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Novell Restates Its Financials to Clear Up Errors

A few weeks ago, Novell announced its financial results for its fiscal first quarter of 2005 ended January 31. To its horror, in the wake of that announcement, the company discovered some errors in the numbers that it reported.

Specifically, the company said that $6.1 million in Linux-related software and services sales in the quarter were reported as software licenses and should have been classified as maintenance and services. Novell said that the bulk of the $6.1 million in misplaced revenue related to server editions of the company's SUSE Linux Professional edition, which is the bleeding-edge version of SUSE Linux. So, new software licenses in the quarter are now $44.3 million, not $50.4 million, and maintenance and server sales are $245.8 million, not $237.9 million. Novell also clarified non-GAAP earnings per share calculations, which it insists were calculated properly, yielding 3 cents per share of earnings once some restructurings and a big payoff from Microsoft were taken out. Novell said that after its call, some Wall Street analysts said Novell's math was wrong. What happened is that Novell has so many different kinds of shares and money coming and going that affects earnings that anyone trying to sort it might make math errors.

Scali Moves Its Headquarters to the U.S., Preps for Growth

Linux cluster management software maker Scali has announced that it has moved its headquarters to the United States from Norway. The move to the States, says Scali CEO Bjorn Skare, is to help him accomplish what the company asked him to do when it brought him in as CEO in April 2003: to take Scali up to the next level. That means expanding beyond its Norwegian roots and attacking the North American Linux HPC cluster market.

To that end, Scali has incorporated in Delaware and moved its headquarters to the Boston suburb of Westborough, Massachusetts, which is along the famous Route 128 corridor that has spawned so many computer companies. After looking at places like Austin, Texas and Silicon Valley, Skare says that Scali decided on Boston because it is one of the most European-like of American cities; when you add in the time zone benefits (which allows Scali to span from Europe to California during the course of an extended business day) and the strong tech background of the area, Boston was an obvious choice. The weather is probably more similar to Norway, too.

Skare says that Scali will continue to have a strong presence in Norway, which will help it expand its European business, but that being in the States was important since the IT industry is dominated by U.S.-based multinationals--many of which, such as IBM, Hewlett-Packard, Dell, SGI, and Novell are Scali's biggest partners. "If you want to be successful with American-based companies, you have to walk the walk and talk the talk--and you have to do it there," says Skare.

When Skare was hired almost two years ago to run Scali, which provides Linux cluster management software, 80 percent of its sales were from Scandanavian countries, and the bulk of the remaining revenue from the company came from other European countries. In 2004, Scali grew sales by over 50 percent per quarter and 312 percent year-on-year, and it did so primarily by boosting sales in Europe and by getting good traction from its partnerships with U.S.-based partners. In the second half of 2004, says Skare, Scali did 63 percent of its sales in the U.S., which shows that the strategy is working. The company, which was founded in 1997, now has 50 employees, and he says that he believes Scali can double sales in Europe in 2005 and do more than that in the U.S. That sounds like a tall order, but Skare says that Scali sold as many licenses in January and February of 2005 as it did in all of 2003. While moving to the U.S. and reporting sales in U.S. dollars was not the reason for the move, a side effect of relocating its HQ is that the company will not only the company now have income and expenses reported on both sides of the Atlantic, but in a way that will help boost its reported numbers thanks to the strength of the euro against the dollar.

HP Commits to SAS Drives for Servers, Licenses RAID 6 Technology

Hewlett-Packard said this week that it will commit to bringing Serial-Attached SCSI (SAS) disk drives in 2.5-inch and 3.5-inch form factors across its ProLiant server and StorageWorks storage arrays as it refreshes those product lines in 2005. Additionally, the company said that it would soon begin licensing its Advanced Data Guarding (ADG) technology as a variant of RAID 6 data protection for other RAID array vendors to make use of.

On the disk front, HP will create universal, hot-plug SAS drives that will be plugged into into ProLiant servers, as well as storage arrays; the company has already committed to doing the same for Serial ATA (SATA) IDE disk drives, and said that it would also expand its support in that area to include 2.5-inch SATA drives. The idea, says Paul Perez, vice president of storage, networking, and infrastructure for the ProLiant line, is to give customers the ability to get the higher bandwidth and smaller form factors of the new SAS drives into their systems while also allowing those customers who want to use the less-expensive SATA drives to do so as well. Obviously, HP will have to sell different SAS and SATA models of its ProLiant machines, since they use different electronics to connect to servers. Perez says that HP expects the transition from 3.5-inch Ultra320 SCSI to 2.5-inch SAS drives and controllers to take some time, and that is why HP is talking about its roadmap now. Future rack-mounted ProLiant servers launched in the spring will used 2.5-inch SAS units, while tower servers will use 3.5-inch SAS drives (since density is not a big issue there); Modular Storage Arrays will use a mix of 2.5-inch and 3.5-inch SAS drives, depending on the density that customers require. Expansion towers for ProLiant servers will also have a mix of 2.5-inch and 3.5-inch units. HP hopes to have SAS drives across its ProLiant and MSA lines by next spring, says Perez.

HP also said that within a few weeks it would announce that it has licensed its ADG disk array technology to a third party (probably a disk controller maker and probably not a rival server maker) and would propose ADG as a variant standard for RAID 6. ADG allows a customer to add a spare parity drive to a RAID 5 array so the array can sustain a failure of two disks. Normal RAID 5 stripes data and parity across all drives and allows recovery from one disk failure. But ADG, which HP wants to rebrand as RAID 6, stripes two independent parity data sets across the disk drives in the array, which allows two disks to fail and still allow the real data to be recreated from the parity information. ADG is now available in ProLiant servers that have four or more disk drives, and with the move to smaller form factor disks, smaller ProLiant servers will not only be able to hold more physical disks, but also support the ADG variant of RAID 6 data protection. HP has been shipping ADG since 2001.

SGI Says Its Servers, Storage, and Viz Technology Are Grid Ready

Supercomputer maker SGI is well known for its Unix and Linux parallel supercomputers, but the company wants to remind everyone that it is well aware that just building standalone clusters is insufficient in the modern high-performance computing market. That is why SGI has been grid-enabling its various server and storage products and participating in the Global Grid Forum and other grid-related projects, says Walter Stewart, business development manager for grid computing at SGI.

"Fewer and fewer of our customers are building big, standalone systems," says Stewart. "In publicly funded facilities, people cannot even get their grants funded unless they acquire grid-enabled technology right from the beginning." He says that even private supercomputer installations are looking for HPC clusters that can server multiple purposes within their organizations and bring multiple resources to be shared, which obviously requires grid hardware software technology. Stewart says that there is an interesting parallel between the industrial revolution of the 18th century and the information revolution of the late 20th century. In the 18th century, businesses built increasingly elaborate distribution systems for the movement of raw materials and finished goods around the world; today, we are building increasingly elaborate distribution systems for data and computing capacity so we can move it around the world. "SGI is not focusing so much on where the computing is, but on where the users are," says Stewart. And that is perhaps the best definition of grid computing anyone has pronounced yet.

Cray Promotes Ungaro to President

Having stolen away IBM's top supercomputer sales executive to take over its own sales, Cray has decided that it is time to make Peter Ungaro the company's president.

Ungaro was vice president of worldwide deep computing sales for IBM, and he was in charge of all IBM servers and storage as they related to high performance computing, life sciences, digital media, and business intelligence. He was hired away by Cray in August 2003 to take over its sales. Cray has brought two supercomputer architectures to market--the Cray X1 multistreaming vector processors and the "Red Storm" Opteron-Linux Cray XT3. Cray was also helped significantly through its $115 million acquisition of Canadian Opteron-Linux supercomputer maker OctigaBay, and has commercialized that product as the Cray XD1. All three product lines are now selling, and after some initial supply constraints, Cray could be heading into an easier sales cycle. But it has posted $144 million in losses against $149 million in sales in 2004. To say that Cray has to focus on sales execution now is an understatement. But, to be fair, the supercomputer business is, by its nature, a choppy one, and with so many large projects, a small delay can push a relatively large amount of sales out into the future. Cray had, for instance, $237 million in sales and $63 million in profits in 2003.

Jim Rottsolk, Cray's chairman and CEO, says that Ungaro's appointment as president will allow him more time to focus on Cray's product strategy. All Cray departments except finance and legal and relations with the governments of the world with which Cray does business will now report to Ungaro.

Oracle Tops Relational Database Market in 2004, says IDC

According to statistics compiled by IDC, Oracle has once again been crowned king of the relational database market in terms of the money it rakes in. IDC reckons that Oracle took 43.1 percent of the $14.9 billion worldwide relational database market, giving it a big lead over IBM and Microsoft.

As in other IDC sectors where U.S.-based companies dominate, the 11.6 percent growth that the relational database market posted in 2004 is somewhat suspect, since a large portion of this growth is due to the weakened dollar. The weak dollar has the effect of inflating the reported sales of U.S. companies like Oracle, IBM, Microsoft, Sybase, and NCR, the top five relational database vendors in 2003 and 2004. In 2004, IBM accounted for 30.6 percent of the relational database market (including sales of the DB2/400 embedded database inside OS/400 on its iSeries line as well DB2 for the mainframe, DB2 for Windows, Unix, and Linux, and Informix for Unix). IBM also has a reasonably large business selling the IMS flat-file database management system, but IDC was not counting such programs in its stats. Microsoft had a 13.4 percent share of the market, with Sybase and NCR (whose integrated database is used in its Teradata data warehousing servers) each getting 3.1 percent. IDC said that IBM and Sybase grew slower than the overall market, while Microsoft had the largest growth. Oracle had smaller growth than Microsoft, but took in an incrementally larger pile of dough selling relational databases last year.

Jedox Open Source Multidimensional OLAP Server Coming in May

German software company Jedox is getting ready to turn the online analytical processing (OLAP) server market on its ear by rolling out an open source variant of its multidimensional OLAP (or MOLAP) server. Jedox currently sells a tool for the Windows environment called Worksheet-Server, which creates multidimensional models that are stored in Excel format. (As such, MOLAP servers do not require relational databases, but can interface with them.) The open source variant of this program, which is being hosted at Open Source OLAP, will be built from Linux, Apache, and PHP. It is expected to be launched in May of this year.