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Jason Stamper's Blog: July 2006 Archives
Sun Microsystems: the Dot in Web 2.0?
July 28, 2006
I have a lot of time for Sun. I have no idea why, but it always seemed to me that much of what the company stood for - like the 'Write Once Run Anywhere' Java programming language - challenged the status quo in the technology industry and in so doing solved a lot of the challenges faced in enterprise IT.
Mercury Falls as Temperatures Soar
July 27, 2006
For all of the talk of Hewlett Packard's acquisition of Mercury Interactive for $4.5bn being about giving HP much-needed capabilities in the area of IT governance, it's clear that Mercury was acquisition fodder the moment it went public with news of its financial shenanigans in November last year.
If any company could possibly survive such a revelation -- and the SEC has said there are 80 companies still being probed about possible stock option irregularities -- it was not Mercury, which for several years had been explaining how its IT governance software could help with "visibility and control", "transparency", and to "lower the cost of compliance with regulations such as Sarbanes-Oxley".
One need only to have looked at the case of Peregrine Systems, a so-called business service management software purveyor that was rocked by its own accounting scandal back in 2002 after a run of revenue-recognition irregularities, two changes of auditors, and the purging of all its top executives. Incoming CEO John Mutch did what he could to restore confidence in the firm, but he was fighting a losing battle and by September 2005 it had been acquired -- by HP no less.
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Gnome worries about OpenGL future
July 21, 2006
Those nice people over at Gnome, the GNU Object Model Environment open source desktop project, were a little perturbed by the revelation in my interview with SGI's CEO Dennis McKenna that OpenGL is up for sale.
Sorry Business 2.0, but Schwartz and Ballmer still matter
July 19, 2006
Business 2.0 magazine just published a list of "10 people who don’t matter", including Sun's relatively new CEO, Jonathan Schwartz, as well as Microsoft CEO Steve Ballmer. We couldn't help but smile, seeing as a couple of weeks back we published our annual 'CBR 10 Special Report' in print and online, which among other lists includes a ranking of the 10 Most Influential Movers and Shakers. Guess what -- we put Schwartz at number one, and Ballmer at number four.
The US business and economics academic Louis Boone once said, "Don't fear failure so much that you refuse to try new things." It was in that vein that CBR produced its first 'CBR 10 Special Report' four years ago - published to coincide with the magazine's tenth anniversary.
That marked the first time that instead of ranking technology vendors objectively by quantitative metrics alone such as revenue or profitability, we instead ranked them subjectively, picking the vendors and personalities that our writers believed held the most influence in their various sectors at that time.
We clearly have a very different set of criteria to Business 2.0, and you can see our full list of the 10 Most Influential Movers & Shakers here, as well as our justification for the rankings.
But we'd also be happy to hear what you have to say on the matter -- who is nearer to the mark in your opinion, CBR or Business 2.0? Hit the comment button below…
Will SGI Become the Next Data General?
July 18, 2006
Remember Data General (DG), the server and storage vendor that, despite some great technology, ultimately failed to capitalize on it and was sold off to EMC back in 1999*? Well SGI's new CEO Dennis McKenna was adamant in an interview with me that, despite the company recently filing for Chapter 11 bankruptcy protection in the US, his company is not now simply looking for an exit strategy as DG once did.
* If you don’t remember Data General, look out for a blog from me in the next few days in which I'll be reminiscing about the company's technology pioneer, Tom West, who was behind not only its Aviion servers but also the Clariion architecture. You read that right -- the Clariions are the storage technology owned by EMC and being successfully sold even today by both EMC and reseller partner Dell. Tom West, meanwhile, was DG's longest serving executive and also the subject of Tracy Kidder's bestseller The Soul of a New Machine. But I digress…
As I noted in a recent blog, SGI's McKenna was in London last month meeting some key customers and a few hacks. It perhaps says a lot about the current enthusiasm for SGI -- or rather the lack of it -- that despite the fact SGI had just weeks earlier announced its bankruptcy, not to mention the offer of free champagne and canapés in a trendy London venue, only three journalists turned up to hear what he had to say for himself.
The question in my mind was whether the game is up for SGI. Founded in 1982 as a maker of graphics display terminals, SGI has largely failed to capitalize on its technology heritage, and lost focus in the nineties when it made a series of -- ultimately botched -- acquisitions.
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Gates' Exit Met with Ambivalence?
July 06, 2006
How much is Bill Gates worth to Microsoft? It's an intriguing question, especially since he has announced that he will be leaving the company in 2008 after 33 years.
Does a senior executive's wage reflect their value to the company? In Gates' case, he was paid a $600,000 salary in fiscal 2005 and was awarded a $400,000 bonus: loose change to him. But he also owns over a billion Microsoft shares, and over the last ten years Microsoft's stock has more than doubled, making him quite a few pennies.
But does that reflect his current worth to the company?
Perhaps it is better to look at what happens to a company's share price when a senior executive joins or leaves. That is a reflection of what the market - the stock market at least - believes the executive is worth that firm.
When Sun COO Ed Zander left after 15 years there, Sun's stock fell 14%, shaving $2bn from its market capitalization. When it was announced Zander was joining Motorola as CEO, Motorola's stock rose 4.2%, adding almost exactly $2bn to Motorola's valuation.
What happened to Microsoft's stock when Gates announced he is leaving in two years' time? Virtually nothing, and since then it has actually risen.
You could argue that since Gates announced an orderly transition, only leaving in two years' time, that the market is yet to react fully to the news. You could argue that since he will retain his title as chairman even after that date, the market doesn't consider him to be leaving at all.
But the timing of his announcement - it was made after the stock market closed for the night - was clearly chosen to try and avoid a sudden share sell-off should investors have panicked. The fact that Microsoft is more or less replacing Gates with two people, Ray Ozzie becoming chief software architect and Craig Mundie the chief research and strategy officer, also reflects Microsoft's nervousness at having to announce Gates' news, and its attempt to reassure the market that he will not be missed.
Perhaps those measures taken together helped soothe investors' nerves. But the company's evident paranoia about breaking the news seems with the benefit of hindsight to have been wholly unjustified. What that says about the market's perception of Bill Gates' worth to Microsoft is worth noting, because it also says a lot about the market's perception of Microsoft as it finds itself in the current competitive environment.
Microsoft is perhaps facing its greatest challenge yet as it competes with Software as a Service (SaaS) in general, and Google in particular. The investment community was largely unmoved by Gates' imminent exit, which is perhaps a good barometer of the fact that he is leaving at exactly the right time, allowing some new minds to step forward and conjure up an effective response to its latest challenges.
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