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But Wait, There's More
Microsoft Gets Into the Collaboration Groove with Acquisition
Just as everyone at IT Jungle was getting ready to head off to the COMMON user group meeting in Chicago, Microsoft upped the ante in the enterprise collaboration space by acquiring Groove Networks, the maker of peer-to-peer collaboration software that was established nearly a decade ago by Ray Ozzie, the man who created Lotus Notes.
The acquisition is as much an offensive as it is a defensive move by Microsoft. Bill Gates, Microsoft's founder and chief software architect, knows that Groove has features that Exchange Server and the Office System does not, and furthermore has the potential to compete effectively with Exchange and Office over the long haul. Moreover, if Groove were to fall into enemy hands--such as IBM or Novell, two companies with big installed bases of email and collaboration products to protect--that could cause real grief for Microsoft. To see our analysis of how this might change the landscape in enterprise collaboration, see our full coverage in The Windows Observer.
Merrill Lynch Pegs iSeries Sales at $1.5 Billion for 2004
If there is one thing that IBM now seems to understand quite clearly, it is that the iSeries server business has hit rock bottom. (This is distinct from the iSeries community, which remains healthy yet somewhat challenged by IBM's past lack of support and difficult economic conditions.) It is rare that IBM puts any numbers on iSeries sales, and so we have to rely on outsiders to take a stab at it. And that is what the tech analysts at Merrill Lynch have done.
According to a report released last week by Merrill Lynch's Steven Milunovich, IBM booked $1.478 billion in iSeries server sales in 2004, down 16.6 percent from the $1.772 billion in sales the company had in 2003. By comparison, 2003 was a good year, with sales up 3.9 percent from the $1.705 billion level in 2002. (Just for the sake of reference, in a normal year in the late 1990s, IBM pushed around $3.5 billion in sales, by my estimates.) Milunovich might not be aware of IBM's commitment to double-digit iSeries revenue growth this year, and that is probably why he is only predicting growth of 8.9 percent to $1.61 billion for the iSeries in 2005.
If Merrill Lynch's iSeries sales numbers are accurate, IBM has to hit at least $1.626 billion to be able to claim double-digit growth. And to make up for lost ground and get just back to 2003's sales levels, IBM is going to have to grow by 20 percent this year. And to get back to the sales levels of the late 1990s, IBM will have to sustain that 20 percent growth rate through 2009. If IBM did that, it would hit about $3.7 billion in sales in 2009. Such a doubling in revenue would probably require at least a quadrupling in iSeries server volumes, however. As I have shown in my own AS/400 sales models (see The iDeal iSeries, Part 5 from December 2002), IBM can still make decent profits if it ramps up volumes. This is, in fact, what IBM has done to dramatic effect with the pSeries line.
Petition Dr. Frank to Start His Own Blog
The human race has created several information revolutions. At first, the advent of language and the oral transmission of information and history; then came writing, which allowed a more permanent storage of information than oral tradition; then came the printing press, which allowed the distribution of storage knowledge to the masses at prices that real people could afford. And now, we have Web blogs, which allows anyone in the world to be their own printing press and distribute their own knowledge at a negligible cost. While the cacophony on the Internet is numbing, experts and industry luminaries can command an audience--and by command I mean both to gather up an audience and to literally tell it what to do and what not to do. And that is why when some IBMers say that Frank Soltis, the chief architect of the iSeries, should have his own blog, they are absolutely correct.
So, if you want Dr. Frank, as he is affectionately called in the iSeries community, to share his thoughts on computing and such with us, you can tell him yourself--indirectly through me. So, send me [TPM] a message through the IT Jungle Web-based contact form and I will send them on to Soltis. And while we are at it, all of the iSeries top brass should have blogs. Soltis should not and cannot carry the weight of the iSeries blogosphere alone on his shoulders.
IBM Is Taking Oracle's Tepid Endorsement for the iSeries Seriously
When Oracle announced its plans for the PeopleSoft and J.D. Edwards ERP suites two months ago, I made a point of getting down in writing exactly what Oracle's future support for the iSeries line would be. (You can read Oracle's statements about its plans in my article, "Oracle Lays Out Plans to Fuse Its Three ERP Suites.") To put it bluntly, when Oracle said it was going to support the iSeries, it apparently did not mean that it would support OS/400 and DB2/400 with its future "Project Fusion" ERP software, which Oracle will roll out in stages between 2006 and 2008. I have been after Oracle for months to clarify its position on OS/400 and DB2/400, and it has been stonewalling.
With Project Fusion, Oracle intends to provide Oracle Applications customers, as well as PeopleSoft Enterprise, EnterpriseOne, and World customers, with a new ERP suite that is developed in Java on the back-end and HTML and Dynamic HTML (DHTML) on the front-end. This Project Fusion suite will take the expertise of all of the three core ERP suites now controlled by Oracle (including lots of depth in different industry sectors) and make a single, united ERP suite that all customers can upgrade to, not migrate to. Back in Jaunary, I told you to mark these words, and for good reason: "It should be a normal upgrade process," said Oracle's chairman, Larry Ellison. "An automated upgrade, not a conversion." As I said back then, this is a tall order, particularly for the four different application suites Oracle wants to upgrade to, and especially if Oracle intends to make shops running JDE suites on OS/400 and DB2/400 move to another platform, such as Unix or Linux running Oracle or DB2 database for those platforms.
Oracle, we are not idiots, but I am not so sure that you are not. You have apparently bought a company whose installed base you do not understand. We all know the iSeries supports Unix and Linux and that it can run any of those databases; we all know the iSeries does a pretty good job running Java. So you can technically say that you are supporting the iSeries. But when JDE customers heard Charles Phillips, Oracle's president, say back in January that Oracle was going to support the iSeries, he knew perfectly well that everyone would think he meant that Oracle would support a native version of Project Fusion on OS/400 and DB2/400 running on the iSeries. It is bad enough that JDE shops will have to give up RPG and move to Java to stay in the Oracle fold, but dumping OS/400 and DB2/400 is asking too much.
It is not too late, of course, for Oracle to come to its senses. Without naming names, I can assure you that the people at the highest levels of IBM are trying to get Oracle to see the wisdom of giving support to OS/400 and DB2/400 for its Java-based Project Fusion suite. According to Joyce Bordash, director of iSeries channel marketing within IBM's Systems and Technology Group, Big Blue has a dedicated person managing the Oracle-iSeries relationship; former iSeries general manager and Software Group evangelist Buell Duncan is probably also exerting some pressure on Oracle to stand by OS/400 and DB2/400. The iSeries community needs to lean on Oracle en masse, because continuing support for the iSeries for Project Fusion is important for the health of the iSeries ecosystem. Start leaning now.
iSeries Education Is Still a Problem, IBM Admits
While IBM has done much in the past few months to pick up the marketing pace for the iSeries, there still remains a lot of work to do to get iSeries processing capacity in the hands of teachers and the students they will train as the next generation of IT professionals. IBM knows this, and is doing something about it.
At the iSeries Town Hall meeting at the COMMON user group meeting in Chicago last week, Peter Bingaman, the top marketeer for the iSeries line, was asked about what IBM would do about this situation. "We haven't had the focus we need to really ramp up our education efforts significantly or quickly enough," said Bingaman. "Linda Grigoleit [a program manager for the iSeries who has been spearheading the iSeries education initiatives] has been doing a great job attacking it as we have, but it's clearly not where it needs to be and that's one of the reasons why we put in writing this IBM Charter for iSeries Innovation," he said, referring to the contract that IBM is making with iSeries customers to improve the platform. "In there is a statement of our commitment to building skills through education. We put that in writing so that we would direct ourselves to go tackle this a lot more aggressively than we have to date. So that was one area that we know we need to focus on and put some mass behind."
To puts its money where Bingaman's mouth is, IBM has started something called the iSeries HUB, which offers remote access to shared iSeries server resources that colleges and universities can tap into as they teach iSeries courses. IBM says that iSeries HUB has a low cost, but considering the dire situation, maybe the cost should be zero. If IBM really wanted to spur interest, it could go so far as to pay students a nominal fee to take iSeries courses, and in some legal way compensate instructors for teaching iSeries courses. To help publicize iSeries HUB, through the end of April IBM is giving away six one-hour sessions to potential instructors through Lotus Sametime that will show them how to code in WebSphere Development Studio Client as it runs remotely on the iSeries HUB. You can find out more by emailing IBM at rchscholars@us.ibm.com.
SSA Global Sees Sales Rise, Profits Flatten in Most Recent Quarter
Midrange ERP application vendor SSA Global announced its financial results for the fiscal 2005 second quarter ended January 31, and says that both sales and profits were up in the quarter. Total sales grew 14 percent to $178 million, with software license sales up 35 percent to $51 million. SSA is particularly pleased that licenses sales, as a share of total revenues, increased by five points to represent 29 percent of sales in the quarter compared to this time last year.
While software and services sales were both up, the company struggled to squeeze more profits out of its many product lines, and in fact, its net earnings decreased a bit--down to $8 million compared to $8.3 million in the same quarter last year. SSA said that its profits were impacted because of investments it was making to strengthen its products for the long term.
Chicago-based SSA Global filed its initial public offering a little more than a year ago, and three weeks ago said that it would sell 14.3 million shares at between $13 and $15 a share, hoping to raise somewhere between $186 million and $215 million from the sale of stock. SSA says it will pay a $100 million dividend to its investors and use the remaining funds to repay other debts. The company will list its stock under the symbol SSAG.
IBM Issues Patch to Fix WebSphere Security Hole
If you use IBM's various WebSphere middleware in your e-business applications, listen up. The company has issued one patch to its WebSphere products to plug a security hole in the software. These patches apply to various platforms, including OS/400, Windows, Unix, Linux, and mainframe boxes.
The first security break is for WebSphere Commerce, and you can read about it here. Under certain circumstances, a page that had user name and password information cached can be linked to a page that should not have access to this authentication information.
In addition to the security patch, IBM also said last week that dummy key files that shipped with WebSphere Application Server V5.0 through V5.0.2.2 had expired on March 17 at 3:08 Eastern time. If your servers were using these default keys and they started acting funny on St. Patrick's Day, WebSphere wasn't drunk. It just lost its keys and wouldn't let you in the door.
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