HP or Oracle announces intention to acquire Brocade by Dec. 7?

The latest tech company to hit the M&A rumor mill is Brocade (BRCD), a manufacturer of data center equipment ranging from blade server modules to storage-area networking gear. Reports in the financial press say that the company has put itself up for sale, and prospective buyers include tech heavyweights Hewlett-Packard (HPQ) and Oracle (ORCL). However, the Wall Street Journal, citing "people familiar with the matter," said that "no deal is imminent."

Oracle has been on an acquisition spree recently, with deals involving Sun and HyperRoll. HP's acquisitions include EDS and Colubris.

Prediction: By December 7, 2009, either HP or Oracle announces its intention to acquire Brocade Communications Systems. The deal does not need to be accepted, approved, or closed by this date, but one of the companies involved must make an announcement or have the news confirmed in a major financial or technology news publication by Monday, December 7, 2009.

Source: http://www.thestandard.com

Read more ...

Oracle Fixes Highly Exploitable Flaws

While Oracle's latest quarterly critical patch may fix fewer flaws than previous quarterly patches, today's release is notable for the number of flaws that can be exploited without credentials, according to Amichai Shulman, CTO of Imperva and a former member of the security center of the Israeli Defense Forces (IDF).

Two vulnerabilities rated a 10 on the CVSS scale, on which 10 is the highest possible risk, because they allowed an attack on the system without authentication. Being able to exploit a flaw without valid database credentials make these flaws extremely important. Those critical vulnerabilities are in the BEA JRockit application and in Oracle Secure Backup.

BEA JRockit is Oracle's Java technology, and the critical vulnerabilities affect the latest versions of the software, R27.6.3 and earlier (JDK/JRE 6, 5, 1.4.2). A user can exploit them to do damage without having the necessary credentials.

Oracle also issued patches for the following other BEA products: Oracle Complex Event Processing and Oracle WebLogic Server.

Oracle also issued two fixes for flaws in Oracle Secure Backup, one of which is a critical flaw rated a 10 on the CVSS. A user can exploit it to do damage without having the necessary credentials. The other is rated 9 because although it also allows a complete takeover of a PC, it requires valid credentials.

Oracle's most popular software, Oracle Database, received 10 fixes today. Some of the patches applied to the new 11g product. Oracle said that three of those fixes rate and can be exploited without a user name and password and one rates a 9 on the CVSS on Windows (but a 6.5 if Oracle is running on Unix or Linux). This flaw enables the complete takedown of a database on Windows and partial takedown on Unix or Linux.

Shulman said that the flaw was likely related to networking components, such as the Oracle Listener component, rather than to the core of the database itself. In April, Cisco released a proof of concept attack on the Oracle Database Listener designed to work on Windows because it attacked a specific DLL (define) file. The flaw that Cisco demonstrated has been fixed.
Lower rated fixes still pose risks

The two fixes issued to Oracle Application Server were rated a 5 out of 10, but both could be exploited without user credentials. Of eight new fixes to Oracle Applications Suite, five could be exploited without user credentials, but none were rated higher than 6. Two new fixes for Oracle Enterprise Manager Suite were not rated higher than 5.5 and were not exploitable without credentials.

Of three new patches for the PeopleSoft and JDEdwards Suite, one fixed a flaw that could be exploited without user credentials, but none was rated higher than 5.5.

One fix was issued for the Oracle Siebel Suite and although it could be exploited without user credentials, it was rated only 3.

But Shulman said that the low CVSS scores may understate the risk. "Using very simple tools like a text editor and a Telnet program (define), available on every PC, I can bring down a production database server," he said. "Oracle follows the CVSS scoring standard and these flaws score relatively low but in reality that's a pretty big security risk," he said.

Author: Alex Goldman @ www.internetnews.com

Read more ...

Oracle to cut 1,000 European jobs

Oracle plans to lay off up to 1,000 workers in Europe, or about one per cent of its global staff, as the recession erodes the giant software compans earnings, it emerged yesterday. The world’s second biggest listed software maker would be one of the last major technology companies to undertake significant layoffs in this economic downturn.

Source: http://www.cityam.com

Read more ...

National Bank of Cambodia to implement Oracle Flexcube

National Bank of Cambodia is to implement Oracle's Flexcube core banking package as it bids to modernise the country's antiquated financial system.

The central bank will use the system to automate operations across deposits, loans, foreign exchange, money markets, securities, funds transfer and asset management.

Thai Saphear, head of the governor's office, National Bank of Cambodia, says: "We see technology as a key enabler in the modernisation of our financial system and are taking steps to deploy a core banking system that provides a platform for effectively and efficiently managing growth."

Supported by the Asian Development Bank, the implemenation project will be led by Oracle in association with local companies interFlex and Neeka.

InterFlex will provide National Bank of Cambodia with environmental software and implementation services for the core banking implementation. Neeka, part of the Thakral Group of Companies, will provide the hardware infrastructure and support services for the project.

Source: http://www.finextra.com

Read more ...

Why Oracle will continue to win

I was somewhat shocked by the stellar results Oracle recently reported, considering the sorry state of the economy. I even called an analyst friend to find out if maybe there was some house of cards ala Computer Associated that explained the consistent rise in revenue and margin. But I was reminded of two simple facts explaining why Oracle remains dominant:

1. Applications drive database sales
2. Oracle owns pretty much everything

Oracle's acquisition streak has given the company an enormous breadth of offerings (say what you will about quality of the software) and the attempt at offering it's own Linux variant gives it an OS that's passable if not meaningful. But, I don't know that owning the operating system is important to the growth of sales in applications or databases. (Note: Matt Asay wrote a very good post about why Ubuntu should be Oracle's Linux of choice.)

Oracle applications and databases have to run on an operating system, but the operating system doesn't necessarily drive software sales, or sell databases. The OS may be a point of influence, but doesn't drive the dollar values that you get from software.

Meanwhile, Oracle has amassed such a wealth of software that it can not only drive it's own database sales through upgrades and replacements (JD Edwards or Siebel running on DB2 seems unlikely) but it can up-sell databases to customers of BEA or any of the other myriad applications it now owns.

Add MySQL into the equation and Oracle can sell you a database pretty much anytime for any purpose, to support any application (which you can probably buy from them too.)

This leads into some questions regarding Cisco's strategy, based on the idea that hardware should sell applications, as well as IBM's strategy, where services have often sold software and hardware. The future is of course a mix of all of these strategies, but it's not clear that another company is as well positioned as Oracle.

While certainly not unstoppable, Oracle's execution has been very impressive, especially in a down economy.

Author: Dave Rosenberg @ http://news.cnet.com

Read more ...

Oracle's Earnings: A Good Omen for Tech?

Fiscal fourth-quarter results from the software behemoth fueled optimism that a rally in tech stocks may continue. Wall Street took heart from a report showing better-than-expected earnings from Oracle (ORCL), the Silicon Valley software giant. Technology stocks have been on a roll this spring, and investors eyed Oracle's fourth-quarter report on June 23 for signs the rally might continue.

Sales, profits, and new software bookings for Oracle's fiscal fourth quarter ended on May 31 exceeded Wall Street's forecasts. That sent shares of Oracle up 2.7% in extended trading, after closing on June 23 down 10¢, or 0.5%, at $19.87. The shares have gained 8.8% in the past three months.

Profits declined 7% and revenues fell 5% in the period, though results would have been better if not for the effects of translating overseas sales into a rising U.S. currency. On Wall Street, analysts said Oracle's recurring revenues from technical support contracts and prudent control of expenses during the quarter helped offset currency-related declines. "Oracle continues to be a high-quality investment," says Andy Miedler, a senior technology analyst at Edward Jones who rates Oracle a "buy."

Pickup in Software Sales

Investors are lifting the shares of tech outfits including IBM (IBM), Google (GOOG), Microsoft (MSFT), and Adobe Systems (ADBE) that reported relatively healthy results during the recession by taking advantage of companies' need to buy products that can boost productivity, Miedler says. "Investors see tech companies posting fairly decent results in this environment, and they're rewarding them for it," he says. The Nasdaq composite index has risen 13.4% since Mar. 24, outpacing other indices.

Oracle executives told Wall Street analysts in a conference call that customers are beginning to buy more software, and pointed to deals closed during the quarter with Wal-Mart (WMT), American Express (AXP), Vodafone Group (VOD), and Perry Ellis (PERY). "The sense of panic and deer-in-the-headlights kind of feeling" has subsided, said Oracle President Charles Phillips.

For the fourth quarter, Oracle earned $1.9 billion, or 38¢ a share, compared with $2.03 billion, or 40¢ a year earlier. Excluding stock compensation and one-time charges, earnings were 46¢ a share, exceeding Wall Street analysts' estimate of 44¢. Revenues were $6.9 billion, vs. $7.2 billion a year earlier. Analysts had expected sales of $6.47 billion. Sales of new software licenses, a closely watched measure of future revenues, were down 13%, to $2.7 billion, but also exceeded analysts' expectations.

Weathering the Recession

Looking ahead, investors are still waiting for more clarity from the company about how quickly it can cut costs after its $7.4 billion acquisition of computer and software maker Sun Microsystems (JAVA) closes this summer, and whether it will keep Sun's server and storage business.

Keeping lower-margin hardware operations would be a strategic departure for Oracle, which generates healthy margins from sales of database, middleware, and business applications. Oracle executives indicated during the conference call with analysts that they will take a run at the hardware business. Oracle has spent more than $30 billion on 55 acquisitions since 2005 to compete with SAP (SAP) in applications software, and with IBM in the market for application-connecting middleware.

The company has withstood the worst effects of the slow economy because of recurring revenues from support contracts. Excluding stock compensation and charges for acquisitions, Oracle's operating margin was 51% during the quarter. Annual fees paid by customers for the rights to new versions of Oracle's software and for technical support accounted for 44% of Oracle's fourth-quarter revenue, and the contracts are considered highly profitable. "The margin story has to do with our enormous installed base of customers who renew their agreements with us every year," Oracle President Safra Catz told analysts.

The company's profit margin will undoubtedly fall after the Sun deal closes, but analysts say the expected declines are reflected in Sun's stock price, and that investors view the acquisition as a positive. "Oracle is a pretty boring story without Sun," says Yun Kim, an analyst at Broadpoint AmTech (BPSG), who has a buy rating on Oracle's stock.

Sun's Hardware Business is Promising

Catz told analysts to expect a decline in sales of 1% to 4% for the first quarter that ends in August, and earnings of 29¢ to 31¢ per share. Oracle also declared a dividend of 5¢ per share payable on Aug. 13.

Brent Thill, director of software research at Citigroup (C), who also rates Oracle a buy, told clients in a June 22 research note that although investors usually fear a "seasonal drop-off" in sales during Oracle's traditionally slow summer quarter, prospects of an economic recovery and the imminent closing of the Sun acquisition "will outweigh those issues." When Oracle announced the deal on Apr. 20, it said Sun would add at least 15¢ per share to its non-GAAP (generally accepted accounting principles) income in the first full year after closing.

Despite calls by some investors for Oracle to sell Sun's hardware business and keep its software products, Oracle executives said they have the opportunity to deliver products that combine Sun computers with Oracle software in a way that gives information technology departments more confidence that the hardware and software will work well together. To underline the point, Oracle Chief Executive Larry Ellison spent half his speaking time on the conference call talking up the virtues of a product called Exadata that runs Oracle's database on Hewlett-Packard (HPQ) hardware.

Ellison's willingness to jump further into the computer hardware market by buying Sun has deep roots, says John Wookey, an executive vice-president at SAP, who left Oracle early in 2008. Ellison used to personally fix errors in programs running on old IBM mainframe computers, according to Wookey. "Larry likes hardware," he says.

If he demonstrates that affection by keeping Sun's hardware assets, investors will focus on whether he can run a hardware business as well as the software juggernaut he's assembled.

Author: Aaron Ricadela @ http://www.businessweek.com

Read more ...

Why Oracle Wants Solaris

With its future apparently secure, the benefits of Sun's operating system become compelling. Oracle praised the Solaris operating system when it agreed to acquire its creator, Sun Microsystems, but the actual beauty of this fine piece of engineering was left unexplained. Here's a look at the advantages of Solaris for business computing and insights into what Oracle's long-term intentions may be for the operating system.

No matter what your attitude is toward Oracle's products, management style and strategy, anyone running a large or small data center should breathe a sigh of relief now that the long-term viability of Solaris is assured. Without an acquisition by Oracle or Cisco ( CSCO - news - people ), Solaris might have been put on the proverbial shelf, a tribute to what the fine engineers at Sun could do back in the day. But now that Solaris will receive the marketing support that it deserves, information technology staff should be taking a close look at the operating system for the following reasons.

Superior virtualization: In the Linux world, virtualization is performed by multiple parties. One organization or company does the hypervisor (Xen, VMware ( VMW - news - people ), Citrix, Parallels), the virtual layer on top of the hardware. Another organization (the Linux community) adapts the operating system to better support virtualization. What Solaris offers IT is a top-to-bottom engineered approach to virtualization where the hardware, the hypervisor, the OS and the ZFS file system are all designed to deliver optimal performance and manageability. Solaris Containers are a lightweight but powerful virtualization option with very low processing overhead (2% vs. about 20% for a hypervisor). Linux will get there but at a slower pace as the multiple parties involved negotiate with each other. Microsoft ( MSFT - news - people ) also offers a unified virtualization stack but it remains to be seen if Windows can ever achieve as wide adoption in the server space.
Scalability for Large Scale Multiprocessing: Benchmarks shows that Linux stops providing benefits at four processors. You can add more, but performance won't get much better. Solaris has been engineered to support massive multiprocessing. If you need to scale a single box, you can add dozens of processors, and Solaris boosts performance accordingly. Solaris also has the most scalable networking support of any operating system on the market.

Reliability: Linux has long been successful in data centers because it is less error prone than Windows, which frequently requires machines to be rebooted. Solaris takes reliability to a new level. A feature called predictive self-healing allows failed hardware components to be swapped out without rebooting.

Security: The security in Solaris benefits from the same engineering quality as the rest of the operating system. Sun's security DNA comes from its experience supporting financial services computing and e-commerce. Solaris was designed for secure networking and provides many security features, including role-based access control, a firewall and secure out-of-the-box settings.

Administration: Solaris has administration functions that allow mass changes to be made to many instances of an operating system at once and features that allow one master machine to be replicated to many other machines running a copy of the operating system. The administration capabilities have been expanded to cover the challenges of running a large number of virtual machines.

Flexible Deployment: Solaris is offered both as a fully supported commercial product and as OpenSolaris, a leading-edge open source version where the latest features are tested. Solaris 10 can run Solaris 8 and 9 apps in containers. Further, Solaris runs on a huge range of hardware from x86 Intel platforms to high-end RISC servers. Solaris can run on any hardware platform, not just on Sun hardware.

Green IT: As they say at Sun, "You can't be green without the Sun." While that may not be always true, it is true that Sun's SPARC chip set and its servers are among the most energy efficient on the market, in some cases qualifying for utility rebates. Performing a server consolidation using Solaris and Sun hardware provides an easy way to lower carbon footprint but maintain high performance.

With Sun at the helm, you could easily get the idea that Solaris was created as a public service. Sun has never seemed like it was in business solely for the money. At Oracle, green is always a top priority, as it should be, and Larry Ellison is swooning about Solaris because he sees it as key to a new kind of offer to Oracle's customers. But what is that offer?

My guess is that the "Industry in a Box" vision mentioned by Charles Phillips, Oracle's co-president, will actually become the next wave of cloud computing. In a previous column, I recommended that Google ( GOOG - news - people ) get into the appliance business. My guess is Oracle will follow this path with a vengeance. Solaris will power Oracle's cloud offerings, but through appliances, Oracle will bring the cloud to the data center.

Remember that Google, the leading provider of large-scale computing services in the cloud, does so by building its own hardware and software that is integrated and optimized for the task. I believe that Oracle recognizes that there are limits to the amount of enterprise IT that can be put into the cloud. Problems such as security, disaster recovery and moving huge amounts of data are significant barriers to cloud migration. But many of the same economic and operational benefits of the cloud can be achieved through remotely managed appliances that integrate software and hardware in one box. Oracle can run these over the Net using the Smart Services model I wrote about in Mesh Collaboration. The customer gets all the benefits of the cloud without having to move data off premise.

With the acquisition in place, the installed base of Solaris will grow as more companies discover the brightly shining benefits of this operating system.

Author: Dan Woods

Dan Woods is chief technology officer and editor of Evolved Technologist, a research firm focused on the needs of CTOs and chief information officers. He also consults for many of the companies he writes about. For more information, go to www.evolvedtechnologist.com.

Read more ...

Oracle Launches Asia Pacific Virtual Tradeshow

Oracle Corporation is inviting everyone to join the interactive conversations at Oracle’s Applications Unlimited Experts Live! virtual show.

The action-packed day kicks off in high gear on June 16, 2009, 10AM to 4PM with a compelling keynote from Ed Abbo, Oracle’s Senior Vice President of Applications Development.

This FREE virtual show provides convenient access to valuable product updates and the chance to learn more about the trends and technologies that can help companies gain competitive edge in today’s uncertain times. Drop in and attend what interests you, when you like, without leaving your desk.

During this one-day virtual show, attendees can visit Oracle Applications booths, interact with Oracle experts, experience the latest product demos and network with peers.

Attendees can expect to get a better understanding of how Oracle Applications can benefit their organizations through customer case studies featuring companies in the Asia Pacific region such as Maruti Suzuki, LG Electronics, Australian Vintage, VicUrban, Sinosteel, Yarra Valley Water, HPCL and STX Shipbuilding.

Relevant presentations for both the regional and local market include the value of business process outsourcing (BPO), Software-as-a-Service (SaaS) and customer relationship management (CRM) on Demand in the region.

For more details, please visit www.oracle.com.

Read more ...

Oracle Insurance introduces Oracle Revenue Management and Billing for Insurance

Oracle Insurance today introduced Oracle Revenue Management and Billing for Insurance, providing insurers the robust billing capabilities necessary to deliver streamlined, convenient billing, payment and collections processes, and improve service to customers and distribution channels.

Oracle's new solution enables insurers to meet the market demand for multi-channel strategies and increased cross-selling abilities by providing comprehensive and consolidated billing management capabilities.

The solution also helps insurers to improve enterprise revenue management, while efficiently supporting diverse lines of business on a single platform to reduce cost of ownership.

Oracle Revenue Management and Billing for Insurance is part of the Oracle Insurance solution footprint ? a complete, end-to-end offering that includes support for core insurance operations, distribution channels, corporate operations, IT and enterprise performance management.

Oracle will demonstrate Oracle Revenue Management and Billing for Insurance this week at the IASA Educational Conference & Business Show, booth 1011.

Built on an open, standards-based architecture, Oracle Revenue Management and Billing for Insurance minimises the manual back-office activities required to process bill inquiries and bill adjustments. It also easily integrates with existing policy administration, financial accounting and payment solutions to streamline business processes while incurring minimal costs.

The solution enables consolidated billing, providing a complete view of customer billing interactions to enable easy cross-policy adjustments that drive better customer satisfaction and retention.

Comprehensive Account Current and Group Bill Processing capabilities enable strong support for distribution channels and easy reconciliation for group bills, allowing faster cash realisation and lower write-offs.

Oracle Revenue Management and Billing for Insurance provides configuration-driven business rules that enable business users to quickly and easily implement changes to the billing system ? minimising the cost of bringing new offerings to market.

Web-based self-service and e-billing capabilities give customers, agents and brokers improved access to information and a choice of channels for conducting business with insurers ? helping to reduce the overall number of billing inquiries and bill adjustments, and increase overall customer satisfaction.

The solution provides comprehensive support for call centre operations. It gives call centre agents easy access to customer information, minimising average service call times. In addition, the application includes access to online help resources and scripts that model best practices, helping to lower training costs for call centre staff.

The system incorporates built-in business process management tools to ensure consistent interaction with customers and accelerate billing reconciliation.

Oracle Revenue Management and Billing for Insurance supports continued business growth for insurers by providing the scalability to handle customer bases ranging from a few thousand to millions in size.

In today's competitive insurance market, insurers must balance multiple challenges, including the need to improve revenue management and reduce IT total cost of ownership, while providing enhanced customer service that is critical to developing and maintaining long-term customer relationships and satisfying the agents and brokers that manage these relationships,” said Chuck Johnston, vice-president, Strategy and Alliances, Oracle Insurance Global Business Unit. “Oracle Revenue Management and Billing for Insurance delivers a robust and flexible solution that helps insurers to expand and optimise use of distribution channels while supporting diverse lines of business on a single, cost-effective billing platform. As important, the solution supports delivery of universal, best-in-class service that today's customers demand.”

Source: http://www.itweb.co.za

Read more ...

Sun investors to vote on Oracle on July 16

Tune in on July 16 to see whether Oracle actually becomes the new parent of Sun Microsystems.

Sun's board of directors has set up a special shareholder meeting for that date to vote on the proposed merger with Oracle, according to a statement Sun released Monday. Sun's board, which has already okayed the merger, is urging stockholders to approve the deal--a majority vote is needed to push it through.

Shareholders can vote on the merger in person, at Sun's Web site, or through a proxy card received by mail. Assuming approval, it expects the merger to be completed over the summer.

The company has sent a proxy statement dated June 8 with full disclosure to all shareholders. Besides providing details on the vote and stockholder meeting, the statement reveals other interesting tidbits.

Severance pay
No details have been revealed about what will become of Sun management, though the proxy statement does discuss potential severance packages for Chairman Scott McNealy, President and CEO Jonathan Schwartz, and other high-ranking execs. If termination were to occur in August, McNealy would receive $9.5 million in total compensation, including severance, health benefits, and equity, while Schwartz would walk away with $12 million.

The courtship of Sun
The proxy statement also reveals blow-by-blow details of the battle to buy Sun, with other suitors besides Oracle in the mix. IBM had been widely rumored as a likely buyer of Sun, but the proxy material doesn't mention any suitors by name.

On November 6, 2008, the CEO of a Sun competitor, known in the statement as "Party A," approached Schwartz about a possible business combination. After initial discussions with Party A, Sun started shopping for other potential buyers, including "Party B." Sun continued its discussion with Party A, entering into a confidentiality agreement and permitting Party A to investigate Sun's finances.

By late December, Sun was serious enough about a potential merger to hire Credit Suisse as its financial adviser to help it consider different offers. On January 28, Party A proposed acquiring Sun for $8.40 to $8.70 a share. In early February, Sun discussed the proposal with its legal and financial advisers.

But by February 12, 2009, Party B was back in the picture as Sun resumed discussions with its other suitor, signing a confidentiality agreement and permitting due diligence for Party B to check into Sun's finances. On February 20, Party A boosted its offer for Sun to $10 a share, predicated on exclusive negotiations between the two companies.

By February 23, Oracle had entered the picture. McNealy spoke with Oracle CEO Larry Ellison about a possible transaction. Between February 22 and 26, Sun's board was busy setting up special meetings to discuss the proposal from Party A and the interest from Party B and from Oracle. Further conversations were held between McNealy and Ellison. But by February 26, Sun had decided to enter into an exclusive agreement with Party A and end discussions with all other companies.

Over the next month, Sun held lengthy meetings with Party A. But negotiations dragged on, and there was talk of ending the exclusivity agreement with Party A and resuming conversations with Party B and with Oracle. On March 12, Oracle sent Sun's board a letter expressing an interest in a limited takeover of certain Sun assets. However, Sun management opted to continue its agreement with Party A.

On March 29, Party A reduced its bid to $9.40 a share. After review, Sun management was worried about Party A's offer for various reasons, especially antitrust issues. Concerned about the price and terms of the agreement, Sun decided on April 4 to reject the offer from Party A.

By April 6, the board was back discussing potential deals with Party B and with Oracle. But on April 8, Party A jumped back into the ring, still interested in Sun. Now the board was at work again to discuss offers from all three companies.

By April 10, Sun and Oracle had entered into a confidentiality agreement, and the two met soon thereafter to hash out a possible transaction. On April 17, Party B opted out of the race. On the same day, Oracle sent Sun a draft merger proposal for $9.50 a share.

After the price per share became a sticking point between Sun and Party A, Sun's management finally approved a merger agreement with Oracle on April 19.

Now it's in the hands of the stockholders.

Author: Lance Whitney @ http://news.cnet.com

Read more ...

With Virtual Iron, Oracle Bought a Big Loss

Did Oracle recently buy Virtual Iron, a maker of virtualization software, for its talent? Perhaps so, because the company certainly hasn’t been selling a lot of software, according to financial documents obtained by The Times.

The documents indicate that Virtual Iron had just $3.4 million in revenue last year. That’s a big rise over $1.5 million in 2007. But Virtual Iron sure spent a lot of money to get that revenue.

Its sales, marketing, research, development and administrative costs were $17.7 million last year, up from $13.6 million in 2007. So, in 2008, Virtual Iron posted a loss of $15.3 million.

Last January, Virtual Iron raised $20 million, hiking its total funding up to $65 million. Highland Capital Partners, Matrix Partners, Goldman Sachs, Intel Capital and SAP Ventures all funded the company.

Oracle has declined to reveal how much it paid for Virtual Iron, but with the revenue in 2008 sitting so low, it seems pretty clear that the investors lost out on this start-up — that is, unless Oracle was willing to pay many, many times Virtual Iron’s revenue. (The company did report $17 million in cash and equivalents in 2008.)

With the addition of Virtual Iron, Oracle has a crowded stable of virtualization products. Virtual Iron’s software will join Oracle’s own virtualization software, and soon enough Oracle will inherit even more virtualization software when it completes the purchase of Sun Microsystems.

The funny thing about these various software products is that they’re all based on the open source Xen project. So Oracle will own three products with the same guts.

Each company has made its own tweaks to Xen, leading to some differences among the products. Wim Coekaerts, Oracle’s vice president of Linux and virtualization engineering, said last week that the addition of Virtual Iron would let Oracle’s customers “more dynamically manage their server capacity and optimize their power consumption.”

Even with three sets of virtualization software on its side, Oracle has a long way to go to catch up with the market leader, VMware. Last year, VMware posted revenue of $1.9 billion.

Author: Ashlee Vance @ bits.blogs.nytimes.com

Read more ...

Swiss America’s Cup Team Says Oracle Employed a Spy in Europe

The tradition of spying in the America’s Cup is apparently alive and well. Jean Antoine Bonnaveau, an employee of the American team BMW Oracle Racing, is under investigation by the Swiss and French police for taking photographs last month at Alinghi’s base in Villeneuve, Switzerland.

The investigation became public when the Swiss yacht club that Alinghi represents, the Société Nautique de Genève, included a copy of a police report concerning Bonnaveau with an affidavit it filed this week. The affidavit was submitted for a hearing on Thursday at the Supreme Court of the State of New York related to the still-unresolved terms of the next Cup.

“A spy from BMW Oracle was spotted trying to gather illegal information from the Alinghi boatyard in Villeneuve,” Paco Latorre, a spokesman for Alinghi, said in a telephone interview.

The BMW Oracle spokesman Tom Ehman played down the incident and accused the Swiss team of engaging in diversionary tactics.

“Société Nautique de Genève (S.N.G.) is once again trying to avoid the Court’s clear judgment by making trumped-up allegations that have nothing to do with the matter at hand,” Ehman said in a statement. “Legal observation of competitors is common practice in the America’s Cup and other major sporting events.”

The Cup, the most visible event in sailing, has long generated controversy and legal fees. Spying and claims of nautical espionage are not new. During the 1992 Cup in San Diego, Bill Koch, the owner of the victorious America, employed scuba divers to examine competitors’ hull designs. During the 2003 edition, the American challenger OneWorld was penalized for being in possession of proprietary design information that belonged to rival syndicates.

Syndicates routinely use chase boats to examine other teams’ yachts and tactics during training. When BMW Oracle launched its new 90-foot trimaran last year in Anacortes, Wash., Ehman said there were Alinghi employees on site observing and analyzing the yacht. He added that Alinghi representatives were also present when the trimaran was based in San Diego.

But Latorre said Bonnaveau’s behavior was of a more invasive nature than usual in Villeneuve, the Lake Geneva town where Alinghi is building its new multihull yacht behind closed doors. Bonnaveau is suspected of violating Swiss privacy laws.

“It should not be confused with what Alinghi did in San Diego,” Latorre said. “Observing and watching a boat that is public and that has been launched in front of everybody cannot be put in the same category as illegal espionage.”

Alinghi and BMW Oracle, the team based in San Francisco and owned by the American billionaire Larry Ellison, have been engaged in a protracted legal dispute since shortly after Alinghi successfully defended the Cup in June 2007 in Valencia, Spain.

Last month, after a series of appeals, BMW Oracle won the right to become the challenger of record for the next Cup. The decision dislodged the Spanish yacht club Club Nautico de Vela, which had been Alinghi’s initial choice to be its principal challenger.

But Alinghi and BMW Oracle officials are still haggling over the particulars of the competition, including the dates, which is the reason for Thursday’s hearing in New York.

After BMW Oracle’s victory in court last month, negotiations between the teams about the possibility of staging a traditional multiple-challenger event using monohulls off Valencia quickly broke down. They are now all but certain to face each other in massive multihull yachts in a best-of-three series next year.

BMW Oracle officials say that the next Cup should respect the latest court ruling and be held in February 2010, 10 months after the final appeal was resolved. But Alinghi officials have insisted on May 2010, arguing that the Cup’s governing document, the Deed of Gift, does not permit racing in the Northern Hemisphere before May 1.

Bonnaveau, a 50-year-old Frenchman, is suspected of beingin Villeneuve on April 28 and 29 attempting to gather information on Alinghi’s multihull in progress. Alinghi officials videotaped him and his vehicle when they spotted him, and he was later questioned by the French and Swiss police in the southern French city of Nîmes.

In the police report — a transcript of a hearing May 1 — Bonnaveau said that he worked as a sail analyst for BMW Oracle at a salary of $13,600 per month. He said that he had been sent to Villeneuve by BMW Oracle’s racing team designer, Manolo Ruiz de Elvira, and that such information-gathering missions were “routine” in the Cup world.

“I was officially authorized by my company to carry out this reconnaissance,” Bonnaveau said in the transcript. “In fact, I am part of the design team, but the entire staff can provide useful information, particularly on opposing teams. We call that a ‘recon cell’ for reconnaissance.”

Author: CHRISTOPHER CLAREY @ www.nytimes.com

Read more ...

Oracle Aims to Be the Apple of Data Center Hardware

Oracle's recent US$7.4 billion bid for Sun Microsystems could turn Sun's ailing hardware business into a boon for data-center managers. But industry analysts question whether the software firm can turn Sun's hardware platform back into gold.

Oracle has done well in past acquisitions, buying and quickly integrating large software companies such as BEA Systems, PeopleSoft, and Siebel Systems. But the purchase of Sun, and its large hardware business and SPARC processor platform, is a whole different beast, says George Weiss, VP of server and operating system trends at Gartner.

"The nature of this acquisition (for Oracle) is different than anything that has preceded it," Weiss says. "Oracle has to carve out an opportunity in a market where Sun was pretty vulnerable and threatened."

In statements posted online, Oracle argues that its planned purchase of Sun Microsystems will give IT managers better, more integrated enterprise appliances for the data center. But Weiss worries that the acquisition could leave Oracle facing the same quandary as Sun: Decreasing hardware revenues for a minority SPARC platform.

Sun's revenues for its servers and storage products have fallen quickly in the past year. In 2008, the company made $153 million less on its computer system and storage products as compared to the prior year.

And, in its most recent quarter, which ended on March 29, Sun's product revenue fell even further, down $434 million compared to the same quarter in 2008, according to its filings with the Securities and Exchange Commission.

Companies that compete against Sun's SPARC architecture question whether Oracle would be better served staying with the proprietary platform or increasing its adoption of Intel's Nehalem architecture. Intel announced the Xeon 5500, its first enterprise processor family which uses Nehalem, in March.

"Do they really need to stay on a SPARC-based system and what are the advantages of cost?" asks Jeff Hudgins, VP of marketing for NEI, which builds designs and builds enterprise products for other companies based on Intel's architecture. "Sun is leveraging a lot of x86 technology already. They have a Nehalem strategy as well."

When Oracle announced the acquisition on April 20, the company immediately tried to assuage the fears of Sun hardware users by committing itself to increasing its support of the SPARC processor architecture. "After the closing, Oracle plans to be the only company that can engineer an integrated system where all the pieces fit and work together so customers do not have to do it themselves," the company states in a FAQ posted on its Web site. "Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."

Oracle declined to comment on the acquisition beyond the statements posted on its Web site, but in a posted interview, Oracle CEO Larry Ellison likens his strategy to Apple's creation of the iPhone.

"If a company designs both hardware and software, it can build much better systems than if they only design the software," Ellison said in the interview. "That's why Apple's iPhone is so much better than Microsoft phones."

If Oracle can deliver on the promise, data-center managers would stand to benefit. And an Oracle-Sun combination could threaten giants such as IBM, says James Kobielus, senior analyst for data warehousing and advanced analytics at Forrester Research.

"IT managers will have a one-stop shop of hardware and and software needs in the data center, in terms of both the servers and the storage, the databases and the business intelligence," Kobielus says. "This is clearly a shot across the bow of IBM, who long offered one-stop shop advantages."

IBM declined to be interviewed for this article.

Creating well-tuned appliances for the data center will not be anything new for Oracle, Kobielus adds. The software company already does just that for its data warehousing product line.

"Oracle will be able to scale economies, which will give everyone else in this area a run for their money, which will lead to an era when data managers can get a cheap out-of-the-box experience," Kobielus says.

Author: Robert Lemos @ www.computerworld.com

Read more ...

Sun shareholders look to block Oracle sale

Sun shareholders are fiercely resisting the company's projected sale to Oracle. In the last month. there have been three separate lawsuits attempting to stop the sale, according to a filing to the Securities and Exchange Commission from Sun.

The suits, filed in California, name Sun, some of its officials and Oracle as defendants. All three actions are aimed at blocking the US$7.4(£4.9) billion sale, alleging the price tag is "unfair and inadequate." They also allege "claims for breach of fiduciary duty against the individual defendants and for aiding and abetting a breach of fiduciary duty against the corporate defendants," the filing states. The defendants have yet to file answers to the complaints.

Sun also said in the filing that it may have broken the US Foreign Corrupt Practices Act during fiscal 2009. The law is meant to stop companies from bribing foreign officials. Sun said it has started an independent probe into suspect activities in a "certain foreign country" and "took remedial action," as well as made a voluntary disclosure to US authorities.

Meanwhile, Sun has decided to put the brakes on an effort to consolidate its database infrastructure into a single global ERP system.

Sun has "experienced a number of challenges" during the project that have affected operations, according to the filing.

"During the next six months, we have decided to delay the implementation of the remaining phases of the project while we evaluate alternatives," Sun said.
A Sun spokeswoman said the company "intends to respond appropriately to the lawsuits" but otherwise declined comment.

An Oracle spokeswoman declined to comment on the suits, but provided a statementsaying that Sun had disclosed its potential violations of the FCPA prior to the acquisition agreement.

Author: Chris Kanaracus, IDG news service

Read more ...

Oracle upgrades BI offering

Oracle has launched Business Intelligence Applications Release 7.9.6, which includes improvements and integrations with other Oracle software, as well as a pair of new tools, Project Analytics and Loyalty Analytics.

The release adds a number of new human-resources dashboards, such as for talent management, recruiting and absenteeism. The vendor's procurement and spend-analytics BI module gets a number of updates, including a new employee-expenses dashboard and a "spend analyser."

In addition, Oracle has integrated its JD Edwards EnterpriseOne Financial Management application with its financial analytics BI software.

Meanwhile, the new Project Analytics module is aimed at governments, construction companies and services companies that want to analyse the costs of their projects. It includes a number of pre-built dashboards tuned for both private and public-sector organizations. Loyalty Analytics enables users to determine the success of marketing campaigns at both the customer and partner level.

Oracle's announcements reflect the fact that it's getting tougher for vendors to further evolve their underlying BI platform's capabilities, since the technologies have matured, according to Forrester Research analyst Boris Evelson.
"All the core functions have really been addressed," he said. "The real difference is in the applications."

The pre-built tooling in applications like Loyalty Analytics will likely have more appeal for smaller enterprises, which are interested in getting software up and running quickly or may not have a core competency in a particular area, Evelson said. A customer might say, "'We're a small bank, we know everything about banking, but not CRM. We're going to trust Oracle."

But large enterprises tend to shy away from such an approach, preferring to build out specialized BI applications themselves to gain a competitive advantage, he said. "There's no way anybody there is going to say, 'I'm going to trust Oracle to lead the way of how I should analyze my customers.'"

Meanwhile, the new project-analytics module could prove attractive to companies as the world attempts to emerge from an economic recession and government stimulus spending ramps up infrastructure projects and related activities.

There have always been plenty of choices for project portfolio management software, including the technology Oracle acquired last year by buying Primavera. But there is probably room in the market for advanced analytics that ride on top of such applications, Evelson said.

Author: Chris Kanaracus, IDG news service

Read more ...

Coca-Cola, Oracle, Intel use Cayman Islands to avoid US taxes

Seagate Technology, the world’s largest maker of hard disk drives, is headquartered in Scotts Valley, California. Yet the documents it files with the Securities and Exchange Commission list its address on South Church Street in George Town, the capital of the Cayman Islands.

Seagate is just one of the companies that may be affected by President Barack Obama’s proposal Monday to raise about $190 billion over the next decade by outlawing techniques used by US companies in offshore locations to avoid paying taxes. While the US corporate tax rate is 35 percent, Seagate paid an effective tax rate of 5 percent in the year ended June 2008, according to data compiled by Bloomberg.

The Caymans have no corporate income tax for companies incorporated there. The Caribbean island has helped scores of US companies, including Coca-Cola Co. and Oracle Corp., to legally avoid billions in tax payments to the US government, says US Senator Byron Dorgan.

“Our Main Street businesses are working hard during this economic downturn to pay their fair share of taxes,” says Dorgan, 66, a North Dakota Democrat. “Some of the country’s largest corporations are using these loopholes to avoid paying their fair share of taxes. It is my hope that the Congress will quickly take action to pull the plug on tax breaks that subsidize runaway plants that move US jobs overseas.”

One quarter of the 100 largest contractors with the US federal government, including Altria Group Inc. and Tyco International Ltd have had subsidiaries in the Caymans, according to a study by the Government Accountability Office. At least 10 of the 30 companies listed in the Dow Jones Industrial Average have had units with addresses in the Caymans.

As of November 2007, 378 US publicly traded companies had at least one significant subsidiary in the Cayman Islands, a GAO study found. Altria, Tyco, Coke and Oracle still have subsidiaries in the Caymans, according to their most recent SEC filings. Seagate lists its headquarters in Grand Cayman.
One of the Dow 30 companies using offshore sites to reduce its US taxes is Santa Clara, California-based Intel Corp., the world’s largest chipmaker.

Intel’s then vice president of tax, licensing and customs, Robert Perlman told the US Senate Finance Committee in March 1999 that Intel would have been better off incorporating in the Cayman Islands when it was founded in 1968.

“Our tax code competitively disadvantages multinationals simply because the parent is a US corporation,” Perlman testified.

Intel spokesman Chuck Mulloy said Monday his company is rethinking its tax strategy. “We’re studying the Obama proposal,” Mulloy said. “Particularly with taxes, the devil’s in the details.”

Seagate spokesman Brian Ziel said Monday that his company incorporated in the Caymans to reduce its taxes. “The competitive benefits relate both to taxes saved on certain income earned outside of the United States and the ability to efficiently deploy assets around the globe to remain competitive,” he said.

Eighty-five percent of Seagate’s employees work outside the US and more than 70 percent of the company’s revenue comes from sales overseas, Ziel said.

“Officially, our administrative headquarters is in the Caymans,” Ziel said. “That’s how it’s listed in our annual report.”

Altria spokesman Bill Phelps said his company is in the process of dissolving its Cayman subsidiary. Coke spokeswoman Kerry Kerr said, “We don’t comment on tax strategies, for competitive purposes.”

Tyco’s Paul Fitzhenry and Oracle spokeswoman Karen Tillman didn’t return calls requesting comment.

A five-story office building on South Church Street in the Caymans serves as the official address for 18,857 corporations. That building, called Ugland House, is listed in SEC filings as Seagate’s headquarters. About half those Cayman companies had billing addresses in the US, according to a 2008 GAO study.

President Obama referred to Ugland House Monday.

“On the campaign, I used to talk about the outrage of a building in the Cayman Islands that had over 12,000 businesses claim this building as their headquarters,” Obama said. “And I’ve said before, either this is the largest building in the world or the largest tax scam. And I think the American people know which it is: The kind of tax scam that we need to end.”

Maples and Calder, the law firm that occupies all of Ugland House in Grand Cayman, said Obama is mistaken.

“I’m sorry to disappoint anyone, but our office is neither the largest building in the world nor a center of financial misconduct,” said Charles Jennings, joint managing partner of Maples and Calder.

“Having a registered office address in the Cayman Islands is driven by commercial considerations, not by tax avoidance,” Jennings said. “It allows companies to raise capital and conduct global business.”

The firm, which provides services for the corporations that use its address, has incorporated more than 6,000 new companies over the past five years. Back in 2004, the building served as home to 12,748 companies using the same address in the Caymans, a British crown colony 150 miles south of Cuba.

Del Monte Fresh Produce Inc., whose corporate headquarters is in Coral Gables, Florida, lists another address -- Walker House on Mary Street in George Town, Grand Cayman -- in its SEC filings. That’s around the corner from Ugland House.

Del Monte’s effective tax rate for 2008 was 3 percent, up from 1 percent the year before. Del Monte spokeswoman Vidya Samsundar had no immediate comment on why the company is incorporated in the Caymans.

Author: David Evans @ http://www.caribbeannetnews.com

Read more ...

Oracle upgrades collaboration tool to take on Microsoft

Oracle has announced enhancements to its recently launched Beehive collaboration software. The company has also slashed its entry-level price for Beehive by more than half, while announcing prices for a cloud-based version.

Oracle announced Beehive at last September's OpenWorld conference. It replaces the Oracle Collaboration Suite.

According to independent analyst Peter O'Kelly, Beehive represents Oracle's fourth attempt to crack the collaboration market, which has been long dominated by Microsoft and its Exchange and SharePoint products, and IBM with its Lotus Notes and Domino software.

Last updated in 2005, Collaboration Suite "failed to put a dent in the universe," O'Kelly wrote in a blog at Beehive's launch. SharePoint, meanwhile, has 100 million licensed users, according to Microsoft.

Despite its late entrance to the market, Oracle's senior vice president of collaboration technologies David Gilmour asserts that things will be different for Beehive.

"The market leaders are groupware products that have grown up," he said. "Collaboration was layered on after the fact, not designed that way in the beginning. Beehive is almost the complete inverse of that."

Gilmour was CEO of collaboration vendor Tacit Software. Tacit offered a cutting-edge "expertise location" platform that tracked employees' usage to build a profile of their expertise that could be found by other employees. Tacit was acquired by Oracle in November.

Oracle did not mentione an expertise location feature today. However, new features announced include "web-based team workspaces," which include wikis, team calendaring, file sharing and others built with enterprise-grade security and compliance, enhanced web and teleconferencing, and expanded compatibility with non-Oracle desktop tools, such as Microsoft Outlook email.

Not only can end users employ existing mail or IM clients of their choice with Beehive, but IT managers can continue to use Microsoft Exchange in conjunction with Beehive, Gilmour said. That can smooth over one of the difficulties associated with persuading large enterprises that have invested years and millions of dollars in Microsoft or IBM to migrate to Beehive.

Also, while "people hate switching, there are immediate hard dollar savings," Gilmour said. He reitierated that Beehive, which stores all data in an Oracle database, is more scalable than competitors.

"It is just way better when you're living in a real database," he said. "Everything is pretty complicated and brittle in Exchange. With Beehive, there are no hidden, strange 1GB store limitations."

SharePoint uses Microsoft's SQL Server, while Exchange uses the Jet database, which some users have criticized for not scaling well.

Oracle previously set Beehive's price for a one-time licence at $120(£80) per user, plus an additional 18 percent of that license per year for maintenance. In its announcement, Oracle cut the entry-level price to $50 per user. Components such as messaging and team collaboration, however, cost an additional $30 per user.

Companies can also deploy Beehive as a cloud-based service for $15 per user per month with as many features as they want, Gilmour said.

Author: Eric Lai, Computerworld (US) @ http://www.techworld.com

Read more ...

Oracle introduces Oracle Retail Data Model

Industry-specific schema embedded with retail-specific analytics to help retailers gain intelligence into their business operations.

Oracle has introduced the Oracle Retail Data Model, a standards-based data model for Oracle Database, to help retailers accelerate their design and implementation of an enterprise data warehouse.

According to Oracle, the data model features a retail industry-specific schema complete with embedded retail-specific analytics to help retailers gain intelligence into their business operations, which is built for the Oracle Database platform including the HP Oracle Database Machine and HP Oracle Exadata Storage servers.

Oracle claims that the model helps retailers make better decisions by providing advanced analytics such as forecasting out-of-stock situations, understanding hidden patterns for loss prevention, contribution and market basket analysis, product affinity, customer clustering and segmentation, halo impact and promotional lift.

Oracle has said that the model is designed to start data warehouse and business intelligence initiatives helping retail organizations realize a return on investment by reducing implementation time and costs. Furthermore, the solution's open, standards-based model allows for better integration with existing retail applications further reducing integration costs and complexity.
Ray Roccaforte, vice president of data warehousing and analytics at Oracle, said: "The Oracle Retail Data Model is the culmination of our efforts in combining Oracle's deep retail industry and data warehousing expertise and technologies into a comprehensive, pre-built and tuned solution for retailers. Oracle Retail Data Model offers customers a solution designed for rapid, predictable deployment and integration with existing investments to help customers save time, effort and costs."

Source: http://appdev.cbronline.com

Read more ...

The Oracle open source credibility gap

Paula says open source executives are suspicious, and the unscientific poll I did here confirms it.

Oracle has an open source crediblity gap.

(Harry Shearer and Michael McKean, right, with David Lander, were part of a radio comedy troupe dubbed The Credibility Gap early in their careers. It must be true, I read it on Wikipedia. They are now touring as Unwigged and Unplugged with Christopher Guest.)

Fact is that many in the open source movement distrust Oracle’s motives in buying Sun and taking over such blue-chip open source names as Java, mySQL, Open Solaris and OpenOffice.org.

The fear that Oracle will seek to destroy these projects is real. And as with the swine flu, fear has consequences.

Just as Mexico is being pummeled because people fear a bug that has (as of yet) killed no one in this country, so Oracle is hurt by its open source credibility gap.

When Oracle bought proprietary vendors like Seibel Systems it could easily make up the $5.8 billion cost on the backs of Seibel’s customers. Their code, and support for their code, disappeared into the Oracle maw and, since most were fairly scaled, they had no choice.

Oracle can’t do that with mySQL. Any attempt to change the license or kill it through non-support would be immediately followed by a community fork, which in turn would probably be followed by entrepreneurs grabbing former mySQL committers and selling support for the fork.

Things would be even tougher with OpenOffice. A good alternative, OpenOffice Symphony, is supported by IBM, which even has a viable business model for the office suite.

Java was proprietary until a few years ago, yet dozens of companies had versions of it. Making it open source was necessary to tear down that Tower of Babel. And Glassfish?

Point is, Oracle is already being hurt by this community distrust. Where CEO Larry Ellison can feel it, in the wallet.

So long as Oracle does not make its intentions clear, and so long as fear exists that it intends to do Sun’s open source projects harm, support for those projects is going to diminish. The assets are like ripening fruit.

Until Oracle makes clear that it intends to fully support Sun’s open source projects, and by extension the open source movement itself, the value of those assets will be degraded.

Author: Dana Blankenhorn @ http://blogs.zdnet.com

Read more ...

Naked CIO: Oracle and Sun - good luck

Integrating IT can make or break a merger or acquisition, says the Naked CIO. Here's how to get it right.

Inspired by Oracle's recent bid to purchase Sun and mumblings about the difficulty to integrate their product sets, I recalled the challenges IT had in several companies I worked for when trying to integrate systems as a result of mergers and acquisitions.

Firstly, I recall the frustration I had as an executive running IT that I was not included in the 'need to know' circle when the consideration of the merger or acquisition was being discussed. Inevitably, once the deal was pretty much final, IT would be brought into the loop and then be perceived as party poopers when rightly we would identify considerable challenges and costs to integrating services, applications and data into one seamless environment.

In my experience streamlining and creating synergies between platforms and applications of two companies can take a considerable amount of time, often years, to do right.

When the board looks at the upside of a merger or acquisition, they almost always leap to the conclusion that services, products, applications and information will be seamlessly integrated from day one. Even those that have been through the exercise before are often still believers that Santa Claus will come down and make everything work perfectly.

Secondly, the challenge when integrating two companies' IT platforms and indeed strategies is attaining business alignment. It is almost always the case of a square peg in a round whole - and trying to understand what to compromise is very difficult.

Additionally, it's hard to decide, with two often-divergent strategies coming together, which one or which hybrid is the right one. Don't ask the board, as in my experience they rarely have thought that far ahead.

So in most cases integrating IT platforms in these circumstances is a wait-and-see exercise propagated by naïve executives and pawned off on unsuspecting IT professionals to make right - and to be accountable for if it goes wrong.

There are many ways in which companies can mitigate some of these unfortunate events. Having a CIO or IT executive on the board in the first place is an excellent start. Evaluating the IT integration opportunities even before due diligence would be beneficial. Understanding these costs and challenges prior to any agreement is a must especially if IT integration is a key aspect of the success of the whole initiative, which is predominantly the case.

When acquiring another organisation, it is critical to have a plan that encompasses all aspects of the integration process right from the beginning. This will allow you to ensure that benchmarks and expectations are managed properly. Quite often you can achieve some form of synergy quickly through establishing a data warehouse that can take multiple source system data and allow for analysis and manipulation while you wait for application synergies and development in order for operation platforms to work in unison.

Even though you, the IT executive, may be the bad-news bearer, never over promise in terms of mergers and acquisitions. Instead always err on the side caution. Why? Because the unknowns in these circumstances always have a negative impact on the plan.

Most of all, convince your company that if it is planning to acquire another company, IT needs to be a key player from the start. This will help with the integration efforts and provide valuable information on the true cost of a merger.

Author: Naked CIO @ http://management.silicon.com

Read more ...

Will OpenOffice survive the Oracle-Sun takeover?

The last week has seen a lot of speculation about the future of Sun’s open source projects now that the company has been absorbed by Oracle. Most of the fallout from Oracle’s latest acquisition falls outside my realm of expertise or even interest. Some of my university readers are certainly going to be curious (OK, some university IT folks and even the occasional K-12 shop that has invested in Sun technologies are downright nervous). However, I have to say that the only bit of Sun technology that I actually care about at this point is OpenOffice.

Sure, Solaris was becoming quite a platform for virtualization and Sun had made real strides in terms of bring cross-platform virtualized applications to the desktop. They donated time, money, and expertise to a variety of educational pursuits. We all know the open source projects they had in their stable. I just can’t get fussed about anything, though, except OpenOffice.

Mostly this is because I’m convinced that MySQL will live on; it’s simply embedded in too many places to die and has already been forked, so I’m not overly concerned. VirtualBox is great, but there are other virtualization products that will do the trick if it dies. OpenOffice has forked as well, but Go-oo.org lacks the brand recognition or credibility of OpenOffice. It is also Windows and Linux only; Macs need to rely on OpenOffice or NeoOffice, the former of which is fully cross-platform.

Why do I care about OpenOffice so much? Because it saves our schools a lot of money. More importantly, it saves our students, parents, and community members a lot of money. It means that any student with a computer can have a fully-functional, mature office productivity suite without paying hundreds of dollars or settling for the Works suite that might have come with their computers.

Can OpenOffice do a mail merge as well as Office 2007? No, not quite. Are its spreadsheet functions as easy to use? Close…very close. Aside from that, though, is there anything that most students, faculty, or staff would be looking for in an Office suite that can’t be satisfied for free with OpenOffice? The simple answer is no.

What this means is that OpenOffice must live on beyond Sun. Maybe Oracle will get behind it; I’m not so sure and I’m not alone. However, whatever rebranding of Go-oo needs to happen should happen and we should make sure that our students and schools still have access to the highest quality, free office suite available.

Author: Christopher Dawson @ http://education.zdnet.com

Read more ...

Fitch Affirms Oracle's Ratings at A/F1 on Merger

Fitch Ratings has affirmed the ratings of Oracle, following the announcement that Oracle will purchase Sun Microsystems.

The ratings are affirmed as follows: --Issuer Default Rating (IDR) at 'A'; --Senior unsecured debt at 'A'; --Short-term IDR at 'F1'; --Commercial Paper (CP) at 'F1'.

The Rating Outlook is Stable.

The affirmation follows the announcement that Oracle will purchase Sun, for approximately $8.7 billion, including $1.3 billion of assumed debt ($5.6 billion net of cash and debt acquired). The Board of Directors of Sun has unanimously approved the transaction, which is anticipated to close by the summer of 2009, subject to Sun stockholder approval, certain regulatory approvals and customary closing conditions.

The affirmation incorporates Fitch's expectations that Oracle will fund the acquisition with a mixture of cash, CP borrowings and long-term debt issuance, with the majority being funded with debt, given that most of the company's cash is located outside the U.S. While credit protection measures are expected to deteriorate as a result of this transaction, Fitch believes Oracle retains solid financial flexibility at its current ratings, which incorporate total leverage of approximately 1.5 times (x) given the company's current operating profile. Fitch anticipates Oracle will continue to pursue an aggressive acquisition strategy, which could temporarily drive leverage outside of expectations. However, in line with past transactions, the company is expected to refrain from meaningful share repurchases and use significant free cash flow to reduce debt incurred in the transaction.

Fitch believes that materially weaker credit metrics over an extended period from a failed integration of Sun, a more aggressive financial policy, or a significantly worse impact of the weak macroeconomic environment, could result in negative ratings actions.

Concerns for the transaction center on greater integration risk associated with Oracle's purchase of Sun due to Sun's sizable employee base (33,000 at year-end 2008) and broad and diverse product portfolio, including a significant hardware segment. Additionally, uncertainty exists regarding potential segment/product divestitures, management structure and product strategy, particularly regarding open source software (e.g. MySQL). Positively, Fitch believes that Oracle can achieve significant cost synergies, primarily general and administrative expenses. Also, Oracle should be able to able to derive incremental benefits from Sun's sizable customer base and large intellectual property portfolio (e.g. Solaris and Java software platforms).

For the latest 12 months (LTM) ended Dec. 28, 2008, Sun generated total revenue, operating EBITDA and free cash flow of $13.3 billion, $1 billion (7.7 percent margin) and $8 million, respectively. Fitch estimates server systems, storage, software, and services accounted for approximately 39 percent, 17 percent , 5 percent and 39 percent of Sun's total revenue in the LTM period, respectively.

Pro forma for the recently initiated $1 billion dividend, Fitch estimates that Oracle's free cash flow for the LTM ended Feb. 28, was $7 billion, providing the company with significant financial flexibility for this transaction. Fitch said it believes that cash restructuring payments associated with the transaction and a pressured operating environment could have a slight impact on free cash flow in subsequent years, although the cash generating capability of the underlying business is expected to remain strong.

Oracle's credit metrics are expected to deteriorate upon the transactions close as Fitch estimates leverage could increase to approximately 1.4x from 1.0x from additional debt associated with the acquisition and interest coverage declining to approximately 12x from 18x, assuming 100 percent of the transaction is debt financed.

As of Feb. 28, Oracle's cash and cash equivalents were approximately $11.3 billion, of which approximately $10.1 billion was held by foreign subsidiaries. In addition, Oracle has an undrawn $5 billion CP program backed by a $3 billion revolving credit facility expiring March 2011, and a $2 billion 364-day facility expiring March 2010 (which the company entered into upon expiration of the previous $2 billion facility in March 2009).

Total debt as of Feb. 28, was approximately $11.2 billion and consisted primarily of $1 billion of floating- rate senior notes due May 2009, $1 billion of floating-rate senior notes due May 2010, $2.25 billion of 5 percent senior notes due January 2011, $1.25 billion of 4.95 percent senior notes due April 2013, $2 billion of 5.25 percent senior notes due January 2016, $2.5 billion of 5.75 percent senior notes due April 2018, and $1.25 billion of senior notes due April 2038.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, fitchratings.com.

Comments on this story may be sent to newsdesk@closeupmedia.com

Source: www.tmcnet.com

Read more ...

More thoughts on Oracle and hardware

There are two explanations making the rounds for Oracle’s unexpected entry into the hardware business. Neither on its own is wholly convincing, but each hints at what is probably really going on here.

The first is the explanation that Oracle was putting about on Monday. This holds that vertical integration of all aspects of hardware and software is the next step being demanded by the customers of enterprise technology companies, who want one throat to choke when something goes wrong.

But it hardly feels as though customer expectations have changed enough to force Oracle to buy a deeply troubled server company to take on entrenched rivals like IBM, HP and now Cisco. Not does this explanation take account of the fundamental nature of the enterprise technology industry, which relies on deep technology and business partnerships.

The other explanation is that Oracle had to move quickly to outmaneuver the slow-footed IBM, so it was willing to take on the unappealing hardware business just to get its hands on Sun’s software assets. It then follows, according to this view, that Oracle will now turn around and unload the hardware side as soon as it can, perhaps in pieces.

To judge from the people we’ve spoken to, neither of these explanations quite gets to the bottom of what is going on.

One good pragmatic reason for assuming Sun’s struggling hardware business is that, for the arch cost-cutters at Oracle, this is where many of the biggest opportunities for expense savings lie. Oracle has promised $1.5bn in operating profits from the Sun deal in the first year. Slashing hardware costs is likely to be a quick way to get there - and if the economy turns, Sun’s highly cyclical hardware arm could even provide a pleasant surprise.

One person familiar with Oracle’s thinking suggests that the company will act quickly to narrow the focus of Sun’s hardware on a smaller number of high-end system designs. And a person close to the Sun camp admits that Sun itself simply failed to act aggressively enough to cut costs - though this person adds that a big acquirer like a Oracle also has many more opportunities to save money than Sun could have done on its own, for instance by combining salesforces.

Another pragmatic reason to take on the hardware business is that it offers Oracle a strategic hedge. In a world dominated by a handful of giant systems companies, life as a pure software company could become uncomfortable: what if big partner/rivals like IBM and HP become less enthusiastic about selling and supporting Oracle’s software?

Being able to offer its own hardware gives Oracle a fall-back, according to one person close to the transaction. The very existence of an Oracle hardware division changes the equation and removes a potential weapon in the hands of its enemies.

Of course, none of this changes Oracle’s main motivation for the Sun acquisition: getting its hands on Java, Solaris and MySQL. But it does help to explain why a software company with operating profit margins of 35 per cent is willing to take on a business that recently has had trouble making any money at all.

Author: Richard Waters @ http://blogs.ft.com

Read more ...

Oracle to buy Sun Microsystems for $7.4 billion

Sun Microsystems Inc.’s scramble to find a suitor landed the slumping server and software maker in the arms of Oracle Corp., which agreed to pay $7.4 billion in cash for Sun in a startling marriage that would transform Silicon Valley and the computing industry.

The acquisition announced Monday illustrates how some of the biggest and richest technology companies are racing to become one-stop shops for corporate and government customers.

By picking up Sun and expanding heavily into hardware, Oracle would look much more like the company it beat out for Sun — IBM Corp., which appears unlikely to re-enter the bidding.

Heavyweights like IBM, Hewlett-Packard Co., Cisco Systems Inc. and now Oracle all want to offer a richer mix of technology products. The companies hope to find more hooks into customers and use those relationships to sell other kinds of stuff.

That setup, with a broad mix of services, software and hardware, helped Armonk, N.Y.-based IBM escape financial ruin in the 1990s and become one of the industry’s most profitable companies. IBM has forked out nearly $13 billion on 40 acquisitions since 2006 to expand its offerings. HP has followed suit, spending $13.9 billion for services provider Electronic Data Systems last year.

Santa Clara, Calif.-based Sun lacked that kind of scale, especially after the tech meltdown of 2001 knocked the company off balance and led to a decade of financial pummeling.

Sun’s best sellers are computer servers and machines that store data on tape. But Oracle and IBM mainly had their eyes on Sun’s software.

The deal would give Oracle ownership of the Java programming language, which is a key element of the Internet and runs on more than 1 billion mobile devices worldwide. Oracle would get the Solaris operating system, which already has been a platform for Oracle’s products. And Oracle would get Sun’s MySQL database software, which has undercut Oracle and siphoned some sales away.

All these products are open-source, which means their underlying code is distributed freely on the Internet. To make money from the software, Sun sells support contracts alongside those programs. Like IBM before it, Oracle believes it can make money off those properties better than Sun can, partly by selling other products in package deals.

Forrester Research analyst Ray Wang thinks Oracle could keep MySQL to put pricing pressure on Microsoft, a longtime Oracle nemesis that sells a less-expensive database product.

“With the acquisition of Sun, Oracle is now able to make all of the pieces of the technology stack fit together and work well,” Oracle Chief Executive Larry Ellison said during a Monday conference call.

But unlike IBM, Oracle is a surprising suitor because it doesn’t make hardware. Although Sun wouldn’t be Oracle’s biggest acquisition during a four-year shopping spree that has cost about $40 billion, it may be the boldest.

Some analysts suspect Oracle might try to sell Sun’s hardware divisions if they turn out to be a drag.

“This is a really strange deal to me — Oracle buying all this hardware, I wonder what they’re going to do with it all,” said Jane Snorek, an analyst with First American Funds. “I don’t know what to think, frankly. It seems everyone wants to be IBM and have a mix. If it wasn’t the for the fact that Oracle is such a good acquirer, I’d be negative” about the deal.

Oracle shares sank 24 cents, 1.3 percent, to close at $18.82 in trading Monday. Sun shares jumped $2.46, 37 percent, to $9.15.

Oracle’s offer — which is valued at $5.6 billion when Sun’s cash and debt are taken into account — amounts to $9.50 per share. That represents a 42 percent premium to Sun’s closing stock price of $6.69 on Friday, and is about twice what Sun was trading for in March, before word leaked that IBM and Sun were in negotiations.

While Sun wouldn’t be Oracle’s most expensive acquisition, it will be the largest in terms of the people involved. Sun employs about 33,500 workers, far more than the roughly 12,000 that PeopleSoft had when Oracle bought that company in 2005 for $11.1 billion — the biggest outlay during Oracle’s expansion.

Sun has campuses in Broomfield and Colorado Springs.

Oracle, which already has roughly 86,000 workers, didn’t specify how many people will lose their jobs after it takes control of Sun. The cuts might not be as dramatic as they would have been in an IBM acquisition because Sun and Oracle have fewer overlapping products.

The smaller overlap also could keep Oracle from facing the antitrust objections that IBM likely would have prompted with Sun. Indeed, one of the sticking points in the IBM-Sun negotiations was the level of assurance Sun sought that IBM would see the deal through a regulatory review. Regulators figured to look closely at the way that swallowing Sun would expand IBM’s lead over Hewlett-Packard in certain markets for servers and data storage.

Oracle already says the Sun acquisition, which it expects to close this summer, will add at least 15 cents per share to its adjusted earnings in the first year after the deal closes. The company estimated Sun will contribute more than $1.5 billion to Oracle’s adjusted profit in the first year and more than $2 billion in the second year.

With former investment bankers Charles Phillips and Safra Catz steering things as the company’s co-presidents, Oracle has been able to hit its financial targets in all its acquisitions during the past four years.

That helped enable Oracle to earn $5.5 billion on revenue of $22.4 billion in its last fiscal year. Investors have enjoyed some of that prosperity too, with Oracle’s stock rising about 35 percent since the PeopleSoft takeover was completed in 2005. Oracle recently decided to pay a dividend for the first time.

But Oracle’s emphasis on increasing profits will likely raise concerns in its new role as the steward of Sun’s open-source software.

“This gives Oracle the keys to the crown jewels of the open-source movement,” said Wang, the Forrester analyst.

Ellison said Oracle intends to invest more heavily in Java than Sun has been able to afford as its fortunes waned. While Sun still has big sales — $13.9 billion last year — its profitability has been hit and miss. Earnings last year were $403 million, but from 2002 through 2006 Sun lost more than $5 billion.

Source: http://www.dailycamera.com

Read more ...