But Wait, There's More

Look for the Four Hundred 2005 Special Report on December 15

Another year is winding down, and all of us are looking ahead and perhaps looking forward (they are not always the same thing, as the latter implies optimism) to 2005 and beyond. So what does the future of the IT market in general and the iSeries market in particular hold? What are the products and policies that OS/400 shops would like to see IBM and its partners implement in the iSeries? Find out in the "Four Hundred 2005 Special Report," which will be published on December 15. You don't have to do anything special to receive this report. We are sending it free to all subscribers to our OS/400 newsletters as a holiday gift.

Computer Associates Taps Top IBM Software Exec As Its New CEO

Beleaguered software giant Computer Associates, which has seen its top brass booted from the company as it has been embroiled in an accounting scandal, has gone to IBM's top ranks to get a 26-year veteran to come aboard the company as its new CEO. After reviewing 30 potential candidates for the job, Computer Associates chose John Swainson, who headed IBM Software Group's sales team until he spearheaded IBM's WebSphere middleware products, starting in the late 1990s. After former chief executive Sanjay Kumar was stripped of the title in April, in the wake of the accounting scandal, board member Kenneth Cron has been acting CEO, and he will retain that job for a few months as Swainson gradually takes over the reins.

JDE Shops Have Low Expectations for Oracle Acquisition, Says AMR

According to a recent survey performed by software consultancy AMR Research, users of the OneWorld and World ERP software suites, created by J.D. Edwards and now owned by PeopleSoft, are not all that hopeful about the consequences of Oracle prevailing in its $9.2 billion takeover bid for PeopleSoft. About 47 percent of the JDE shops surveyed by AMR said that they expect Oracle to offer no new functions in their software if the company takes over PeopleSoft, with another 17 percent expecting only minor tweaks and changes.

If the survey results can be extrapolated to the 6,500 JDE customers worldwide, then many thousands of customers, who spend hundreds of millions of dollars a year on software licenses and maintenance, do not hold out much hope for the EnterpriseOne (what PeopleSoft calls OneWorld) and World software suites. Oracle has not said much about what it will do with the former JDE suites, though has promised to deliver a future version of the PeopleSoft ERP suite. But half of the PeopleSoft installed base is very jumpy, and Oracle is well aware that it needs to fix this if it wants to improve its prospects for finishing the acquisition and keeping the revenue streams from the JDE products bubbling.

IBM, Fujitsu Agree on Autonomic Computing Standards

Server makers IBM and Fujitsu said last week that they would collaborate to create a set of open standards for autonomic computing. All of the major server platform makers have been investing in hardware and software technologies that allow their systems to do predictive self-maintenance and self-healing, which enable those systems to gracefully deal with crashes. However, all of those platforms have radically different electronics, and their system microcode and higher-level software platforms (including operating systems and systems management programs) are not exactly compatible, either.

To that end, IBM and Fujitsu have agreed to work on standards surrounding the Web Services Distributed Management (WSDM) event format. IBM has proposed an "event format," a way of describing a failure of a component or some other aspect of it that is important to autonomic management of a server, to the Organization for the Advancement of Structured Information Standards, one of the main standards consortia behind Web services standards. IBM and Fujitsu are going to collaborate on a standard set of actions that are driven by events, as well as another set of standards that govern how software is installed and activated on servers.

JDA Software Restructures to Cut Costs

Retail software specialist JDA Software Group announced last week that it would be restructuring its operations to cut costs. Under the restructuring plan, JDA will lay off 167 employees, or about 13 percent of its workforce, while consolidating certain software product lines and closing excess office space. JDA expects that the changes will result in cost savings of between $15 million and $17 million a year. The company expects restructuring charges of between $3.2 million and $3.6 million in the fourth quarter and between $1.4 million and $1.8 million in the first quarter of 2005.

The consolidation of products as part of the restructuring involves the imminent launch of a .NET-based front end to various JDA application suites called Portfolio 2005.1. By moving to a common front end to various applications (which run on a mix of OS/400, Unix, and Windows servers), JDA says that it can focus more on adding features to the software and less on what the front end looks like. Once Portfolio 2005.1 is released next year, JDA says, it will move 20 developers who have been working on it over to customer support to help customers deploy the solution.

Disk Array Market Is Up in the Third Quarter, Too

Despite insane levels of competition, the rapid introduction of less-costly disk arrays and disk drives, and rampant discounting in the storage market, the aggregate storage industry posted its sixth consecutive quarter of revenue gains in the third quarter of 2004, according to a report from IDC.

The growth rate has cooled a bit, however, with $3.4 billion in external disk array sales in the third quarter, up 3.5 percent. The overall disk market (including internal arrays such as those used in the AS/400, iSeries, and i5s) grew by only 2.1 percent, to $5 billion, which suggests that internal array sales continue to fall as companies embrace storage area networks (SANs) and network-attached storage (NAS) arrays. Incredibly, IDC estimates that the aggregate amount of capacity sold in the third quarter was up 50.5 percent, to 310 petabytes (that's 310,000 terabytes), the highest growth in seven quarters and the most disk capacity ever sold in a quarter.

In the external disk market, EMC is the market leader, with $724 million in sales (21.2 percent of sales) and 17.4 percent revenue growth. Hewlett-Packard's external disk business has taken it on the chin in the past few quarters, and saw a 7.5 percent revenue decline, to $647 million, in the quarter, dropping from first place to second place, with 19 percent of external disk array sales for the quarter. (HP has been the number-one disk array seller since buying Compaq, more than two years ago.) IBM is a distant third, with $448 million (13.1 percent) of the external disk array pie in the third quarter of 2004, down six-tenths of a percent. Hitachi saw sales drop 2.3 percent, to $289 million (giving 8.5 percent of the pie), while Dell had 11.9 percent growth, pushing sales to $237 million (6.9 percent of the pie). The NAS array market grew by 14.3 percent, crested above $2 billion, a level it first attained in the second quarter of the year.

In the overall worldwide disk array market (external plus internal arrays), HP is still the market leader, with $1.2 billion in sales and 23.6 percent of the market; but the company lost more than two points of market share. IBM is number two, with just over $1 billion in sales and a smidgen of growth. EMC, Dell, and Hitachi are numbers three, four, and five in the market, respectively, and other vendors accounted for $1.4 billion in sales, 28.1 percent of the storage pie in the quarter.

IBM Rumored to Be Selling Its PC Business

At press time, The New York Times was reporting that IBM is trying to sell off its entire PC business (desktops, workstations, and laptops) for somewhere between $1 billion and $2 billion. IBM may not have created the PC business (the company was dragged into it, kicking and screaming, by market forces that it did not understand), but by putting its seal of approval on the idea in 1981, with the launch of the IBM PC, the PC business as we know it, a relatively open box with third party components that can be easily cloned, was born.

The reason why IBM would sell its PC business for such a paltry sum is simple: there isn't really much there. IBM outsourced the manufacturing of all of its PCs nearly three years ago to Sanmina-SCI, which last year also got a contract to make all of IBM's X86 servers, except its BladeCenter blade servers and the "Summit" xSeries 44X high-end X86 servers. In effect, what IBM has left of its PC business, with about 6 percent of quarterly market share, are some brand names and intellectual property, and a revenue stream worth about $11 billion a year that is not profitable most of the time. According to the rumor mill, Chinese PC and server manufacturer Lenovo Group, formerly known as Legend, and one of the fastest-growing PC companies in the world, is the expected buyer.