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Volume 13, Number 41 -- October 11, 2004

But Wait, There's More

IBM Ends Support for OS/400 Data Mining Software, Recommends Replacements

On September 30, IBM discontinued service for Intelligent Miner for Data for AS/400 Version 6.1. IBM recommends that customers move their OS/400-based data mining activities to other platforms. This could involve licensing and installing DB2 Intelligent Miner for Data or DB2 UDB Data Warehouse Edition on a Linux, Unix, or Windows server, and getting iSeries data using the DB2 Information Integrator product. IBM also recommended that users look into SPSS's flagship Clementine data mining product, which, IBM says, "has many of the same functions as DB2 Intelligent Miner and is fully supported on the iSeries platform."

IBM Announces End of Support Date for Various WebSphere, DB2 Products

IBM recently announced the end of marketing and support for several WebSphere and DB2 products for the iSeries. On September 30, 2005, IBM will no longer support WebSphere Development Studio client (WDSc) for iSeries Version 4.0. Customers who use this core development environment for the OS/400 platform are encouraged to upgrade to the current version, WDSc 5.1.2. The same day will also be the last day that IBM provides support for various WebSphere Commerce Version 5.4 products across all of its supported operating systems, including WebSphere Commerce Professional Entry Edition for Windows 2000, Windows NT, and iSeries version 5.4. This is also the last day of support for various DB2 Content Manager products, including DB2 Content Manager OnDemand for iSeries Versions 5.1 and 5.2 (the current release is Version 5.3).

Offshore Outsourcing Growing At 20% Per Year, META Says

The offshore outsourcing market is currently a $10 billion business and will grow at a rate of 20 percent per year through 2008, according to META Group, which held an outsourcing conference last week in San Francisco. The growth figure, which means it will reach about $21 billion by 2008, backs up another recent accounting of the growth of offshore outsourcing done by the Government Accountability Office, which found that, from 1997 to 2002, the offshoring of business, professional, and technical services (of which IT is only a part) grew from a $21.2 billion business to $37.5 billion, a 77 percent increase. Eventually, META says, the average enterprise will use offshore resources for 60 percent of its work related to developing and maintaining applications. Application development and maintenance currently accounts for about 30 percent of the outsourcing work sent offshore, which saves organizations about 30 percent, the group says. But the potential savings are much greater. For other types of IT work, which META did not specify, offshore labor can be anywhere from three to five times cheaper, the group says. The current political and public backlash against offshore outsourcing is just one more "item to be managed in the process of moving offshore," META says.

MKS Establishes Presence in India to Serve Offshore Outsourcers

With more and more software development work making its way to India, it is inevitable that software vendors that support the application development process will follow them. Such is the case with change management software vendor MKS, which last week announced plans to establish a presence in the burgeoning Indian market through a new partnership with IonIdea, a provider of offshore outsourcing development services with offices in the technology center of Bangalore, as well as Virginia and the Ukraine.

MKS's chief operating officer, Michael Harris, says the new partnership will help MKS to serve existing customers in India, as well as attract new customers on the subcontinent. "India is a significant market for enterprise-wide software configuration management technology due to the high value placed on software quality," he says. "In conjunction with IonIdea we expect to expand our coverage of multi-national companies, develop more accounts directly in the local market and, finally, with several Global 1000 customers already with development centers in India taking advantage of our architecture and solutions, serve these customers more fully." MKS sells change management software for OS/400, Unix, Windows, and other platforms.

Jack Henry Buys Biometric Authentication Solution Provider

Jack Henry & Associates is getting into the biometrics business. Last week, the Monett, Missouri, provider of OS/400 banking software and services announced that it has acquired Verinex Technologies, a Southern California provider of biometric-based authentication solutions, including Biodentify, which uses fingerprints to authenticate people. Verinex's solutions are currently used by financial services firms and healthcare providers, and are used as part of e-commerce and point-of-sale transactions, time and attendance tracking, and "physical access" functions, Jack Henry says. "Verinex will expand our service offerings to our existing customer base, and expand our potential customers to entities that have not traditionally been our targets," says Jack Henry's chief executive, Jack Prim. Terms of the acquisition were not announced, although company officials say the acquisition should provide a $3 million to $4 million (EBITDA) boost for the remainder of this fiscal year.

Acquisitions Part of CA's Restructuring Plan, but What About More Divestitures?

Computer Associates, which owns the Synon OS/400 4GL development environment, has begun realigning its business in the wake of an embarrassing accounting scandal that cost Sanjay Kumar, its former chief executive and chairman, his job. Fiscal 2005 will be a turnaround year, the company's new chief executive, Ken Crom, said in August, when he outlined his four-point plan to right the world's fourth-largest software company.

Crom says he wants the company to focus on internal product development, geographic expansion, new ways to market CA software, and acquisitions. Layoffs could be considered a fifth component, as the New York software firm announced in late September its plans to save the company $70 million per year through the layoff of 800 workers, or about 5 percent of its workforce, by October 31.

CA returned to its old acquisitive self last week, when it announced plans to buy identity management software vendor Netegrity for $430 million in cash. In addition to buying software, the company could resort to selling some of its extensive software portfolio as a possible sixth realignment technique. As part of the restructuring plan, announced two weeks ago, the company said it wants to "simplify the product portfolio." We're still waiting to see how that manifests itself at CA, which sold its interBiz business unit, which included a bundle of applications that ran on OS/400 and other platforms, to SSA Global in 2002.

Lawson to Lay Off 100 As Part of Restructuring Plan

Lawson Software recently announced a restructuring plan in the wake of a disappointing fiscal 2005 first quarter. The company, which develops ERP software for OS/400, Unix, and Windows platforms, reported total revenues of $82.7 million for the quarter that ended August 31, compared with $88 million for the same period in fiscal 2004. License fee revenues were $13.3 million in the fiscal 2005 first quarter, compared with $22.7 million in the fiscal 2004 first quarter. The lone bright spot was services, revenues from which increased by $4 million to $69.4 million during the quarter. Despite the total decline in revenue, Lawson still managed to turn a profit of $916,000, or $0.01 per diluted share, based on non-GAAP financial measures, compared with non-GAAP net income of $4 million in the first quarter last year.

Nevertheless, the company announced plans to streamline its operations, including laying off 100 employees in operations, marketing, sales, research and development, and support and services in the United States and England. The St. Paul, Minnesota, company says it is also evaluating other ways to reduce costs.

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Editor: Timothy Prickett Morgan
Managing Editor: Shannon Pastore
Contributing Editors: Dan Burger, Joe Hertvik, Shannon O'Donnell,
Victor Rozek, Kevin Vandever, Hesh Wiener, Alex Woodie
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
Contact the Editors: To contact anyone on the IT Jungle Team
Go to our contacts page and send us a message.


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