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

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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

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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

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