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Numbers, Volume 10

This goes out to Chip

Starting off the Week with a Bang

Q: For those that may have been living under a rock, can you summarize the news?
A: Sure. Yesterday, in an effort to screw up my Patriot’s Day plans, Oracle announced its intention to purchase Sun for $9.50 a share, putting the valuation at $7.4B (or $5.6B less cash on hand). Subject to the customary closing conditions, it would appear that Sun’s days as an independent will be over by this summer.

Also, from Oracle:

This acquisition combines best-in-class enterprise software and mission-critical computing systems. Oracle plans to engineer and deliver an integrated system — applications to disk — where all the pieces fit and work together so customers do not have to do it themselves. Customers benefit as their systems integration costs go down while system performance, reliability, and security go up.

And, the word from Redmond:

“I have no idea why a software company would buy a hardware company. We don’t want to buy any hardware companies,” Ballmer told the American Chamber of Commerce in Cairo, Egypt today, reports Reuters.

See my commentary as well.

Speaking of “Applications to Disk”

By using Sun Systems for MySQL x86 Performance, you can develop and deploy a new application quickly and get more than a 50% boost in performance, while reducing the size of your database by nearly 40% — regardless of the OS you choose. The solution includes the MySQL database with a Sun Fire x86/ x64 server, a MySQL Enterprise subscription, and Sun professional services, plus optional Sun Open Storage. It delivers price/performance that no other system can match, and takes up one-third less datacenter space too. So if you need pure, unbridled performance at launch, this is where to turn.

Becoming “More Like IBM” Don’t Look Too Shabby

First-quarter net profit fell one percent to $2.30 billion from $2.32 billion in the first quarter of 2008. Total revenue for the first quarter decreased by 11 percent, to $21.7 billion from the first quarter of 2008.

Revenues from the Software segment showed the least drop, decreasing by 6 percent to were $4.5 billion compared with the first quarter of 2008, revenues from IBM’s middleware products (WebSphere, Information Management, Tivoli, Lotus and Rational products), decreased by 5 percent to $3.6 billion, and revenue from operating systems decreased 7 percent to $492 million. Revenue from the Systems and Technology segment fell 23 percent to $3.2 million. Systems revenues decreased 22 percent.

$2.32 billion profit? I mean, “holy crap!,” right? See also Microsoft’s numbers.

VMWare Money, Services

Revenues for the first quarter were $470.3 million, an increase of 7% from the first quarter of 2008…. First quarter services revenues were $213.3 million, a 48% increase from last year. VMware’s business mix continues to shift with services revenues becoming a larger proportion of total revenues. In the first quarter, services revenues were 45% of total revenues compared to 33% a year ago. Driven by the challenging macroeconomic environment, license revenues were $257.0 million, a decline of 13% from a year ago.

Forget Net-Neutrality, How about Net-Reality?

An AT&T subscriber near Lake Tahoe forwarded me a letter received via express mail a week after she signed up for naked DSL service from the ISP. The letter noted that AT&T has four tiers that allowed downloads of between 20 GB and 80 GB per month. When we reported on AT&T discussing its trial efforts with the Federal Communications Commission back in November, it said that the tiers would begin with a 20-GB-per-month tier and go all the way up to 150 GB per month. Update: AT&T spokesman Seth Bloom says that customers subscribing to AT&T’s fiber-to-the-node U-verse service can sign up for a higher 150 GB per month tier…. The carrier is sticking with a planned $1 per GB charge for users who exceed their limit.

Cf. The Rise of the Stupid Networks. Also, I recall an IBM person talking recently about how the telcos are deathly afraid of becoming simply “bit pipes,” they want to sell services on-top of that. One has to “wildly” assume that the bulk of traffic now is video and, partly, music. Also, it looks like one group is appealing to the US Congress about all this.

They Shoulda Called It “Test Pattern”

Strobe further broadens the reach and capabilities of the Adobe Flash Platform, the No. 1 technology for video on the Web. According to comScore Media Metrix, approximately 80 percent of online videos viewed worldwide are delivered using Adobe Flash technology. Adobe Flash Player—already installed on 98 percent of Internet-connected desktops—gives viewers access to rich content without having to download additional software.

It makes me wonder what the other 20% is? Silverlight? Java? DivX? AVI?

Also, juxtaposed to the telco download caps (or should that be craps? ;>), you can see that the Video Wars (Adobe vs. Microsoft vs. others) are going to hit an “excess bandwidth charge” limit if they don’t start greasing up the telcos to open up their bit-pipes. Perhaps, you’d think Adobe, Microsoft, &co. could help add those extra services – content, even – that would let telcos be more than bit-pipes. Or, you could just try to blow-out the telcos’ old models in the same way US auto manufactories are currently getting some unwelcome “management consulting” from the US gub’nent – that scenario is doubtful with things like the iBubble.

Still, having to pay for bandwidth is quickly become silly in the eyes of consumers. They haven’t been educated enough to understand that those tubes get choked up and, thus (we’re told) need price-controls to unclog the bit-toilets.

“Ruh roh”

The New York Times Co. fell into a deeper financial hole during the first quarter as the newspaper publisher’s advertising revenue plunged 27 percent in an industrywide slump that is reshaping the print media.

The owner of The New York Times, The Boston Globe, the International Herald Tribune and 15 other daily newspapers said Tuesday that it lost $74.5 million, or 52 cents per share, in the opening three months of the year. That compared with a loss of $335,000 at the same time last year, which was break-even on a per-share basis.

Changing Funding Strategies

Now, I’m really looking for more of a boutique business, one that’s not going to have more than 24 employees and never more than $10 million to $100 million in sales, but is a dependable cash generator. I look for businesses that have a real niche that’s competitively defendable and people want to pay money for it. I’m not very big into the ‘eyeballs’ and page views and that kind of stuff.

In related, Austin news, AV has funding hit an 11 year low.

4 Million More in the Cloud

Virgin Media will today begin moves to transfer its almost four million broadband subscribers to Google’s email service.

The three existing in-house email platforms [yow!] will be gradually decommissioned.

At first only new customers will be invited to join the new outsourced service. Once 20,000 are signed up and the system is working normally, Virgin Media will begin inviting existing customers to switch.

The Black Cloud

Ben-Itzhak told El Reg that the cybercrooks behind the [1.9 million node] botnet made their money by auctioning off access to compromised machines through underground forums, typically charging $100 for 1,000 machines. The miscreants almost made money from selling data looted from compromised machines, he added.

I wonder how that pricing compares to Amazon EC2 and other “white cloud” providers?

Crowd Sourcing in the IT Department

[W]e’ve grown past 650,000 IT pros using Spiceworks. Here are a few stats on where the Spiceworks community is today:

  • 36,000 IT topics with over 137,000 posts.
  • 13,000 IT products rated, with over 3,500 reviews completed by 2,250 reviewers
  • 400 discussion groups created by technology, industry, or location
  • 383 shared reports by 270 authors
  • 103 Spicelists (crowdsourced lists) created with 3,151 items, 11,662 contributors and 39,475 votes
  • 63 plugins by 35 authors have been downloaded over 20,000 times

Spiceworks is the most consistent innovator in what I’d call “collaborative IT management.”

Less Spending in Austin

Austin sales tax revenue fell 14.7 percent in March, according to the latest figures from the Texas Comptroller’s office.

For the month, the state collected $9.3 million for sales made in Austin, down from $10.9 million collected in March 2008.

How’m I gonna make ExecPlat this year?!

Don't get drunk and wrap your tie around your head like a Japanese bandanna

Passenger count at U.S. airlines dipped 10 percent in March compared to a year ago as revenue fell by 23 percent.

Disclosure: IBM, Sun, Microsoft, Adobe, and Spiceworks are clients.

Categories: Enterprise Software, Numbers.

Comment Feed

2 Responses

  1. To put IBM's profits in an even better perspective, check out Apple (AAPL):

    "Over the past three months, Apple enjoyed its best-ever non-holiday quarter. $8.16 billion in revenue, up 9 percent from last year. Profits of $1.2 billion, up 20 percent from a year ago. Apple beat consensus estimates by about 24 cents per share"

    As of today, AAPL has a market cap of $111B compared to IBM's $136B – roughly the same, yet IBM has almost twice as much profit. Most people think that Apple is highly profitable, but put into this context …

Continuing the Discussion

  1. […] “Strobe” project. If you’re interested, I gave a small amount of commentary in this week’s Numbers post. Ryan has a small write-up as […]