Dennis Byron (Research 2.0)'s Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/77058/comments http://seekingalpha.com/article/67555-microsoft-continues-to-waste-shareholder-value-on-standards?source=feed#comment-123415 123415
But for all of you that prefer to be "locked in" to Sun or IBM, it's a free country. (Oh sorry, no actually in your country, it's not. Nanny Neelie has to tell you which company's products to use.)]]> Fri, 07 Mar 2008 07:53:41 -0500
But for all of you that prefer to be "locked in" to Sun or IBM, it's a free country. (Oh sorry, no actually in your country, it's not. Nanny Neelie has to tell you which company's products to use.)]]> http://seekingalpha.com/article/66867-microsoft-getting-more-saas-y?source=feed#comment-121461 121461 Mon, 03 Mar 2008 09:38:14 -0500 http://seekingalpha.com/article/66683-server-operating-system-indicator-both-windows-linux-gains-continue?source=feed#comment-121136 121136
As noted in earlier blog posts, I expect Windows to move toward 50% evenutally at the expense of "Other." This would begin to show up in August 2008 numbers if I am correct and should be very obvious by this time next year.]]> Sun, 02 Mar 2008 13:05:07 -0500
As noted in earlier blog posts, I expect Windows to move toward 50% evenutally at the expense of "Other." This would begin to show up in August 2008 numbers if I am correct and should be very obvious by this time next year.]]> http://seekingalpha.com/article/66683-server-operating-system-indicator-both-windows-linux-gains-continue?source=feed#comment-120977 120977
But just to be compensate for any possible skewing of the data as you suggest, I look at Unix and Linux as one market, and Windows and other as a second market. This is not a Linux vs. Windows comparison but a Unix vs. Linux and Windows vs. Other comparison.

-- Dennis]]> Sat, 01 Mar 2008 16:59:44 -0500
But just to be compensate for any possible skewing of the data as you suggest, I look at Unix and Linux as one market, and Windows and other as a second market. This is not a Linux vs. Windows comparison but a Unix vs. Linux and Windows vs. Other comparison.

-- Dennis]]> http://seekingalpha.com/article/66228-sun-to-skeptics-open-source-has-a-clear-economic-model?source=feed#comment-119817 119817
As for "crippling licenses and sneaky licesning exceptions," that's called marketing. ]]> Wed, 27 Feb 2008 14:09:14 -0500
As for "crippling licenses and sneaky licesning exceptions," that's called marketing. ]]> http://seekingalpha.com/article/66018-yahoo-adobe-it-s-a-vision-thing?source=feed#comment-119122 119122
But I have a few issues that might change your overall thinking (in reverse order to where they appear in your article):
1. Aunt Sue and all do object to advertising on TV--thank god for Tivo
2. In addition to Microsoft Works, which is basically sold bundled by OEMs, Aunt Sue can get a pretty full "3-device" Office 2007 Home and Student(Word/Powerpoin... and something called OneNote) for $50 "per device." One of the devices doesn't even have to belong to a student or a teacher, which was the XP deal. So one for Sue, one for Uncle Jim's computer and one for someone else. Believe me, it's well worth not having advertising popups and overlays and " click here if you don't want to wait 45 seconds."
3. Online applications have a major flaw. 40 years ago when I started we called it computing. Somewhere along the line it became offline computing. After a short hiatus, it made a comeback as disconnected computing. It's still important.

Overall great analysis. Microsoft should buy both Adobe and Yahoo.

-- Dennis]]> Tue, 26 Feb 2008 05:56:28 -0500
But I have a few issues that might change your overall thinking (in reverse order to where they appear in your article):
1. Aunt Sue and all do object to advertising on TV--thank god for Tivo
2. In addition to Microsoft Works, which is basically sold bundled by OEMs, Aunt Sue can get a pretty full "3-device" Office 2007 Home and Student(Word/Powerpoin... and something called OneNote) for $50 "per device." One of the devices doesn't even have to belong to a student or a teacher, which was the XP deal. So one for Sue, one for Uncle Jim's computer and one for someone else. Believe me, it's well worth not having advertising popups and overlays and " click here if you don't want to wait 45 seconds."
3. Online applications have a major flaw. 40 years ago when I started we called it computing. Somewhere along the line it became offline computing. After a short hiatus, it made a comeback as disconnected computing. It's still important.

Overall great analysis. Microsoft should buy both Adobe and Yahoo.

-- Dennis]]> http://seekingalpha.com/article/64754-the-real-danger-to-microsoft?source=feed#comment-116432 116432
Except for your closing shot at drunks, your analysis is right on. That is, you have it right on the ad-revenue issue and Microsoft's real intentions. But you really don't understand "online applications."

Microsoft wants Yahoo to help it to go "live" faster, not for the ad revenue (see seekingalpha.com/artic...).

As I say in that post, " If it chooses to, Microsoft is able to change the user’s total information technology experience in a way no other software supplier can. Microsoft can combine the role of the user who is at once a consumer, an information worker, an individual looking for entertainment or personal information, and so forth." When I say "no other software supplier," that includes Google.

Speaking as someone who takes it one day a time, smart gamblers--whether addicts or not--don't drink and gamble at the same time. So don't bet against Microsoft just because some drinkers of the Google Kool-aid need to dry out. ]]> Fri, 15 Feb 2008 06:05:48 -0500
Except for your closing shot at drunks, your analysis is right on. That is, you have it right on the ad-revenue issue and Microsoft's real intentions. But you really don't understand "online applications."

Microsoft wants Yahoo to help it to go "live" faster, not for the ad revenue (see seekingalpha.com/artic...).

As I say in that post, " If it chooses to, Microsoft is able to change the user’s total information technology experience in a way no other software supplier can. Microsoft can combine the role of the user who is at once a consumer, an information worker, an individual looking for entertainment or personal information, and so forth." When I say "no other software supplier," that includes Google.

Speaking as someone who takes it one day a time, smart gamblers--whether addicts or not--don't drink and gamble at the same time. So don't bet against Microsoft just because some drinkers of the Google Kool-aid need to dry out. ]]> http://seekingalpha.com/article/63876-microsoft-s-last-big-beat-internet-domination-or-death?source=feed#comment-115483 115483
I caution you on your underlying assumption about Linux being developed "at almost no cost" however. IBM, Intel, Novell, HP, Fujitsu, EMC, Oracle, Sun, Motorola, and all the other sponsors of the Linux Foundation (LF) as well as many that work on Linux without belonging to the Foundation have spent billions on maintaining and updating the Linux kernel both in cash and in-kind contributions to the development effort.

If "low-cost Linux" is at all key to your conclusion, be careful. In fact, I believe relatively soon, Microsoft will become--along with Google--one of the largest users of Linux, thanking the LF profusely as it makes that transition.]]> Sun, 10 Feb 2008 06:57:02 -0500
I caution you on your underlying assumption about Linux being developed "at almost no cost" however. IBM, Intel, Novell, HP, Fujitsu, EMC, Oracle, Sun, Motorola, and all the other sponsors of the Linux Foundation (LF) as well as many that work on Linux without belonging to the Foundation have spent billions on maintaining and updating the Linux kernel both in cash and in-kind contributions to the development effort.

If "low-cost Linux" is at all key to your conclusion, be careful. In fact, I believe relatively soon, Microsoft will become--along with Google--one of the largest users of Linux, thanking the LF profusely as it makes that transition.]]> http://seekingalpha.com/article/62012-vmware-hammered-in-after-hours-trading?source=feed#comment-113394 113394
Analyst after analyst on the conference call whined, "But 50% annual growth really means only a 35% growth run rate by the end of 2008." If the fall of 2008 is like the fall of 2001 (the analogy many macroeconomic analyses are setting up), 35% growth rate next fall could be 35x software market growth.]]> Tue, 29 Jan 2008 09:00:06 -0500
Analyst after analyst on the conference call whined, "But 50% annual growth really means only a 35% growth run rate by the end of 2008." If the fall of 2008 is like the fall of 2001 (the analogy many macroeconomic analyses are setting up), 35% growth rate next fall could be 35x software market growth.]]> http://seekingalpha.com/article/60862-sun-mysql-the-real-winner-is-oracle?source=feed#comment-112484 112484
The reference to SAP should have made clearer that I was referring to its NetWeaver business. As described in many previous posts, SAP in CY 2006 made impressive gains in the middleware market. SAP landed “standalone” middleware business not dependent on its ERP business. Based on the exchange rate used in its 20-F, SAP recognized more than $1B in license/maintenance/li... revenue for NetWeaver in the 12 months ending March 31, 2007.

In fact, counting Business Objects but not counting BEA, SAP probably surpassed Oracle in the middleware market in 2007. That's the part of SAP Sun will be competing with.

Dennis

]]> Wed, 23 Jan 2008 16:30:26 -0500
The reference to SAP should have made clearer that I was referring to its NetWeaver business. As described in many previous posts, SAP in CY 2006 made impressive gains in the middleware market. SAP landed “standalone” middleware business not dependent on its ERP business. Based on the exchange rate used in its 20-F, SAP recognized more than $1B in license/maintenance/li... revenue for NetWeaver in the 12 months ending March 31, 2007.

In fact, counting Business Objects but not counting BEA, SAP probably surpassed Oracle in the middleware market in 2007. That's the part of SAP Sun will be competing with.

Dennis

]]> http://seekingalpha.com/article/60622-users-lose-middleware-choice-in-oracle-acquisition-of-bea?source=feed#comment-111382 111382 Fri, 18 Jan 2008 12:15:48 -0500 http://seekingalpha.com/article/60622-users-lose-middleware-choice-in-oracle-acquisition-of-bea?source=feed#comment-111380 111380
In addition to the comment above questioning my middleware history analysis, I've received a few emails and a phone call on the subject. So here goes:

The key word in my analysis is "market." Prior to BEA, most of the independent software vendors that made middleware positioned themselves as tools suppliers. I believe BEA led the way in turning the value proposition on its head, saying "here's the tools, pay us for the number of instances of the resulting run-time code you deploy." That's what makes a market: the value proposition behind the buying and selling in the bazaar, not just making the product.

As I said in the post, Iona predated BEA as did Netwise, Transarc and a few others. But they didn't really push the deployment value proposition. And since IBM funded Camelot at CMU and quickly bought Transarc after it was founded, I would argue Transarc was not "independent."

Independent is another key word in the analysis. Most of the early middleware was part of the leading systems suppliers' stacks (to which it has returned, which is the real point I was trying to make in the post).

So whether you agree with my analysis or not, raise a glass of your favorite libation this weekend to Actional, Allaire, Antares, Ascential, Bluestone, Crossworlds (and the woman in the red dress), Haht, Mercator, Oberon, Persistence, SeeBeyond, Silverstream, Staffware, WebMethods, etc and all the other middleware memories.

[By the way, lest you think I just fell of the turnip truck, I fell of the turnip truck a long time ago.

I started researching "middleware" when Chris Stone was forming the Object Management Group in the late 1980s while still physically located in the Data General facilities on Computer Drive in Westboro.

I was the primary "middleware" analyst for the Datapro division of McGraw Hill from 1991 to 1997 and wrote monthly articles for Application Development Trends during the same time period. I put the term "middleware" in quotes because I don't actually remember using the term "middleware" regularly until 1995 doing some consulting for Noblenet (later part of RogueWave, later aquired by Quovadx).

After a hiatus doing ERP research, I was the IDC "middleware" analyst from 2003 to 2006. Again I put the term in quotes because by then it was called application deployment software :) ]

]]> Fri, 18 Jan 2008 12:13:32 -0500
In addition to the comment above questioning my middleware history analysis, I've received a few emails and a phone call on the subject. So here goes:

The key word in my analysis is "market." Prior to BEA, most of the independent software vendors that made middleware positioned themselves as tools suppliers. I believe BEA led the way in turning the value proposition on its head, saying "here's the tools, pay us for the number of instances of the resulting run-time code you deploy." That's what makes a market: the value proposition behind the buying and selling in the bazaar, not just making the product.

As I said in the post, Iona predated BEA as did Netwise, Transarc and a few others. But they didn't really push the deployment value proposition. And since IBM funded Camelot at CMU and quickly bought Transarc after it was founded, I would argue Transarc was not "independent."

Independent is another key word in the analysis. Most of the early middleware was part of the leading systems suppliers' stacks (to which it has returned, which is the real point I was trying to make in the post).

So whether you agree with my analysis or not, raise a glass of your favorite libation this weekend to Actional, Allaire, Antares, Ascential, Bluestone, Crossworlds (and the woman in the red dress), Haht, Mercator, Oberon, Persistence, SeeBeyond, Silverstream, Staffware, WebMethods, etc and all the other middleware memories.

[By the way, lest you think I just fell of the turnip truck, I fell of the turnip truck a long time ago.

I started researching "middleware" when Chris Stone was forming the Object Management Group in the late 1980s while still physically located in the Data General facilities on Computer Drive in Westboro.

I was the primary "middleware" analyst for the Datapro division of McGraw Hill from 1991 to 1997 and wrote monthly articles for Application Development Trends during the same time period. I put the term "middleware" in quotes because I don't actually remember using the term "middleware" regularly until 1995 doing some consulting for Noblenet (later part of RogueWave, later aquired by Quovadx).

After a hiatus doing ERP research, I was the IDC "middleware" analyst from 2003 to 2006. Again I put the term in quotes because by then it was called application deployment software :) ]

]]> http://seekingalpha.com/article/60543-mysql-and-bea-wednesdays-two-big-acquisitions?source=feed#comment-111046 111046 Thu, 17 Jan 2008 09:03:16 -0500 http://seekingalpha.com/article/57985-netsuite-not-as-well-positioned-as-larger-players?source=feed#comment-110526 110526
Thanks again for time you put into your comments.

Most important, here's hoping you didn't buy "N" at the top on the day you wrote the first post :) As for the historical points in your comment, I think you are violently agreeing with me?

1. You say SAP was not involved in BPEL but you link to a page that correctly tells about SAP's involvement? But, anyways, the real point is that SaaS has nothing to do with the architectural and technical underpinnings like BPEL. SaaS is just how you sell it.

2. Based on my experience I can compare SAP in 1980-1992 with D&B, MSA, M&D, etc. Specifically SAP did close to $300 million in sales in 1992, and clearly played in the same league with the guys you mention. The real point is, as you say, SAP was a "mainframe ERP" company and not a newcomer to the market when the C/S era started.

I think your overall thesis is that a new crop of application suppliers emerges in each architectural generation. That is true historically.

You also note that the same is happening in what you call the SaaS era, what I would call the SOA era. That is also true although not to the extent we saw at the beginning of the C/S era or during the dot-com boom (which is where Netsuite comes from by the way).

And finally you believe that this new crop will replace the old because of architectural decisions (first comment) that the new crop of suppliers has made or new terms and conditions decisions (second comment) that the incumbents fail to embrace. That is not true historically.

SAP, Oracle (and Microsoft) might fail to make the move to the next historical phase of the ERP market but that is not predetermined by past architectural decisions or by the introduction of new terms and conditions. Each has already come through multiple architectural phases, and multiple business models, to lead the ERP market.

Thanks again]]> Tue, 15 Jan 2008 13:19:22 -0500
Thanks again for time you put into your comments.

Most important, here's hoping you didn't buy "N" at the top on the day you wrote the first post :) As for the historical points in your comment, I think you are violently agreeing with me?

1. You say SAP was not involved in BPEL but you link to a page that correctly tells about SAP's involvement? But, anyways, the real point is that SaaS has nothing to do with the architectural and technical underpinnings like BPEL. SaaS is just how you sell it.

2. Based on my experience I can compare SAP in 1980-1992 with D&B, MSA, M&D, etc. Specifically SAP did close to $300 million in sales in 1992, and clearly played in the same league with the guys you mention. The real point is, as you say, SAP was a "mainframe ERP" company and not a newcomer to the market when the C/S era started.

I think your overall thesis is that a new crop of application suppliers emerges in each architectural generation. That is true historically.

You also note that the same is happening in what you call the SaaS era, what I would call the SOA era. That is also true although not to the extent we saw at the beginning of the C/S era or during the dot-com boom (which is where Netsuite comes from by the way).

And finally you believe that this new crop will replace the old because of architectural decisions (first comment) that the new crop of suppliers has made or new terms and conditions decisions (second comment) that the incumbents fail to embrace. That is not true historically.

SAP, Oracle (and Microsoft) might fail to make the move to the next historical phase of the ERP market but that is not predetermined by past architectural decisions or by the introduction of new terms and conditions. Each has already come through multiple architectural phases, and multiple business models, to lead the ERP market.

Thanks again]]> http://seekingalpha.com/article/60228-vmware-s-pipeline-looks-strong-jeffries?source=feed#comment-110476 110476
But it's not clear that that's what's happening so the question is "Is the pipeline being filled by the many new partners VMware has lined up in the last few years?" These new partners accounted for less than 5% of the growth through the first three quarters of 2007 according to the Nov. 2007 10Q. Is the pipeline still heavily dominated by Ingram Micro, which provided 29% of 2006 revenue?

]]> Tue, 15 Jan 2008 09:48:57 -0500
But it's not clear that that's what's happening so the question is "Is the pipeline being filled by the many new partners VMware has lined up in the last few years?" These new partners accounted for less than 5% of the growth through the first three quarters of 2007 according to the Nov. 2007 10Q. Is the pipeline still heavily dominated by Ingram Micro, which provided 29% of 2006 revenue?

]]> http://seekingalpha.com/article/60203-sap-4q-results-enterprise-application-market-strong?source=feed#comment-110470 110470
But how this reflects on the overall enterprise applications market depends on how much of this growth is from NetWeaver middleware vs. classic SAP applications. In the recent past, NetWeaver has been a major growth driver for SAP more than enterprise applications.

And sorry but SAP's self-selected measurement of the "core enterprise applications" market is of very little value in understanding SAP's relative growth or decline against competitors. It's unclear who they count as competitors. It is unclear if they include NetWeaver revenue. It is unclear where they get the 7% "industry analyst projection." But it is clear that they are achieving this self-determined share growth by claiming to participate in only about 15% of the overall software market as defined in their SEC filings. ]]> Tue, 15 Jan 2008 09:22:32 -0500
But how this reflects on the overall enterprise applications market depends on how much of this growth is from NetWeaver middleware vs. classic SAP applications. In the recent past, NetWeaver has been a major growth driver for SAP more than enterprise applications.

And sorry but SAP's self-selected measurement of the "core enterprise applications" market is of very little value in understanding SAP's relative growth or decline against competitors. It's unclear who they count as competitors. It is unclear if they include NetWeaver revenue. It is unclear where they get the 7% "industry analyst projection." But it is clear that they are achieving this self-determined share growth by claiming to participate in only about 15% of the overall software market as defined in their SEC filings. ]]> http://seekingalpha.com/article/57985-netsuite-not-as-well-positioned-as-larger-players?source=feed#comment-107103 107103
Thanks for the comment. At Research 2.0, we agree with your analysis that the SOA-ERP market will follow the past lifecycle of legacy-ERP followed by CS-ERP followed by Internet-ERP. (SaaS is just how you buy it to us but we agree with your wave theory.) The report that this blog post references goes into more detail.

But your analysis that the old dogs can't learn new tricks (and therefore the next era will be dominated by a lot of new names) isn't historically accurate. In the past, typically only one new name has broken through per era. SAP did not just emerge from the fields of Waldorf in 1992; it had been into mainframe ERP for 10-15 years before that. Edwards certainly made the transition from legacy (System/38 in its case) as well. Most of the original Microsoft stuff was monolithic too, but on a PC. Peoplesoft was the breakthrough application vendor of the client/server era. Siebel was the breakthrough application vendor of the Internet era.

We also agree with your comments about BPEL (invented by SAP) and open source software. One of our concerns about NetSuite, detailed in the report, is that it is not doing enough in these new technology areas.

Thanks again.]]> Thu, 27 Dec 2007 17:20:26 -0500
Thanks for the comment. At Research 2.0, we agree with your analysis that the SOA-ERP market will follow the past lifecycle of legacy-ERP followed by CS-ERP followed by Internet-ERP. (SaaS is just how you buy it to us but we agree with your wave theory.) The report that this blog post references goes into more detail.

But your analysis that the old dogs can't learn new tricks (and therefore the next era will be dominated by a lot of new names) isn't historically accurate. In the past, typically only one new name has broken through per era. SAP did not just emerge from the fields of Waldorf in 1992; it had been into mainframe ERP for 10-15 years before that. Edwards certainly made the transition from legacy (System/38 in its case) as well. Most of the original Microsoft stuff was monolithic too, but on a PC. Peoplesoft was the breakthrough application vendor of the client/server era. Siebel was the breakthrough application vendor of the Internet era.

We also agree with your comments about BPEL (invented by SAP) and open source software. One of our concerns about NetSuite, detailed in the report, is that it is not doing enough in these new technology areas.

Thanks again.]]> http://seekingalpha.com/article/57194-whatever-happened-to-ibm-s-software-factory?source=feed#comment-105158 105158 Thu, 13 Dec 2007 08:29:52 -0500 http://seekingalpha.com/article/49724-oracle-bids-17-share-for-bea-systems?source=feed#comment-98468 98468
I hadn't even backcast for this week's earlier news yet because it's never over 'til its over. But for BEA, I do think it's over. It was a good run, Alfred. Who would have thought there was so much value in some AT&T Tuxedo distributorships?]]> Fri, 12 Oct 2007 08:34:18 -0400
I hadn't even backcast for this week's earlier news yet because it's never over 'til its over. But for BEA, I do think it's over. It was a good run, Alfred. Who would have thought there was so much value in some AT&T Tuxedo distributorships?]]> http://seekingalpha.com/article/46549-consider-shorting-oracle-following-tibco-s-guidance?source=feed#comment-95302 95302
Financial services made up 27.5% of IBM's revenue in CY 2006, a higher split than BEA, Oracle and TIBCO (according to the numbers above). Of course, that revenue includes more than just technology (as does BEA's, TIBCO's and especially Oracle's revenue). IBM's success outside the U.S. may protect it from the U.S. subprime thing but apparently TIBCO's international business did not protect it. ]]> Thu, 06 Sep 2007 11:01:02 -0400
Financial services made up 27.5% of IBM's revenue in CY 2006, a higher split than BEA, Oracle and TIBCO (according to the numbers above). Of course, that revenue includes more than just technology (as does BEA's, TIBCO's and especially Oracle's revenue). IBM's success outside the U.S. may protect it from the U.S. subprime thing but apparently TIBCO's international business did not protect it. ]]> http://seekingalpha.com/article/34100-emc-vmware-spin-out-new-shareholders-get-virtually-nothing?source=feed#comment-86994 86994
OK. If I buy into your scenario, then I still feel the same way as I feel about server virtualization--no separate market for VMware to compete in. I think you agree when you say Microsoft is taking steps toward this approach.

But I also don't buy into the scenario that virtualization is a marketable way to make PCs more secure; too powerful and too elegant in my opinion.

Then there is the $64,000 question for about 5 years out: what is a PC any ways? The examples you give will all be happening in the cloud and the cloud will worry about security. For the personal devices where I (or my boss) cares about security, physical means will predominate because any software-enabled methodology can be software hacked.]]> Fri, 25 May 2007 06:04:37 -0400
OK. If I buy into your scenario, then I still feel the same way as I feel about server virtualization--no separate market for VMware to compete in. I think you agree when you say Microsoft is taking steps toward this approach.

But I also don't buy into the scenario that virtualization is a marketable way to make PCs more secure; too powerful and too elegant in my opinion.

Then there is the $64,000 question for about 5 years out: what is a PC any ways? The examples you give will all be happening in the cloud and the cloud will worry about security. For the personal devices where I (or my boss) cares about security, physical means will predominate because any software-enabled methodology can be software hacked.]]> http://seekingalpha.com/article/36375-os-survey-results-microsoft-can-breathe-easy-as-linux-levels-off?source=feed#comment-86884 86884
The server-market results reported by IDC for Q1 2007 (and every quarter in what they call their Server Tracker) are not related to the long delayed and much discussed Microsoft Vista client operating software sales in the first quarter (IDC has another service called the PC Tracker for that). The Server Tracker, according to IDC press release, is a measurement of HP, IBM (all products including AS/400 and mainframes), Sun, Dell, Fujitsu, and so forth servers and whether they get provisioned with AS/400, Linux, Unix (all variants), Windows, zOS, and so forth operating systems.]]> Thu, 24 May 2007 06:40:37 -0400
The server-market results reported by IDC for Q1 2007 (and every quarter in what they call their Server Tracker) are not related to the long delayed and much discussed Microsoft Vista client operating software sales in the first quarter (IDC has another service called the PC Tracker for that). The Server Tracker, according to IDC press release, is a measurement of HP, IBM (all products including AS/400 and mainframes), Sun, Dell, Fujitsu, and so forth servers and whether they get provisioned with AS/400, Linux, Unix (all variants), Windows, zOS, and so forth operating systems.]]> http://seekingalpha.com/article/35911-ibm-forecasts-big-profit-jump-by-2010?source=feed#comment-86484 86484
-- IBM will need to be acquiring service revenue streams to build EPS, not software license streams. Software margins in general will be plummeting because of commoditization. That's why so many software companies are going to Software as a Service (SaaS) as fast as SOA and open source software will get them there.

-- For IBM to buck this trend and increase its software margins as stated, I guess it can squeeze more profits out of those held captive behind the Big Blue Curtain but that doesn't quite line up with the Linux on Mainframe campaign IBM has been leading.

-- As for virtualization, I would argue that IBM invented this "new technology" 40 years ago. Reminding clients of this will help profits to the extent that IBM can keep its users on big iron but that's going to be more protecting against profit erosion than increasing profits.]]> Fri, 18 May 2007 06:35:37 -0400
-- IBM will need to be acquiring service revenue streams to build EPS, not software license streams. Software margins in general will be plummeting because of commoditization. That's why so many software companies are going to Software as a Service (SaaS) as fast as SOA and open source software will get them there.

-- For IBM to buck this trend and increase its software margins as stated, I guess it can squeeze more profits out of those held captive behind the Big Blue Curtain but that doesn't quite line up with the Linux on Mainframe campaign IBM has been leading.

-- As for virtualization, I would argue that IBM invented this "new technology" 40 years ago. Reminding clients of this will help profits to the extent that IBM can keep its users on big iron but that's going to be more protecting against profit erosion than increasing profits.]]> http://seekingalpha.com/article/35104-deltek-ipo-arriving-a-decade-late-to-the-erp-debutante-ball?source=feed#comment-85938 85938
That doesn't change my IT investment research opinion however: PSA is a bad bet to start with, the competitive set has changed since PSA's hey day, ERP has become commoditized in the last 10 years, all the big guys are all over government contracting (and all the other important industries noted by Deltek), and the governance structure penalizes investors unless they are just looking for a quick in and out.

If it is a quick in and out bet, I don't see the kind of bounce of the old days of ERP (maybe Deltek itself experienced it).

Thanks again.]]> Fri, 11 May 2007 08:51:28 -0400
That doesn't change my IT investment research opinion however: PSA is a bad bet to start with, the competitive set has changed since PSA's hey day, ERP has become commoditized in the last 10 years, all the big guys are all over government contracting (and all the other important industries noted by Deltek), and the governance structure penalizes investors unless they are just looking for a quick in and out.

If it is a quick in and out bet, I don't see the kind of bounce of the old days of ERP (maybe Deltek itself experienced it).

Thanks again.]]> http://seekingalpha.com/article/35247-is-red-hat-looking-to-buy-zimbra-and-alfresco?source=feed#comment-85928 85928 -- I disagree with Jason Maynard and think such acquisitions would be a bad idea for both Red Hat and the larger open source software (OSS) community.
-- Not only didn't I hear that idea expressed by RHAT at Wednesday's Financial Analsysts conference (maybe Credit Suisse got some inside-baseball feedback outside the open meeting), I heard just the opposite at Red Hat's most recent quarterly-results conference call--see my March 30 SeekingAlpha post on the Red Hat quarterly results

Look at the scope of the opportunity:
-- Application spend makes up more than half of the overall $244B software market (2006, the total is based on publicly available IDC data; the applicaton percentage is based on my research).
-- There is no reason why application spend would evenutally not make up at least an equally high percentage of the $7B OSS market (2006, 3% of the $244B total, also based on publicly available IDC data released by Red Hat at Wednesday's financial analyst conference)
-- Today, packaged OSS applications represent only about 10% of the OSS market (also IDC data released by Red Hat at Wednesday's financial analyst conference)

For packaged OSS applications to become a larger share of the rapidly growing OSS market ($20B by 2010 from $7B in 2006), they need to attain the same quality level as both proprietary packaged apps such as SAP, Lawson, etc. and OSS infrastructure software such as RHEL, JBoss, etc.

Choice is required as well: not only does the OSS market need Zimbra for collaboration but it needs OpenOffice, etc. This is true for the same reason that it is important for users today to have a choice among Office, Notes, etc. That same choice and quality equation holds for all 50-plus types of packaged applications (the move to composite applications is going to increase that taxonomy by a factor of 10 but I put that factoid aside for this discussion).

Red Hat Exchange (RHX) is all about building that needed portfolio of quality products. RHX is potentially as important to the OSS movement (and the overall IT market) as the DEC ISV catalog was in the 1970s, the Oracle CAI program was in the 1980s, and the Microsoft ecosystem was in the 1990s.

Red Hat acquisition of application suppliers from their "catalog" (or using the program as a due-diligence method for M&A) would instantly set up conflict that will retard the entire OSS market's development. (Maybe in 10 years, after the OSS applications market is on solid footing, Red Hat can change strategy the way Oracle bought Datalogix in 1998 and Microsoft bought Great Plains, etc. earlier this decade).

And as I said above, not only didn't I hear that Red Hat wanted to acquire applications suppliers on Wednesday, I heard just the opposite in March.]]> Fri, 11 May 2007 06:38:53 -0400 -- I disagree with Jason Maynard and think such acquisitions would be a bad idea for both Red Hat and the larger open source software (OSS) community.
-- Not only didn't I hear that idea expressed by RHAT at Wednesday's Financial Analsysts conference (maybe Credit Suisse got some inside-baseball feedback outside the open meeting), I heard just the opposite at Red Hat's most recent quarterly-results conference call--see my March 30 SeekingAlpha post on the Red Hat quarterly results

Look at the scope of the opportunity:
-- Application spend makes up more than half of the overall $244B software market (2006, the total is based on publicly available IDC data; the applicaton percentage is based on my research).
-- There is no reason why application spend would evenutally not make up at least an equally high percentage of the $7B OSS market (2006, 3% of the $244B total, also based on publicly available IDC data released by Red Hat at Wednesday's financial analyst conference)
-- Today, packaged OSS applications represent only about 10% of the OSS market (also IDC data released by Red Hat at Wednesday's financial analyst conference)

For packaged OSS applications to become a larger share of the rapidly growing OSS market ($20B by 2010 from $7B in 2006), they need to attain the same quality level as both proprietary packaged apps such as SAP, Lawson, etc. and OSS infrastructure software such as RHEL, JBoss, etc.

Choice is required as well: not only does the OSS market need Zimbra for collaboration but it needs OpenOffice, etc. This is true for the same reason that it is important for users today to have a choice among Office, Notes, etc. That same choice and quality equation holds for all 50-plus types of packaged applications (the move to composite applications is going to increase that taxonomy by a factor of 10 but I put that factoid aside for this discussion).

Red Hat Exchange (RHX) is all about building that needed portfolio of quality products. RHX is potentially as important to the OSS movement (and the overall IT market) as the DEC ISV catalog was in the 1970s, the Oracle CAI program was in the 1980s, and the Microsoft ecosystem was in the 1990s.

Red Hat acquisition of application suppliers from their "catalog" (or using the program as a due-diligence method for M&A) would instantly set up conflict that will retard the entire OSS market's development. (Maybe in 10 years, after the OSS applications market is on solid footing, Red Hat can change strategy the way Oracle bought Datalogix in 1998 and Microsoft bought Great Plains, etc. earlier this decade).

And as I said above, not only didn't I hear that Red Hat wanted to acquire applications suppliers on Wednesday, I heard just the opposite in March.]]> http://seekingalpha.com/article/34343-doubleclick-ceo-online-ad-spending-too-inefficient?source=feed#comment-85375 85375
A comparison I wrestle with (see my March 7 post on seekingalpha): “Is Google a media play or an information technology investment?” The continuing challenge is whether to compare Google to Viacom (VIA), Disney (DIS) and McGraw Hill (MHP) or to Oracle (ORCL), IBM (IBM) and Microsoft (MSFT). If someone can convince me Google is a media play (preferably Google management), I can scratch them off the list of information technology (IT) suppliers I follow. But Google, which began as an IT supplier, wants to keep the now maybe dated comparison with Microsoft, etc. because IT is a more dynamic (and better capitalized) industry.]]> Thu, 03 May 2007 06:28:29 -0400
A comparison I wrestle with (see my March 7 post on seekingalpha): “Is Google a media play or an information technology investment?” The continuing challenge is whether to compare Google to Viacom (VIA), Disney (DIS) and McGraw Hill (MHP) or to Oracle (ORCL), IBM (IBM) and Microsoft (MSFT). If someone can convince me Google is a media play (preferably Google management), I can scratch them off the list of information technology (IT) suppliers I follow. But Google, which began as an IT supplier, wants to keep the now maybe dated comparison with Microsoft, etc. because IT is a more dynamic (and better capitalized) industry.]]>