Whether it is mere speculation or a fact , the combination of two IT giants -- IBM and Sun Microsystems -- will surely alter the dynamics of the IT services market.
Of recent times, everybody is racing to offer hardware-software services and own data centres. We have seen that happen with Cisco s Unified Computing Systems, HP bought EDS, now IBM is looking at Sun.
There is no official comment from the two companies, but if the deal goes through it will give IBM a bigger control of the market and make it a fitting rival for HP, Dell and Microsoft.
Together, IBM and Sun would have about 65% of the market for server computers running the Unix operating system and 42% of the total server market, measured by the dollar value of the market.
Like Sun's Java and Solaris, the operating systems have gained substantial market share over the years. Similarly, Sun could give it some extra hardware market share specifically in servers.
However, reports indicate that Sun has not been doing well ever since the global recession began last September. Reports indicate that IBM may pay at least $6.5 billion in cash for the deal, which would be a 100% premium over Tuesday's closing price for Sun.
In last year's fourth quarter, IBM led in the global server market revenue with $4.9 billion in sales, about 36% of the market. HP was No. 2 with $3.9 billion in sales ie, about 29% of the market. Dell, with $1.4 billion in sales, and Sun, with about $1.3 billion, were a distant No. 3 and No. 4.
However, Sun's Solaris servers have a strong presence in the premium market, which is seen as more profitable. That is why that valuation may be justifiable for IBM.
But Sun's recent acquisition of StorageTek for $4.1 billion was termed as a hogwash, mainly because it did not go well with Sun and ended up in cold waters.
With customers like HDFC Bank, Punjab National Bank (PNB) and Tata Teleservices, Sun's strong presence in the financial services and telecom domains has been the envy of its rivals.
But in case of a merger, issues like having a number of common customers and how to merge the two global brands will come up. As a Sun employee, said, Sun employees are concerned about the future of our products if the acquisition happens, since there is a significant overlap between our products and that of IBM s.
Sun's corporate communications office terms it as a mere speculation and refused to comment on the rumour . So did the IBM communication team, saying they have no reactions from their headquarters and cannot comment on the issue.
Meanwhile, T.R. Madan Mohan, managing partner, Browne and Mohan, said that the WSJ picked up the news from the blog of a Sun employee.
According to him, the deal may not come through, but given the market cap of Sun, which is just about $ 2 billion, and IBM is supposed to have quoted $ 6.5 to $ 6.8 billion that is a very good valuation for a company that has been dithering.
Similarly, Sun's strengths are in government, BFSI and telecom. In telecom, it has some marque clients such as NTTDocomo, Dialog, Telefunken, Vodafone, etc which run mission-critical applications.
IBM has not been able to move into these accounts globally, unlike the easy entry the company had with Bharti Airtel, Aircel, Vodafone, Idea in India. By acquiring Sun, IBM will get access to these critical markets and benefit from the Java/My SQL communities.
CXOtoday
Saturday, March 21, 2009
Has AIG bonus outrage gives employees a fear?
The bonuses paid to AIG executives have turned pillars of a Connecticut community into pariahs and have workers fearing for their safety.
An executive who feared retribution and spoke Friday on condition of anonymity says AIG workers in ritzy Fairfield County are ``very, very nervous'' about security.
AIG's financial products division is in nearby Wilton. Corporate officials have told employees to avoid sporting the company logo and to travel in pairs at night.
Activists plan to visit the homes of AIG executives Saturday in an attempt to deliver letters highlighting the economic problems of ordinary Americans.
Security companies say the financial crisis is creating brisk business in everything from bomb-sniffing dogs to bodyguards.
Agencies
An executive who feared retribution and spoke Friday on condition of anonymity says AIG workers in ritzy Fairfield County are ``very, very nervous'' about security.
AIG's financial products division is in nearby Wilton. Corporate officials have told employees to avoid sporting the company logo and to travel in pairs at night.
Activists plan to visit the homes of AIG executives Saturday in an attempt to deliver letters highlighting the economic problems of ordinary Americans.
Security companies say the financial crisis is creating brisk business in everything from bomb-sniffing dogs to bodyguards.
Agencies
US bank rescue plan likely out on Monday
The US government will announce as soon as Monday a long-awaited plan to try to get bad assets off the books of banks, a cornerstone of its efforts to tackle the credit crisis, The Wall Street Journal reported.
The Obama administration, battling a deepening recession, is set to adopt a three-pronged approach to ridding the financial system of so-called toxic assets, reports said.
The plan would create an entity, backed by the Federal Deposit Insurance Corp, a U.S. banking regulator, to buy and hold loans, the reports said.
It would expand a newly launched Federal Reserve facility -- that lends money to investors to buy securities backed by consumer loans -- to include toxic assets. And it would create new public and privately financed funds to buy such securities under the management of private investment experts.
The Obama administration plans to contribute between $75 billion and $100 billion in new capital to the effort although that amount could be expanded, the Wall Street Journal said.
The Treasury Department and Federal Reserve declined to comment. Sources familiar with the government's thinking have told Reuters details of a plan could be announced next week.
The Bush administration tried without success late last year to set up a mechanism to get bad assets off the balance sheets of commercial banks.
The banks have been hammered by losses incurred by mortgage-related debt that has turned sour amid a fall in house prices and a pickup in defaults, sparking a credit crisis that has strangled the US and global economies.
Obama's Treasury secretary, Timothy Geithner, has outlined a new proposal to soak up as much as $1 trillion in assets through a public-private program.
But investors have grown increasingly concerned that his efforts are running into problems more than a month after he outlined the plan.
The slow start of the new Federal Reserve consumer lending program this week has been seen as a sign that private capital may shun the toxic-asset plan because of public outrage over large executive bonuses.
Many big private investors are worried they could face tough new rules in US financial rescue programs after Congress pressed ahead with efforts to claw back bonuses paid to executives at failed insurer American International Group.
The Wall Street Journal said the Treasury would match private sector finance for the public-private toxic asset funds on a one-for-one basis in most cases.
Washington would be a co-investor also in the new FDIC troubled loans program but could contribute 80 percent in some cases, and would guarantee as much as $500 billion in loans investments, the newspaper said in its report.
The New York Times said the FDIC program could involve government funding for up to 97 percent of the equity.
It also said the plan is likely to offer generous taxpayer subsidies, in the form of low-interest loans, to coax investors to form partnerships with the government.
Agencies
The Obama administration, battling a deepening recession, is set to adopt a three-pronged approach to ridding the financial system of so-called toxic assets, reports said.
The plan would create an entity, backed by the Federal Deposit Insurance Corp, a U.S. banking regulator, to buy and hold loans, the reports said.
It would expand a newly launched Federal Reserve facility -- that lends money to investors to buy securities backed by consumer loans -- to include toxic assets. And it would create new public and privately financed funds to buy such securities under the management of private investment experts.
The Obama administration plans to contribute between $75 billion and $100 billion in new capital to the effort although that amount could be expanded, the Wall Street Journal said.
The Treasury Department and Federal Reserve declined to comment. Sources familiar with the government's thinking have told Reuters details of a plan could be announced next week.
The Bush administration tried without success late last year to set up a mechanism to get bad assets off the balance sheets of commercial banks.
The banks have been hammered by losses incurred by mortgage-related debt that has turned sour amid a fall in house prices and a pickup in defaults, sparking a credit crisis that has strangled the US and global economies.
Obama's Treasury secretary, Timothy Geithner, has outlined a new proposal to soak up as much as $1 trillion in assets through a public-private program.
But investors have grown increasingly concerned that his efforts are running into problems more than a month after he outlined the plan.
The slow start of the new Federal Reserve consumer lending program this week has been seen as a sign that private capital may shun the toxic-asset plan because of public outrage over large executive bonuses.
Many big private investors are worried they could face tough new rules in US financial rescue programs after Congress pressed ahead with efforts to claw back bonuses paid to executives at failed insurer American International Group.
The Wall Street Journal said the Treasury would match private sector finance for the public-private toxic asset funds on a one-for-one basis in most cases.
Washington would be a co-investor also in the new FDIC troubled loans program but could contribute 80 percent in some cases, and would guarantee as much as $500 billion in loans investments, the newspaper said in its report.
The New York Times said the FDIC program could involve government funding for up to 97 percent of the equity.
It also said the plan is likely to offer generous taxpayer subsidies, in the form of low-interest loans, to coax investors to form partnerships with the government.
Agencies
Friday, March 20, 2009
AT&T Looks for Customers for Center in India
AT&T Inc., a US-based company offering advanced IP-based business communications services, is set to acquire customers from IT, ITES, manufacturing and finance service companies for its newly launched data center in India.
AT&T set up its India data center in Bangalore last December. Since then the company is looking at the growing demand from multinational customers in India for online data centers with highly resilient facilities and a wide range of IT infrastructure management services.
Talking to CXOtoday, Gopi Gopinath, chairman and chief executive officer of AT&T Global Network Services India, said, "Since the data center has just become operational, we have not got any customers in India so far, but the data center has been build to 'Green' specifications laid down by the parent company across all data centers."
The Whitefield center has a 5,000 sq ft of capacity and can expand unlimitedly. It is part of a $1 billion planned AT&T global network and portfolio investment for 2009. Data center customers will have access to a wide range of fully integrated managed hosting, application and networking services to support their data and e-commerce needs. Connectivity to the centre can be supported with AT&T's existing suite of managed data services in India.
The data center is built to the same rigid specifications consistent with AT&T's other 37 global data centers and are enabled with services that proactively manage customers' hosting solutions for predictable application performance. They are protected from intrusion and failure with the same multi-layered security, failsafe redundancy, diversity measures, and rapid response recovery measures built into each data center.
"We will be able to support multinational customers in India who turn to AT&T for integrated hosting and network solutions, allowing them to focus on running their businesses," said Gopinath.
The center is directly connected to AT&T's global MPLS backbone to offer a portfolio of hosting solutions with network performance and features. Among them are greater agility when making real-time changes to IT environments, more control to extend applications to the customer's premises or to other data centers, and the ability to include 'on network' capabilities in a customer solution.
CXotoday
AT&T set up its India data center in Bangalore last December. Since then the company is looking at the growing demand from multinational customers in India for online data centers with highly resilient facilities and a wide range of IT infrastructure management services.
Talking to CXOtoday, Gopi Gopinath, chairman and chief executive officer of AT&T Global Network Services India, said, "Since the data center has just become operational, we have not got any customers in India so far, but the data center has been build to 'Green' specifications laid down by the parent company across all data centers."
The Whitefield center has a 5,000 sq ft of capacity and can expand unlimitedly. It is part of a $1 billion planned AT&T global network and portfolio investment for 2009. Data center customers will have access to a wide range of fully integrated managed hosting, application and networking services to support their data and e-commerce needs. Connectivity to the centre can be supported with AT&T's existing suite of managed data services in India.
The data center is built to the same rigid specifications consistent with AT&T's other 37 global data centers and are enabled with services that proactively manage customers' hosting solutions for predictable application performance. They are protected from intrusion and failure with the same multi-layered security, failsafe redundancy, diversity measures, and rapid response recovery measures built into each data center.
"We will be able to support multinational customers in India who turn to AT&T for integrated hosting and network solutions, allowing them to focus on running their businesses," said Gopinath.
The center is directly connected to AT&T's global MPLS backbone to offer a portfolio of hosting solutions with network performance and features. Among them are greater agility when making real-time changes to IT environments, more control to extend applications to the customer's premises or to other data centers, and the ability to include 'on network' capabilities in a customer solution.
CXotoday
US axes 651,000 jobs in February; unemployment rate highest in 25 years
US employers axed 651,000 jobs in February, pushing the unemployment rate to its highest in 25 years, as companies buckled under the strain of a recession that is showing no signs of ending, according to a government report.
While that figure was near economists' expectations for a 648,000 drop in non-farm payrolls, January and December job losses were revised sharply higher.
The Labor Department on Friday said the unemployment rate surged to 8.1 percent in February, the highest level since December 1983. That was above market forecasts for a rise to 7.9 from January's 7.6 percent.
January's job cuts were revised to show a steep decline of 655,000, while December's payrolls losses were adjusted to 681,000, the deepest since October 1949. Since the start of the recession in December 2007, the economy has purged 4.4 million jobs, with more than half occurring in the last 4 months.
Job losses in February were broad based, with only government, education and health services adding jobs.
"Since the recession began, the rise in unemployment has been concentrated among people who lost jobs, as opposed to job leavers or people joining the labor force," said Bureau of Labor Statistics Commissioner Keith Hall
The manufacturing sector shed 168,000 jobs in February, after eliminating 257,000 positions the prior month. Construction industries bled 104,000 jobs in February after losing 118,000 in January.
The service-providing industry slashed 375,000 positions after shedding 276,000 in January.
Agencies
While that figure was near economists' expectations for a 648,000 drop in non-farm payrolls, January and December job losses were revised sharply higher.
The Labor Department on Friday said the unemployment rate surged to 8.1 percent in February, the highest level since December 1983. That was above market forecasts for a rise to 7.9 from January's 7.6 percent.
January's job cuts were revised to show a steep decline of 655,000, while December's payrolls losses were adjusted to 681,000, the deepest since October 1949. Since the start of the recession in December 2007, the economy has purged 4.4 million jobs, with more than half occurring in the last 4 months.
Job losses in February were broad based, with only government, education and health services adding jobs.
"Since the recession began, the rise in unemployment has been concentrated among people who lost jobs, as opposed to job leavers or people joining the labor force," said Bureau of Labor Statistics Commissioner Keith Hall
The manufacturing sector shed 168,000 jobs in February, after eliminating 257,000 positions the prior month. Construction industries bled 104,000 jobs in February after losing 118,000 in January.
The service-providing industry slashed 375,000 positions after shedding 276,000 in January.
Agencies
Has SAP lays off unspecified numbers in India?
The German software giant SAP AG reportedly laid off an unspecified number of employees recently as part of its previously announced plan to trim 3,000 jobs.
The lay offs were confirmed by a company spokesman according to the report. The spokesman said that the cuts were not directed at any one particular discipline or area of our business and were spread across the board.
SAP, which implemented cost savings in October after sales dropped sharply, said it would continue to slash costs and announced that it intended to reduce its workforce to 48,500 by the end of this year from 51,800 now.
The world's biggest maker of business management software gave no target for its key software and software-related sales this year but based its margin forecasts on the assumption that core sales would be flat or 1 percent lower than 2008 sales of 8.62 billion euros.
Co-chief executive Leo Apotheker told Bloomberg television in January that SAP was still seeing demand for software despite the global economic slump and that it intended to avoid forced layoffs. However, seems that approach is not working.
SAP said it expects the staff reductions to result in 300 million to 350 million euros in annual cost savings beginning in 2010 but also in restructuring charges this year in a range of 200-300 million euros.
That would weigh on its 2009 operating margin by 2 percentage points to 3 percentage points, the company said. It forecast an operating margin of 24.5 percent to 25.5 percent versus 28.2 percent last year.
SAP said 2008 operating profit rose 4 percent to 2.84 billion euros ($3.75 billion) and total software and software-related sales gained 14 percent to 8.46 billion euros.
Agencies
The lay offs were confirmed by a company spokesman according to the report. The spokesman said that the cuts were not directed at any one particular discipline or area of our business and were spread across the board.
SAP, which implemented cost savings in October after sales dropped sharply, said it would continue to slash costs and announced that it intended to reduce its workforce to 48,500 by the end of this year from 51,800 now.
The world's biggest maker of business management software gave no target for its key software and software-related sales this year but based its margin forecasts on the assumption that core sales would be flat or 1 percent lower than 2008 sales of 8.62 billion euros.
Co-chief executive Leo Apotheker told Bloomberg television in January that SAP was still seeing demand for software despite the global economic slump and that it intended to avoid forced layoffs. However, seems that approach is not working.
SAP said it expects the staff reductions to result in 300 million to 350 million euros in annual cost savings beginning in 2010 but also in restructuring charges this year in a range of 200-300 million euros.
That would weigh on its 2009 operating margin by 2 percentage points to 3 percentage points, the company said. It forecast an operating margin of 24.5 percent to 25.5 percent versus 28.2 percent last year.
SAP said 2008 operating profit rose 4 percent to 2.84 billion euros ($3.75 billion) and total software and software-related sales gained 14 percent to 8.46 billion euros.
Agencies
Thursday, March 19, 2009
Will Common service centres generate 400,000 jobs in India?
The government's common service centre (CSS) initiative will generate around 400,000 direct employment opportunities and as many as indirect jobs in rural India, a top government official said here on Thursday.
"The scheme was likely to generate over 400,000 direct jobs opportunities as well as indirect employment avenues of a like number in rural India," Cabinet Secretary K.M. Chandrasekhar told reporters after inaugurating a conference on 'Common Service Centres: The Change Agents'.
The CSC is a government-run one-stop shop that offers web-enabled e-governance services in rural areas, including various application forms, certificates, and utility payments such as electricity, telephone and water bills.
"The scheme was structured to promote rural entrepreneurship. By creating appropriate support structures that enable demand-driven services as well as capacity building and training, entrepreneurs can be empowered as change agents for rapid socio-economic change in rural India," he said.
Earlier, while inaugurating the conference, Chandrasekhar said inclusive growth and rural empowerment were the major goals of the CSC initiative.
He added that the government would set up 100,000 CSCs across the country under the public-private partnership model by year-end.
Last month, Communications and IT Minister A. Raja had said that the government would invest Rs.57.42 billion (Rs.5,742 crore) for setting up CSCs.
Agencies
"The scheme was likely to generate over 400,000 direct jobs opportunities as well as indirect employment avenues of a like number in rural India," Cabinet Secretary K.M. Chandrasekhar told reporters after inaugurating a conference on 'Common Service Centres: The Change Agents'.
The CSC is a government-run one-stop shop that offers web-enabled e-governance services in rural areas, including various application forms, certificates, and utility payments such as electricity, telephone and water bills.
"The scheme was structured to promote rural entrepreneurship. By creating appropriate support structures that enable demand-driven services as well as capacity building and training, entrepreneurs can be empowered as change agents for rapid socio-economic change in rural India," he said.
Earlier, while inaugurating the conference, Chandrasekhar said inclusive growth and rural empowerment were the major goals of the CSC initiative.
He added that the government would set up 100,000 CSCs across the country under the public-private partnership model by year-end.
Last month, Communications and IT Minister A. Raja had said that the government would invest Rs.57.42 billion (Rs.5,742 crore) for setting up CSCs.
Agencies
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