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Windows 2003 Small Biz Server at Six Months

Windows Small Business Server 2003, the integrated version of Microsoft's Windows operating system and pieces of its middleware software stack, is six months old this week. Microsoft says that the product is taking off, with unit shipments up 170 percent, compared with the first six months of the shipment of Windows 2000's implementation of Small Business Server. Part of the reason why SBS is doing better is that it is being preconfigured on entry servers from all of the tier-one server suppliers, but the fact that Microsoft now has 47,000 partners certified to sell and support Windows SBS 2003, compared with 10,000 for the Windows 2000 version of SBS, is probably boosting sales, too.

Windows SBS 2003 includes the core Windows Server 2003 operating system, plus Exchange Server 2003, SQL Server 2000, Internet Security and Acceleration Server, Terminal Services, Shared Fax Services, and SharePoint Services.

RFID Looks Like an Opportunity to Microsoft

Radio frequency identification (RFID) is the hot topic these days, and it may even turn into a hot business. Because there is so much interest in this new technology, which places electronic ID tags into all kinds of goods in the supply and distribution chain, so software can track on a component level as materials and products move along from a raw material to a finished good in a customer's hands, Microsoft has to start positioning its Windows products for RFID and start pointing its vast partner channel at this opportunity.

To that end, the company has established the Microsoft RFID Council, a forum where hardware and software vendors in the Windows channel can meet and exchange ideas and forge partnerships to chase RFID money and to help Microsoft understand how to weave RFID support into Windows, SQL Server, and BizTalk Server, among other software. Microsoft also announced last week that it has joined ECPglobal Network, a standards body in the RFID area that is run jointly by the Uniform Code Council and EAN International.

InterTrust, Microsoft Settle Digital Content Lawsuits

Microsoft has been embroiled in a lawsuit with InterTrust Technologies over patents and intellectual property related to digital rights management and the security of digital content delivered over Internet protocols. This week Microsoft paid $440 million to settle these lawsuits and to license some, but not all, of InterTrust's software to be included in Microsoft tools and products.

Microsoft is increasingly interested in settling its outstanding legal disputes, and is willing to spend a portion of its more than $50 billion cash hoard to get out of the courtroom and out into the marketplace. Microsoft has been interested in monetizing transactions for digital content on the Internet for itself, its partners, and its customers, and InterTrust holds 30 patents and has 100 patent applications covering this technology, and it is backed by Sony and Phillips, two big electronics manufacturers. It is just easier to settle and share technologies and make money than it is to fight, and that is why Microsoft did it.

Dell Says It's Ahead on $60 Billion Target

Desktop and server juggernaut Dell finished its fiscal 2004 year, ended January 30, posting $41.4 billion in sales, up 17 percent from fiscal 2003. Net earnings for the year were up 26 percent, which means that Dell grew profits faster than it grew revenue, but not as much as in the past. In fiscal 2003, Dell grew revenues by 13.5 percent, to $35.4 billion, but earnings nearly doubled from 46 cents a share to 80 cents a share. A big portion of the revenue growth fell right to the bottom line. Chairman Michael Dell, who founded his company in a dorm room at the University of Austin, 20 years ago, says that the moves his company has made will allow it to reach or exceed its target $60 billion in annual revenues within a few years. Dell did not say when that would happen, but if current growth rates persist, it should hit that $60 billion annual run rate by the end of fiscal 2006 or early in fiscal 2007. The question is whether Dell will be more or less profitable than it is today. Chasing big-time revenue growth in a vicious IT market has a nasty habit of killing profits.

IBM to Acquire Large Indian Outsourcing House

IBM is acquiring an Indian outsourcing company, it was announced last week. Daksh eServices is one of India's largest business process outsourcing (BPO) firms, with 6,000 employees spread across its four BPO facilities near its headquarters in Gurgaon, and one new BPO facility currently under construction in the Philippines.

Daksh, created in 1999, specializes in call centers and provides back-office transaction processing services to a variety of companies, including Amazon.com. This will be the first BPO acquisition for IBM in India, although IBM already employs 9,000 people at its Bangalore subsidiary, which provides BPO services. The financial terms of the acquisition, which is subject to Indian regulatory approvals and is expected to close in May, were not announced. Following the acquisition, Daksh employees and customers will be absorbed into IBM Business Consulting Services. This is not the first time the companies have worked together. In March, Daksh and IBM completed an installation of a PeopleSoft ERP package in just 20 weeks, which the companies said was a record. IBM Business Consulting Services performed the ERP implementation at Daksh facilities in India, the Philippines, England, and the United States.

Bill Gates, Windows Errors, and the CIA

Microsoft's chairman and chief software architect, Bill Gates, reiterated his company's commitment to developing secure software at the recent Gartner conference in San Diego. Of paramount importance in the development cycle is user feedback, Gates said. But he admitted that, for some users, security concerns sometimes trump the desire to provide feedback to Microsoft, which leads them to click the "don't send" option in Windows after an application crash. "When the CIA buys our products, they check that box," he said.