March 30, 2010
EXECUTIVE TECHNOLOGY STRATEGIES
Experture
/ RFG
Weekly IT News Snapshots
…experts on demand
Cal Braunstein, Chief Research Officer
ETS 10-03-12
Week in Review
This week, Experture/RFG highlights the following topics
Mixed Financials
Accenture PLC (HP) reported weak second quarter financials while Oracle Corp. posted mixed
results for its third quarter. Oracle's numbers include about one month of Sun revenue
contributions. In other financial news, Red Hat Inc. reported strong fourth quarter revenues and
earnings while Novell Inc. rejected a buyout bid.
RFG believes 2010 is proving to be another tough year for IT vendors as corporations
remain cost-conscious and focused on the near-term. The consulting and outsourcing
businesses continue to be very competitive as users seek short-term results and pricing
bargains. On the applications software side, Oracle ate further into SAP AG's market
share, as the German firm had previously reported declining revenues. The Red Hat gains
reflect the moves by IT executives to cut software expenses by find lower cost, open
source solutions. IT executives should take advantage of the current competitive and
economic environments to gain greater contract, price and service level concessions from
all of their IT vendors.
Akamai Improves Internet, Dell Powers Clouds and IBM Cancels Cell
Akamai Technologies Inc. announced new electronic software delivery solutions and an upgrade
to its delivery platform while Dell Inc. unveiled new cloud servers and services to its catalog of
offerings. On the withdrawal front, IBM Corp. announced the end of its cell blade server line.
RFG believes Dell is playing catch up and may struggle to acquire market share in the
cloud computing arena, even though its hardware powers Microsoft's Azure platform.
Conversely, IBM pulled out of the co-processor market in which it was performing well. IT
executives should evaluate the positioning shifts and roadmaps of these IT vendors and
determine if and how these solution moves should be incorporated into their IT strategies.
Windows Phone 7 Starts to Win Over Developers
Microsoft has been putting concerted effort into promoting its forthcoming Windows Phone 7
operating system and its key device partners, HTC and LG, promise phones in time for the
holiday season with the new OS. Unusually for Microsoft in the mobile world, it seems to be
winning over developers too.
There is also a sense of relief that Microsoft is going for a completely new platform, rather
than clinging to old Windows norms, and a new confidence from the progress its search
engine, Bing, has made in catching up with Google. "There's a sense it is capable of
coming from behind after all," said one. Kartik Hosanagar, a professor at Wharton
management school, said: "The move to Windows Phone 7 makes sense to me. There's a
strong correlation between the iPhone's success and the failure of Windows Mobile. You
can see where Microsoft is coming from. Microsoft had to make a clean break from the
previous operating system. The company was at risk of being shut out of a category that's
growing."
Copyright © 2004-2010 Experture and Robert Frances Group, all rights reserved
20 Crooked Mile Road, Westport, CT. 06880; (203) 557-0856;
http://www.experture.com/; Contact: inquiry@experture.com
March 30, 2010
EXECUTIVE TECHNOLOGY STRATEGIES
ETS 10-03-12
FCC's Spectrum Proposals Under Fire On All Sides
The spectrum proposals included in the FCC's National Broadband Plan are coming under fire
from all sides. The two major telcos, Verizon and AT&T, are fighting against the rules governing
the mobile satellite (MSS) network planned by private equity group Harbinger Capital. And the
MSS spectrum was supposed to be the easy target in the FCC's aim of freeing up as much as
500MHz for mobile broadband. Another area where it sees potential is in the broadcasters'
spectrum, but they were always expected to be hostile.
Editor’s Note: With the explosion in wireless services and service/market expansion of all
telecom carriers, it is probable that the issues being raised are more likely being raised on
behalf of potential/proposed/future service market share.
Copyright © 2004-2010 Experture and Robert Frances Group, all rights reserved
20 Crooked Mile Road, Westport, CT. 06880; (203) 557-0856;
http://www.experture.com/; Contact: inquiry@experture.com
March 30, 2010
EXECUTIVE TECHNOLOGY STRATEGIES
ETS 10-03-12
Mixed Financials
Lead Analyst: Cal Braunstein
Accenture PLC (HP) reported weak second quarter financials while Oracle Corp. posted mixed
results for its third quarter. Oracle's numbers include about one month of Sun revenue
contributions. In other financial news, Red Hat Inc. reported strong fourth quarter revenues and
earnings while Novell Inc. rejected a buyout bid.
Focal Points:

Accenture released its financial results for its second quarter of fiscal 2010. Net
revenues for the quarter were $5.18 billion, compared with $5.27 billion for the
second quarter of fiscal 2009, a decrease of two percent. Net income for the quarter
fell eight percent from last year's quarter of $502 million to $462 million. Net
consulting revenues for the period were $2.93 billion, compared with $3.03 billion for
the same period last year, a decrease of three percent. The contraction reflects lower
demand for consulting services and a very competitive pricing environment,
executives stated. Moreover, some clients continue to focus on initiatives designed to
deliver near- and medium-term cost savings and performance improvement, while
others remain cautious, seeking flexibility by shifting to a more phased approach to
contracting work. In its outsourcing business, net revenues for the second quarter
were $2.24 billion, which is flat compared with the second quarter of fiscal 2009.
Outsourcing revenues continued to be affected by clients' needs to reduce overall
costs through shifting to lower-cost resources at reduced price levels; fewer scope
expansions on existing contracts; and contracts operating at lower volume levels,
according to the company. A higher volume of contract terminations and restructuring
also affected the business.

Oracle posted its financial results for its third quarter of fiscal 2010. Net revenues for
the quarter were $6.40 billion, an increase of 17 percent from the same period in the
previous year when it had revenues of $5.45 billion. On a GAAP basis, net income
for the quarter shrank 10 percent from last year's quarter of $1.33 billion to $1.19
billion. Excluding the impact of the Sun Microsystems revenues, Oracle's revenues
grew seven percent. New software license revenues expanded 13 percent as did
software license update and product support revenues. While both the applications
and database/middleware revenues overall grew at 13 percent apiece, the new
software license revenues for the applications software expanded by 21 percent to
$477 million while the new license revenues for database/middleware software grew
by 11 percent to $1.24 billion. Total hardware system revenues for the month Sun
was part of Oracle came to $458 million.

Red Hat posted its fourth quarter and fiscal year 2009 results. Net revenues for the
quarter were $196 million, an increase of 18 percent from the year-ago quarter of
$166 million. On a GAAP basis, net income for the quarter was $23 million, an
increase of 44 percent from the previous year's quarter of $16 million. Subscription
revenue for the quarter was $169 million, up 21 percent year-over-year from $139
million. For the full year, total revenue was $748 million, an increase of 15 percent
over the prior year's revenues of $653 million, and subscription revenue was $639
million, up 18 percent year-over-year from $541 million. Net income for the fiscal
Copyright © 2004-2010 Experture and Robert Frances Group, all rights reserved
20 Crooked Mile Road, Westport, CT. 06880; (203) 557-0856;
http://www.experture.com/; Contact: inquiry@experture.com
March 30, 2010
EXECUTIVE TECHNOLOGY STRATEGIES
ETS 10-03-12
year was $87 million, an 11 percent gain from the prior year's income of $82 million.
In other news, Novell rejected a buyout from private equity firm Elliott Associates.
The value of the deal was approximately $2 billion.
RFG believes 2010 is proving to be another tough year for IT vendors as corporations
remain cost-conscious and focused on the near-term. The consulting and outsourcing
businesses continue to be very competitive as users seek short-term results and pricing
bargains. On the applications software side, Oracle ate further into SAP AG's market
share, as the German firm had previously reported declining revenues. The Red Hat gains
reflect the moves by IT executives to cut software expenses by find lower cost, open
source solutions. IT executives should take advantage of the current competitive and
economic environments to gain greater contract, price and service level concessions from
all of their IT vendors.
Copyright © 2004-2010 Experture and Robert Frances Group, all rights reserved
20 Crooked Mile Road, Westport, CT. 06880; (203) 557-0856;
http://www.experture.com/; Contact: inquiry@experture.com
March 30, 2010
EXECUTIVE TECHNOLOGY STRATEGIES
ETS 10-03-12
Akamai Improves Internet, Dell Powers Clouds and IBM Cancels Cell
Lead Analyst: Cal Braunstein
Akamai Technologies Inc. announced new electronic software delivery solutions and an upgrade
to its delivery platform while Dell Inc. unveiled new cloud servers and services to its catalog of
offerings. On the withdrawal front, IBM Corp. announced the end of its cell blade server line.
Focal Points:

Akamai announced a new solution, Akamai Download Analytics, as well as upgrades
to its existing solution, Akamai Download Manager. These solutions are also part of
the enhanced Akamai Electronic Software Delivery (ESD) 2.0 solution. With ESD
2.0 customers can create a customized and branded download experience, increase
user engagement during the download process, improve conversion rates and garner
business-critical download analytics reporting and data, according to the company.
Akamai's Download Manager is a desktop application designed to enable users to
download content quickly, easily and reliably. It offers a simplified, multi-file
workflow designed to enable software publishers to enhance the user experience
while managing complex workflows for entitled software. The Download Analytics
software offers users analysis by geography, network, and connection speed, new
engagement metrics, user behavioral data, content usage metrics, and custom
reporting filters and tools.

Dell rolled out three new servers optimized for cloud computing. The C1100 is
targeted for clustered computing environment while the C2100 is designed for data
analytics, cloud computing and cloud storage. The C6100 is a four-node cloud and
cluster system that offers a shared infrastructure. The C6100 uses half-width, twosocket motherboards and puts four of them in a 2U rack unit, two side-by-side and
stacked two high in the box. All four server nodes slide in and out of the chassis
independently and are hot pluggable into the power supplies and shared storage. All
three PowerEdge C machines support Novell Inc.'s SUSE Linux Enterprise Server 11
or Red Hat Inc.'s Enterprise Linux 5.3 operating system, as well as the VMware Inc.'s
ESXi 4.0 Update 1 and Citrix Systems Inc.'s XenServer 5.5 hypervisors. The
PowerEdge C boxes do not do Microsoft Corp.'s Windows. Dell is also offering
turnkey cloud solutions, which include pre-tested and pre-assembled hardware,
software and services packages that businesses can use to quickly deploy and run
their cloud infrastructures.

IBM has announced it is closing down its QS21 two-socket Cell blade server line.
The QS21 is a second generation of IBM Cell blades, which were first announced in
August 2007. The move comes several weeks after IBM stated it would no longer
develop a future Cell-based blade server, which had been dubbed the QSZ2. IBM told
customers that are using its QS21 blades (mostly in supercomputer clusters) that they
have until June 25, 2010 to order more parts. The QS22 blade, which was announced
in May 2008, is still available. IBM has not announced a withdrawal date for the
QS22 blade server, which based on the PowerXCell 8i chips.
RFG believes Dell is playing catch up and may struggle to acquire market share in the
cloud computing arena, even though its hardware powers Microsoft's Azure platform.
Copyright © 2004-2010 Experture and Robert Frances Group, all rights reserved
20 Crooked Mile Road, Westport, CT. 06880; (203) 557-0856;
http://www.experture.com/; Contact: inquiry@experture.com
March 30, 2010
EXECUTIVE TECHNOLOGY STRATEGIES
ETS 10-03-12
Conversely, IBM pulled out of the co-processor market in which it was performing well. IT
executives should evaluate the positioning shifts and roadmaps of these IT vendors and
determine if and how these solution moves should be incorporated into their IT strategies.
Copyright © 2004-2010 Experture and Robert Frances Group, all rights reserved
20 Crooked Mile Road, Westport, CT. 06880; (203) 557-0856;
http://www.experture.com/; Contact: inquiry@experture.com
March 30, 2010
EXECUTIVE TECHNOLOGY STRATEGIES
ETS 10-03-12
Windows Phone 7 Starts to Win Over Developers
Lead Analyst: Caroline Gabriel, Rethink Wireless
Microsoft has been putting concerted effort into promoting its forthcoming Windows Phone 7
operating system and its key device partners, HTC and LG, promise phones in time for the
holiday season with the new OS. Unusually for Microsoft in the mobile world, it seems to be
winning over developers too.
Focal Points:

In a new survey by Appcelerator, quoted by GigaOm, 34% of US developers said they
were "very interested" in creating apps for Windows Phone 7, up from just 13% in
January, before it was officially unveiled. The actual launch, at Mobile World
Congress, may not have been brilliantly handled, but since then, many commentators
say that Microsoft is building up a head of steam behind its product, and convincing
programmers that this really will be its breakthrough OS.

However, US developer interest remains low compared to the Apple systems, with a
huge 87% of the same 1,000 respondents saying they were "very interested" in
creating apps for iPhone, and 53% for iPad (though those are supposed to be
interchangeable). Android also scored highly, on 81%, reinforcing other recent
surveys that find the bulk of the iPhone developer community porting to the Google
OS too.

Among Microsoft's stronger tactics have been the emphasis on the Silverlight rich
media technology and the release of free tools to spark interest.
There is also a sense of relief that Microsoft is going for a completely new platform, rather
than clinging to old Windows norms, and a new confidence from the progress its search
engine, Bing, has made in catching up with Google. "There's a sense it is capable of
coming from behind after all," said one. Kartik Hosanagar, a professor at Wharton
management school, said: "The move to Windows Phone 7 makes sense to me. There's a
strong correlation between the iPhone's success and the failure of Windows Mobile. You
can see where Microsoft is coming from. Microsoft had to make a clean break from the
previous operating system. The company was at risk of being shut out of a category that's
growing."
Copyright © 2004-2010 Experture and Robert Frances Group, all rights reserved
20 Crooked Mile Road, Westport, CT. 06880; (203) 557-0856;
http://www.experture.com/; Contact: inquiry@experture.com
March 30, 2010
EXECUTIVE TECHNOLOGY STRATEGIES
ETS 10-03-12
FCC's Spectrum Proposals Under Fire On All Sides
By Caroline Gabriel, Rethink Wireless
The spectrum proposals included in the FCC's National Broadband Plan are coming under fire
from all sides. The two major telcos, Verizon and AT&T, are fighting against the rules governing
the mobile satellite (MSS) network planned by private equity group Harbinger Capital. And the
MSS spectrum was supposed to be the easy target in the FCC's aim of freeing up as much as
500MHz for mobile broadband. Another area where it sees potential is in the broadcasters'
spectrum, but they were always expected to be hostile.
Focal Points:

On the satellite front, Verizon and AT&T could face another competitor, to add to
Sprint/Clearwire, with a major spectrum swathe. The two telcos are already angry at
the restrictions placed by the FCC on the Harbinger spectrum. As a condition of its
acquisition of MSS operator SkyTerra, the private equity firm must pledge to allow no
more than 25% of the traffic on its wholesale network to come from the big two.

AT&T said the 25% limit will give unfair advantage to competitors, such as Sprint
Nextel and T-Mobile USA, which will not have to get approval from the FCC to
access the spectrum. "The Commission is setting a very disturbing precedent when it
implies that it may use allocation of spectrum to manipulate the wireless market," Jim
Cicconi, AT&T's senior EVP for external and legislative affairs, said in a statement.
"This action is manifestly unwise and potentially unlawful."

Paul de Sa, chief of the FCC's Office of Strategic Planning and Policy Analysis, wrote
in a blog post that the rules "provide some reassurance that the approval will ignite
new broadband competition while protecting the public from any potential harms."

Meanwhile, broadcasters have kicked off a ferocious lobbying battle over the FCC's
call for them to give up spectrum for wireless broadband use. The agency wants to
auction off up to 120MHz of spectrum from TV broadcasters, giving them a share of
the proceeds in return, but this requires the cooperation of the TV players to proceed.
The FCC's aim is to start the sell-offs in 2012 or 2013 and clear the band by 2015.

"I haven't heard one broadcaster say 'I'm interested in giving back my spectrum',"
Dennis Wharton, a spokesman for the National Association of Broadcasters, told
Bloomberg.

The FCC claims the plan would not disrupt local TV services. If it does not get
voluntary participation from sufficient broadcasters it says it will examine other
options, such as "transition to a cellular architecture on a voluntary or involuntary
basis", increased spectrum fees or a shared usage model.
Editor’s Note: With the explosion in wireless services and service/market expansion of all
telecom carriers, it is probable that the issues being raised are more likely being raised on
behalf of potential/proposed/future service market share.
Copyright © 2004-2010 Experture and Robert Frances Group, all rights reserved
20 Crooked Mile Road, Westport, CT. 06880; (203) 557-0856;
http://www.experture.com/; Contact: inquiry@experture.com