But Wait, There's More
French Bank Consolidates Unix, OS/400 onto the i5 570
One of the biggest financial institutions in France, Credit Immobilier de France (CIF), is undergoing a server consolidation that is exactly the kind of consolidation that IBM was hoping would result from the advent of the i5 generation of OS/400 servers.
CIF has about 22 billion euros in credit that it provides to 1.2 million people in France, and for years it has used a distributed platform to give its 2,400 employees at its 300 locations around the country the tools to provide financial services to its customers. According to Nicolas Sekkaki, a vice president in IBM's European services operations who is familiar with the CIF deal, says that CIF had 17 data centers running a mix of AS/400 servers and IBM RS/6000, Hewlett-Packard HP 9000, and NCR Unix servers; CIF also had a mix of storage platforms, but ironically, no servers or storage made by the indigenous French server maker, Bull. In 2001, CIF decided that it wanted to consolidate its data centers and IT operations into one facilities, and the different operating units of CIF debated what applications all of its subsidiaries would standardize on. CIF's applications had been propped up on middleware, which allowed the workloads on the IBM and HP Unix boxes to be consolidated.
After deciding what applications to keep, CIF decided to use the i5 as its sole server platform. An i5 570 with four processors replaced a lot of distributed iron, and that server has been set up with five i5/OS partitions and two AIX partitions to run CIF's applications. (This is clearly a situation where the OS/400 applications have done a pretty good job of holding their own against Unix apps.) Instead of consolidating storage on the iSeries, CIF made a more sensible move of choosing IBM's DS8000 midrange SAN arrays, which will allow other servers that have yet to be consolidated to attach to the SAN first and migrate their data, and then migrate the OS platforms to the i5 as CIF's schedule allows. All of the storage used by CIF was moved to the DS8000 at the end of March, and about half of the server instances have been consolidated and moved over to the i5 570 as of this week. CIF hopes to be done by the end of June.
SSA Global Prices Its Initial Public Offering
ERP software supplier SSA Global said last June that it wanted to go public again, and last week the company priced its shares and the size of the float in the initial public offering. Last year, in SSA's filings, it put a dummy value of $200 million in the S1 filing it made with Securities and Exchange Commission (so it could calculate fees for financiers), and the real value came in at about half that. Specifically, SSA plans to sell 9 million shares at a starting price of $11 a pop, which comes to $99 million. That gives SSA a market capitalization of about $206 million. SSA's venture capital owners, General Atlantic Partners and Cerebus Partners, together own a large swath of stock that they can hold on to or sell as they see fit--nearly 56 million shares, in fact; these shares are currently valued at just under $2 a share for reasons that probably make sense to Wall Street analysts but not to normal people. Why SSA is not valued at $716 million in the S8 form it filed is unknown, but all shares being equal, that is what value the company should have based on the float.
As to whether or not SSA is worth this much money is a matter that Wall Street investors will decide over time. SSA had $157.5 million in software license sales in fiscal 2004 ended July 31 last year, support revenues of $322.5 million, and services revenues of $156.5 million, for a total of $636.5 million. This is above the range that SSA was projecting when it went on a acquisition binge several years ago after being taken over by venture capitalists. SSA brought $18.8 million to the bottom line last year, about a third of the prior year when revenue was less than half of fiscal 2004's levels. In the first two quarters of fiscal 2005, SSA has been able to maintain its sales and boost its profits by about a third.
BOS Sells Shares to Raise $2.5 Million
Midrange connectivity and thin client provider Better Online Solutions said last week that it has issued 1.087 million shares at a price of $2.30 a share that are now available to private investors in Israel, where the company is headquartered, and in Europe, where it sells a lot of its products. The initial investor in the private placement is Catalyst Fund, which already owns 18.58 percent of BOS and which has committed to pump up to $800,000 into the private placement with a ceiling of 24.99 percent total ownership in BOS. The company says that it will use the proceeds from the investment to pump up its balance sheet and for general corporate purposes.
Gartner Says IT Staffs Will Contract by 15 Percent in Five Years
Just when you thought it could not get worse, maybe it can. According to Gartner, by 2010 the number of people in the IT profession is expected to contract by 15 percent. Moreover, the company is projecting that within five years, six out of ten people affiliated with IT organization will have business-facing roles (rather than being isolated in coping with hardware and software), which at midrange and large enterprises could mean that up to a third of employees vanish compared to staffing levels in 2000. There are a lot of forces behind this trend, but Gartner expects that business units will start managing their own IT infrastructure, which leaves IT people out of the loop. Utility computing and other services-style computing are also part of this expected trend.
Update on COMMON
by Mary Lou Roberts
The skeptics have for years been questioning the longevity of the COMMON midrange user group, some even predicting its imminent demise. But who cares what they say? They've been saying the same thing about RPG, OS/400, and the iSeries as well--and they don't seem to be leaving the stage. So, how are things going at COMMON? Just fine, boasts Beverly Russell, president of the organization that binds together the iSeries true believers.
Russell was pleased with attendance and results from the 2005 Spring IT Education Conference and Expo in Chicago this past March, noting that 2,137 individuals participated, surpassing attendance at the fall 2004 Toronto conference.
Plans are well underway, Russell reports, for the fall 2005 conference that will be held in Orlando, Florida on September 18-22. "Several pre-conference workshops will be offered on Sunday, and an IT 'behind-the-scenes' tour of Universal Studios will be offered later in the week." The fourth annual IT Executive Conference will be held concurrently with the fall COMMON conference.
The keynote speaker for both conferences will be the ever-popular, crowd-drawing IBM iSeries chief scientist, Frank Soltis. (Perhaps, as some have suggested, COMMON's recent heavy use of IBM suits as keynoters is a way to cut costs, but it's probably a valid strategy. But Soltis is always a favorite of the faithful, and he certainly knows how to play to iSeries fans.)
Also in the works are plans for COMMON to produce several one- or two-day seminars toward the end of the year. These seminars, under the moniker of "The Seminar Series," are planned for several cities, which may include Portland, Seattle, Dallas, Houston, and Columbus. Russell promises more information soon.
At COMMON's Chicago headquarters, interim executive director, Ralph Gervasi, has been working to conduct a thorough review of all of the group's areas of operation in an attempt to position COMMON for a strong future. "Although COMMON has been operating below industry averages for administration," Gervasi says, "we are in the process of evaluating all operations in an effort to become even more efficient and streamlined. And, even though there have been some reductions in staff and other operating expenses, he promises that "the remaining staff is working closer together to continue to provide the high quality of service that our members have become accustomed to."
This includes communications with COMMON members. "Shortly after the COMMON conference in Chicago, we launched a fantastic, new Web site," Russell says. "This was a team effort by COMMON staff with Jane Jarrad taking the lead and ably assisted by Fred Pritchard on the technical side. COMMON's new Web site is very easy to navigate, full of exciting information on COMMON and details on all the upcoming events. This much-needed overhaul really modernizes our Web presence."
In addition, the new magazine, COMMON Connect, "is doing fantastic this year," according to Russell, having already secured a significant amount of advertising for 2006. "The next issue will be mailed in mid-June and will include articles on virtualization, on overview of the Fall 2005 Conference, IT Executive Conference information, interviews with the candidates for the upcoming Board of Directors election, and several other interesting articles."
Workers Protest IBM Layoffs
It's an obvious question: How come IBM has $5 billion to blow on stock buybacks to prop up its earnings per share a smidgen and has $9 billion in profits for all of 2004, but it needs to cut 10,000 to 13,000 workers around the globe to get its costs in line with its revenues? This is a question that members of the Alliance@IBM union in the States as well as work councils in Europe (which are similar to unions) were asking Big Blue as they staged protests last week on the layoffs. Protesters were urged to wear black and blue to work, to have a 10 minute sit in at 1 p.m. Eastern time, and to send Sam Palmisano, IBM's chairman and CEO, emails or to call him to pester him about the layoffs. Workers in France and Italy went a little bit further than taking 10 minutes off, but unions are much stronger in Europe than in the United States. The unions are asking IBM to do something other than lay off people, including finding ways to cut costs without cutting workers. With the services business mostly being about people and not raw materials or capital expenditures, it is tough to see how this can be accomplished. And IBM corporate has clearly already made up its mind.
That said, the unions make a good point. If corporations were valued by how many people they employ and how much of an effect they have on local, national, and the global economy (and they got tax breaks based on how large those contributions were), it might not be necessary to write this sentence.
IBM Pushes Grids for Economic Development
Grid technology and utility computing are fast becoming the universal ointment to fix the woes of the computer business. Whether or not this salve actually will work remains to be seen, but being skeptical does not mean being negative on every new idea related to grid computing that comes along.
For instance, last week, IBM announced a partnership with OneCleveland, based in the formerly industrial center of Cleveland, Ohio, to try to use grid technology to bolster collaboration between branches of the government in the greater Cleveland area, its citizens, and public facilities such as hospitals and schools. IBM and OneCleveland are going to build a grid, called the Economic Development Grid, using technology that has yet to be determined.
If you are not familiar with Cleveland, that is where Standard Oil of Ohio, part of the Rockefeller empire, was based and where shipping and railroad infrastructure was dense and manufacturing and distributors were located in the late 19th and early 20th centuries. According to OneCleveland's president, Scott Rourke, the non-profit Internet service provider has been getting donations of fiber optic bandwidth to build a network that serves northeast Ohio, which has a population of around 1 million. Public schools, universities and colleges, hospitals, government offices, and museums pay OneCleveland for access to this network, which is run by IBM. Having built the network, IBM and OneCleveland want to take the system up a notch and use grid technology to allow collaboration across that network. For instance, one of the early projects will be to allow patient records to be shared across all hospitals in the region, thus eliminating redundant and incomplete record keeping for patients that go to different hospitals in the area. Eventually, OneCleveland hopes to add in K-12 school records, which will allow preventive medicine to be performed on students in the area. This ultimately cuts healthcare costs and improves the quality of life in the Cleveland area.
According to Ken King, vice president of grid computing at IBM, IBM is cooking up other schemes to use grid computing to drive economic development. He says that there are natural centers of information around the world, which could become centers of research and collaboration if this information becomes gridded. Think of where the petroleum, medical, pharmaceutical industries are clustered. The establishment of such grids could even be used to foster a new business. For example, a city with good pizza delivery near a rural setting and low costs for living could decide to set up a grid to attract software developers out of Silicon Valley and to a new area. The software companies could not only collaborate over the grid, but actually use the grid to code, test, and distribute their wares. King says that IBM is starting out small with these economic development grids, and will stay in the United States with them for now. But he says that there is nothing unique about the U.S. that makes the idea work. IBM just wants to get some experience before it goes global.