But Wait, There's More

IBM Fires in U.S. and Europe, Hires in India

Sometimes, I get the distinct impressions that the people who run the world's major corporations and who, not coincidentally exert the more influence over the economy than governments or individual people, think we are all idiots. And maybe we are, since we have not all incorporated ourselves and set the terms for our own employment. But that is another issue. The issue that set my teeth on edge is a story in The New York Times and yet which gave me no surprise whatsoever is a report by Steve Lohr, who got his hands on an internal IBM memo that says Big Blue is going to hire some 14,000 new employees in India just after it has said it will cut some 10,000 to 13,000 workers, mostly in its services unit and mostly in Europe.

Now, I understand globalization. I have worked for a London company for 16 years in one form or another as well as companies in the States. I understand the need to have local workers in local expanding markets. But the kind of talk that Bob Moffat, a senior vice president quoted in the story, was talking is just nonsense. "People who say this is simply labor arbitrage don't get it," Moffat told Lohr. "It's mostly about skills."

No, it isn't, Bob. It's about profits, plain and simple. It is about the price/performance of workers, and that is what the H1-B visa influx was also all about. It is not about skills, as the millions of unemployed IT workers who were let go since the dot-com bubble will tell you. While I understand that IBM's services business needs to cut costs and there are lots of people in India and China who have the skills to do the work that was formerly done in the States and in Europe--and to do so at a fraction of the cost--what I cannot tolerate are executives who don't call it like it is. The fact is, IBM just put a lot of people out of work, and that effect will ripple through a lot of lives. And no corporation ever concedes this publicly, and I doubt any one ever did privately, either. If IBM has to fire people, so be it. But tell it like it is.

Red Hat Releases Fedora Core 4 Linux

Commercial Linux distributor Red Hat announced its latest development release, Fedora Core 4, just after we went to press last week. The announcement comes just as Red Hat is working out a way to set the Fedora development process free, which is an open source community dominated by Red Hat coders, and put it into a foundation controlled by that development community and not the company itself. (See Freed Fedora Foundation Might Get Participation Boost from last week's issue for more.)

This is the first implementation of Fedora that is distributing on the PowerPC processors from IBM and Freescale Semiconductor in addition to 32-bit X86 and 64-bit X64 platforms. Red Hat says Fedora Core 4 can run on Apple Power-based Macs and Xserves as well as on IBM's pSeries Unix/Linux boxes, but it will also probably run on Power-based iSeries midrange servers as well.

There are a number of new features in Fedora Core 4, namely initial support for the Xen virtual partition hypervisor and management software and an early release version of the OpenOffice 2.0 office automation suite. The latest Fedora also has the new Gnome 2.1 and KDE 3.4 graphical user interfaces, the Eclipse 3.1 application development tool, Red Hat's own Global File System, and a new PDF and Postscript file viewer called Evince from the Gnome project. You can get Fedora Core 4 at www.fedora.redhat.com/download.

IDC Says Disk Storage Sales Grew Modestly in Q1

Market researcher IDC says sales for disk storage continue to grow modestly. In its analysis of the external disk array market for the first quarter of 2001, IDC reckons that overall market revenue for external disk arrays grew by 6.7 percent to $3.77 billion, while the total market for disk arrays (including internal units sold for servers) grew by 6 percent to $5.47 billion. The aggregate capacity sold across all kinds of disk arrays continues to explode, with a total of 409 petabytes peddled in the quarter, up 58.6 percent.

EMC was the dominant supplier of disk arrays, with $808 million in sales in the first quarter. Up 12.2 percent. Hewlett-Packard came in second with $668 million in sales and growth of only 6.2 percent, followed by IBM's $435 million (up 9.2 percent), Hitachi's $345 million (up only 1.9 percent), and Dell's $291 million (up 29.2 percent). Other vendors in the diverse disk array market accounted for $1.22 billion in sales, but their share of the pie shrank by a fraction of a percent.

When you add in internal disk arrays, HP is the dominant supplier, with $1.23 billion in sales in the quarter, up 4.2 percent, followed by IBM, with $1.02 billion in sales, up 4 percent. EMC's numbers stay the same because it does not sell its own servers, but Dell's numbers are bumped up a bit to $444 million across all disk array types, an increase of 26.2 percent compared to last year. At current growth rates (provided they persist), Dell will surpass EMC in the overall disk market within three years, and in four years will be jockeying for the top spot with HP. Other disk array makers accounted for $1.61 billion in sales in the quarter, up 2.2 percent and accounting for a little less than a third of all disk array sales worldwide.

IT Managers Still Sleepless Over Security Issues

When you see words like deadly and crippling used to describe security threats, you can be pretty sure the words that follow will wipe the smile of the face of any IT manager. That's assuming you've seen an IT manager smile in the first place. According to Gartner research, IT managers don't have much to smile about. Their minds are tortured with thoughts about the potential havoc created by viruses and worms. And they fear their current defense systems--firewalls, intrusion detection and protection, and anti-virus software--is inadequate protection.

Based on a Gartner survey that garnered responses from 133 North American organizations with global operations and revenues exceeding $750 million, 50 percent of the respondents increased IT security spending in 2005 and expected to do so again in 2006. Seven of 10 considered their systems and processes more secure than a year ago, mainly because better security controls now are in place.

In a Gartner forecast from earlier this year, the research firm predicted revenue for the security software sector would grow at a compound annual growth rate of 16.2 percent through 2009, with new license revenue reaching $11.4 billion. Market growth will be bolstered by a strengthening economy, stimulus from government regulations, and new types of security threats.

Spending priorities--beyond firewalls, intrusion detection and protection, and anti-virus software--include patch management, strong user authentication, remote access, vulnerability assessment, user provisioning or identity management, security event correlation and reporting, spam filtering, and Web site filtering or blocking.

Malicious employees within the organization ranked eighth on the list of critical threats.

Seagull Trims Losses, Shows Progress in Latest Financial Report

Seagull Software is celebrating another step in its gradual comeback from fiscal jeopardy. Based on its recent report of $1.9 million in profits for the second half of its current fiscal year, and a modest 2 percent gain for the for the full year, Seagull was able trim losses from $4 million to $908,000. Seagull is a provider of software products for transforming legacy applications into Web services for service-oriented architecture. It's financial year ended April 30, 2005.

Total revenue for the second half was $12.2 million, an increase of 10 percent over first half revenue. Seagull suffered a $2.8 million loss in net income during the first half, which was turned into a $1.9 million gain in the final six months. Despite the improvements, the company still reported a net loss of $908K for its fiscal year. But compared to a net loss of $4 million in 2004, it would appear Seagull is moving in the right direction once again.

During the second half, license revenue increased $700,000 and maintenance and service revenues advanced $500,000. However, the full year totals show license revenue was off $900,000. Service revenues were critical to the company's success, as they grew $1.5 million. During the past year, Seagull reports a 9 percent reduction in expenses. Maintenance revenues jumped 14 percent and consulting revenues advanced 8 percent.

Geographically, the Americas region contributed 69 percent of total revenues with the remaining 31 percent generated by Europe and Asia Pacific. These figures were similar to results from the previous year. Seagull grew its customer base (enterprise accounts) by adding 129 new customers across a variety of vertical markets including financial services, government, telecommunications, transportation and utilities.

In April the company acquired SofTouch Systems, a company that specializes in middleware that integrates mainframe applications with service-oriented architectures (SOA). Earlier in its fiscal year, it formed a strategic partnership with the open source middleware company, JBoss , and a global alliance with Cordys, a company that provides Composite Application Framework (CAF). Under that agreement, the companies will collaborate on technology, marketing and sales initiatives worldwide. Seagull also expanded its presence in the Asia Pacific region by establishing distributor relationships in China and India.

JDA Chooses Koziol to Fill New COO Role

JDA Software Group, a software and services company specializing in the retail market, appointed Christopher J. Koziol to the newly created position of chief operating officer.

Koziol is a technology industry veteran whose 23-year career covers roles from president and COO of a Fortune 500 technology systems integrator and wholesaler to leading sales and services organizations. He spent 16 years with MicroAge and participated in its growth from a privately held organization to a $6 billion NASDAQ company. He served as president of MicroAge Technology Services, and also led the company's Pinacor distribution subsidiary and launched a sales and service agency business unit serving the Fortune 1000 marketplace.

JDA has a lengthy history with OS/400-based products. It currently has a customer base of more than 4,600 retailers and manufacturers in 60 countries. Its product suite is focused on merchandising, point of sale, analytic, and collaborative solutions.

One month ago JDA announced a partnership with Intel, which followed a new Microsoft Windows .NET-based product portfolio that was introduced earlier in 2005.

The JDA headquarters are in Scottsdale, Arizona. More than 1,100 employees work from 26 offices in major cities throughout North America, South America, Europe, Asia, and Australia.

SSA Global's Underwriters Exercise Over-Allotment Option

Underwriters of a recent public offering of SSA Global Technologies common stock have exercised the over-allotment option to purchase 1,350,000 shares. Based on a public offering price of $11 per share, the company will receive additional net proceeds, after underwriting discounts and commissions, of approximately $13.8 million, which will result in total net proceeds from the offering of approximately $100.9 million. The closing of the over-allotment option is expected to occur June 21, 2005, and is subject to customary closing conditions.

This news comes two weeks after the company's third quarter report for fiscal year 2005, which revealed SSA recorded double-digit growth in both revenue and adjusted net income compared to the third quarter of 2004. Total revenue for the third quarter rose to $180.4 million, an increase of 10 percent from $164.5 million in the previous third quarter. Software license revenue was $52.5 million, up 27 percent comparing year-to-year figures. Software license revenue grew 16 percent and represented 29 percent of total revenue for the quarter.

SSA Global is a provider of extended ERP solutions for manufacturing, distribution, retail, services, and public organizations. In addition to core ERP applications, SSA Global offers performance management, customer relationship management, product lifecycle management, supply chain management, and supplier relationship management software. The company has headquarters in Chicago, and 63 locations worldwide.

SSA claims its products are used by approximately 13,000 active customers in more than 90 countries.