers.
EMC is pitching AutoSwap as a lower-cost alternative to IBM's
Geographically Dispersed Parallel Sysplex application. AutoSwap
costs $200,000 per mainframe server MSU.
The Dell-sold mid-tier Clariion line got a makeover with three new
products - CX300, CX500 and the CX700 - providing 25%-100% faster
performance than their predecessors.
Targeted at workgroups, the CX300 is the new entry point and is
supposed to provide 25% more performance than the CX200 it replaces.
The CX500 is aimed at departments and is said to provide double the
performance, connectivity and capacity of the older CX400.
Targeted at data centers, the top mid-range storage system, the
CX700, replaces the CX600 and is supposed to provide up to 200,000
IOPS. The 700 scales up to 240 drives and is supposed to deliver 33%
better performance than the 600.
EMC also enhanced its SAN Copy data mobility software and added
incremental copy capabilities. IBM, HP, Sun and Hitachi already
support SAN Copy. New SnapView modules for Exchange and SQL Server
support Microsoft's Volume Shadowcopy Services for automating backup
and recovery in Windows environments.
Like the DMX-2, the new Clariions can be had as upgrades to existing
installations.
EMC expects the new CX stuff to account for half of its Clariion
sales this quarter.
Tucci said that, as expected, a low-end Clariion would debut in the
coming months but did not provide details.
On the NAS side, EMC launched a NS700 NAS Gateway to let customers
integrate NAS functionality into Clariion CX and Symmetrix
environments. The NS700G comes in single- or dual-Data Mover
configurations and is supposed to provide 33% better
price/performance than the NS600G. The company also rolled out the
NS700 with an upgrade path to the gateway.
A single Data Mover version of the NS700G costs $63,600 while a
single 2TB costs $137,500.
EMC has added native mainframe connectivity to the Centera fixed
content storage system through an API supporting IBM z/OS
mainframes. "Data is no longer tied to the mainframe that created
it," Donatelli said. In addition, an upgrade to the system's
CentraStar OS doubles the replication speeds and other enhancements
such as faster processors, 320GB ATA drives, 1Gb Ethernet and
software upgrades are supposed to boost performance by up to five
times.
The Centera, however, doesn't seem to be living up to initial
expectation. Merrill Lynch recently described it as a "bit of a
sleeper product" with a $200 million run rate.
According to Tucci, most of EMC's large customers are running at
about 70% storage utilization, up from 30%-50% a couple of years
ago.
Some Wall Street analysts were impressed by EMC's new gear. "The
combination of faster product cycles and a solutions emphasis makes
it difficult for competitors to take share, including Hitachi's
Lightning expected later this year," Merrill Lynch's Steven
Milunovich wrote in a research note.
CSN 535-18 Brocade Losses Widen
Storage switch vendor Brocade lost $36.8 million, or 14 cents a
share, on revenues of $145 million in its fiscal first quarter ended
January 24.
Revenues grew 18% year-over-year and 5% sequentially.
Excluding deferred stock compensation expenses, lease terminations
and other related costs, the company reported a non-GAAP net income
of $8 million, or three cents a share, a penny ahead of what the
Street expected.
The gross margin came in at 54.9%, the high end of the company's
guidance.
In the same period a year ago, Brocade lost $6.9 million, or three
cents a share, on revenues of $123.1 million.
"We saw revenue growth across our entire business," Brocade CEO Greg
Reyes said on a conference call.
The company claims it added over 100 new customers for its high-end
Silkworm 12000 storage switch.
Besides its old rival McData, Brocade also faces a new rival in
Cisco, which is starting to make inroads into the storage networking
market.
In a research note to investors, Bear Stearns said it continued to
be concerned about the competitive outlook and mentioned that Cisco
was beginning to show traction in the SAN switch market after a
jerky start last year.
This quarter, Brocade CFO Tony Canova is forecasting EPS before
charges of two cents to three cents on revenues of $143 million-$147
million. The gross margin is expected to come in between 53%-55%.
CSN 535-19 Maranti Rakes in $26m
SAN switch vendor Maranti Networks has completed a new round that
brought in $26 million. The Series C round takes the San Jose,
California storage networking start-up's total financing to $57
million.
JPMorgan Partners led, with participation from existing investors
Menlo Ventures, Trinity Ventures and Alliance Ventures.
The new money is earmarked for expanding sale and marketing.
In conjunction with the funding JPMorgan Partners principal Vikram
Gupta and Aristos Logic CEO Anil Gupta are joining Maranti's board.
Maranti's flagship CoreSTOR line of switches debuted in December. It
consists of the CoreSTOR 2000 16-port switch for remote offices,
CoreSTOR 3000 128-port switch for data centers, CoreSTOR Storage
Services software suite and the Storian Manager application to
manage the entire storage infrastructure from a central console.
Separately, the company also named Debbie Miller as its new CEO.
Before joining Maranti, Miller was CEO of Egenera.
Miller replaces Maranti co-founder Kuldeep Sandhu, who now chief
strategy officer.
The start-up is said to have five unnamed beta customers but doesn't
appear to have sold its widgetry to anyone yet.
Maranti's competitors include Cisco, McData and Brocade.
CSN 535-20 Storactive Upgrades LiveBackup
Storactive has enhanced its LiveBackup software adding support for
Windows Server 2003.
The upgrade also features enhanced checkpointing technology that
creates system checkpoints even if applications hold exclusive file
locks on particular system or data files.
Pricing for release 2.72 starts at $99 per client.
CSN 535-21 3Par Raises $32m; Eyes Profitability in '05
Storage start-up 3Par has raised $32 million in a fourth round.
Silicon Valley VC Menlo ventures led the infusion, with 3Par's
existing investors like Mayfield, Worldview Technology Partners,
Oracle, Sun and Veritas participating.
The Fremont, California-based outfit plans to use the money to
expand into the UK, Europe and Asia.
The new money takes 3Par's total financing to $153 million, making
it one of the most richly funded storage start-ups.
3Par CEO and HP veteran David Scott expects the new money to take
the company to profitability next year.
According to Scott, 3Par has sold scores of systems to dozens of
customers. "We have a very robust, well-proven product with strong
reference points in US and Japan," he said.
3Par claims 17 customers among the Fortune 1000/Global 1000 and
major government agencies in the US, UK and Japan. The 150-man
concern counts AIG, Hitachi ULSI, Matsushita, Merrill Lynch,
Infinity Pharmaceuticals and Veritas among its clients.
Pricing for 3Par's widgetry starts at around $100,000 and the bill
can run into the millions. Scott boasted that over half of 3Par's
customers had made repeat purchases.
Launched in the fall of 2002, 3Par's Utility Storage platform is
supposed to deliver the storage component of utility computing. The
company's products include the InServ Storage Servers and the InForm
software suite.
3Par has focused its attention on two segments - storage
consolidation and performance-intensive applications.
Scott said 3Par would roll out upgrades this half.
CSN 535-22 Intel Debuts New Optical Transceivers
Intel has introduced two 4Gbps optical transceivers aimed at
doubling the performance of Fibre Channel storage.
The new TXN31015 and TXN31115 widgets are designed to support the
emerging 4Gbps Fibre Channel specification, which is meant as a way
around the bottlenecks in 2Gbps SANs.
The two 4Gbps optical transceivers are aimed at host bus adaptors,
switches and RAID modules that provide high-speed optical
connections for the new generation of 4Gbps Fibre Channel storage
systems. Both products are supposed to be compatible with 2 Gbps and
1 Gbps in the field, providing an upgrade path.
Intel executives said the new transceivers are aimed at systems that
can meet the needs of the video and graphics-rich applications that
are driving the need for faster storage networks.
The TXN31015 is targeted at HBAs and RAID applications in SANs while
the TXN31115 is designed for 4 Gbps Fibre Channel switches.
The new parts are supposed to conform to multi-source standards that
define electrical, physical and other characteristics, providing
storage equipment vendors with compatible building blocks that cut
design time and cost.
Intel said the two transceivers are sampling now and would ship in
production quantities in the second half. Priced at $47 in sample
quantities of 1,000, they are supposed to be competitive with 2/1
Gbps prices in volume orders.
Intel also launched two new transceivers for the entry-level 2/1
Gbps Fibre Channel and Ethernet storage systems. The new 2/1 Gbps
TXN31011 SFF and TXN31111 SFP transceivers operate at 2 and 1Gbps
Fibre Channel and at 1 Gbps Ethernet rates. They are designed for
Fibre Channel HBAs and switches, and Ethernet network interface
cards. Intel said both products are shipping now priced at $35 in
quantities of 1,000.
CSN 535-23 DBassociatesIT Gets Funding, New CEO
DBassociatesIT has raised $9 million in Series A funding from
Insight Venture Partners.
The start-up plans to use the proceeds to expand its operations in
the US and boost its sales and marketing staff.
DBassociatesIT provides the SQL LiteSpeed backup and recovery
software for Microsoft SQL Server.
The company also brought in Walter Scott as CEO. Scott was
previously VP of worldwide sales at Embarcadero Technologies. He
replaces DBassociatesIT founder and CTO Douglas Chrystall.
CSN 535-24 Aplus.Net Upgrades Online Storage Service
Web hosting services provider Aplus.Net has enhanced its Web-a-File
online file storage service for small and mid-sized companies.
Enhancements include strong encryption to protect files, automated
backup, file backup for Pocket PCs, file compression and shared
access to files.
Linux Watch
CSN 535-25 Lindows Case Halted in Mid-Stream so Microsoft Can Appeal
To Protect Windows Trademark
Microsoft's dicey trademark infringement case against Windows
wannabe Lindows.com, which was meant to go to trial March 1, has
been halted in mid-stream so Microsoft can lodge a rare
interlocutory appeal before the trial court rules.
Microsoft is basically going to ask the United States Court of
Appeals for the Ninth Circuit to find that it owns the Windows
trademark, because the trial judge basically says he won't.
The Honorable John Coughenour, the Seattle federal judge sorting out
the trademark differences between Microsoft and Lindows.com - the
turned-inside-out infringement case that Microsoft brought against
Lindows and wound up defending its own Windows mark - isn't buying
Microsoft's argument that the jury should only consider the way the
word Windows is used today, not the generic way the digerati used it
between 1983 and 1985 before Microsoft "proprietized" it.
Although Coughenour has made no explicit ruling based on timing, he
told Microsoft the other day that if it came to it he would instruct
the jury to decide whether the Windows mark was generic before
Microsoft brought Windows 1.0 to market in November of 1985 and that
he would not instruct the jury that if the word was generic that
Microsoft's trademark could still be valid.
The judge says there's a lot of room surrounding the question of law
here for differences of opinion so he's going to grant Microsoft's
motion to appeal before the trial even begins, an unusual step
allowed only in very limited situations.
The appeals court will be asked to rule on the period of time
governing genericness. The trial judge said in his decision that "a
determination on this issue could materially affect the outcome of
litigation" - could in fact terminate it - and so it is "in the
interests of justice and judicial economy to consider the issue at
the present time."
Lindows, glorying in Microsoft's "delaying tactics," while
complaining that Microsoft is depleting its resources by dragging
things out, claims victory on a key legal issue because of
Coughenour's position that once a word is declared generic, it would
stay generic no matter how much marketing Microsoft threw at it.
Lindows is telling people that as the situation currently stands it
"will be able to keep its name indefinitely or until the final
decision in the case is made."
Microsoft has had more luck in Europe where it's gotten Lindows
bounced out of Holland. Finland and Sweden and is trying for France,
Belgium and Luxembourg.
CSN 535-26 SCO Now Wants $5b from IBM
The SCO Group wants to amend its 11-month-old suit against IBM and
substitute charges of copyright infringement for trade secret
violations and up its demand for damages from $3 billion to a
minimum of $5 billion, a nice round number.
Along with the trade secrets charge goes SCO's claims that IBM
dipped into SCO's own OpenServer and UnixWare widgetry on behalf of
Linux, not only code, but also know-how, concepts, idea,
methodologies, standards, specifications, programming, techniques,
architecture, design and schematics.
The move leaves SCO down to proving it owns derivative AIX and Dynix
code that IBM claims it owns and that IBM put that derivative code
in Linux.
SCO filed the amended suit with the federal court in Salt Lake City
last week but it's unclear whether the thing's going to fly. SCO
needs the magistrate doing the housekeeping for the trial judge to
approve the change and so far she has said nary a word about it in
public, not even at the hearing she held last Friday where IBM and
SCO argued over their motions to compel evidence from each other.
At the end of that hearing Magistrate Brooke Wells threw up her
hands and said all this commotion was very technical and took the
matter under advisement, promising a written decision in a week.
Presumably that decision will include an indication of whether or
not she's going to accept the amendment.
Primarily, however, the decision is supposed to sort out IBM's claim
that SCO didn't lay out its evidence that IBM ripped off SCO-owned
Unix code and put it in Linux like the court ordered SCO to do and
SCO's insistence that it can't go further than it has until IBM
turns over, oh, all versions of AIX and Dynix along with who wrote
it all and some 50 other items.
IBM complained to the court that producing all the stuff SCO wanted
would be an undo burden on it and could take man-months.
IBM told the court that SCO admitted in a letter delivered to IBM
late Thursday, hours before the hearing, that it had "failed to
produce numerous responsive documents" and committed "to doing so at
an unspecified time in the future."
The letter left IBM to argue that "In response to the court's order,
SCO abandons any claim that IBM misappropriated its trade secrets,
concedes that SCO has no evidence that IBM improperly disclosed Unix
System V code and acknowledges that SCO's contract is grounded
solely on the proposition that IBM improperly disclosed portions of
IBM's own AIX or Dynix products, which SCO claims to be derivatives
of Unix System V."
IBM wants to know exactly what lines of SVR5 are in Linux, which, it
says, SCO must know "to allege the contributions were improper."
IBM told the judge that SCO's court filings and public statements
are at odds. It said that "SCO has identified no more than
approximately 3,700 lines of code in 17 AIX or Dynix files" that IBM
is supposed to have contributed to Linux while SCO CEO Darl McBride
told the Harvard Law School last week that a "million lines of code"
were pilfered and that SCO "basically supplied that" - in other
words the evidence - to IBM. "If the 'million lines of code' in fact
exist," IBM said, "then SCO should have identified them in response
to the court's order."
IBM claims that SCO is "hinting" that "None of the allegedly
improper disclosures made by IBM (or any of the other code in Linux
to which SCO claims to have right) derive from Unix System V."
SCO, meanwhile, is basing its copyright claims on IBM's alleged
breach of its Unix agreements and its breach of Sequent's Unix
agreements and the fact that since SCO terminated IBM's AIX license
last year, "IBM has continued to reproduce, prepare derivative works
of and distribute Unix software, source code, object code,
programming tools and documentation." SCO claims IBM infringement
has been willful.
Novell of course claims dibs on the same copyrights along with the
right to absolve IBM from any infringement or termination. SCO
claims IBM induced Novell to claim copyright ownership and the right
to waive away.
It would seem logical to conclude that the Novell slander suit would
be heard first and, as a point of passing interest, in a legal
tussle with Novell SCO loses its home court advantage.
IBM claims it has an irrevocable and perpetual Unix license.
The copyright infringement charge per se only adds a billion dollars
to SCO's list of claimed damages. SCO breaks down the damages
differently than it did last June when it amended the suit and went
from a mere $1 billion to $3 billion in damages. It now says it
wants a billion dollars for IBM's breach of its Software Agreement
and another billion for IBM's breach of Sequent's Software
Agreement, same as before, but introduces demands for a billion
dollars each for IBM's alleged breach of its Sublicensing Agreement
and Sequent Sublicensing Agreement.
These alleged sublicensing breaches are tied up with IBM flaunting
the cancellation of its AIX license.
Last year SCO got to $3 billion by asking for a billion for unfair
competition, a charge that also seems to have disappeared as a core
component.
SCO conceives of the $5 billion as only a floor. It has other
demands it hasn't put a number on that would have to be decided at
trial.
CSN 535-27 SCO Ignores Novell Ultimatum
Novell, which continues to claim that it can dictate to the SCO
Group, wrote SCO a letter last Friday demanding that SCO waive any
purported rights to require IBM to treat Sequent code as being
subject to confidentiality requirements or to restrict Sequent's
Unix license. Novell gave SCO until high noon Utah time Wednesday to
do it.
SCO didn't.
Instead, SCO said. "It is SCO's strongly held legal position that
Novell has no rights to step in and change or alter source code
license agreements that SCO owns and holds with its Unix licensees.
SCO has no intention of waiving any of its rights against Sequent or
IBM. We will deal with Novell on all of these issues in court."
According to Novell, SCO claims IBM is obliged to keep derivative
Sequent code out of Linux on the basis on section 2.01 of Sequent's
original Unix agreement with AT&T, which reads:
"Such right to use includes the right to modify such software
product and to prepare derivative works based on such software
product, provided the resulting materials are treated hereunder as
part of the original software product."
Novell tells SCO general counsel Ryan Tibbits that this means AT&T
retained ownership in its code even if it was incorporated in a
derivative work, not that it imposes confidentiality or use
restrictions on the Sequent code.
Novell says AT&T clarified the meaning of Section 2.01 (which is in
all Unix agreements) in the AT&T newsletter $echo in April 1985, the
month the Sequent agreement was signed, and said that a sentence
would be added to the codicil that said that AT&T "claims no
ownership interest in any portion of such a modification or
derivative work that is not part of the software product."
Absent an amenable answer from SCO, Novell will probably forgive
Sequent itself considering it claims to have the right "to take any
action on [SCO's] own behalf."
CSN 535-28 Novell Seeks To Get SCO Suit Thrown Out
Novell is trying to get the SCO Group's slander suit against it
dismissed claiming that SCO has no grounds.
Novell told the court that "Without conclusively establishing that
it owns the Unix and UnixWare copyrights, SCO cannot show that
Novell's statements to the contrary are false, and cannot prevail."
It also called SCO's alleged injury "speculative."
SCO retorted that Novell's motion to dismiss is based on its
illegitimate claims that the Unix copyrights are "not necessary for
SCO's business" and therefore "did not transfer from Novell to SCO."
The company reiterated that it owns the copyrights to Unix. "The
transfer of these copyrights is made plain, clear and unambiguous in
the 1995 Asset Purchase Agreement between SCO and Novell," it said.
"Amendment No. 2 to the Asset Purchase Agreement clarifies this
position and SCO will continue to aggressively defend these Unix
copyrights in our court case against Novell. In the next 20 days, we
expect that SCO's lawyers will file a response motion to this filing
by Novell."
CSN 535-29 Linux Tax Evasion
The Open Source Development Lab is passing around another paper
written by the Free Software Foundation's general counsel, Columbia
University professor Eben Moglen, to discourage end users from
paying SCO its Linux tax.
Moglen says that, since SCO sued Novell and essentially admitted
that its ownership of the Unix copyrights isn't crystal clear, no
court in the country would hold a user liable for infringing SCO
rights until somebody figures out who really owns the darned things.
Even if SCO comes out the winner, Moglen feels no Linux taxes will
be owing because SCO distributed Linux under the GPL.
CSN 535-30 Red Hat Taps Israeli Distributor
Red Hat, which is on an international expansion course, has named
Matrix, a publicly traded systems integrator with a staff of some
1,800 people set up for big projects, its main distributor in
Israel.
Matrix is supposed to dislodge the Unix installed base.
Matrix senior VP of marketing and manager of its software unit Natan
Gavish estimates Matrix will do $2 million worth of business in Red
Hat this year. The Meta Group says the Linux market is still limited
in Israel compared to other places but is expected to grow to a
volume of $30 million in 2007.
The company's other partners include PeopleSoft, BMC, Ascential and
Business Objects. It's been doing Red Hat training for a few years.
CSN 535-31 Evans Counts Open Source Developers
Evans Data Corporation has counted noses and claims that 1.1 million
developers in North America are spending at least some of their time
on open source projects. The census is found in what the market
researcher calls its "North American Population Study," which also
found a half-million developers are spending some time on 64-bit
architectures and a quarter-million are active on grid projects. It
said clustered computing developers number just under a half-million
and account for 17% of the North American development population.
CSN 535-32 Red Hat Carts Off German Win
Red Hat plucked a cheeky win right from under SuSE's nose. ISP
Telefonica Deutschland GmbH, the second largest national IP carrier
in Germany, SuSE's stomping grounds, is going to use Red Hat's
Enterprise Linux distribution as its "platform of choice" for its
business operations. It's switching over from Unix although it's
evidently had Linux in its infrastructure for a while. It's also an
early adopter of the new Red Hat Network Provisioning Module.
CSN 535-33 German Ministry Goes Linux
A division of the German finance ministry, which pays the country's
civil servants, has moved its back office operations to two
mainframes running IBM's proprietary OS and Linux ousting 30 Sun and
Fujitsu Siemens servers, IBM said.
CSN 535-34 RTLinux Tests F-35 Fighter Engine
FSMLabs brags that Pratt & Whitney is using its RTLinuxPro hard RTOS
to test the F135 engine for the US military's new F-35 Joint Strike
Fighter aircraft.
FSMLabs says that on February 2, Pratt & Whitney ran the first
production configuration engine at full power on a test stand
controlled by RTLinuxPro.
RTLinuxPro is also supposed to be the core component of systems used
for developing and testing engine control embedded software for the
F135.
RTLinuxPro includes FSMLabs' RTCore Posix PS51 robust hard real-time
kernel and an embedded Linux development system. RTCore uses a dual-
kernel method to run Linux or BSD Unix as applications.
The F-35 is scheduled for its first flight next year.
Mail Bag
CSN 535-35 Attention, Conspiracy Theorists
To the Editor:
Guess what happened after I installed the Microsoft 2/2/04 IE
cumulative security update last week: It broke my Linux-based Web
host's log-on system in not one, but two ways. First the damned
thing edited my favorites and shortcuts, inserting some extraneous
address info. In addition, it strips out needed pieces of embedded
URLs. Specifically, mydomain.com/webmail gets converted to
mydomain:portaddress/ i.e., it puts in the port address but deletes
the destination page.
A conspiracy theorist would conclude that Microsoft has figured out
that the way to stop Linux is to make IE incompatible with it.
Andrew Allison
Computer Industry Consultant
http://aallison.com
BillyGrams
CSN 535-36 Linux Rates a Tiny Corner of the Desktop
IDC is reportedly pulling together figures that say that Linux
managed to claim 3.2% of the desktop market last year passing Apple.
IDC expects Linux to represent 6% of the desktop market by 2007,
leaving Microsoft with 94%.
CSN 535-37 StarOffice Loses its Corner on the Office Challenger
Market
Demo 2004 attendees are going to be treated to a screening of
China's Office competitor Evermore Integrated Office, which was
financed by the Chinese city of Wuxi and runs on both Windows and
Linux. A US version of thing is supposed to sell for 99 bucks, a
fraction of what Office goes for. It reportedly includes a word
processor, spreadsheet and presentation kit.
CSN 535-38 SGI in Talks To Sell Alias
Perpetually down-on-its-luck SGI, the first company to observe that
there is to a United Unix and it's called Linux, is negotiating to
sell its Alias graphics unit in Canada because Alias is a remnant of
SGI's former glory and no longer a strategic fit. SGI is talking to
an unidentified equity investment house. Exclusively, it says. If
Alias goes, it will operate as an independent software company with
no change in management or product. Alias widgetry has been used to
create the special effects in "The Lord of the Rings" trilogy and
"Spider-Man." Alias, which has some 500 people, made roughly $5.7
million on revenues of $65.1 million in the year ended last June 27.
SGI bought the operation in 1995 for $440 million in stock and
merged it with Wavefront Technologies Inc.
CSN 535-39 Sun Debt Rated Junk
While Sun was busy rolling out its latest new product wave Tuesday
and telling everybody how wonderful it was, Finch Ratings was busy
lowering Sun's senior unsecured debt to the status of junk. Some
$1.3 billion worth of public debt securities are involved. Finch
said it cut Sun's rating because of on-going operating losses on top
of its losses in eight out of the last 10 quarters coupled with the
belief that the company's near-term financial and operating
performance will be volatile because of increasing competition. Even
Sun's long-term prospects are a worry though Finch is betting things
will gradually improve. It said it thinks it will take Sun longer-
than-expected to return to profitability. It imagines that Sun's
brighter side - its strong $5.1 billion liquidity position,
recurring revenue base mostly from maintenance revenues, solid
balance sheet, low debt levels, consistent Unix market share and R&D
- could become increasingly more important to customers who are
considering signing long-term contracts with Sun.
CSN 535-40 So, Let's See What Gates Learned
It looks like Bill Gates is going to be deposed for both the
Burst.com antitrust suit and the Sun antitrust suit against
Microsoft. Burst claims Microsoft ripped off its technology and is
infringing on a technique to broadcast video over the Internet and
Sun claims that Microsoft tried to turn Java into roadkill like
Netscape. Burst argued that Gates was no Lee Iacocca. The former
chairman of Chrysler got out of testifying under oath by claiming he
wasn't personally responsible for the problems in Chrysler's cars.
One wonders whether Gates learned from that ghastly deposition he
gave for the government's antitrust trial.
CSN 535-41 Sun Spent $224m on Acquisitions
According to its quarterly SEC filing, Sun spent $23 million for
Pixo, $65 million for CenterRun and $136 million for Waveset, a
total of $224 million on the three acquisitions it initiated last
year. Pixo's Java software is supposed to monetize content on mobile
widgets, Waveset is supposed to have the identity skills to take the
point on Sun's identity strategy and CenterRun the provisioning
software Sun wanted for N1.
CSN 535-42 Fedora on Linux 2.6 Out
Red Hat has posted Fedora Core 2 test1, which is based on the new
2.6 kernel. Other new technologies in the stuff include Gnome 2.5
and KDE 3.2RC1. Fedora is meant for the open source community to
play with and debug before the technologies go into Red Hat's good
stuff. It'll only meant to be used in non-critical environments.
CSN 535-43 MyDoom Juiced
MyDoom morphed into MyDoom.d or Doomjuice.b programmed to launch
distributed denial of service attacks against Microsoft after
February 12. Like its MyDoom.c, it scans for systems infected with
MyDoom.a or b and gives them new instructions. MyDoom.d is supposed
to mount an intense DOS attack on Microsoft's home page in any month
except January and on all dates except the 8th-12th of each month.
Apparently, its requests mimics IE's making it hard for Microsoft to
distinguish between them. Some IT industry watchers are speculating
that organized crime is behind My.Doom.
CSN 535-44 Anti-Spam Law a Joke
A new study by MX Logic has found that over a recent 30-day period
only 3% of sample spam complied with the new CAN-SPAM federal anti-
spam law.
CSN 535-45 Washington Watch
The FCC decided Thursday that voice-over-IP (VoIP) shouldn't be
regulated by the government like convention telephone services,
probably sealing the fate of tradition services.
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