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But Wait, There's More
Vendors Create Enterprise Grid Alliance
If grid computing means anything, it's taking all of the disparate and incompatible systems and servers that are running out there in the data centers of the world and allowing companies, as well as transcorporate and academic institutions, and ganging up the collective processing embodied in those machines to do useful work. You can't do that without open standards (which is why we have the Global Grid Forum), but you also have to have an industry consortium that can corral vendors into cooperating where they reflexively would rather compete.
This mission of the Enterprise Grid Alliance is to smooth over the substantial differences of opinion and differences in objectives among the hardware and software companies involved in the emerging grid computing market so that multiple grid standards do not create isolated islands of automation. The EGA started out as a suggestion by database maker Oracle as it was rolling out its grid-enabled Oracle10g database late last year. In addition to Oracle, the EGA board of directors includes representatives from EMC, Fujitsu Siemens, Hewlett-Packard, Intel, NEC, Network Associates, and Sun Microsystems. Missing on the list of EGA founding members is IBM and commercial grid computing specialist Platform Computing. These things take time.
IDC Says Grid Sales to Hit $12 Billion by 2007
There has been a lot of talk about grid computing in the past two years about how grids will change the way we do computing. But there has not been any hard evidence that anyone is buying grid technology, nor have there been any forecasts of the investment that corporations, governments, and other institutions will make in grid computing over the next several years.
That's why IDC has taken a stab at sizing up the grid market. Chris Willard, the analyst who follows the workstation and high performance computing markets for IDC, says the company reckons that the grid computing market will grow to represent $12 billion by 2007. If you think that is a lot of money, remember that the IT industry was about $1.1 trillion in 2003. So this is just a small trickle of business. You also have to realize that IDC counted the value of any server or device connected to a grid as revenue for grids. So this is not simply the value of the software and other devices that go into making up a grid. This is a reasonable way to calculate the value of the grid market, to be sure, but it is not the same thing as counting money in the pockets of grid vendors. This number will be a lot smaller.
SGI Boosts Revenues, Gets Closer to Profits
Silicon Graphics is in the midst of transforming itself from a vendor of high-performance Unix workstations and clustered servers to a maker of high-performance Linux shared memory systems, and the indications are, based on the company's fiscal third quarter results, that this strategy is working. SGI booked $230 million in sales for the quarter, up 6 percent, and it moved significantly closer to being profitable, with a net loss of $4 million. (This time last year, SGI had revenues of $217 million and posted a $35 million loss.) SGI has pared down its payroll and pushed its new Altix shared memory supercomputers, which are based on the Itanium processor and run Linux, very hard in recent quarters. But Bob Bishop, SGI chairman and CEO, said that sales in North America were not as strong as SGI had projected. SGI had $146 million in the bank as of the end of March, and just two weeks ago the company sold its Alias software unit (which was already operating as a separate company) for $57.5 million.
In a statement released today, the company said that it has 215 Altix customers to date and that they have purchased machines with an aggregate of about 13,000 Itanium processors. The Altix 3000 line was launched in February 2003, and it originally spanned to 64 Itaniums with a single shared memory. (Machines can be clustered using NUMAflex to grow beyond that.) In January, SGI launched an entry Altix 350 system, which scales from one to 16 Itanium processors in a shared memory Linux cluster.
Cray Sells X1 Super to U.S. Army
Some time during this quarter, the Space and Missile Defense Command facility of the U.S. Army in Huntsville, Alabama, will take delivery of a new Cray X1 supercomputer. The Department of Defense's High Performance Computing Modernization Program is picking up the tab for the X1, and would not say how big the X1 machine would be or what it will cost. A fully loaded X1 machine has 64 cabinets with 1,024 multistreaming processors (MSPs), shared main memory that ranges from 16 TB to 64 TB, and a performance of about 52.4 teraflops. (An MSP is a virtual vector processor made of four physical processors.) Such a machine would cost between $200 million to $300 million in a usable, balanced configuration. There is no indication that the Army is getting a machine anywhere near that powerful. The word on the street is that the Army machine costs under $10 million, which probably means the Army is getting a 1 to 2 teraflops box. The X1 will be used in missile simulations.
Computer Associates CEO Steps Down, but Maintains Innocence
Sanjay Kumar stepped down as chief executive officer and chairman of Computer Associates last week as the Securities and Exchange Commission and U.S. Attorney's Office continued their two-year criminal investigation into accounting irregularities at the software giant. The company announced that Kumar will remain with CA as chief software architect and that Lewis Ranieri, who has served as the board's lead independent director since 2002 and is the founder of Hyperion, will become its chairman. CA said it will quickly appoint an interim CEO and that it is searching for a permanent replacement for Kumar, who has maintained his innocence in accounting irregularities that so far have led to the firing or resignation of at least 14 CA employees; four employees have plead guilty to criminal charges, according to Reuters. Employees at the $3.2 billion Islandia, New York, company, which sells application software, systems management tools, and programming languages for everything from mainframe and OS/400 servers to Linux and Windows systems, have been accused of prematurely booking revenue from software fees. The company itself has not be charged. CA says its audit committee has found that changes made to financial reporting in October 2000 are working and that the company's financial reporting from fiscal year 2002 remain unaffected by the prior accounting practices.
Companies Need to Develop Long-Term Compliance Strategies, Gartner Says
If you're looking for a "quick and dirty" fix for Sarbanes-Oxley compliance in 2004, be prepared to do it all again next year, and the year after that, advises Gartner. The IT analyst firm is recommending that companies take a more long-term and strategic view of their compliance initiatives, instead of purchasing one-off software products that address only one particular pain point. "Enterprises that choose one-off solutions for each regulatory challenge they face will spend 10 times more on compliance projects than their counterparts that take a proactive approach," said French Caldwell, research vice president at Gartner. The Stamford, Connecticut, company helped companies with compliance strategies at its Midsize Enterprise Summit East 2004 conference, held last week at the Gaylord Opryland Resort in Nashville, Tennessee. Gartner's analysts recommend the following spending breakdown for Sarbanes-Oxley compliance initiatives: 50 percent for implementation and remediation issues, including directors' and officers' insurance and increased consulting fees; 30 percent for internal analysis, including redundant audits for the next three quarters; and 20 percent for software upgrades and new purchases.
IBM Leads in Content Management Software
According to an analysis of the content management software market performed by WinterGreen Research, IBM is the market leader in sales of content management software, with a 20 percent share of the market through the first three quarters of 2003. WinterGreen estimates that, for the full year, content management software will account for a total of $1 billion in sales across all vendors, and it forecasts that this market will grow to $2.1 billion by 2009. WinterGreen say that Documentum, acquired late last year by disk array maker EMC, was the number-two vendor in the content management software space, with 14 percent of the market in the first nine months of 2003, followed by Open Text with a 9 percent share. With no one vendor having a dominant position, it is still possible for a newcomer to enter the market, but both IBM and EMC have invested heavily in this space and intend to gain market share in the area. Microsoft certainly has aspirations in the CMS market, too, and has embraced the XML lingua franca that all of the other CMS players have adopted.
By the way, CMS software does more than manage HTML documents on a Web site, or at least enterprise-class CMS systems do. Increasingly, CMS programs have to manage XML documents, PDF documents, and various kinds of structured and unstructured data. One of the big drivers behind this market is having to comply with government reporting regulations, which force companies to archive information and communication over a long term.
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