Archive | April 2007

And the Winner Is…

Fortunes List of Most Admired Companies for 2007
by: Jerry Liao

Fortune Magazine recently published America’s most admired companies for 2007 from different industries. Fortune and its survey partners at Hay Group asked 3,322 executives, directors, and securities analysts to select the 10 companies they admire most. Since TechNews101 is all about technology – I will be focussing more on the information technology companies – hardware, software, Internet, services etc.

How The Survey was Conducted:

The Most Admired list is the definitive report card on corporate reputations. Fortune’s survey partners at Hay Group started with the FORTUNE 1,000 and the top foreign companies operating in the U.S. Hay sorted them by industry and selected the ten largest in each. To create the 63 industry lists, executives, directors, and analysts were asked to rate companies in their own industry giving each company a numerical score from zero (poor) to ten (excellent). 3,322 responders ranked companies on these eight attributes:

1. Quality of management’ 2. Quality of products and services; 3. Innovation; 4. Long-term investment value; 5. Financial soundness; 6. People Management: Ability to attract, develop and keep talented people; 7. Social responsibility; 8. Use of corporate assets

A company’s score must rank in the top half of its industry survey. Here are the results and their scores:

Most Admired – COmputer
1. IBM (7.46); 2. Apple (7.44); 3. Xerox (6.74); 4. Canon (6.61); 5. Hewlett-Packard (6.48)

Contenders
6. Pitney Bowes (6.21); 7. Sun Microsystems (6.09); 8. Dell (5.88); 9. NCR (5.33); 10. Gateway (4.55)

—–

Most Admired – Computer Software
1. Intuit (7.55); 2. Autodesk (7.35); 3. Adobe Systems (7.35); 4. Microsoft (6.73); 5. Electronic Arts (6.65)

Contenders
6. Symantec (6.40); 7. SAP (6.35); 8. Oracle (6.12); 9. BMC Software (5.19); 10. CA (3.98)

——

Most Admired – Computer Peripherals
1. Network Appliance (8.10); 2. Seagate Technology (7.65); 3. EMC (6.99)

Contenders
4. Lexmark International (6.44); 5. Symbol Technologies (6.23); 6. Western Digital (5.87)

—–

Most Admired – Electronics
1. General Electric (8.04); 2. Emerson Electric (7.17); 3. Siemens (6.98); 4. Matsushita Electric Industrial (6.74); 5. Samsung Electronics (6.47)

Contenders
6. Royal Philips Electronics (6.38); 7. Hitachi (6.20); 8. Sony (6.15); 9. Whirlpool (5.92); 10. Tyco International (5.08)

—-

Most Admired – I.T. Services
1. Accenture (7.38); 2. Perot Systems (6.85); 3. Electronic Data Systems (5.41); 4. Science Applications Intl. (4.99); 5. VeriSign (4.91)

Contenders
6. CACI International (4.89); 7. Affiliated Computer Services (4.71); 8. Computer Sciences (4.55); 9. Unisys (3.98)

—–

Most Admired – Internet Services and Retail
1. IAC/InterActiveCorp (8.23); 2. Google (7.95); 3. eBay (7.18); 4. Yahoo! (6.77)

Contenders
5. Amazon.com (6.76); 6. Liberty Media (5.95); 7. Sabre Holdings (5.23)

—–

Most Admired – Network Companies
1. Cisco Systems (7.73); 2. Corning (7.62); 3. Motorola (7.60); 4. Qualcomm (7.50); 5. Tellabs (7.18)

Contenders
6. Juniper Networks (6.41); 7. Harris (6.27); 8. Avaya (5.58); 9. Andrew (5.46); 10. UTStarcom (4.34)

—–

Most Admired – Semiconductors
1. Texas Instruments (7.73); 2. Broadcom (7.20); 3. Applied Materials (7.18); 4. Advanced Micro Devices (6.91); 5. Intel (6.58)

Contenders
6. Freescale Semiconductor (6.04); 7. Micron Technology (5.54); 8. Jabil Circuit (5.25); 9. Sanmina-SCI (5.12); 10. Solectron (5.08)

—–

Most Admired: Telecommunications
1. BellSouth (7.32); 2. AT&T (7.09); 3. Verizon Communications (7.00); 4. Comcast (6.90); 5. Cox Communications (6.55)

Contenders
6. Alltel (6.15); 7. DirecTV Group (5.91); 8. Sprint Nextel (5.83); 9. EchoStar Communications (5.76); 10. Qwest Communications (4.69)

Due to insufficient response, the results of 29 companies in five industries are not reported: health care, pharmacy and other services; home equipment, furnishings; precision equipment; tobacco; and printing. The full report can be viewed at: http://money.cnn.com/magazines/fortune/mostadmired/2007/index.html

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VIRGINIA TECH MASSACRE

Technology Becomes a Coping Mechanism
by: Jerry Liao

“It can’t be happening again”, this was my intial reaction while watching an international TV news program on cable reporting about the shooting incident in Virgina Tech. The incident reminded me of the Columbine High School shooting incident. At the time of the report, the report was 22 students were killed and another 22 were injured. Of course, we all know that there were 33 people killed by Cho Seung-Hui — a 23-year-old senior majoring in English, who arrived in the United States as a boy from South Korea in 1992 and was raised in suburban Washington, D.C.

The shootings took place on Monday April 16, 2007 on the campus of Virginia Polytechnic Institute and State University (Virginia Tech), A total of 61 people were shot by the gunman, who then shot and killed himself. 32 people, not including the shooter, were killed in two separate attacks approximately two hours apart, in two separate buildings on the Virginia Tech campus.

The first shooting occurred around 7:15 a.m. in West Ambler Johnston Hall, a co-ed dormitory that houses 895 students. Approximately two hours after the initial shootings, shots were reported in a classroom at Norris Hall, an engineering and science building that houses the Engineering Science and Mechanics program.

Virginia Tech cancelled classes for the rest of the week and closed Norris Hall for the remainder of the semester. The school is offering counseling assistance for students and faculty and held an assembly on Tuesday, April 17, 2007. Additionally, the Red Cross has dispatched several dozen crisis counselors to Blacksburg to help Virginia Tech students cope with the tragedy.

There was a widespread international response, including condolences and sympathy from many countries including officials in Australia, Canada, People’s Republic of China, France, Germany, India, Iran, Japan, Mexico, the Philippines and the UK, as well as Pope Benedict XVI, U.S. President George Bush, Virginia senators, French President Jacques Chirac, Queen Elizabeth II and more.

During those terrifying moments at Virginia Tech, many students communicated with one another through text messages and video from their cell phones. After becoming aware of the incident, most of the students opt to stay home after what had happened. And the students resorted to social networking websites like Facebook and MySpace, Flickr, YouTube, message boards, blogs and online groups to share their grief and create memorial pages of their fellow collegues. More than 500 Facebook groups honoring those lost on the incident have been created nationwide.

A website called VTTragedy.com was also created and was swarmed with visitors all over the world, so many that the site crashed. Legacy.com, an online obituary service, set up a guest book for people to write notes about the tragedy. TechSideline.com, a site for VT sports fans, also quickly morphed into a meeting place where students, family and friends could
communicate.

I consulted a doctor friend of mine and asked him how effective is technology in helping ease the grief in a way. This is what he said – “Communication is very important in this time of grief. One should be able to express his/her grief and anxiety in any form at hand. And if social networking websites and other hi-tech communication will be available for them to express what they feel, then let it be. But of course, this is a temporary solution, I heard that authorities already offered crisis counselors to help families and students to cope up with the tragedy”.

Some other advantages that I can see is of course the Internet is available 24/7, so any time one wishes to write something about the tragedy, or wishes to talk to someone, the Internet will be available. Another advantage is some are not good in talking and prefers writing. Being able to share or express one’s feelings and sentiments about the incident is very important at this stage. Some may even offer a different perspective about the incident which may help ease the pain for some and may also help others understand what happen and why it had to happen.

A social network is a map of the relationships between individuals, indicating the ways in which they are connected through various social familiarities ranging from casual acquaintance to close familial bonds. A social networking site is an online place where a user can create a profile and build a personal network that connects him or her to other users.

For girls, social networking sites are primarily places to reinforce pre-existing friendships; for boys, the networks also provide opportunities for flirting and making new friends. But in the case of the Virginia Tech tragedy, social networking websites
becomes a source for outpouring of support and love. People from all walks of life comforting each other.

There will be questions we can answer. There will be some we cannot. We try to search for the right words to express all the grief and sadness, the frustration and fury, but nothing comes. Tragedy, it seems, always manages to wrench us from our innocence and, as if to remind us all of our mortality and our vulnerability, it reveals to us the language of death. We cannot help but share the crushing sense of weakness.

The fact remains that there are things we cannot know. Whatever is happening is simply happening. And, from a spiritual perspective, anything negative that happens has only one purpose: to foster compassion in the human heart. Anything can fuel the fires of compassion if our hearts are open wide enough. As it is written in the Bible, “What man has intended for evil, God
intends for good.” Even the most horrific situations can increase with in us our capacity to love.”

Remember always my friends: When we view things from God’s perspective, it changes our values. Death is no longer a tragedy, but rather a homecoming. Suffering is no longer pain, but rather an opportunity to learn to trust in God. Illness is no longer dreaded, but rather an opportunity to see God’s comfort and care. Persecution no longer makes us feel weak and helpless, but rather it makes us strong in our faith. Walking through the valley of darkness is no longer frightening, but rather it helps us to learn to walk by the light.

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The Clean Machine

Greenpeace Gives Grades to Electronics Manufacturers
by: Jerry Liao

Mirror mirror on the wall, who’s the cleanest of them all? This seems to be the question Greenpeace was asking when it conducted a study who among the top electonic manufacturers ranks the best in as far as on their global policies and practice on eliminating harmful chemicals and on taking responsibility for their products once they are discarded by consumers – 14 companies were included in the ranking. But before we give you results, let me tell you first the criteria used:

Chemicals policy and practice (5 criteria)
1. A chemicals policy based on the Precautionary Principle
2. Chemicals Management: supply chain management of chemicals via e.g. banned/restricted substance lists, policy to identify problematic substances for future elimination/substitution
3. Timeline for phasing out all use of vinyl plastic (PVC)
4. Timeline for phasing out all use of brominated flame retardants (not just those banned by EU’s RoHS Directive)
5. PVC- and BFR-free models of electronic products on the market.

Policy and practice on Producer Responsibility for taking back their discarded products and recycling (4 criteria)
1. Support for individual (financial) producer responsibility – that producers finance the end-of-life management of their products, by taking back and reusing/recycling their own-brand discarded products.
2. Provides voluntary takeback and recycling in every country where it sells its products, even in the absence of national laws requiring Producer Responsibility for electronic waste.
3. Provides clear information for individual customers on takeback and recycling services in all countries where there are sales of its products.
4. Reports on amount of waste electrical and electronic equipment (WEEE) collected and recycled.

The points awarded to corporate practice on chemicals (five criteria, double points for PVC – and BFR-free models) are weighted more heavily than criteria on recycling, because until the use of harmful substances is eliminated in products, it is impossible to secure ‘safe’, toxic-free recycling. Where two companies score the same number of total points, the company with the higher score on the chemicals criteria will be ranked higher.

And now the result (10-Highest; 0-Lowest):

1. Lenovo (8pts) – The most improved: from last place to first. Progress on all criteria but loses points for not having products free of the worst chemicals on the market yet.
2. Nokia (7.3pts) – Good on all criteria, but needs clear timeline for PVC phase out for all applications. Needs to better report on how many discarded mobiles it recycles.
3. Sony Ericsson (7.0pts) – The first to set 2008 as its deadline to put on the market products free of the worst chemicals. Some products are already greener, but needs better takeback reporting.
4. Dell (7pts) – Still among the top but loses points for not having models free of the worst chemicals. Strong support for takeback.
5. Samsung (6.3pts) – Moving up the rank and gaining points for takeback policies. But its take back system is not yet global and needs improvement.
6. Motorola (6.3pts) – Loses points for not providing clear timelines for phase out of worst chemicals.
7. Fujitsu-Siemens (6pts) – Some models free of the worst chemicals, but should improve takeback and recycling.
8. HP (5.6pts) – Needs to do better on the chemicals criteria especially phase out timelines and greener products. It loses points for weak definition of takeback policies.
9. Acer (5.3pts) – Improved chemical policies but no models free of the worst chemicals. Needs to improve on takeback.
10. Toshiba (4.3pts) – Some models without the worst chemicals and has gained points by providing timelines for chemical phase out. But loses points for poor waste and take back criteria.
11. Sony (4.0pts) – Some models without the worst chemicals, but loses a penalty point for inconsistent takeback policies.
12. LGE (3.6pts) – In free-fall: it loses a penalty point for inconsistent takeback policies. But scores points for providing a mobile free of the worst chemicals.
13. Panasonic (3.6pts) – Slipping down for failing to keep up with the movement of all the other companies. No commitment to eliminate the worst chemicals, and poor on takeback.
14. Apple (2.7pts) – Holding firmly in last place: low scores on almost all criteria and no progress.

Apple contends that it has made some important environmental decisions in the past few years. In addition to the computer take-back program started last year, Apple was one of the first companies to eliminate CRT monitors from its product lines. According to the company, using flat-panel displays eliminate more than two pounds of lead, consume up to 80 percent less energy in sleep mode and weigh half as much as their CRT counterparts.

Apple is keen to point out its reservations concerning Greenpeace’s evaluation system, offering in a statement that: “We disagree with Greenpeace’s rating and the criteria,” surrounding the chart run down, while it also claimed that, “Apple has a strong environmental track record and has led the industry in restricting and banning toxic substances such as mercury, cadmium and hexavalent chromium, as well as many brominated flame retardants.”

The guide does not rank companies on labour standards, energy use or any other issues, but recognises that these are important in the production and use of electronics products.

Greenpeace is a global campaigning organization that acts to change attitudes and behaviour, to protect and conserve the environment and to promote peace. Greenpeace is present in 40 countries across Europe, the Americas, Asia and the Pacific. To maintain its independence, Greenpeace does not accept donations from governments or corporations but relies on contributions from individual supporters and foundation grants. Greenpeace has been campaigning against environmental degradation since 1971.

Of course, the result has nothing to do with the quality of product being produced, but I must say that for a company to consider its environmental responsibilities do add to it’s corporate credibility, reputation and commitment to environmental safety and product excellence.

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Small Wonders

Opera Launches 9.2 Browser with Speed Dial
by: Jerry Liao

According to a website called W3Schools.com, for the month of February 2007 – the most widely used browser is IE6 with 39.8%, followed by Firefox with 31.2%, IE7 with 16.4%, IE5 with 2.5%, Safari with 1.7%, Opera with 1.5% and Mozilla suite with 1.4%. With the statistics shown, it’s almost unimaginable how small browsers can compete with the the likes of Internet Explorer and Firefox. The answer is simple – innovation, new and interesting features.

Just recently, Opera unveiled the beta release of Speed Dial, a new feature that lets people transform their top sites into nine visual bookmarks that are immediately available in any new tab. Speed Dial is a new feature in the forthcoming Opera 9.2, available in beta as a free download from labs.opera.com. Speed Dial came about from careful consideration of individual browsing preferences.

“Speed Dial is a fresh way to call up the top sites you enjoy throughout the day,” said Jon von Tetzchner, CEO, Opera. “It’s a cool, new way to access those sites – you can do it through the Speed Dial or enter the corresponding number in the address bar. I hope current and new Opera users find Speed Dial both enjoyable and addictive.”

“Speed Dial is based on the idea that people generally have five to 10 sites they browse regularly throughout the day,” said Johan Borg, team manager for Opera’s desktop browser. “Speed Dial is made for almost instant access to those sites. We want developers and the curious-minded to discover Speed Dial. When they do, we hope they’ll help us with another rigorous round of testing before the final release.”

With each blank tab, Speed Dial presents a thumbnail preview of the top nine sites as selected by the user. In addition to fast access through the Speed Dial, users can also enter the number corresponding with each bookmarked Speed Dial page in Opera’s address field to access the page.

“Speed Dial fits in with my life. I’ve been using it since the beta release and I’ve surprised even myself with how I’ve come to rely on it,” said Chris Thornton, an avid Opera user and member of the My Opera community. “It’s far faster than typing the URL over and over, and I can use it to see when my Speed Dial sites are updated – so I can have one easy overview of what’s going on with my favorite sites.”

Some of the new features of Opera 9.2 are:

Speed Dial
a new way to access your favorite Web sites. Just open a new tab to get your Speed Dial. It’s easy to populate and addictive to use.

Fraud protection
Opera’s advanced fraud protection protects you against web sites that try to steal your personal information.

BitTorrent
You don’t need a separate BitTorrent application to download large files. Simply click a torrent link and
start the download.

Widgets
Small Web applications (multimedia, newsfeeds, games and more) that make your desktop experience more fun. Use the Widgets menu to discover new widgets and access your favorites.

Thumbnail preview
It is easy to have many tabs open at once in Opera. But exactly which tab had that video you wanted?

Voice
The voice feature allows you to control Opera’s interface by talking and to have documents read aloud. Voice is currently offered in English and runs on Windows 2000 and XP.

Opera 9.2 with Speed Dial is available for Windows, Mac and Linux and comes in 31 languages. It is also a recommended security upgrade and can be downloaded free from http://www.opera.com.

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Security Depends on You

Gartner – Virtualization Can Weaken Security
by: Jerry Liao

Virtualization offers organizations the opportunity to reduce costs and increase agility, however, if this is
done without implementing best practices for security, virtualization may actually increase costs and reduce agility, according to Gartner, Inc.

Virtualization software allows users to simultaneously run multiple operating systems (OS), or multiple
sessions of a single OS, on a single, physical machine — server or desktop. Regardless of the specific
architecture, virtualization uses a privileged layer of software that, if compromised, places all consolidated workloads at risk.

“Virtualization, as with any emerging technology, will be the target of new security threats,” said Neil
MacDonald, vice president and Gartner Fellow. “Many organizations mistakenly assume that their approach for securing virtual machines (VMs) will be the same as securing any OS and thus plan to apply their existing configuration guidelines, standards and tools. While this is a start, simply applying the technologies and best practices for securing physical servers won’t provide sufficient protections for VMs.”

Because of the rush to adopt virtualization for server consolidation efforts, many security issues are
overlooked, best practices aren’t applied, or in some cases, the tools and technologies for addressing some of the security issues with virtualization are immature or nonexistent. As a result, through 2009, 60 percent of production VMs will be less secure than their physical counterparts.

Gartner analysts said the process of securing VMs must start before the VMs are deployed, and ideally, before vendors and products are selected, so that security and securability can be factored into the evaluation and selection process. During this process, organizations must consider these security issues in virtualized environments:

– Virtualization software, such as hypervisors, represent a new layer of privileged software that will
be attacked and must be protected.

– The loss of separation of duties for administrative tasks, which can lead to a breakdown of defense
in-depth.

– Patching, signature updates, and protection from tampering for offline VM and VM “appliance” images.

– Patching and secure confirmation management of VM appliances where the underlying OS and configuration are not accessible.

– Limited visibility into the host OS and virtual network to find vulnerabilities and assess correct configuration.

– Restricted view into inter-VM traffic for inspection by intrusion prevention systems (IPSs).

– Mobile VMs will require security policy and settings to migrate with them.

– Immature and incomplete security and management tools.

“Organizations need to pressure security and virtualization vendors to plug the major security gaps,” said Mr. MacDonald. “Existing virtualization solutions address some of the gaps, but not all. It will take several years for the tools and vendors to evolve, as well as organizations to mature their processes and staff skills. Knowledge of the security risks and the costs to address them must be factored into the cost-benefit discussion of virtualization. If these added costs are avoided, the risk of not making the necessary security investments must be accepted by the decision maker in the move to virtualization.”

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Line of Fire

Two of Every Three Office E-mails are Spam
by: Jerry Liao

Did it ever occured to you that when you open your email, hundreds or even thousands of emails are awaiting for you inside your inbox? Perhaps it makes you wonder for a while how come all of sudden you gained so much friends or why the sudden popularity? Before you even start wondering, let me share with you that even before you open your inbox – most of the emails there are SPAM emails.

Spam by e-mail is a type of spam that involves sending identical or nearly identical messages to thousands (or millions) of recipients. Addresses of recipients are often harvested from Usenet postings or web pages, obtained from databases, or simply guessed by using common names and domains. By definition, spam is sent without the permission of the recipients.

But did you know that aside from the hassle and the danger that spam emails may even include viruses, a research firm indicated that monetary losses are getting big due to spam emails. Nucleus Research
announced that the spam epidemic is costing US businesses $712 per employee each year in lost worker
productivity.

According to a survey of 849 e-mail users conducted during March 2007, Nucleus Research and KnowledgeStorm found that two out of every three e-mail messages received by today’s business users are spam. As a result, users are spending 16 seconds identifying and deleting each spam e-mail, which translates into an annual cost of $70 billion to all US businesses.

“Although most organizations have deployed some spam filtering technology, it clearly has not solved the
spam problem – in fact, in some cases it’s made it worse,” said Rebecca Wettemann, VP of Research of
Nucleus Research. “Spam is no longer just a technology problem – it’s a problem that we should be attacking with more than just technology.”

Some additional key findings in the report include:

– Looking at the total e-mail traffic, Nucleus estimates that at least 90 percent of e-mail reaching corporate servers is spam.

– The average user receives 21 spam messages to their inbox each day.

– Many e-mail filtering technologies block anything with the word “Nigeria” in the title or text.

“The Companies and their employees are beyond fed-up with the spam problem,” said Jeff Ramminger, executive vice president, KnowledgeStorm. “In fact, almost 20 percent of respondents believe jail time is an appropriate punishment for serial spammers. While that’s probably not a realistic outcome, it indicates
that frustration with spam has reached a boiling point.”

The most common types of spam identified by respondents were adult oriented solicitations (86 percent), financial lending solicitations (80 percent), and retail offers (76 percent).

In a separate study, MessageLabs announced the results of its MessageLabs Intelligence Report for March 2007. Quarter on quarter spam levels have raised to 76.3 percent, their highest in two years. Virus and botnet activity has also increased. The report highlights the impact of increased spam levels on small-to-medium sized businesses (SMBs) as these organizations receive more than double the volume of spam per user each month than in enterprise organizations.

Also in Q1 2007, MessageLabs saw virus and trojan traffic levels steadily decline from last year with
rates of 1 in 126.1 emails. While the overall levels decreased, MessageLabs believes that virus and Trojan activity is actually on the rise with spammers delivering them disguised as spam. Phishing activity accounted for 70.8 percent of the malware threats this quarter, an increase of 8.6 percent on the previous quarter. In early 2007, “do-it-yourself” phishing kits became more available and easier to obtain online. MessageLabs also saw continued targeted phishing attacks based on information available on social networking sites and new variants of Warezov and StormWorm being intercepted at alarmingly high rates.

Other report highlights:

Spam: In March 2007, the global ratio of spam in email traffic from new and unknown bad sources, for which the recipient addresses were deemed valid, was 75.2 percent (1 in 1.33 emails), a decrease of 2.6 percent on the previous month. Techniques adopted by spammers have become increasingly more sophisticated indicating spam will continue at similar levels in the coming months. As botnets become more agile, fewer viruses are now needed to maintain them giving way to a divergence between spam and virus levels.

Viruses: The global ratio of email-borne viruses in email traffic from new and previously unknown bad
sources destined for valid recipients, was 1 in 145.0 emails (0.6 percent) in March, a decrease of 0.2
percent since last month. Virus and Trojan traffic levels have steadily declined over the last year with
Q1 2007 rates of 1 in 126.1 emails. This is in direct correlation with the shift toward more subtle,
targeted attacks and in the way that criminals distribute malware.

Phishing: March saw a fall of 0.17 percent in the proportion of phishing attacks compared with the previous month. One in 203.7 (0.32 percent) emails comprised some form of phishing attack. When judged as a proportion of all email-borne threats such as viruses and trojans, the number of phishing emails has fallen to 46.9 percent of the malware threats in March. Overall for the quarter, phishing activity accounted for 70.8 percent of the malware threats.

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When it Rains, it Pours

Oracle Sues SAP; Shai Agassi Leaves SAP
by: Jerry Liao

What do you when your fieriest competitor filed a case against your company and then the presummed successor to the CEO of your company resigns? All happening while your company is experiencing a tough year on the financial front. Definitely your company will be under tremendous pressure – and this is exactly what’s happening to SAP – a company that develops business process software solutions designed to link nearly all transactions that occur during the normal course of everyday business across the entire organization.

Oracle recently filed a lawsuit against enterprise software rival SAP, alleging the European software company broke into its computer system to steal confidential information. The case, filed at the District Court in San Francisco, has been described by Oracle as being about “corporate theft on a grand scale”. Oracle claims it discovered SAP was engaged in systematic and illegal access to Oracle’s computerized customer support systems and alleges that SAP stole thousands of proprietary, copyrighted software products and other confidential materials.

Oracle added that there were more than 10,000 illicit downloads from the site between September last year and January of this year, a systematic sweeping of Oracle’s support website from SAP TN (TomorrowNow) servers prior to the expiry of customer licenses. Oracle said it has invested billions of dollars in research and development (R&D) for these products which include patches, updates, bug fixes and instructional documents and regards them as a vital subset of technical support.

SAP bought a small product support company called TomorrowNow in early 2005, which now operates as SAP TN, and was formed by several former PeopleSoft engineers promising to provide less expensive software support. SAP indicated that they intend to aggressively defend against the claims made by Oracle.

Next problem, the resignation of Shai Agassi. Who is Shai Agassi and why is he considered by many as a big loss to SAPs cause.

Shai Agassis is SAPs President of Product and Technology Group, he joined SAP 2001 and was appointed to Executive Board 2002. It was reported that Agassi was very much behind a major platform push that led to the development of NetWeaver, mySAP ERP, SAP’s integration and development platform, and the company’s transition to a SOA (service oriented architecture) model.

“While we regret Shai’s decision to leave, we congratulate him on his record of achievement,” said SAP chairman Hasso Plattner, in a statement.

According to reports, Agassi’s departure had nothing to do with the Oracle lawsuit or SAP’s bumpy financials. The more popular reason was because SAP’s board extended Henning Kagermann’s CEO contract to 2009, leaving Agassi in the lesser position of president of the Product and Technology Group for another two years. SAP shares fell after the resignation of Shai Agassi.

The third problem is SAP missing its profit-target. SAP’s 2006 software license sales, an indicator of future revenue, missed analysts’ estimates and the company’s own forecast. The company in January forecast its profit margin will decline for the first time in seven years because of spending to push sales to smaller companies.

Missing the target profit and the resignation of Agassi is SAPs marketing and company decision problem. Let us focus on the lawsuit filed by Oracle.

Why is Oracle filing the case and how will this affect SAP?

It is a common knowledge that Oracle bought companies left and right to enter the business application market where SAP is clearly the leader. Oracle bought almost 30 companies, to buy their technology as Oracle claimed but the real reason is of course to buy the client base. Clients who are SAP users or SAP partners.

The lawsuit obviously is not about protecting intellectual property, this is about market control and leadership. Oracle’s past ten years of research and development efforts have been so dismal that the company had to resort to many acquisitions to fill the gap. It is certainly making in-roads compared to SAP in the applications business, but it is still in a distant second place. Another factor hurting Oracle (and other companies for that matter) are third-party companies like TomorrowNow who provides maintenance to companies. These third-party maintenance companies will hurt vendors like Oracle and SAP in maintenance rates, and maintenance represents one-third or more revenue for the vendor. And TomorrowNow is a subsidiary of SAP.

While this is more of a business move for Oracle, this does not exonerate SAP from the possibiliy that indeed SAP TN downloaded materials from Oracle websites. Downloading patches and documentation is not an unusual practice especially to system integrators who provide services to companies. Perhaps what SAP TN did was to download the materials all at the same time. SAP and its partners should be more careful next time in doing these things not only to Oracle but to other companies.

So what will be the affect of this case? Nothing much except it may create fears, doubts and uncertainties among customers and system integrators, of both Oracle and SAP. If found guilty, SAP will be in a big and deep trouble.

Who will win in this battle? Let us see.

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