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Volume 1, Number 22 -- July 28, 2004

But Wait, There's More

Microsoft Releases Office Service Pack 1

Microsoft yesterday announced Office 2003 Service Pack 1, the first major update to its productivity suite since it shipped more than two years ago. Among the obligatory bug fixes and stability improvements, SP1 users will also see some new features. In Outlook, for example, Microsoft hopes to give users the upper hand on spam with new controls for filtering e-mails by the sender's country suffice or the character encoding of a message. Additionally, false positives during spam filtering should be reduced with the capability to automatically add senders to a new "safe sender" list. Better tools for InfoPath developers, enhanced integration with OneNote, improved handwriting recognition on tablet PCs, improved digital signature support, and a new Access conversion pack round out the list of enhancements in this release.

Intel Talks Up Future Itanium Tech

Intel is making the rounds, whispering about future technologies that it is weaving into its dual-core "Montecito" Itanium 2 processor, due next year. Montecito will be Intel's first dual-core Itanium chip, and it will have two full Itanium 2 cores, each with their own 12 MB L2 cache. (Unlike some dual-core designs, the Montecito chip will not have a shared L2 cache.) Montecito will apparently include Intel's implementation of simultaneous multithreading, which it calls HyperThreading, which will make the dual-core chip look like four cores to the operating system and will boost performance (through chip pipeline efficiencies) by perhaps as much as 30 percent. Montecito will also have the SpeedStep power management features, found in Intel's laptop and notebook processors, which cuts down power use when the chip is idling. Montecito will also have features that allow corrupted cache lines to be shut down (Pellston Technology) and special hardware to enable virtualization, called Silvervale. Montecito is expected to run at around 2 GHz and will be implemented in Intel's new 90 nanometer process.

IBM, Oracle, BEA Duke It Out in Middleware Market

The application deployment middleware market grew by 4.4 percent in 2003 to hit just over $7 billion in sales worldwide, according to a report by IDC. This is a steady market, says IDC, which expects sales of new licenses and add-on products to grow at a compound annual growth rate of 4 percent through 2008.

While these numbers seem firm enough, IDC's terminology for this market is somewhat new and has been adjusted to reflect the diversity of the middleware market. When IDC says application deployment software, it means Web, application, and data integration server programs as well as message queuing, transaction processing, and access servers. When you add this all up, it is bigger than the much-discussed Web application server market, which has IBM and BEA Systems in a tight race. The race is nowhere near tight in the broader application deployment middleware market, according to IDC. IBM had a 35.6 percent share of sales in 2003, or about $2.5 billion, while BEA came in at a distant second with 11.5 percent, or $805 million in sales. Oracle, the number-three player, was an even more distant third, with $415 million in sales.

IDC analysts say that IBM has to be careful, since its hegemony in this broader middleware market is based almost entirely on sales of software into the mainframe and OS/400 server markets, which IDC predicts will be displaced slowly as the platforms of choice for such software as customers move to heterogeneous systems (meaning some Unix, but mostly Linux and Windows) to support this software in the future. BEA is the market leader in the Unix and Linux space for application deployment middleware, and Oracle is growing fast in these areas, too. IBM is in for a tough fight, it seems.

IBM Wants Students to Bolster Skills with IBM, Open Software

Time and time again, it has been shown that the technologies students are exposed to in college IT courses are what they prefer to implement once they become working IT professionals. The seeding of technologies in schools is, in part, how Unix, Macintosh, Windows, and Linux all developed a cult following that turned into real markets. While IBM loves Linux and Java, it wants students to be familiar with its interpretation of those open technologies, and to that end Big Blue has launched the IBM Academic Initiative to provide universities with WebSphere, DB2, and other software products, as well as new BladeCenter and Power5-based servers, at a deep discount if they promote Java, Linux, and other open technologies.

These discounts on software complement Scholars Portal, which makes 40 IBM software technologies available to university faculty members so they can use IBM code in their courses. IBM says that 8,000 instructors have signed up for the portal to date. IBM has plans to make larger "Squadron" Power5 servers available to instructors and students remotely through a "virtual loaner" program.

The Channel Is Pushing More Servers, Says IDC

The collective channel of business partners, resellers, and systems integrators that the big server makers rely on to help peddle their products are pushing a lot more volume these days, according to a new report by IDC. Janet Waxman, an IDC analyst, says that the number of servers pushed through the channel in the U.S. market increased by 40 percent in the first quarter of 2004, while the increase in units sold directly by vendors was up only 9 percent. While they were pushing more product, however, the companies in the channel did not see any revenue increase, while the vendors themselves saw a 9.6 percent increase. This is going to make for a very unhappy channel.

IBM seems to be sharing best with its channel (if aggregate data across all brands within a single quarter can be said to be representative), with 63 percent of its server units and 62 percent of its revenue coming from direct sales. (The iSeries sells predominantly through the channel, but the zSeries mainframes sell mostly directly. The pSeries and xSeries are a mix of channel and direct sales.) During the first quarter this year, Hewlett-Packard pushed 38 percent of its server units itself but took 49 percent of the revenue. Sun Microsystems pushed only 21 percent of its server units directly, and because these were mostly big boxes, Sun got to keep 35 percent of the sales. IDC says that Dell, which has plenty of companies that resell its products, despite the fact that it bills itself as a direct-only vendor, got about 80 percent of its sales and 66 percent of its server volumes from direct sales.

Progressive Policy Institute Advises How to Deal with Offshoring

There's been a lot of noise about offshoring these days, and it is going to continue to be a hot topic even after the presidential election is over, because globalization is not just a campaign issue but a fact of life. As is the case with so many issues in America, people are polarized on the issue, according to members of the Progressive Policy Institute, a think tank based in Washington, D.C., that has been a major factor in pulling Democrats toward the right in the past decade.

The PPI has just released a report on offshoring that echoes many of the sentiments that chief executives of high-tech companies have expressed when discussing the issue. Robert Atkinson, author of a report entitled "Meeting the Offshoring Challenge," says Americans cannot be either protectionist or laissez faire on the issue, but have to take a middle course.

"If we are to successfully compete in the global economy--and to preserve support for globalization itself--then it is time for something completely different," says Atkinson. "It is incumbent upon government, working with industry, universities, labor unions, and other groups, to develop and implement a national strategy for competing and winning in the global economy." Like many technologists, Atkinson believes we can simply innovate our way out of the situation, and he prescribes generous tax credits for research and development and an increase in Federal spending on research and training in math and science. He also wants to make it easier for foreign scientists and engineers to work in the United States, while reining in the abuses of the visa system, and wants to create a National Skills Corporation for training U.S. workers for 21st century jobs. The PPI also thinks that the offshoring issue can be solved by the U.S. government enforcing global trade rules and stopping global currency manipulation, which, PPI says, distorts the economy and creates some of the conditions that make offshoring appealing in the first place. Finally, the PPI says that the government and employers have to establish a new covenant with U.S. workers and their unions whereby companies get to shift workers and jobs around the globe but have to be responsible, and if they offshore jobs they have to give employees three months' notice and training to find a new job.

The PPI report is interesting, and in keeping with these polarized times, it will give everyone something to be happy and angry about. The so-called third way, which the PPI generally proposes, might make no one happy or make everyone equally unhappy.

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Editor: Alex Woodie
Managing Editor: Shannon Pastore
Contributing Editors: Dan Burger, Joe Hertvik, Kevin Vandever,
Shannon O'Donnell, Timothy Prickett Morgan, Victor Rozek, Hesh Wiener,
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
Contact the Editors: To contact anyone on the IT Jungle Team
Go to our contacts page and send us a message.


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