| http://www.rfgonline.com/ | Monday, August 6, 2001 |
Tarantella Extends its Reach
Tarantella, Inc. announced release 3.11 of its Tarantella Enterprise 3 software for multi-client, multi-platform enterprise application access. With this release, the software's complete range of features runs on all leading Linux and Unix platforms, according to the company.Focal Points:
RFG believes IT executives and their teams should look closely at Tarantella's solutions for Web enablement and support of multi-client application access. The software's broad range of supported client and server platforms, combined with its scalability and manageability, can be a powerful adjunct or alternative to other such solutions. Further, solutions such as Tarantella Enterprise 3 can help IT executives reduce the costs associated with deploying and maintaining current and new applications, and in cutting client access license costs for applications including Microsoft's Office suite.
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Forecast: Partly Cloudy for Sun
Last week, amid reports of personnel redeployment, Sun Microsystems, Inc. announced the release of a new clustering solution. In a separate announcement, Sun, along with Texas Instruments, Inc. (TI) confirmed the 900 Megahertz (MHz) UltraSPARC III microprocessor has gone into full production, and will ship this quarter.
Focal Points:
RFG believes the economic slowdown has had a negative impact on Sun in the short term, but was a needed wake-up call. Sun became used to being an order taker, but times have changed, and the company needs to refocus itself if it wants to ride the next wave of growth. IT executives, therefore, should look to see if this internal re-organization results in external improvements in customer relationships, products, product quality, and support.
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Storage Backs Up, Puts out, Automates, and Levitates
Last week, EMC Corp. and IBM Corp. announced new products and enhancements to existing storage solution product lines. In a separate announcement, Storage Technology Corp. and NCR Corp. reported a joint automated data management software offering.
Focal Points:
RFG believes these announcements signify that storage vendors are beginning to pay attention to customer complaints and requirements. At a time when IT spending is declining and customers want to see the value of their purchases reflected in performance, flexibility, and efficiency, vendors are becoming hard-pressed to offer innovative solutions at competitive prices. IT executives should carefully evaluate their business requirements, both present and future, and comparison shop as storage vendors leap frog one another to offer enhanced functionality and attractive pricing. IT executives should find this competition to their benefit when negotiating aggressive storage deals.
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A New Initiative for IBM: Grid Computing
Last week, IBM Corp. announced its Grid Computing Initiative, which intends to leverage advances in supercomputing and high-speed networking to make computing power into a broadly accessible utility like electricity. As part of the campaign, IBM also announced it won two national contracts to develop computing grids in Britain and the Netherlands.
Focal Points:
RFG believes grid computing does represent the next leap forward in Internet computing and, like the Internet itself, will have its early test bed in the academic, engineering, and, scientific communities. IBM, as well as Sun and Microsoft, are embracing grid initiatives because the companies believe grid computing's massive hardware and software requirements will translate into large competitive advantages and opportunities. IT executives should watch this space closely but cautiously, as initial forays into grid computing are likely to be expensive and fraught with challenges, such as security.
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Improving Data Flow and Customer Support
New product announcements from IBM Corp., Peregrine Systems, and Remedy Corp. include the release of an end-to-end global infrastructure solution, reliable data management application, and enhanced customer support services.
Focal Points:
RFG believes offerings and alliances such these are potent indicators of the increasing values enterprises are placing on abilities to collaborate, deliver superior customer care, manage projects, and perform other business-critical tasks online. IT executives, especially at enterprises already using any of the above solutions, should implement processes to ensure that future offerings integrate well with incumbent solutions, and enhance the enterprise's ability to do business online effectively.
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New Business Management Initiatives
PeopleSoft Inc. announced that it will use its own products to automate functions and cut costs. The company has also released a new module targeted at the healthcare industry. In similar news, SAP and Tecnomatix Technologies Ltd. have joined forces to increase collaboration capabilities for product engineers, streamlining the lifecycle of product development and manufacturing.Focal Points:
RFG believes a continued drive towards cutting costs and streamlining business processes will encourage new product development to that end. As new products are released, IT executives should evaluate them to determine whether they might be used to yield cost savings within their companies.
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Very Dissimilar Results for Software and Services Companies
MicroStrategy announced strong revenues and improvements in its pro forma net operating losses. Aether Systems, however, announced increased revenues, but significantly worse pro forma net operating losses.Focal Points:
RFG believes MicroStrategy may have finally turned the corner, although it is still too soon to be sure. If the company can deliver against its guidance, and achieve a pro forma break even by year-end, then IT executives using its products will be able to sleep a little easier. Unfortunately, the same cannot be said of Aether. Unless it can find a way to stop the bleeding, it may find itself on the financial ropes. IT executives should create and maintain accurate and current profiles of their key current and candidate vendors, and protect themselves via well-negotiated contracts and stringent service level agreements (SLAs). (See the RFG Presentations "Stretching IT Budgets: Effective Vendor Negotiation Strategies" and "Service Level Agreements: What You Don't Know Can Hurt You!.")
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Wireless Happenings: A New, A Split, and An Ending
AirPrime announced an add-on to Handspring handheld devices that gives the personal digital assistants (PDAs) cellular telephone capabilities. Palm Computing announced it would divide its business into two sections: one focusing on hardware and the other on software. Also, Metricom, Inc. announced it would shut the door on its high-speed wireless service.Focal Points:
RFG believes the desirability of Handspring Visor has taken another step in the right direction with the ability to access Sprint's PCS network, in addition to ones using Global System for Mobile Communications (GSM) technology. As for Palm, hopefully its decision to separate out its hardware and software businesses will lead to the introduction of more enterprise-oriented capabilities – an area where the company has arguably lost some of its vision and some significant ground to Microsoft's Pocket PC this past year. Unfortunately, for Metricom and its loyal allegiance of subscribers, the harsh realities of the post dot.com world and the need for profitability have gotten the better of it. IT executives should be investing in technologies, whether wireless or otherwise, that are not only sound in capabilities, but also have strong financial potential.
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ICCM Conference Sparks Flurry of Contact Center Announcements
The Inbound Call Center Management (ICCM) conference, held in Chicago, drew a large crowd, which included many call center and customer relationship management (CRM) vendors. New product announcements focused on economics and methods of increasing employee efficiency.
Focal Points:
RFG believes the MCCC market is seeing growth in the range of solutions designed to reduce the time and cost requirements of CRM implementations, and to increase the efficiency of business procedures on an enterprise-wide basis. IT and call center managers should take advantage of these emerging products to contain costs, and shorten the payback periods of MCCC and CRM implementations, especially during tight economic times.
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NetIQ Offers Help to Enterprises Deploying Microsoft Technologies
NetIQ announced immediate availability of its NetIQ Migration Suite. The bundle of software offerings is designed to help IT executives and teams deploying Microsoft's Windows 2000, Active Directory, and Exchange 2000 offerings in their enterprises.Focal Points:
RFG believes NetIQ has years of valuable experience in helping to improve Microsoft server offerings, and that that the NetIQ Migration Suite may be a welcome aid to many IT executives and their teams. However, IT executives should make sure that they have reviewed their Microsoft software contracts and licenses, and planned carefully for the future of these before considering or implementing tools designed to aid upgrades that may be delayed or avoided entirely. (See the RFG Research Note "Understanding and Coping with Microsoft's Pricing Strategies," Aug. 2, 2001.)
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Rumor, Innuendo, and Gossip: Microsoft Tightens the Grip
In preparation for the official release of Windows XP, Microsoft has begun executing a multi-faceted assault plan aimed squarely at corporate accounts. Components of this marketing thrust include auditing some of its corporate accounts for license compliance, changing the licensing paradigm, dropping of Java, bundling in new applications into XP in a fashion that could easily shut out competitors, and the selling of Hailstorm and Passport as "innovations that benefit consumers."
While Microsoft has audited accounts in the past, this year's action has some subtle tones to it. When Microsoft implemented the 5.0 Volume Licensing programs, it eliminated some of the rights users had for multiple copies, such as copies for home use. Now as Microsoft is getting people to settle up and move to the new Software Assurance program, it is pressing a set of companies to validate all licenses they have, and to "true up."
RFG has heard some firms are concerned about being in compliance, as they do not know the number of licenses (based on the new contract counting method) they really have. Some companies are agreeing to move forward with the Software Assurance program to avoid legal difficulties. (For more on the Software Assurance program see the RFG Research Note "Understanding and Coping with Microsoft's Pricing Strategies," Aug. 2, 2001.) Companies concerned about this predicament might want to consider solutions from Scalable Software or WebCensus.
Part two of the strategy is the software lock-down. Java is not supported by Windows XP. To get Java programs to run, the Java Runtime Environment (JRE) will have to be downloaded separately from Sun. As an added touch, Microsoft is changing the security settings in its new Windows and Office programs, so that in some cases, Java programs will be disabled. Microsoft claims Java is a security threat, yet it continues to allow the transmission of Visual Basic Script (VBScript) macros, such as those found in Word and Excel documents, even though these have been responsible for thousands of viruses.
Furthermore, Microsoft is reusing its browser tactic to deliver new applications such as instant messaging, and to eliminate the competition. Microsoft will make its code compulsory, while making it difficult to switch to a competitor's. All this in the name of innovation and "benefiting the little guy."
Lastly, Microsoft is pressing hard to move everyone to .NET and XP, so that it can execute its Hailstorm and Passport strategies. If this works, everyone will be locked into Microsoft, and paying it a per-click charge every time business is conducted over the Internet. While that is bad enough, to make matters worse, the success of this strategy calls for Microsoft to be the keeper of our personal data. The same company that cannot write secure code, and the one hackers love to attack, now wants everyone to trust it with the most sensitive of data.
RFG believes Microsoft has an excellent strategy in place that will allow its current monopoly to provide it the foothold it needs to dominate the Internet. However, Microsoft is not a benign giant and corporations, line of business executives, and IT executives should not be lulled into thinking that what is good for Microsoft is good for them or the nation. If Microsoft succeeds, IT executives can expect to be paying it a king's ransom in fees.
RFG Research Notes provide concise, high-level analysis and recommendations on specific topics of interest to enterprise IT executives. The Notes also provide a framework for further detailed Inquiries by RFG clients, and for follow-up presentations and workshops by RFG research staff available to all interested IT decision-makers. For more information, contact Client Services by telephone at (US) +203/291-6900 or by e-mail at clientservices@rfgonline.com.
Copyright © 2001 Robert Frances Group, Inc. All rights reserved. Agenda products are published by Robert Frances Group, Inc., 22 Crescent Road, Westport, CT 06880. Telephone (203) 291-6900. Facsimile (203) 291-6906. http://www.rfgonline.com/. This publication and all Agenda publications may not be reproduced in any form or by any electronic or mechanical means without prior written permission. The information and materials presented herein represent to the best of our knowledge true and accurate information as of date of publication. It nevertheless is being provided on an "as is" basis. Reprints are available.