But Wait, There's More

IBM Tweaks ServerProven Rebates

IBM last week expanded its ServerProven rebate offering to include new models in its eServer catalog. Under the ServerProven rebate program, customers who buy a new iSeries, i5, pSeries, or xSeries server or upgrade an existing iSeries or i5 server can get rebates. On the iSeries and i5, the rebates on new systems range from a low of $700 on an i5 520 to $68,000 on a loaded i5 595. Customers upgrading to iSeries 8XX machines can get anywhere from $525 to $19,200, and those moving up to an i5 can get anywhere from $900 to $20,400 from IBM. (IBM has added the i5 595 to the list this time around.)

By the way, ServerProven rebates are only available on new pSeries 670 and 690 server sales, and the rebates kinda stink at $3,000 for a pSeries 670 and $5,000 for a pSeries 690. They are not so great on the xSeries machines, either. Companies buying a new xSeries 365 (four-way Xeon) get $500, a new xSeries 445 (4-way to 16-way Xeon) get $2,500, and a new xSeries 445 (4-way to 16-way Itanium) get $5,000. ServerProven rebates are not available for upgrades in the pSeries or xSeries line, and new p5 machines do not have any ServerProven rebates. IBM also removed DB2 products running on xSeries servers from the ServerProven promotion last week.

IBM's Project BOSS Development Tool Surfaces

A few weeks ago, I caught wind of something called "Project BOSS," supposedly coming out of the IBM midrange organization. It could have been a marketing blitz to try to sell the iSeries to C-level managers. It could have been a project to put the open source JBoss Web application server at the heart of IBM's WebSphere products. It could have been a lot of things. So a bunch of us nosy midrange busybodies started poking around to try to figure out what this might be.

Kudos to the busybody (who shall remain nameless) who found out that Project BOSS is an application development tool project being undertaken at IBM's software research labs in Haifa, Israel, to create a Web application development tool that allows non-programmers to create Web applications. The project is aimed primarily at small and medium businesses, which often do not have the technical expertise to create Web sites for their companies. IBM is actually soliciting advice on the project, and you can give that advice at http://mrtgsrv.haifa.il.ibm.com:9080/boss/.

Quadrant Software Moves HQ to Florida

Midrange document processing software maker Quadrant Software is heading south for the winter. The company, which has been headquartered in New England since its founding in 1990, when it rolled out the first native faxing software for the AS/400, is heading to Tampa, Florida, which is more closely linked to the Atlanta, Georgia, OS/400 hub and more accessible and, in some ways more appealing, to the rest of the world that does business as a customer or partner to Quadrant.

Quadrant plans to keep facilities open in its current Taunton, Massachusetts, offices outside of Boston, but is planning to make a big expansion in the Tampa area. Quadrant already has sales offices in Atlanta and London, England. The move to Tampa makes Quadrant a much bigger fish in a somewhat smaller pond. This was demonstrated by the following quote from Governor Jeb Bush in the company's statement announcing the move:

"The arrival of Quadrant Software's world headquarters into Hillsborough County is excellent news, and builds upon aggressive efforts by all involved to diversify Tampa Bay's economy. We welcome Quadrant Software as the newest member of Florida's growing hub of international technology-based companies, and stand committed to ensuring a business climate and infrastructure that supports emerging technologies and entrepreneurship."

It's not every day you see a Bush quoted in a tech press release. Presumably, the golfing is a lot better in Tampa, too.

Intentia to Lay Off Employees as Jobs Move Offshore

Intentia will be laying off additional employees in the Scandinavian region as it moves research and development and customer support work to Asia, the Swedish ERP vendor announced last week. Intentia recently signed letters of intent with two offshore service providers, IBM and Symphony Services, the latter which operates offshore work centers in the Indian cities of Bangalore and Pune. The commitments follow another letter of intent that Intentia had previously signed with its regional affiliate, Intentia South Asia. Intentia hopes to have contracts in place with all three organizations soon.

Intentia's move offshore was expected. Last July, as new Intentia CEO Bernard Sciard oversaw a 16 percent reduction in the company's staff, the company said it would be looking to boost its R&D and customer support capacity by adding offshore resources. The staff reductions helped boost Intentia into the black, as it had net income of about SEK 90.9 million ($12.9 million) for the fourth quarter ended December 31, compared to a loss of about $22 million a year earlier. Its total revenues increase three percent to about $126.7 million. Only about 200 of Intentia's 3,400 customers worldwide are located in the United States. Last month, the vendor replaced the president of the America's division with David Rode.

Suppliers Not Living Up to Retailers Expectations, IBM Says

The productivity of the consumer product goods industry is in dire jeopardy due to a huge disconnect between the expectations of the large retail chains and the capabilities of the manufacturers and distributors supplying the retailers, IBM says. IBM bases that conclusion on the results of a survey, which show only nine percent of retailers felt their suppliers had a good understanding of their business objectives. Instead of selling "products," account managers at manufacturers and distributors need to retrain themselves to focus on fulfilling the business needs of their customer--which is now the retail chain, mind you, not Joe Six-Pack.

"Consumer products companies must redefine the way they do business," says John Breuer, a consumer products industry partner with IBM Business Consulting Services. "Having historically focused on the consumer as their only 'customer,' consumer product companies must now seek ways to better understand and provide added value to their retail trade customers as well," he said. This means more sharing and collaboration. The survey shows that retailers with over $1 billion in sales identified store-level customer insights and merchandising and category management services as their top two requirements from suppliers over the next five years, IBM says.

MKS Reports 108 Percent Growth in Change Management License Revenue

These are good times for companies that sell software change management systems, as the most recent financial results at MKS attest to. MKS, which helps companies manage the development, modification, and roll-out of code for OS/400 and other platforms, reported than revenue from sales of change management licenses increased by a whopping 108 percent year-over-year for its third quarter of fiscal 2005, which ended January 31. Although MKS didn't say it in its announcement, the high rate of new sales was almost certainly driven by last fall's Sarbanes-Oxley Act deadline, which required public American companies to display a certain degree of control over their internal development processes or risk sending their CEOs and CFOs to the penitentiary.

Maintenance fees and sales of new change management licenses combined rose 64 percent to $8.3 million, while revenue from its growing services business doubled year-over-year, the company said. MKS' total quarterly revenue was $10.6 million, a 46 percent increase from last year. These heady sales figures tipped MKS into the black, with net income of $800,000, compared to a net loss of $1.1 million last year, and a net gain of $200,000 for the quarter ended October 31, 2004. Investors rewarded the good news by driving up the value of MKS shares, which are traded on the Toronto Stock Exchange, by about 12.5 percent Thursday, to about $1.80 Canadian, a new 12-month high.

Seagull Turns Profit for First Time in Fiscal 2005

Seagull Software turned a profit during its third quarter, the first profitable quarter of fiscal 2005 for the Dutch developer of software for extending iSeries and zSeries applications to the Internet. Last week, Seagull announced total revenues of $6.3 million for the quarter, a 5 percent increase from the same quarter a year ago, and net income of $45,000, compared to a net loss of $259,000 in the second quarter. Over the first three quarters of fiscal 2005, the company has posted a loss of $1.4 million; however, this is significantly lower than the $4.4 million loss over the first three quarters of fiscal 2004.

For the quarter, Seagull managed to lower its core expenses, which include sales and marketing, research and development, and administrative costs, by about $500,000, or 9 percent, to $4.9 million. This is the result of a restructuring that Seagull undertook earlier in the fiscal year, says Mory Motabar, Seagull's CFO. "Profitability this quarter reflects a combination of sustained revenue performance, plus the positive impact of consolidation of our European development labs announced in September 2004," he said. "We are very pleased with our Q3 results."