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Microsoft Opens Large Campus in India; Partners with Wipro, Infosys

Microsoft's chief executive, Steve Ballmer, was in India this week to oversee the official opening of the software giant's new 28-acre campus in a suburb of Hyderabad and to cement new relationships with two of the largest offshore-outsourcing companies in Bangalore. According to a story in The New York Times, the new building in Hyderabad has the capacity to hold more than 1,600 employees, although Microsoft only has 450 developers working there currently. Microsoft also announced it has signed an $8 million joint venture with Infosys Technologies to provide cross-industry solutions based on Microsoft's technologies. The Times reports that Ballmer also signed a major agreement with Wipro, another large offshoring provider, to allow Wipro to use Microsoft technologies to build software for their clients, "at more favorable terms." Microsoft formally announced the new Infosys partnership. It did not formally announced the partnership with Wipro or the new building in Hyderabad, which is said to be the largest Microsoft campus outside the company's headquarters in Redmond, Washington. In March, Bill Gates, Microsoft's chairman and chief software architect, said that most Windows operating system work would stay in Redmond. "We do have India and China development groups," he said at the time. But "the bulk of Windows development and testing is going to stay in one place" (see "Bill Gates Talks Up Next 'Holy Grails' of Computing").

Novell Sues Microsoft for Killing WordPerfect, QuattroPro

As expected, Novell filed a lawsuit against Microsoft last week alleging that the software giant crippled its capability to sell WordPerfect and Quattro Pro software programs. Novell claims Microsoft took several actions that hurt WordPerfect and Quattro Pro when it owned those programs from 1994 to 1996, including withholding technical information about Windows that prevented Novell from developing new versions of its software; integrating technologies into Windows to exclude Novell's products from certain markets; and using its monopoly power to prevent hardware partners from offering Novell's products to customers. Novell said it would prefer to settle out of court, and did not specify how much money it would take to make that happen. Novell paid more than $1 billion to buy the WordPerfect word processing application in 1994, the same year it bought the Quattro Pro spreadsheet application. It sold the two programs to Corel for $170 million in 1996, after its share of the word processing market fell from 50 percent to 10 percent. In a statement issued last week, Microsoft blasted Novell's lawsuit, calling it "fundamentally flawed" and saying the real reason Novell lost so much market share with WordPerfect was its "bad decisions and business mistakes." Last week, Microsoft agreed to pay Novell $536 million to settle an antitrust lawsuit related to Novell's NetWare operating system. Microsoft says it expects to pay $950 million more to settle remaining claims and lawsuits.

Microsoft Lures NetWare Customers with Windows Discounts

Microsoft is offering cash to entice Novell NetWare users to migrate to Windows Server 2003. Microsoft announced yesterday that it will pay NetWare users $600 for each Windows Server 2003 license they purchase. (They must also purchase at least 50 client access licenses.) The U.S. Mid-Market NetWare Migration Program, as Microsoft calls it, is good for up to 25 "subsidies" per customer, which translates into $15,000 in savings off the cost of the Windows and the CAL licenses. The deal is good for NetWare customers buying licenses between October 25 and May 1, 2005, or until Microsoft gives away 1,000 subsidies, whichever comes first. Microsoft is also providing tools and services to help NetWare customers if they decide to move to Windows Server 2003. Novell, which also owns the SuSE Linux operating system, is in the process of trying to move its vast installed base of around 75 million or so NetWare users forward. Novell's customers are currently beta-testing the new Open Enterprise Server, which will include both NetWare and SuSE Linux kernels, and which, Novell says, will allow NetWare users to make the move to Linux at their own pace or to stay on NetWare.

New Credit Card Transaction Options Brought to Retail Management System

Small and midsized retailers that use Microsoft Business Solutions Retail Management System 1.2 can now use Wells Fargo, Bank of America, or Paymentech to process their credit card and debit card transactions over the Internet, Microsoft announced yesterday. The newly released integration means that Microsoft Retail Management System 1.2 users no longer need to acquire and install payment processing middleware to run transactions. Additionally, the users will also no longer need a credit card terminal or a dedicated phone line for transaction processing. The addition of these three providers adds to Microsoft's previous support for Citi Merchant Services. "Merchants that want integrated card processing included in Microsoft Retail Management System 1.2 now will be able to simply set up an account with one of four industry-leading acquiring companies," according to Joseph Corigliano, director of business development at the Microsoft Business Solutions subsidiary.

The Microsoft Solution for Windows-Based Hosting, Vol. 3

Consultants and service providers who are interested in hosting Windows servers for their customers will be glad to hear that Microsoft yesterday announced the availability of a new version of the product that lets them do just that. The new version of the product, The Microsoft Solution for Windows-based Hosting Version 3.0, includes new capabilities for helping service providers to build, provision, patch, and monitor their customers' hosted Windows applications. One of the new modules of the eight-part Microsoft Solution include Automated Deployment Services, which, Microsoft says, shorten server build times by automating up to 85 percent of the installation and maintenance tasks. There is also a new module called Windows SharePoint Services, which delivers a Web portal, a new module called Data Hosting, which provides a SQL Server database to power Web sites or applications, and a new module called Web Hosting, which uses Internet Information Services (IIS) to deliver information via ASP.NET, SSL, FTP, e-mail, and FrontPage Server Extensions. The other four modules of The Microsoft Solution include Centralized Management (an Active Directory implementation); Monitoring and Reporting (which has Microsoft Operations Manager under the covers); Service Provisioning (which uses the Microsoft Provisioning System); and Patch Management (which uses Software Update Services).

VMware Cuts GSX Server Prices

VMware, the virtual machine partitioning software maker, which is a subsidiary of disk array maker EMC, announced last week that it is slashing prices on its GSX Server virtualization program. GSX Server is the entry VMware product for virtual machine partitioning on servers. VMware is cutting the price of GSX Server from $2,500 on a two-way server down to $1,400. It is also capping the price of GSX Server on larger machines at $2,800, regardless of the number of processors in the box, from four to 32. Up until now, GSX Server cost $5,000 on a four-way box and $10,000 on an eight-way box. The biggest boxes typically running GSX Server are 16-way machines, and customers installing these boxes will see a big reduction, down to $2,800 from the $20,000 VMware was charging before the price cut. The price cuts are meant not only to spur demand but also to make GSX Server more price-competitive with the new kid on the virtualization block, Microsoft's Virtual Server 2005, which supports Windows, Linux, NetWare, and OS/2 (yes, OS/2) partitions. Microsoft is charging $499 for four-way servers and $999 for servers with eight to 32 processors for Virtual Server 2005; customers also have to buy Microsoft Operations Manager for $729 and pay $539 for each Microsoft Operations Manager-managed device.

IDC Plots Steady Software Sales Through 2008

The market for packaged software products, including operating systems, middleware, and applications, is growing again after a decline last year, according to IDC. The market researcher is predicting that worldwide software sales (including perpetual software licenses as well as software rented on an annual or a monthly basis) will rise by 5.1 percent this year, to $189 billion. IDC says further that the compound annual growth rate for worldwide software sales between 2003 and 2008 will be about 6.9 percent, which suggests that the market growth will accelerate, pushing sales to about $250 billion or so. While this seems good, it is only so by recent comparison. "Even though the software industry is recovering from its first-ever decline, the double-digit growth rates experienced in the last decade will not return in the foreseeable future," said Anthony Picardi, senior vice president of global software research at IDC, who put together the software forecast. "Issues of complexity, security, and software quality, as well as a myriad of changing macroeconomic factors, all pose continuing challenges to industry growth." In 2003, one third of total software sales went to five vendors: Microsoft, IBM, Oracle, SAP, and Computer Associates. As for trends, IDC says that the Linux platform gave it seventh-place in the software market, well behind various Unix, Windows, and MVS mainframe platforms. However, IDC expects that, by 2008, the Linux platform will move into the fourth position. As is the case in other parts of the IT industry, North America is and will remain the largest software market, and Asia and Central Europe are the fastest growing software markets.