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Dennis Byron

 
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  • European Consumers, Microsoft Shareholders Pay the Price of EU’s Ruling [View article]
    Update: Of course, Microsoft's legal counsel would have spelled his "big sister's" name correctly. It's Neelie, not Nellie.
    Sep 18, 2007. 06:01 PM | Likes Like |Link to Comment
  • European Consumers, Microsoft Shareholders Pay the Price of EU’s Ruling [View article]
    Update: Of course, Microsoft's legal counsel would have spelled his "big sister's" name correctly. It's Neelie, not Nellie.
    Sep 18, 2007. 06:01 PM | Likes Like |Link to Comment
  • SCO vs. Novell: The Last Word Has Yet To Be Said [View article]
    Thanks for registering, hapmoori.

    You don't say what it is that you found odd however? Therefore I am not sure if you are objecting to the judge's opinion (see link in article) or mine. I assume it is the judge's opinion you are arguing with because my only opinion above is that Novell had good lawyers and that Novell shareholders have a stake in this (this is an investment research site after all). There is nothing in my opinion based on anything by McBride, only by the Utah Federal District Court Judge, cited by page and paragraph where required.

    Is it possible that somewhere in the past you read the 1995 Novell-SCO agreement but not the Ammendments that came out in 1995 and 1996???

    Also according to the judge's ruling in August 2007, it is the non-compete clause and not the asset purchase list that gave SCO grounds to sue Novell. That they didn't is just a continuation of the bad legal advice they have been getting all along.

    Either way, like they say, it ain't over til it's over.

    Thanks again

    Dennis
    Aug 17, 2007. 08:16 AM | Likes Like |Link to Comment
  • VMware Blasts Off: Lessons and Implications [View article]
    Paul, you're right, the dot.com era is returning. The bet is on buzz not reality.

    In the software space, investors are paying no attention to the outcome-depressing effects of functional convergence (e.g., web servers into app servers during the dot.com era, word processors into office suites before that, virtualization BACK into operating systems in the next few years), SaaS (e.g., the "annunity" way it is accounted for as well as its effect on reducing traditionally- priced software), open source software (basically wiping out the for-profit software development market, which spawns the rest), bundling (what some call appliances), and a litany of other non-technology issues that are turning the IT market of the early 21st century into the auto market of the late 20th from an investment perspective. That's all good news for users but not for investors.

    Plus, as I wrote about the VMware IPO a few months ago(software.seekingal... where's the pay off for EMC investors? This thing is going to come down as fast as all the buzzed about bombs of 1999.
    Aug 15, 2007. 07:09 AM | Likes Like |Link to Comment
  • Dell, Sun Could Suffer As Virtualization Business Picks Up [View article]
    There are some arithmetic issues in this prediction that I don't get. A "modest contraction" of server growth rate in 2009 is a lot different than no increase in the "server installed base" after 2008. The latter would not be a modest contraction, it would be a catastrophic drop to near zero in absolute number of units shipped.

    But it doesn't matter. It sounds like the quote Watson Sr. supposedly made in 1940s: "'I think there is a world market for maybe five computers.' Virtualization has been around since the 1960s and it hasn't caused this effect yet. It is unlikely to start having this effect in 2009. Server virtualization is a SaaS farm play (and a useful form of increased efficiency). But tech analysts should forget "agriculture" and conisder the home.
    Jul 31, 2007. 06:21 AM | Likes Like |Link to Comment
  • The Good News Out Of IBM & SAP [View article]
    Dolph, I talked about that possibility here ("itinvestmentresearch.c..." on August 6, 2006) based on comments by Hasso Plattner and just the fun of saying "What if." I really don't think IBM wants back into the ERP applications game (having exited in 1991) because of channel conflict and its strategy of becoming almost totally a services provider. And it has no need for SAP's billion-euro NetWeaver middleware business.

    But "you never say never." Market dynamics could force IBM to reenter the ERP market in one of two ways.
    1. The applications business could stay somewhat as it is today, heavily driven by perpetual right to use licenses but trending toward paying for the right to use as a monthly subscription (SaaS). In this scenario, the market will most likely be dominated by Microsoft, Oracle and SAP (and Intuit if it changes strategy vis a vis mid-sized enterprises). IBM would need to take advantage of the opportunity, if it evolves in this manner, by programs like the SAP/mainframe investment last year and by other programs with Lawson and others in the heritage AS/400 application supplier stable. In this scenario, IBM might choose to acquire one of its partners if Microsoft, Oracle and SAP successfully block Lawson and the others, and SAP is as good a candidate as there is for such an acquisition (forgetting likely anti-trust objections).
    2. A second possibility is that the application business slowly contracts to be replaced—in a back to the future move—by technology-based business services (think ADP) where the brand of the application is not a major market factor. In this scenario, IBM would need to think in terms of acquiring many of the AS/400 application supplier partners, including Lawson and the JDE business of Oracle, for their industry and domain expertise. SAP wouldn't be much help to IBM in this scenario.

    I used to think that scenario two would emerge quickly when my generation (first-year baby boomer; trained as a COBOL programmer) retired from IT management but I now fear, from talking to a lot of the X-generation moving into IT management (and still as techy as can be) that it is going to take another 10-15 years before enterprises move in large numbers to getting their IT as business services. As long as executive management feels that IT can provide competitive advantage and is not just a "payroll service," everyone will keep reinventing the wheel. IBM of course is already well positioned for both eventualities
    Jul 31, 2007. 06:02 AM | Likes Like |Link to Comment
  • Bill Gates' Three-Dollar Barricade Against Ubuntu [View article]
    David, stand back. You're going to get a million emails from the Free Softies (fsf.org) explaining that "free software" is not free as in "free beer." It's free as in "free speech." Canonical can mail it to you for free but there is nothing in the open source software (OSS) bible that says they can't charge you shipping and handling.

    The issue isn't whether Ubuntu is "better than" Windows (unless you're into OS internals). The question is whether OpenOffice is "better than" Office 7, Firefox is "better than" Explorer, Real Media is "better than" Media Player, Quicken and Turbotax run well on Ubuntu (they will if you add a Windows emulation layer but why would you do that), and so forth. The good news is that we all get to choose which we want (except maybe that's not true in China?)

    But don't kid yourself that this is the white hats vs. the black hats (or red hats I guess in terms of China). Apparently Canonical is maling it for free as a marketing thing. Here's the razor. Did you need some blades? Canonical wants to sell you a service contract just like IBM, MySQL, Oracle, and Red Hat do (and Microsoft will with its $3 Windows).
    Apr 24, 2007. 08:53 AM | Likes Like |Link to Comment
  • New General Public License To Challenge Microsoft-Novell Linux Deal [View article]
    Whoa!

    I am not sure of the source of the sentence above: "The new license is aimed at undermining a deal inked between Microsoft and Linux support provider Novell in November, which implied that Microsoft has legal rights to Linux, according to some." It is misleading in two directions:
    -- The rewriting of the Gnu General Public License (GPL) has been ongoing for a couple of years and has nothing specific to do with the November 2006 Microsoft-Novell agreement. Two subpoints:
    1. The Free Software Foundation (FSF) public comment/review process ended in July 2006. If changes have been made by the FSF since the closing of the public process in order to counter future Novell-Microsoft-like deals without allowing public scrutiny of those changes, that would be unlike the FSF's usual open process and kind of against their ethics.
    2. The FSF leader, Richard Stallman, has been quoted to say that the Novell-Microsoft deal is totally in agreement with the current GPL license so nothing in the new draft would "undermine" the current Novell-Microsoft arrangment.
    -- The Novell-Microsoft agreeement didn't really imply anything about Microsoft asserting legal rights. Steve Ballmer says it explicitly any time he speaks about patents in general and has been doing so for a couple of years

    Reuters has a history of misconstruing FSF statements so as to get some Microsoft vs. the open source software (OSS) world drama going. I assume that is what is happening here.

    As for the statement that the FSF "owns most of the rights to the Linux operating system," it's a pretty good bet that the FSF is not the source of that statement because they would have used the term GNU/Linux. This license wording issue is in the minutia when compared to license options from Apache, Berkeley, and so forth. But if you want to dive down into it, see my posts at ebizq.net under OSS Culture.
    Mar 27, 2007. 12:35 PM | Likes Like |Link to Comment
  • Oracle Sues SAP: Below the Belt With a 2x4 [View article]
    Thanks for the correction, Diana.

    I was joking in my post last nite but I really was on vacation that second week of July and didn't see the Reuters interview. I did "attend" the SAP conference call the following week (July 20) when SAP formally announced its Q2 2006 results and I didn't make note of any comments along those lines. I am sure the handlers had Henning pretty well prepped by the following week not to fall into the trap if the same question were asked.

    I call it a trap because--as I posted here on SeekingAlpha a few days ago--the way to look at these competitive comparisons is on a trailing-12-month basis. Even Oracle suggests that in its investor material. In this case, Henning apparently was comparing one of his historically slow quarters with Oracle's historically fastest growing quarter. [Not too smart but not as dumb as allegedly stealing thousands of documents (that I think he could legally buy under restraint of trade regulations).]

    Time period is only one methodological quirk than investors need to look at when comparing competitive software market share claims. Are they talking about license, license and maintenance, or total revenue (including subscription fees) is another.

    Exchange rate is another. As I posted in January--when SAP claimed to have gained 3 points on the market in 2006 on an annual basis--that is probably just as misleading because SAP got a big exchange rate boost last year by most methodologies.

    Another important methodological technique is to backcast. Oracle rarely does that because it is not required by GAAP.

    Trying to account for all these factors (and no mormalization actions are ever perfect), SAP grew its applications product business (eliminating NetWeaver revenue) 12.4% last year while Oracle only grew its comparable applications software business 8.7%. Given Oracle's announcement on March 20, I expect that spread to have significantly narrowed when looking at SAP's trailing 12 months results for the period ending March 31, 2007 vs. Oracle's trailing 12 month results for the period ending February 28, 2007. Oracle might even begin to gain share for the first time since the PeopleSoft announcement.
    Mar 23, 2007. 02:13 PM | Likes Like |Link to Comment
  • Red Hat, Oracle: Cross Currents in the Linux Market [View article]
    I cannot judge the methodology of the Pacific Crest market research vis a vis Oracle doing better in the Linux market versus Red Hat and others than conventional wisdom (CW) suggests. But I am inclined to believe it. In 30 years of doing IT market research, many of them specifically tracking Oracle ERP and middleware products, I found very often that Oracle had a higher presence in a market than CW said.

    Case in point, BEA and IBM executives consistently told me that they never saw Oracle in application-server sales situations in the early years of this decade. But Oracle publicly stated (subject to time in the SOX pen if it were false) that it was growing its application-server business dramatically both in terms of revenue and unit sales. I believe both sides were telling me the truth (or as close to the truth as you get from marketing folks). The disconnect occurs because the large and largely satisfied Oracle database installed base is installing other Oracle products without even talking to a second source. This phenomenon is very likely happening with Oracle Linux as well.
    Mar 20, 2007. 09:39 AM | Likes Like |Link to Comment
  • SAP Moves into SaaS, Still Has a Long Way to Go [View article]
    As promised, I followed up with SAP to try to understand the difference between its two types of Hosting. SAP's answer:

    -- "The Hosting (the revenue flow of which) moved from Service Revenue to Other Services is so called Non-mandatory Hosting, meaning that the software can be hosted by SAP, our partners but also any other Hosting provider.

    -- "Mandatory Hosting(, which) was previously in Subscription/Rental (Product) Revenue(,) is now (in) a new line item called Subscription and other SW related services. Customers can have their software hosted only by SAP and certified hosting partners, this is true for e.g. (for) SAP CRM on demand."
    Mar 16, 2007. 09:25 AM | Likes Like |Link to Comment
  • Oracle to Buy Hyperion Solutions for $3.3B Cash -- NYT [View article]
    Sorry Alfred but Oracle will do anything to surpass BEA in "middleware." Even acquire a middleware company tight with IBM, Microsoft and SAP.
    Mar 1, 2007. 06:30 AM | Likes Like |Link to Comment
  • Windows Vista: Not Exactly Selling Like Hotcakes at Amazon [View article]
    I agree. I would think consumers (who are not the only target market) would be going directly to Microsoft or through their PC supplier to Microsoft.

    The Express upgrade program (free upgrade if you bought a Vista-enabled PC after 10/26/2006) is not going too smoothly by the way. Maybe Microsoft will be able to recapture the "Technolgy Guarantee" set aside from Q2. See the apology page on HP's site at . I have been unable to even confirm the order I placed in mid Feburary based on a Lenovo PC I bought recently.
    Feb 28, 2007. 05:37 PM | Likes Like |Link to Comment
  • Apple Envy Seizes Microsoft [View article]
    This is a great review of Microsoft but unfortunately from an investment perspective I feel that it covers only one-quarter or one-fifth of the Microsoft problem . The observation vis a vis Apple applies to Microsoft's consumer-gadget business but the bigger issue is that Microsoft is having a hard time focusing on what business it's in these days (and how it will "model" that business).

    There is also Microsoft's enterprise software business (made up of two or three pieces depending on how you cut it) and its consumer-content/searc... business. So as I commented on at informationarbitrage.c... (Roger Ehrenberg's home page) back at the time of the first article he mentions as well as in my own research on the Microsoft 10K at itinvestmentresearch.c..., Microsoft has to make its mind up vis a vis what business it's in as well as focus on a delivery model.

    In terms of businesses, I think it's spread too thin, competing with

    -- SAP, Sage, Intuit, Lawson, Infor and others in enterprise applications (this is the convetional wisdom candidate for the business it should get rid of)
    -- Oracle, IBM, BEA and others in enterprise middleware
    -- All variations of the UNIX/Linux world in operating software with all of the increasingly effective attacks by its open-source-software-b... competitors (this is my candidate for a business that it can gracefully exit depending on the delivery model decision)
    -- Google and others in content/search
    -- Apple in consumer gadgets as described here

    The main problem is that Microsoft hasn't decided how to deliver its value proposition to the markets represented by these businesses. Will Microsoft be a technology provider or a services provider?

    -- Technology provision is increasingly a low-margin game. Microsoft could be good at it but culturally, it's not "cool."
    -- Or will Microsoft go "... Live" full bore. I have been an Office Live beta user for 9 months and I can tell you Microsoft really doesn't have a clue how to be a services provider YET.

    From an IT Investment Research perspective, we all knew there would be problems with Vista's late delivery and slow ramp-up re CY 2006 and FY 2007. That's the source of the Apple envy. But with the Vista launch, Microsoft was more like GM in the early 1960s than Apple in the 1990s (or IBM in the 1980s). Microsoft is still flacking the fins on the back of the cars and the 400 cubic-inch engines when it should be downsizing both itself and its "cars."

    And it should be coming up with a value proposition that either highlights the dashboard and rack and pinion steering, or the quality of the chauffer and speed by which it can get you from here to there. It probably can't do both.
    Feb 6, 2007. 05:15 PM | Likes Like |Link to Comment
  • Will Oracle Pass BEA In the Middleware Market? [View article]
    Hi Robert. Thanks for the comment. In my phrase in the last paragraph of my December 21 SeekingAlpha opinion, "if Fusion doesn't do the job," I am referring to Fusion in the broadest sense, just as Oracle does in defining middleware. I do not mean just the application server, lower case (not just OC4J if that helps).

    As the original post tries to argue, Oracle's broad definition of middleware is what will allow Oracle to "overtake BEA" in Oracle's fourth fiscal quarter
    -- BEA doesn't offer products in most of the categories that Oracle (and IBM, SAP and Microsoft) call middleware so of course Oracle will eventually be larger (unless BEA acquires someone in the 4GL, business intelligence/analytics or collaboration markets).
    -- I have never understood Oracle management's obsession with this claim (which is always made to the investor community, not to those of us that follow the technology closely) because it is so misleading.
    I can only conclude it is an attempt to divert attention from the broader picture.

    That big picture, under the numbers, is that Oracle is really competing against IBM, SAP and Microsoft with Fusion middleware, not BEA. Fusion middleware is still just in the process of becoming a suite (I think Oracle calls it a platform) in the way that WebSphere, NetWeaver and implicitly the middleware bundled into NT already are (because the others have been at it longer and/or are less dependent on acquisitions). That's why I still think there's a chance Fusion in this broad sense "won't do the job" for your applications guys as they try to truly integrate the many application architectures (10, I think, last time I counted) they have inherited.

    If that happens and Oracle needs another middleware suite to put under its next-generation apps, BEA would be a good choice (or the best of some bad choices:
    -- SAP and Microsoft would make no sense because they are the direct applications market competitors
    -- IBM would probably be a bad choice culturally although I think the market would accept it).

    (Hopefully it's clear from the above that I am looking at SAP NetWeaver in this same broad way, not just at its application server, lower case. In fact, I have said publicly that I think that the NWAS is NetWeaver's weak link and I would like to see SAP get something like the TP-monitor capbility that was built into Basis under their next-generation apps.)

    Dennis
    Jan 20, 2007. 09:02 AM | Likes Like |Link to Comment
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