But Wait, There's More

• And then there was one: Massachusetts. The state of West Virginia has reached a $21 million settlement of its portion of the antitrust lawsuit against Microsoft. The Bush administration had put forth a settlement of the Microsoft antitrust case in 2001, and several states had appealed. The appeal was ruled on in November 2002, and only Massachusetts and West Virginia vowed to fight on for stiffer measures and penalties against Microsoft. Microsoft has been very aggressive about trying to settle all of these cases, and has gotten off easily. With $45 billion in the bank, Microsoft could have generously and quickly settled the case, but the piddling settlements, which amount to a few bucks per PC sold in the past several years, are all Microsoft had to give to get states attorneys general, weary from the battle, to settle and go home claiming victory. People who don't know about the settlement obviously won't chase down one of these $5 or $10 vouchers Microsoft is giving to residents of West Virginia. The Microsoft antitrust case and the ensuing settlements (pun intended) once again demonstrate that the Sherman Antitrust laws of Teddy Roosevelt's trust-busting administration during the Gilded Age of industrialism were a confusing set of legislation that looked liked it reined in businesses from engaging in abuses of power more than it actually does rein them in. They haven't been a total loss, of course. The antitrust laws did compel IBM to behave itself more than it would have in the 1960s and 1970s, and did result in the breakup of AT&T, which caused a massive cheapening of telecommunications costs through competition that provided the means for the Internet to take off. A few more industrial giants in other industries, like John Rockefeller's Standard Oil, have been compelled to behave, but the Seven Sisters of SO have remerged--ExxonMobile is Standard Oil of New Jersey and Standard Oil of New York, for instance--and collectively the SO companies wield as much power as the old SO ever did. It's just more subtle. The amount of money and political energy antitrust lawsuits require pretty much makes the Sherman Antitrust laws a baroque joke. If it's baroque, don't fix it.
  
  

• The Securities and Exchange Commission has launched an investigation of IBM, but exactly what it is looking for is unclear. Investors, jumpy after the collapses of Enron, MCI/Worldcom, and myriad dot-coms in the past few years, dumped IBM's shares, which knocked $10 off the share price. But the shares have regained half that loss already, as IBM is hinting in its only public statement about the matter that it "believes" the investigation is a secondary investigation by the SEC into IBM's revenue recognition practices related to sales of retail and point-of-sale equipment in 2000 and 2001--a matter the SEC has already apparently examined. IBM is the number-one vendor of such retail systems in the world, with about $600 million in sales in 2002. Whether the SEC's investigation will go beyond retail systems is unclear, and that was initially what Wall Street was worried about.
  
  
• Nothing is easy in this world. Just ask Oracle, PeopleSoft, and J.D. Edwards. PeopleSoft and JDE agreed three weeks ago that PeopleSoft would acquire JDE for $1.7 billion in stock. A few days later, Oracle launched a $5.1 billion hostile takeover bid for PeopleSoft to try to secure its number-two spot in the applications software market, which it will lose to PeopleSoft if the JDE acquisition goes ahead. PeopleSoft's board of directors last week resoundingly and unanimously rejected the Oracle bid. None of PeopleSoft's employees, partners, or customers like Oracle's idea of putting PeopleSoft's applications on mere life support and trying to get the PeopleSoft installed base to move to Oracle's applications, which is what Oracle CEO and chairman Larry Ellison said he would do if he took over PeopleSoft, saying that this was a better idea than trying to keep the PeopleSoft and JDE product lines distinct and alive. Adding more drama to the situation, JDE late last week sued Oracle for $1.7 billion in compensatory damages; the suit also seeks punitive damages from Oracle. The JDE suit alleges that Oracle is engaging in unlawful and anticompetitive business practices, and JDE is seeking a court order to stop Oracle from trying to buy PeopleSoft shares on the open market to gain control of the company. Oracle has $5.5 billion in the bank, and PeopleSoft has a market cap of $5.64 billion. If PeopleSoft shareholders want to sell, Oracle can certainly scrape up the dough to do it. Other bidders could emerge in the mess. Microsoft could, for instance, buy PeopleSoft and JDE with pocket change and still have tens of billions of dollars in the bank. A buyout of Oracle, which has a market cap of $69 billion, would be tough for Microsoft, but then again it has a market cap of $254 million and could use a combination of stock and cash to buy Oracle, PeopleSoft, and JDE, if it really wanted to. No one is suggesting that Microsoft will do this, of course. But tongues are wagging, as usual. Even IBM has been cited as a possible white knight in a takeover of one of these three companies. On Monday morning, PeopleSoft announced that it had sweetened the deal in the aftermath of its share price dropping, and would throw in $863 million in cash and some new PeopleSoft shares to JDE shareholders, bringing the current value of the acquisition to $1.75 billion. JDE shareholders will be able to choose either cash or PeopleSoft shares.
  
  
• It seemed like business as usual at J.D. Edwards Quest user conference last week, at least from an outsider's perspective. The company--which surprised the industry when it announced plans to be acquired by PeopleSoft two weeks ago, only to have the wind blown out of its sales thanks to an unsolicited bid by Oracle to buy PeopleSoft, sans JDE--used the conference to showcase its technology and to make a number of forward-looking announcements that seemed to defy the present uncertainty facing the company and its customers. JDE also launched a new advisory service to help customers comply with the Sarbanes-Oxley Act, and announced that the country's largest consumer bank, Bank of America, is entering the fourth phase of a JDE CRM software implementation that will see the number of the bank's users grow to 8,500. Think that's enough for one user conference? JDE also detailed its activities in the life-sciences industry and announced plans to deliver new features for this vertical, with a third-quarter release of its core ERP and supply chain management applications. Speaking of the new J.D. Edwards 5 suite, the company announced a major update of its CRM product and announced that is has set a record (of which type, we're not yet sure) by introducing the greatest number of enhancements in the newest release of its supply chain management application. The company also highlighted the successes it's having in certain market sectors (industrial manufacturing and distribution and consumer processed goods), it says it has strengthened its market position with a new alliance in China, and that it will establish a development center in India through Covansys. But wait, there's more! The company also announced "Team J.D. Edwards," a joint venture with the company's consulting partners--Accenture, Cap Gemini Ernst and Young, Deloitte & Touche, Hitachi Consulting, and IBM Business Consulting Services--to offer education, implementation, training, and support. Lastly, JDE announced a new program with IBM called Global Business Value, which will bring a series of industry-specific packages to small and midsized businesses, including two programs called Automotive for SMB and J.D. Edwards WorldSoftware Conversion for SMB.
  
  
• The Linux community has rolled out an updated kernel for the Linux 2.4 distribution of Linux. The new kernel includes enhancements for the support of a plethora of peripherals common on servers and desktop machines these days, as well as improved support for IBM's 64-bit PowerPC and Power4 processors, Sun Microsystems' 64-bit UltraSparc processors, Intel's 64-bit Itanium processors, and Advanced Micro Devices' 64-bit Opteron X86-compatible processors. You can download Linux kernel 2.4.21 at www.kernel.org. Exactly when and if the commercial Linux distributors will roll in the new Linux 2.4 kernel is unclear. They're thinking about Linux 2.6 right now, which was supposed to be launched around June 2003 and is scheduled to ship sometime later in the summer.
  
  
• Sendmail, the Emeryville, California, company that provides services and support for the open source Sendmail e-mail server, has announced that it has partnered with Hewlett-Packard and Intel to build a platform for secure e-mail serving for employees working from wireless machines or Web-based computers that are not necessarily their own machines. The Workforce Mail solution is based on the Carrier Grade Linux variant of the open-source Linux operating system that is being created for telecommunications and other service providers that need a more rugged version of Linux than the standard commercial distributions. On top of that is a policy-based, hardened version of Sendmail, created by the company of the same name, which is distinct from the open-source version of Sendmail even as it is compatible with it. For instance, it has anti-spam and anti-virus software built in, unlike the open-source Sendmail. The solution runs on HP's ProLiant servers, which use 32-bit Intel processors, and also relies on wireless products from Intel to provide links to deskless workers.
  
  

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