But Wait, There's More

• Everybody is touchy about the increasing practice of offshoring IT jobs from major Western countries to emerging countries in Central and East Asia. Consultancy Gartner has issued a report indicating that companies should think twice about offshoring. "ESPs using U.S.-based labor will find it impossible to compete with ESPs using offshore labor for the lowest billing rates, but they can compete in communication and effectiveness," says Audrey Apfel, a vice president and research fellow at Gartner who is tracking the offshoring phenomenon. "Offshore ESPs, such as vendors located in India, capable of maximizing the amount of AD [application development] efforts conducted offshore, will improve their chances of winning bids for AD projects over U.S. ESPs. ESPs using U.S.-based labor that target projects with onsite needs (for security, regulatory or other purposes) or require AD resources with high scores in effectiveness and communication will improve their chances at winning bids for those projects, as well." Basically, the initially billing costs for programming are only part of the deal. Telecom and coordination costs, language barriers, and the quality of the final work product are issues that often get glossed over and add significant costs to offshored projects.
  
  

• If you are a hacker who gets a kick out of creating worms and viruses, Microsoft has just put a bounty on your head. With viruses like SoBig and MSBlast causing much irritation to hundreds of millions of users, and billions of dollars of direct economic damage and lost productivity worldwide, the software giant is taking a new tack in fighting hackers, who tend to target its Windows platform. Last week, Microsoft announced it will give $250,000 each to the person who rats out the hackers behind SoBig and MSBlast. Microsoft has created a $5 million bounty kitty to chase down hackers of future viruses. Some doubt that this will be enough money, but it's a start. Maybe Microsoft should just spend some of its $50 billion danegeld to pay hackers to not hack? It might cause less damage in the long run. (Yes, that was a joke.)
  
  
• Microsoft is hosting the IT Forum 2003 trade show in Copenhagen, Denmark, this week, and it chose that venue to roll out Systems Management Server 2003. The new middleware product is a rewrite of the SMS product, which has been extended to support features of Microsoft's Dynamic Systems Initiative utility computing project and has been tweaked to support the new Windows 2003 server platform. Microsoft is offering a 120-day free trial of the software. SMS 2003 costs $1,219 with a 10-user Client Access License.
  
  
• In February, Microsoft bought a small software company called Connectix, which had developed virtual machine partitioning software for Intel-based PCs running Windows, Linux, and other operating systems. Connectix was working on a server implementation, too. While Microsoft's plans for Windows servers are still unclear, the company this week has rolled out the desktop version of the software, called Virtual PC 2004, which it said will be generally available by the end of this year. The exact number of virtual partitions that the software will support on a single processor is unclear, but Microsoft is recommending a minimum of a 400 MHz Pentium II processor in a PC, plus anywhere from 32 MB to 128 MB for each operating system instance running on the machine. And while Microsoft hasn't mentioned the "L" word in its product announcement, Linux will indeed load inside Virtual PC 2004 partitions. Virtual PC 2004 will cost $129 per machine, down from the $229 that Connectix was charging.
  
  
• Any time two big organizations merge, there are going to be a bunch of high-powered executives who do not have as much power as they used to have, wondering what they are going to do next. Some of them decide that it is time to move on or to retire. And so it has been since the merger between Hewlett-Packard and Compaq. In the past few days, two more high-level executives have departed. Webb McKinney, who was president of HP's Business Customer Organization (which is responsible for all of HP's commercial products, like servers, storage, and PCs), and was given the tough job of managing the integration of HP and Compaq for the past 18 months, is retiring after a 34-year career at Hewlett-Packard Co. He has been with HP since 1969, when he worked in the company's Santa Clara, California, office as a sales engineer, after getting his bachelor's and master's degrees in electrical engineering from the University of Southern California. He has run HP's PC, server, printer, office, and software divisions in his career at the company, and was probably the most knowledgeable of the public HP executives of the so-called HP Way. McKinney was also pushed into the limelight as the apologist and evangelist for HP as the Compaq merger was taking place, and as a schism had cracked wide open between chairman and CEO Carly Fiorina and the families of founders Hewlett and Packard, who did not want to do the merger. Mary McDowell, who was recently named senior vice president of strategy and corporate development after running Compaq's Intel-based server unit before the merger, has also decided to leave the company. McDowell was on sabbatical after HP reorganized its server business in May, and it was never clear if she was going to come back to HP. McDowell had been running Compaq's Industry Standard Server unit since 1998. She was one of the first employees at Compaq after she graduated with an engineering degree from the University of Illinois in 1986. She was not just steeped in the Compaq Way; she helped to define it. McDowell has not said what her next move will be, but talk on the street is that she will end up at a company in the server business that she knows so well. In mid-September, Howard Elias, who was named senior vice president of business operations and management for the newly created Enterprise Systems Group back in May, left the company to take a job at disk-array maker EMC. Mark Sorenson, who used to run HP's storage unit and was from Compaq, like McDowell and Elias, also just jumped ship to rival EMC. Hugh Jenkins, vice president of marketing for the Intel-based server line within Enterprise Systems Group, also resigned from the company in September.
  
  
• The engineering research center at Mississippi State University is going to be one of the first institutions in the world to get a high-performance parallel supercomputer cluster based on commodity Intel-based servers and a high-speed interconnection fabric based on InfiniBand. The supercomputer cluster, which the university has nick-named "Maverick," is based on 192 of IBM's xSeries 335 servers, which have two Xeon DP processors. These machines presumably will be running Linux and will have an aggregate of about 2.3 teraflops. This is about five times the computing power that the university had in a prior cluster. By using InfiniBand, which IBM says has 10 times the bandwidth of commonly used high-performance-computing interconnection technology, the latency between the parallel memories in the servers should drop, and that should increase the efficiency of the cluster. When running real high-performance-computing workloads, a cluster might have teraflops of theoretical performance, but because of the low bandwidth and high latency in the interconnect between the machines, they perform at a much lower level than you might expect. In any event, the university will be one of the proving grounds for InfiniBand on high-performance-computing clusters, and it will use the Maverick cluster to do crash-test simulations for automobiles. The Maverick cluster also will be used to create a virtual wind tunnel for testing the aerodynamics of cars and airplanes, and will initially study the formation of ice on the wings of aircraft and try to figure out how to limit such dangerous formations. IBM has partnered with Voltaire, in Bedford, Massachusetts, for InfiniBand server adapters that operate at 10 Gbit/sec. The InfiniBand spec calls for adapters that run at 2.5 Gbit/sec, 10 Gbit/sec, and 30 Gbits/sec. Most Linux clusters in use today use Gigabit Ethernet, but some installed machines are still using low-speed 10/100 Mbit Ethernet interconnections. Some clusters use Myrinet cards--made by Myricom, a specialist in high-performance-computing clusters--which provide dual 2 Gbit/sec links between machines.
  
  
• MAPICS recently announced its financial results for the fourth quarter ending September 30. The Atlanta company reported its second straight quarter of profitability, following its acquisition of Windows ERP vendor Frontstep earlier this year. But it was close. The company eked out a profit of $893,000 on revenues of $45.1 million, a decline compared with its third-quarter, when the company reported net income of about $3 million on revenues of $47.0 million. Year-to-year comparisons of MAPICS's fourth-quarter revenues look promising: License revenue increased 31 percent, to $12.1 million; services revenue increased 55 percent, to $33 million; total revenue increased nearly 48 percent, to $45.1 million. But MAPICS's expenses also increased as a result of the acquisition, by 76 percent, to $42.9 million for the quarter, and MAPICS decided to announce adjusted earnings of about $2.1 million for the quarter, which takes into account a $1.2 million restructuring charge. MAPICS chief executive Dick Cook says the positive results show the company is moving forward. "We have now reported two full quarters of financial results since the [Frontstep] acquisition, and our results clearly validate our strategy as well as support our goals for the new MAPICS," he stated. MAPICS also said it expects fiscal year 2004 revenues to be between $190 million and $200 million. Following the news, MAPICS stock, which is traded on the Nadaq stock market, increased by about 11 percent, to about $11.25, more than twice its 12-month low.
  
  

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