But Wait, There's More
After Many Years, Turbolinux Finally Goes Public
When commercial Linux distributor Red Hat went public in August 1999 and saw its market capitalization soar to $3 billion on the first day and eventually peaked at above $20 billion before the dot-com bubble burst in early 2000, it seemed all but inevitable that all of the commercial Linux distributors would quickly follow suit, dip into the honey pot that is Wall Street, and fuel their phenomenal growth. While Turbolinux and LinuxCare announced their intent to go public on the American NASDAQ market, SUSE (now part of Novell) hung back and waited to see what would happen and MandrakeSoft (now Mandriva went public on the French equivalent of the NASDAQ market. Turbolinux, which was then just about the only commercial Linux distributor in the Asia/Pacific region, never made it to the initial public offering because the high-tech stock market imploded around March 2000.
After a very long wait, Turbolinux completed its IPO on the Japanese Osaka Stock Exchange, selling 10,000 primary shares at 100,000 Japanese Yen a pop, giving the company about $9 million to fuel its expansion.
Turbolinux did not announce what percentage of its shares it was floating, but the official Japanese IPO Web site says that after the IPO, Turbolinux has 87,000 shares outstanding and that the shares opened up trading at a price of 450,000 Yen, which would seem to imply a market capitalization of about 39 billion Yen (about $353 million). That same site says that in the first six months of 2005, Turbolinux posted sales of 542.9 million Yen (about $4.9 million) and had a net profit of 108.3 million Yen (just under $1 million).
Top Oracle Linux Exec Moves Over to SpikeSource
Open source software stack supplier SpikeSource announced last week that it has hired Jamshed Patel, who was senior director of database and application software maker Oracle's Linux development efforts, has been tapped by SpikeSource to lead that upstart's efforts to bring yet more open source software into its AMP stack. Patel spent nine years at Oracle and was responsible for that company's initial port of the Oracle 8i database to Linux. Murugan Pal, who is the founder and chief technology officer of SpikeSource, is also an Oracle alum and was the main developer for the company's Application Server and related XML technologies. Former number two at Oracle, Ray Lane, who has been at venture capitalist Kleiner Perkins Caufield & Beyers since he left Oracle six years ago, is the company's chairman and helped bring SpikeSource into being.
The question is how big does SpikeSource get before Oracle tries to eat it? For all we know, it has already tried.
HP and Red Hat Boot Up Storage Laboratory for Customers, Partners
Linux distro Red Hat and server and storage array supplier Hewlett-Packard said last week that they have set up a joint storage development and performance laboratory at Red Hat's headquarters in Raleigh, N.C. The lab will be used for customers and partners to test their applications on HP iron and Red Hat's Linux and Global File System. The establishment of the lab follows an agreement that HP and Red Hat inked in August that saw HP integrate and bundle its ServiceGard for Linux high availability clustering software with Red Hat's Linux and GFS software.
Novell Does Share Buybacks to Get Wall Street Off Its Back
Sitting on close to $1 billion in cash with a languid stock price and flat revenues, commercial Linux distributor Novell has been under pressure from Wall Street and investors to buy back some of its own shares in order to prop up its stock price and to make per-share earnings comparisons a little more attractive. Instead of taking a hard line and saying that this case is best held in reserve for emergencies, Novell's management has succumbed to pressure and announced last week that it will spend $200 million over the next 12 months to buy back common stock on the open market.
Jack Messman, Novell's chairman and CEO, put the best face forward on the announcement, as you might imagine any top executive would if his company were in the same position. (And many in the tech industry sure do get into that position, don't they?) "Our stock buyback is just one of the elements of a plan aimed at enhancing shareholder value and securing Novell's future as an important provider of solutions to the IT market," he said in a statement. "The buyback demonstrates the Board and management's confidence in our financial strength and strategic plan."
Novell's stock has been rising since the middle of August and was up 20 percent before the announcement, so Wall Street really has nothing to complain about except that Novell's transition from proprietary to open source software supplier is taking a while--which is exactly what Messman and his team have said it would do from the get-go. If Novell wanted to do something really useful, it would take the $1 billion in cash, borrow another $1.6 billion, and take itself private so it can manage its own transitions and cash exactly as it sees fit. Going public is a great way to get rich quick, but it is a stupid way to try to keep control of your company.
HP Buys Peregrine and AppIQ for Around $625 Million
Having hinted recently that it would make some acquisitions to boost its OpenView systems management portfolio, Hewlett-Packard shelled out approximately $600 million to buy Peregrine Systems for asset and service management and AppIQ for storage management. HP admitted that it had paid $425 million for publicly held Peregrine Systems--it has to say so--but did not divulge how much money it paid for privately held AppIQ. However, a report in the Wall Street Journal pegged the price of the AppIQ deal at around $200 million.
HP paid cash to merge with Peregrine Systems, which worked out to $26.08 a share. HP paid a pretty hefty for Peregrine and did so because it was convinced that Peregrine has fixed itself after having become embroiled in an accounting scandal several years ago and driven into bankruptcy. Peregrine was working on getting relisted on the NASDAQ market and forming partnerships with all the major IT players. (It is traded on the OTC exchange right now.) Peregrine's stock on the OTC tended up from $16 a share, wiggling its way up and down to hit around $23 a share in May of this year, but since then the stock fell back to around $19 a share, which means HP is paying around a 37 percent premium for Peregrine. This is somewhat surprising given the fact that Peregrine closes its last year in March with a loss of $25.4 million on sales of $191 million. HP expects to integrate Peregrine's asset and services management products into OpenView once the acquisition closes, which is expected before the end of the first quarter of 2006. Peregrine has 700 employees and 2,500 customers.
AppIQ is an up-and-coming storage management software vendor, and one that nearby EMC or perhaps IBM might have been contemplating acquiring. (Acquiring Peregrine at such a high premium might have been HP's way of beating others to the punch, too.) AppIQ has 125 employees and 250 customers, and HP says that this acquisition will take about 45 days to close.
Linux Starts Showing Up in Big Databases, Says Winter
Every couple of years, IT consultancy Winter makes headlines as it ranks the top 10 data warehouses in the world. The largest data warehouses in the world have unique requirements for the scaling of performance and data, and knowing who chooses what is an interesting study in server architectures.
Winter says Yahoo has the largest database in the world, a hefty 100 terabyte behemoth that is three times as large as the biggest production database in Winter's 2003 survey. This Oracle database runs on Sun Microsystems's Solaris Unix on a cluster Fujitsu-Siemens PrimePower Sparc64 servers. Sun also hosts the second largest data warehouse, the "Daytona" call detail data store running at AT&T Research Labs and comprising 93.5 TB of data in the database and handling a table with more than 743 billion rows. According to AT&T, the Daytona platform can handle as much as 312 TB of data, with a single table of more than 1.9 trillion rows, and could handle even more but AT&T ran out of data to put into the system.
The largest OLTP database surveyed by Winter is a parallel sysplex cluster of zSeries 990 mainframes from IBM that runs at the Land Registry for England in Wales in the United Kingdom; this setup has a relatively modest amount of storage at 23.1 TB, which is provided by disk arrays from EMC and Hitachi. The highest throughput OLTP system is also a zSeries 990 mainframe cluster using IBM storage that is installed at United Postal Service. This UPS mainframe cluster runs IBM's DB2 database on the z/OS operating system and that is capable of cranking through 1.1 billion SQL statements per hour. By comparison, the largest OLTP system running on Unix (in this case Solaris) copes with 8.6 million SQL statements per hour. The mainframes at UPS have a factor of 128 more SQL scalability than the largest Unix OLTP system (which was not named).
The largest Windows-based database in the world is now a 19.5 TB database (double the size from two years ago). Linux is also getting into big databases, according to Winter, and the three largest Linux-based databases in the world are at bookseller Amazon, which has built 7.8 TB, 18.5 TB, and 24.7 TB databases on Linux.
IDC Says U.S. Companies Will Double Up on Offshoring by 2009
If you think that offshoring is just a passing fad, the analysts at IDC and Gartner sure do not think it is.
According to a report (that costs a stunning $8,000, mind you) from IDC, companies in the United States are expected to double their spending on offshored IT services contracts between 2004 and 2009, reaching $14.7 billion. That's a compound annual growth rate of 14.4 percent. Financial services companies are expected to account for 28.9 percent of the services offshoring spending by U.S.-based companies, with discrete manufacturers accounting for 17 percent. Retail and communications companies are also expected to be big spenders for offshoring of services. These projections are based on a survey that IDC did with 1,000 companies in the States.
Gartner also released its own offshoring report last week, and said that it expects that total worldwide offshoring from the developed economies in North America, Western Europe, and Japan will reach a combined $50 billion by 2007. Gartner says that India is the current dominant force in the offshoring business, with China coming in a distant second. That said, Gartner is recommending that customers give other offshoring locations a second thought, such as Latin America, Brazil, Mexico, the Czech Republic, Hungary, Poland, and Russia. Language requirements are also driving nearshore IT services projects, says Gartner, and with Ireland, Canada, Mexico, and parts of Africa expected to see growth.