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Market Roundup November 21, 2003 IBM Announces WebSphere Portal Express
for iSeries |
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IBM Announces WebSphere Portal Express for
iSeries
IBM has announced eServer iSeries support for WebSphere
Portal Express, allowing iSeries customers to use IBM’s portal offerings for
supporting personalized Web sites for employees, suppliers, and consumers.
WebSphere Portal Express provides a means for iSeries users to integrate 5250
“green screen” applications, collaborative applications, Java/WebSphere
solutions, and PC-based solutions into a single internal or external Web site
that can be accessed with a browser and password. The new offering includes
specialized wizards for easing installation, set-up, configuration, and
integration with other servers including HTTP and LDAP servers. In addition,
WebSphere Portal Express includes WebSphere Studio, a development environment
for ebusiness applications. The pricing for WebSphere Portal Express on iSeries
is identical to that for Intel servers; $85 per user or $33,000 per processor.
In addition, IBM is offering iSeries i825 customers twenty licenses at no extra
charge. Web Sphere Portal Express will be available on December 4.
IBM’s iSeries platform (AKA AS/400) is something of an
anomaly in the IT world. In a portion of the market largely dominated by
Intel-based servers, the iSeries continues to command a near-fanatical
following among users despite everything the Wintel combine has been able to
throw at it. In large part this success is due to the stability, dependability,
and flexibility of iSeries servers, allowing the platform to maintain its
position as the place small businesses migrate to when they enter the higher-demand
realms of the mid-market and begin using 64-bit applications. Microsoft and
Intel, of course, have a very different vision of how SBs
should mature into SMBs. In their view, small businesses should hold tight to
their 32-bit Wintel solutions and scurry merrily along to Windows on Itanium
for all their 64-bit needs. Good enough, but a serious challenge overshadows
that scenario, namely the relatively paltry number of mid-market solutions that
are currently available for Wintanium. IBM’s iSeries
offers users a radically different approach to doing business. Along with
offering full support with for Windows, iSeries servers can also simultaneously
run OS/400 and Linux applications, allowing customers to have their Windows
cake and eat it along with extra helpings of Linux and OS/400, too. Most
importantly, the iSeries has been and continues to be a favorite platform among
SMB developers who have created tens of thousands of OS/400 business
applications. This and the growing enthusiasm among users and developers for
Linux business solutions make a compelling argument for the iSeries as a
tested, cost-effective platform for SMB IT consolidation.
So what does WebSphere Portal Express offer that iSeries didn’t have before? In essence, the new offering significantly simplifies the building of customized ebusiness Web sites. The fact is that many SMBs struggle along with a fraction of the cash and staff resources that mature mid-market companies can throw at their IT problems. By providing tools that ease the creation of sites integrating business solutions including 5250 green screens, WebSphere, Java, Lotus, and Windows applications, IBM is helping SMBs consolidate business and IT processes in ways that could once only be afforded by larger enterprises. In other words, the WebSphere Portal Express for iSeries will make it easier and less expensive for SMBs to do business, which in turn makes it easier for them to stick with or move to iSeries. This is a strategy IBM’s competitors have yet to emulate, let alone master.
Sun Microsystems CEO Scott McNealy announced at this
week’s Comdex trade show that Sun had signed an agreement with the China
Standard Software Company Ltd. (CSSC) to one million computers per year in the
People’s Republic of China using Sun’s Java Desktop System, which includes
Sun’s Star Office 7.0 productivity suite. The Java Desktop System is designed
to run on Linux, the operating system and development environment on which CSSC
has decided to base its deployment of up to 200 million desktops in the coming
years. The government of China has both invested in CSSC and decided that it
will use Linux and open-source technology as the foundation of its planned
national computing infrastructure build-out. The Java Desktop System is priced
at $100 per desktop or $50 per desktop for users of the Java Enterprise System.
No terms of the total dollar amount of the deal were announced. It goes into
effect at the end of this year.
Given the fact that the Chinese government is intent on
building out an IT infrastructure for a good portion of its 1.3 billion
citizens over the next few decades, it is surely a market that IT vendors of
all stripes would want to enter. Considering that the PRC, among a number of
other nations, has decided to cast its IT lot with Linux and other open source
development strategies, any company that can offer believable products for this
environment has a reasonable shot at a substantial revenue opportunity. In the
case of Sun, the company looks well positioned to cash in on that opportunity
with its Java Desktop System. As a result, for the first time Sun may have a
viable market for its desktop alternative to the bane of Scott McNealy’s
existence, Microsoft .
But while the CSSC deal appears to be good for Sun, we believe some caution is in order. This is more a story about Linux and open source development strategies then it is about Java. The PRC and other countries opting for open source IT development models are seeking to maintain local control of their IT build-outs and to diminish the amount of capital shipped overseas, especially to the US. In other words, what these nations build, they also deploy. While Sun has a real opportunity to establish an alternative to Windows on the desktop in the PRC, it would not be surprising to us to see future requests from the CSSC asking that Sun loosen their grip on Java development directions and standards, something Sun has heard before and been reluctant to do. Since the PRC’s interest in open source is essentially practical, it is not going to adhere to the tenets of IT religious schisms between Sun, Linux, and Microsoft that McNealy is so fond of highlighting. Just because Java is not Microsoft is not a good enough reason for the PRC to stick with Java if Sun’s grip on the technology is too rigid. From the point of view of the PRC — or any other nation seeking to control its own IT destiny — this would amount to merely changing the name of the proprietary vendor in a sole source scenario. Will the opportunity of gaining access to the world’s most populated national market finally inspire Sun to loosen its grip on Java standards? Stay tuned.
SCO Expands Linux Legal Actions
During a keynote address at the Computer Digital Expo
(CDE), SCO Group CEO Darl McBride said that the company had signed an agreement
with the law firm of David Boies to file Linux
copyright law suits against large companies that have significant Linux installations.
McBride said he expects the first suits to be filed in the next few months. To
pay Boies’ firm, SCO will take a charge of $8,956,000
in the fourth quarter, which ended October 31. The company plans to take
another non-cash charge of $8,741,000 for the fourth quarter related to the
issue of convertible preferred stock. During the same address, McBride enlisted
the help of the World Intellectual Property Organization. (WIPO is against the
open source GPL licensing.) He also suggested that the worldwide software
market was threatened by the Free Software Foundation’s GPL, and likened the
notion of free software to file sharing, the dotcom bubble, and free love.
McBride defended his management of SCO, saying that he had cut the company’s
quarterly losses and increased the company’s value from a low of $6 million to
a current market value of over $200 million. In a separate interview, McBride
claimed that Novell had signed a non-competition clause when it sold SCO the
rights to UNIX in 1995, and that SCO may have to file suit against Novell if it
believes the company’s recent acquisition of SuSE
threatened competition. Novell responded to McBride’s comments by stating that
no non-competition clause had been included in the contract and that the SuSE does not violate any agreement between the two
companies.
The unfolding of SCO’s legal
strategy resembles the public peeling of an onion. While great things are
promised at every layer, the end result is an odiferous pile best suited for
the compost heap. Though he attempted to infuse his comments at CDE with big
dollar gravitas, Darl McBride wandered from the merely ludicrous to the
fiscally and legally questionable. Equating free software and free love is
enough to make a cheap headline, but saddling stockholders with nearly $9
million in debt to legally strong arm Fortune 500 companies is reckless in the
extreme, and frankly smacks of desperation. The question is not whether SCO can
sue a company for Linux copyright violations (since anyone can sue anyone for
anything in our great land), but why SCO should think anyone should take the
company’s threats seriously when their amorphous copyright claims have never
been examined, let alone held up in court. In fact, rather than place the
evidence they claim to possess into the light of day, SCO has attempted to
delay discovery in both its suit against IBM and in Red Hat’s countersuit
against the company. While McBride insists that upcoming litigation against
supposed Linux miscreants will be easier to pursue than its IBM efforts, we
expect that any suits SCO files will likely generate more countersuits than
cash for the company’s dwindling coffers.
By that same token, McBrides’ defense of his record as CEO are curious in the extreme. While the company has traveled from the red to the black during McBride’s tenure, the way was reportedly eased by significant licensing deals with Microsoft and Sun. In addition, it can be argued that SCO’s dramatic increase in market value was due to the activities of speculators who believed IBM or a consortium of UNIX vendors would purchase the company. Without such a deal or continuing infusions of cash from IBM competitors hoping to spread FUD, we expect SCO to remain the sad shell it has been for some time. Finally, McBride’s threats of possible legal action against Novell are more poor stuff, unless you believe his claims that Novell signed a non-competition clause. This will be another one for the courts to sort out, if they can ever get McBride to put SCO’s supposed evidence where his mouth is. In the long run, we expect the only real winner in SCO’s continuing debacle to be David Boies’ law firm.
The United States Postal Service announced that it will
discontinue its eBillPay service in April of next
year. The service allowed customers to pay their bills online via the USPS site
and was operated by CheckFree Corp., a commercial
provider of such services. The USPS also said it was abandoning its USPS Send
Money service, an electronic cash transfer offering and USPS Pay @ Delver,
which allows customers to have delivery confirmation on electronic cash
transfers. The USPS has already shut down its PosteCS
service, which offered the electronic transfer of large, sensitive digital
files with encryption and electronic watermarks that prevented tampering with
the documents.
A few years ago, when the USPS began offering electronic
services and exploring how to capitalize on the opportunities afford non-snail
mail, the agency was, in our minds, well positioned to be a third party
provider of safe, secure, and auditable electronic document transfers. Since
the USPS enjoys a brand that speaks of reliability and trustworthiness, it was
reasonable to assume that a real opportunity existed for the organization to
offer more than snail mail service. Additionally, unlike any U.S. private enterprise,
the USPS could bring to bear a full corps of Postal Inspectors armed with
essentially draconian federal laws against tampering with the “mail.” Overall,
we suspected that if it developed its offerings carefully, the USPS could have
a serious role in the online secure document and funds handling space,
seriously influencing services such as online auctions that have suffered
ongoing problems with fraud and theft.
Alas, it was not to be. We suspect a number of issues came to the fore that drove the USPS to decide to put these projects in the dead letter file. For one, there was always some resistance to the idea that a quasi-branch of the federal government would offer services in direct competition with private concerns. No doubt the idea that the USPS might actually make a buck or two that could have gone to the purely private sector irked some of those with USPS oversight (like FedEx and UPS). Secondly, we suspect that the rather calcified management of the USPS — one of the country’s oldest federal institutions — did not have the energy or foresight to push these projects to the point that they became so valuable to the general populace that they would become inviolate and potentially undercut the USPS’s historic talent of delivering paper mail. Given the budget constraints the USPS is under, perhaps making a leap into the heady, uncertain online waters was too much to ask of a management steeped in the arcane intricacies of government pay scale ratings and pension benefits. As it is, the USPS appears to be collectively content with delivering snail mail come rain or shine, even as it marches forthrightly into the gloom of night, backs collectively turned away from the bright lights and opportunities of modern communication.