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| | | June 8, 2003
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Sunday, June 8, 2003 |
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Giants engross rivals
The past week was marked by high-profile acquisitions and surprising takeover bids, coming from some of the major players in the software industry.
 On Monday, business software maker PeopleSoft announced it will acquire Colorado-based J.D. Edwards & Co. for $1.7 billion in stock. Combined, the company will have $2.8 billion annual revenue, more than 13,000 employees and over 11,000 customers in 150 countries. PeopleSoft, the third largest business software solutions provider, which has a traditionally strong presence among the top corporate echelons will boost its product lineup and customer base with J.D. Edwards' technology and clients, primarily mid-sized companies. Following the finalization of the deal, not expected before the third or fourth quarter of the year, PeopleSoft will become one of the biggest enterprise and customer management application providers, leaving behind Oracle and second only to Germany-based SAP AG.
In a surprising move, just days after the announcement, Oracle said it will bid to take over PeopleSoft for $5.1 billion. The bold declaration sent shockwaves through the software industry. According to details released by the company, including a statement by Oracle CEO Larry Ellison, the renowned database software developer elaborated on its proposal: the giant plans to stop selling PeopleSoft products to new customers and encourage them to move to Oracle applications, while continue supporting current PeopleSoft users. Oracle also intends to integrate some of PeopleSoft's technology into its Oracle E-business Suite. PeopleSoft executives were swift to call the proposal's true intent an attempt to disrupt the pending acquisition of J.D. Edwards, which will outstrip Oracle in the enterprise applications business, a long-standing interest for Larry Ellison's company. But a multitude of analysts noted Oracle may be indeed trying to gain more customers and support revenue, while reinforcing its presence on the back of rival SAP.
More from: CNET News.com 1 2 | ComputerWorld 1 2 | eWeek 1 2 | InformationWeek | InternetNews.com 1 2 3
Reuters | The Register1 2 | VNUNET.com | The Washington Post | ZDNet
Another sign of consolidation in the IT industry popped up after Palm Inc., the leading maker of handheld devices, announced it will acquire rival Handspring in a stock swap worth about $169 million. In a statement, the company also said its board had finalized a plan to spin off PalmSource, Palm's wireless software division. According to the planned takeover of Handspring, two key executives, who originally launched Palm in the early 1990's are set to return to the company. Jeff Hawkins, the creator of Palm Pilot, the first hot-selling handheld computer, co-founded Handspring in 1998 and is now going to rejoin Palm as Chief Technology Officer (CTO). In addition, Palm is set to add Handspring's Treo smartphone to its product catalog, despite the relatively halfhearted consumer interest in such hardware.
More from: CNET News.com | InternetNews.com | Reuters | The Washington Post
SCO bolsters intellectual property case
The tit-for-tat UNIX intellectual property (IP) controversy continued with unyielding claims and counterclaims, whizzing from all sides. The SCO Group answered Novell's challenge to put up evidence supporting its allegations or simply shut up, making steps forward in two crucial directions.
SCO presented an amendment of the original asset purchase agreement, dating back to October 1996, which, according to the Utah-based company, clearly demonstrates all copyrights and patents, pertaining to the UNIX operating system, were transferred to the group. Novell acknowledged the amendment's authenticity and that at least some UNIX copyrights were sold to SCO, but reiterated the OS's patents continued to be Novell's property.
During the week, SCO also began disclosing parts of its case to analysts, who sign non-disclosure agreements. According to a news report by InformationWeek, Laura DiDio of the Yankee Group, one of the first to see SCO's demonstration, said the company's IP claims appeared to be legitimate. Unidentified portions of Linux's kernel contained lines of code similar to one's in UNIX and many of the developer annotations accompanying the kernel's source appeared identical.
Meanwhile, in Germany, a vastly Linux-friendly country, SCO suffered the ramifications of a temporary restraining order, issued after a motion from LinuxTag, a German Linux lobbyist association. SCO was forced to close its German web site and reinstate it after large portions of the content were removed, including a letter sent earlier this year to 1,500 top international corporations, warning them of potential legal liability from using Linux -- an operating system SCO calls 'illegal derivative' of UNIX.
More from: CNET News.com 1 2 3 | ComputerWorld | CRN | eWeek | InfoWorld | InternetNews.com
Piracy fights continue to rage
In its annual report, the Business Software Alliance (BSA), a group representing some of the major software makers, including Microsoft, Adobe Systems and Apple Computer, found worldwide software piracy dipped by about one percent last year. The problem, however, continues to burden businesses with lost revenues, estimated at about $13 billion for 2002. Already, the BSA is stepping up efforts to combat distribution of pirated products, on large part focusing on two critical regions, Eastern Europe and the Asia-Pacific -- areas with traditionally high piracy rates.
In the United States, the Recording Industry Association of America (RIAA) is continuing its litigation activities. A new lawsuit against StreamCast Networks, the maker of the popular peer-to-peer (P2P) Morpheus file-sharing application, alleges the company violated owners' copyrights when it was gearing up to launch an online radio service several years ago. The project, however, never got on the Internet, but the RIAA claims tens of thousands of songs were illicitly stored in digital databases.
At the same time, problems continue to persist among record companies themselves. The EMI Group joined a $17-billion-dollar battle against Bertelsmann, which supplied pioneer music-swapping service Napster with cash to continue its operations. In May, Universal Music launched a trial against Bertelsmann, parent company of BMG records, claiming the giant was able to cease the illegal distribution of music, but never chose to do so.
More from: CNET News.com 1 2 | IDG.net | Reuters
Security watch
Security companies across the globe warned of a growing threat, coming from a new variant of the Bugbear virus. In several hours, risk ratings were raised to "high" after thousands of users were affected and tens of thousands of virus-laden messages were stopped by e-mail solutions providers. Like the original Bugbear which first appeared in September 2002, Bugbear.B is a mass-mailing worm arriving by e-mail, which entails a number of nasty consequences for infected computer systems. The worm opens a backdoor, making machines susceptible to hacker attacks, and logs key strokes, thus seriously undermining security. The new variant also includes a capability to terminate antivirus software and has a polymorphic behavior, making detection more difficult.
More from: CNET News.com | IDG.net | InternetNews.com | VNUNET.com | The Washington Post
Antivirus software makers also warned of a newly appeared and unexpectedly potent variant of the SoBig worm. The latest modification, dubbed SoBig.C, primarily spreads via e-mail and local area networks (LANs), scanning infected computers for target e-mail addresses. Unlike its predecessor which used only one sender e-mail, the new version spoofs the "From" field of electronic messages and may even appear to come from "bill@microsoft.com," an address reputed to be that of Microsoft's Chairman and Chief Software Architect, Bill Gates.
More from:
CNET News.com | IDG.net | PC World
In Other News...
Canadian software maker Corel Corp. agreed to a long-awaited takeover bid from San Francisco-based Vector Capital, a deal worth about $96 million or $1.05 per share. Although below the self-set minimum of $1.10 per share, Corel directors are recommending shareholders to approve the agreement, a required move before Vector Capital can acquire the struggling developer of CorelDraw and WordPerfect.
Computer giant IBM disclosed the U.S. Securities and Exchange Commission (SEC) has launched a formal, non-public investigation into the company's financial results for 2000 and 2001. The New York-based hardware and software maker announced it is confident in its accounting, but financial experts advised caution in dealing with the situation, in an era after large-scale scandals involving companies like Enron and WorldCom.
In his annual memo to employees, Microsoft Chief Executive Officer (CEO) Steve Ballmer noted open-source software and especially the Linux operating system are Redmond's primary competitors. As a prominent Linux backer, IBM was identified by Ballmer as Microsoft's chief corporate rival.
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