Now that Oracle is succeeding in its acquisition of PeopleSoft (and the former J.D. Edwards business too), pundits are declaring that the IT industry is entering a period of consolidation, which is actually something that's been happening for a while. One of the big players you'll likely see more of as this trend accelerates is Oracle. In fact, before settling on a hostile takeover bid for rival PeopleSoft, Oracle's board had seriously considered several other acquisitions, including middleware developer BEA Systems, CRM software developer Siebel Systems, business intelligence software developer Business Objects, and ERP software developer Lawson Software. Oracle may yet succeed in acquiring these vendors. "It's a period of consolidation where the strong are going to get stronger, and the weak are going to get weaker," says Larry Ellison, who, as Oracle's chief executive and one of the world's richest men, is one of the strong ones.
Another strong player to keep your eye on is IBM, which in December announced its latest acquisition, French procurement services company KeyMRO. According to the Wall Street Journal, court records from the PeopleSoft-Oracle fight show that IBM had been targeting more than two dozen potential acquisitions in the business software market, on a list that bore the name "Predator's Ball." Here at IT Jungle, we understand that surviving, adapting, and thriving sometimes requires a hearty meal of red meat, but some of us are not looking forward to a return of 1980s Wall Street values.
Acquisitions Contribute to a $166.5 Million Quarter for SSA Global
SSA Global, one of the early participants in the consolidation of the ERP software market, announced financial results for its first quarter of fiscal year 2005 last week, and its ongoing strategy of acquiring companies appears to be paying off. For the three months ending October 31, SSA's total revenue increased by 18 percent, to $166.5 million. Software license revenue grew by 37 percent, to $41.4 million; support revenue increased by 11 percent, to $85.4 million; and revenue from services and other areas increased by 14 percent, to $39.7 million. Much of SSA's revenue increase is a reflection of several acquisitions the company has completed since the start of its 2003 fiscal year, including Baan, EXE Technologies, Arzoon, and Marcam.
However, the company is also experiencing organic growth, and among the product lines it owned as of July 31, 2003, its software license revenue grew 21 percent. The company remains profitable, as net income for the quarter grew 22 percent, to $6.6 million, a reflection of its ability to manage expenses, which grew by only 11 percent, to $95.8 million, for the quarter. "This quarter's results demonstrate the continued success of our business strategy--acquire market share and grow customer share--and customer commitment to SSA Global," said Mike Greenough, chairman, president, and CEO of the Chicago software company.
LTO Roadmap Extended Two More Generations, but Transfer Speed Increases Scaled Back
The Linear Tape-Open (LTO) format is alive and well, as the LTO Program late last year tacked two new generations onto the end of its LTO Ultrium roadmap. The roadmap calls for the doubling of tape capacity, and a near doubling of data transfer speeds, every generation. In the first three LTO generations, tape capacity and transfer speeds doubled every year, and the LTO-3 tape drives, which are just starting to come to market, offer 400 GB native capacity (800 GB at 2:1 compression) and 80 MBps data transfer speeds (160 MBps compressed). By the sixth generation, LTO will offer 3.2 TB of native capacity and 270 GB-per-second native data transfer speeds. The group says that compression rates will stay at 2:1. The LTO Program also scaled back its anticipated native data transfer speeds for the future of its LTO drives. Instead of an anticipated 160 GBps native data transfer speed, the group said LTO-4 drives will instead offer a 120 GBps native data transfer speed, which represents a 50 percent improvement, as opposed to the 100 percent improvement LTO has made in each generation up to LTO 3. The new LTO roadmap shows that top data transfer speeds will increase by 50 percent for each successive generation.
SPSS Renews OEM Deal with Hyperion for Essbase on OS/400
Hyperion and SPSS last week announced the renewal of an exclusive deal for SPSS to continue to OEM Hyperion's business intelligence software, port it to OS/400, and sell it to iSeries users.
Hyperion's Essbase multidimensional database software has formed the backbone of the ShowCase suite of products since the two organizations first made the pact in 1996. In 2004, Hyperion launched Essbase Version 7, a technology that SPSS's ShowCase division is currently porting to OS/400 and expects to release in March 2005, as a new version of the ShowCase suite. The iSeries customers will be "thrilled" with the possibilities in Essbase 7 and Hyperion Analyzer, a Web-based interactive analysis and reporting solution that also gets ported to OS/400, says Dyke Hensen, senior vice president of marketing at Chicago-based SPSS. "Hyperion Essbase 7X is a significant release that will enable our iSeries customers to extend their use of Essbase, Analyzer, and SPSS predictive technology to address extensive CRM and product profitability initiatives," Hensen says.
Essbase 7X also includes Hyperion Visual Explorer, which the company is calling the industry's first "visual spreadsheet" tool that enables users to rapidly discover trends, patterns, and highlight exceptions in large data sets. While SPSS has exclusive rights to Hyperion's Essbase on OS/400, it's not the only company selling the software on the platform. Several years ago, the organization formed an OEM agreement with IBM for an OS/400 version of Essbase, which is sold as the OLAP Server.
Gartner Says Utility Computing Will Cost IT Jobs
According to a new report from IT researcher Gartner, the advent of utility-style computing, with its automation of provisioning and systems management, will mean that heads will start to roll at external service providers as well as the internal IT organizations of corporations. This will not be welcome news to the system administrators and network operators who already work in stress-laden IT organizations that have been looking to reduce their IT administrative costs over the past four years.
The Gartner report, released this week in the United Kingdom, concludes that, over the next two to 10 years, data center employees will be increasingly replaced by the machines they love, bringing an ironic full circle to the automation that started with record-keeping and billing at the dawn of the Computer Age decades ago.
"The trend towards offshore services has monopolized attention in terms of job losses," said Gianluca Tramacere, an analyst in Gartner's IT services and sourcing group, in a statement accompanying the report. "There is less awareness that increasing reliance on highly automated infrastructures will significantly reduce the need for manual procedures and direct involvement of the workforce. IT automation can mean greater flexibility and cost efficiency for businesses. However, it makes it harder for IT personnel to defend their jobs as this evolution, accelerated by the global economy and the competitive marketplace, is seen as an inevitable consequence of IT progress."
The challenge for IT personnel, according to Gartner, will be for administrators and system managers to learn skills that are in demand, and that goes for those who work in the corporate data center as well as those in the giant services companies that run other companies' data centers. There is no escaping the automation of the computers. And Gartner's advice to IT personnel? Learn all you can about your company's business processes and become an expert in that. To a Unix or mainframe operator, this advice may seem somewhat bizarre, and the reality is that a company will not necessarily need as many business process experts as it needs system analysts and administrators. There will probably be a lot more people playing musical chairs in the data center than there are chairs to sit on.
The jobs issue is further complicated as companies start dreaming, thanks to the application service provider, utility, and subscription pricing models, which companies like IBM, Sun Microsystems, and Hewlett-Packard keep talking up. If companies rent rather than own their infrastructure, with the advanced networking and decent management tools available today it doesn't much matter where those machines are located or who babysits them. If you subscribe to your servers, which are a relatively small portion of your budget, why would you not subscribe to your system administrator, which is a big portion of your budget? Sharing people and spreading costs among many different companies is what we all do for installation and break-fix maintenance support today. This just takes it all one step further.
"ESPs, including IBM and HP, are investing heavily in new technologies that will allow the automated delivery of IT services," said Tramacere. "Examples of technologies that are emerging include 'self-healing' hardware, rapid development tools and software components, and tools that automatically manage systems and services. In the future, strengthened by the economies of scale, technical enhancements, and adaptable pricing, organizations will be able to access IT utility infrastructure services more competitively, with a reduced reliance on internal resources. Ultimately, organizations will be driven to access utility infrastructure services more frequently and to reduce the size of their internal IT operations."
Survey: CIOs Considering Switch to Linux for E-Mail Servers
Fifty-five percent of IT managers would consider moving their e-mail and groupware back-end software to a Linux-based solution if they could ensure that such a move would not interrupt users, according to a survey by Osterman Research. The results are clearly encouraging for e-mail and groupware software providers for the Linux platform, which is why Scalix, one such vendor, is touting the results of the study in a new whitepaper.
Osterman also found that 21 percent of the IT executives polled said that they would prefer Linux servers as the host platform for all of their e-mail software if they were permitted to throw away their current infrastructure. (Obviously, there is not always budget to move on such dreams.) Also, the consultancy found that insufficient expertise with Linux as well as disruptions to users were the biggest factors keeping companies from adopting Linux. Only 20 percent of those polled said that they planned to change their messaging platforms in the next 24 months.
Congress Allows Another 20,000 H-1B Visas
Congress has approved 20,000 new visas for skilled foreign workers. The cap had been set at 65,000 after years of running at an even higher rate, which had disastrous effects on the IT job market in the United States. IT industry executives had been pushing for 50,000 new visas, while IT workers unions (there are a few) had been lobbying Congress to keep the number of H-1Bs capped at 65,000.
As it turns out, even though the H-1B visas for 2005 were not set until late October, when the omnibus bill passed, vendors were allowed to have applicants fill out visas ahead of time, starting in the spring of 2004. So by the time the bill was passed, the cap had more or less already been filled. And it won't take long for the IT industry to fill the 20,000 new positions, either, even though candidates are required to have graduated from an American university with a master's or a Ph.D.
The question now is what will happen to the unemployment rate among programmers and project managers now that the cap has been lifted. Unemployment rates had been dropping through 2004, and there is a good chance that they will now rise again because of the increase in H-1B visas. The IT industry is giving the same old song and dance about how American universities are not pumping out enough qualified computer scientists, but the truth is that H-1B employees are just "onshored" professionals who are essentially indentured servants for the companies that sponsor them, and can be deported if they lose their jobs. Small wonder they are more qualified and yet will accept lower pay. And whether or not that is legal or ethical is something you don't read about much in the papers.
AFFIRMATIVE COMPUTER
