MYOB rejects private equity bid

SMALL business software specialist MYOB has rejected a $731 million hostile takeover offer from an unnamed local private equity firm.

The company told the stock exchange late yesterday it had knocked back a “non-binding, indicative and highly conditional approach” which may have resulted in a $1.90 per share bid.

MYOB chairman Simon McKeon said the board had carefully considered the offer and considered in inadequate and not in the interests of the shareholders.

“As market leader in Australia and New Zealand and with an international presence, MYOB is well positioned to reap the benefits of its significant investment in wholly-owned product development programs, amounting to around $100 million in the past three years,” Mr McKeon said in a statement to the ASX.

“That investment gives MYOB a strong platform that will deliver growth and ongoing value for shareholders into the future,” he said.

Mr McKeon said the company would take no further action on the issue and would instead take the opportunity presented by its full-year results announcement next week to say more about MYOBs performance and outlook.

“As was evident from our investor briefing in December 2007, MYOB is achieving strong growth, has a strong balance sheet, a high rate of recurring revenue and strong underlying cash flow,” Mr McKeon.

“These factors underpin the board's view that the proposal was inadequate.”

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Google ramps email security services

SEARCH giant Google has unveiled a new suite of security tools for protecting email from spam and related problems, technology it acquired when it acquired internet firm Postini last year.

The so-called Powered by Postini security products deliver message filtering, encryption and archiving for business, and works with any mail system, including Notes, Exchange, and Novell Groupwise.

Pricing for the Powered by Postini services start at US$3 (A$3.35) per user per year, although a premium service that includes filtering, security and archiving costs US$25 per user per year.

“As threats rise in volume and complexity, and compliance requirements pile up, IT is struggling to find the resources to keep up,” said Google director of product management Scott Petry.

“Now, Google can take care of this for you. Organisations of all shapes and sizes can get access to Google's industry leading security and compliance technologies,” Mr Petry said.

The Powered by Postini security products are the latest addition to Google Apps platform, which includes email, word processing, spreadsheets and personal information managers.

These online applications have become the latest industry battleground for the hearts and minds – if not their dollars – of customers. The threat of internet-based apps is one of the keys behind Microsoft’s massive bid for Google’s online rival Yahoo!

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VMware disappoints, gets hammered

STOCK market darling VMware has taken a share price beating after announcing disappointing fourth quarter results, prompting investors to flee in the face of competition from Microsoft and others.

The stock lost more than 30 per cent of its value, wiping US$11 billion ($12.3 billion) off shareholder value.

VMware, a virtualisation specialist, listed last year in the biggest IPO since Google went public in 2004. VMware stock immediately soared.

The company has been a pioneer in the virtualisation market, growing revenues to more than US$1.3 billion in the past decade and helping corporate datacenters to drastically reduce power costs and hardware overheads in the process.

But reports in the US say investors have been spooked by less than stellar fourth quarter results amid fears that industry giants like Microsoft, Oracle and Citrix Systems have now turned an eye to virtualisation and will continue to squeeze VMware performance.

VMware reported fourth quarter revenue of US$412 million, an increase of 80 per cent over the year-ago quarter, but slightly below company forecasts.

What appears to have spooked the market is its forecasts. The company says it expects revenue to grow 50 per cent in 2008, somewhat lower than the consensus analyst view of growth between 55 per cent and 57 per cent.

VMware president and chief executive Diane Greene downplayed the more serious entry of others into virtualisation market, saying the company had a market lead and deeper channel relationships that any competitor.

“VMware executed at a remarkable pace in 2007 as customer interest and partner attention increased several fold,” Ms Greene said. “As others begin to enter the market, VMware and our partners are continuing to broaden and deepen our highly reliable end-to-end virtualisation solutions.

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Firefox grabs more IE marketshare

MOZILLA’S open source browser Firefox has taken another big chunk of marketshare from Microsoft’s Internet Explorer, according to the latest report from French research group XiTiMonitor.

The report says Firefox’ share of the Europe market climbed 5 per cent in the 12 months to December, giving it 28 per cent of the overall browser market.

In Oceania, which includes Australia, New Zealand and the Pacific Islands, Firefox performance is even stronger, claiming 31.1 per cent of the browser market – up from 29.7 per cent in November.

By region, internet users in Oceania are more likely to use Firefox than any other region. The 31.1 per cent Firefox market share in Oceania compared to the Mozilla browser’s 21 per cent in North America, 20.2 per cent in South America and 16.5 per cent in Asia.

For a single country market, Finland leads the world in Firefox users, with more than 45 per cent of the market.

Firefox’ growth in market share has come at the expense of Internet Explorer – which is still the commanding market leader at 66.9 per cent.

More interesting is the successful upgrade conversion rate of Firefox compared to Internet Explorer. Less than half of Internet Explorer site visits are performed with the latest version of the browser, while 93 per cent of all Firefox visits are done with Firefox 2, the latest version.

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EU clears IBM-Cognos merger

European competition regulators have given the green light to IBM’s US$5 billion (A$5.7 billion) acquisition of Canada-based business intelligence software developer Cognos.

The European Commission yesterday ruled the acquisition would not significantly impede effective competition.

The Commission examined the effects that the proposed merger would have on the business analytics sector and its various sub-divisions.

“In each instance, the Commission found that the horizontal overlap between the parties' activities would not give rise to competition concerns, since the parties' combined market share would be moderate,” the Commission said in a statement.

“The combined IBM/Cognos entity would continue to face several strong competitors and customers would find sufficient alternative suppliers of such software products,” it said.

The Commission's investigation found no significant risk that the merged entity would be able to close off competitors from the market.

IBM's and Cognos' positions in their respective segments of enterprise application software (EAS) would not provide sufficient incentives to prevent standalone business analytics software vendors from integrating with their EAS platforms.

The acquisition is expected to be completed during the current quarter. Cognos employs 4,000 people globally and generated revenue last year of just under US$1 billion.

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Microsoft outlines virtualisation plans

MICROSOFT has outlined plans to accelerate development of its virtualisation technology offerings, acquiring privately-held Calista Technologies and expanding its partnership with Citrix Systems.

The company announced the completion of its Calista acquisition at its Virtualisation Deployment Summit in San Jose yesterday. Terms of the deal were not disclosed.

San Jose-based Calista was founded in 2006 and has been pioneering next-generation desktop virtualization. Its product aims to provide richness and responsiveness of locally-executing desktops while preserving the security, management and cost benefits of a centralised computing model.

The company claims to be the only desktop platform that provides a user interface and cost per desktop to support broad adoption. The core of Calista’s technology is a patent-pending Virtual GPU (graphics processing unit) technology that improves user experience, but more importantly increased the number of users per server – dramatically lowering per user costs.

Microsoft Server and Tools Business senior vice-president Bob Muglia said few customers were using virutalisation technology – less than 5 per cent – because it was too costly and too complex.

“We believe Microsoft’s comprehensive approach – from desktop to datacentre – is unique to the industry by delivering solutions that address virtualisation at the hardware, application and management levels,” Mr Muglia said.

“Our approach is not only one of the most comprehensive … (but) also one of the most economical. This combination brings a big strategic advantage and cost savings to customers,” he said.

Microsoft and Citrix announced an expanded alliance to deliver a set of virtualisation solutions to address the desktop and server virtualisation needs, working together to deliver and market joint solutions with Windows Server 2008.

The companies plan to co-market new client computing offerings with the next generation of Citrix Presentation Server and the Citrix XenDesktop products, both based on Windows Server 2008 and Windows Optimised Desktop solutions, and managed by Microsoft System Centre.

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IBM, SAP to join forces

LONG-time technology collaborators IBM and SAP will launch their first joint software product in the fourth quarter, a platform that integrates IBM’s Lotus Notes with SAP Business Suite.

Code-named Atlantic, the software would result in a new style of applications that presents information and data in the context of users familiar with the Lotus Notes desktop.

“IBM Lotus and SAP have thousands of mutual customers who have been asking for the functionality that Atlantic software will provide,” said IBM Lotus Software general manager Michael Rhodin.

“The majority of IBM's top 100 customers also use SAP solutions. We're creating a richer collaboration environment,” he said.

SAP's efforts to better integrate its software with platforms like Lotus Notes is part of a strategy to make SAP products more user-friendly and accessible to more of the employees at companies where it is deployed, increasing its user base.

“This agreement is great example of how SAP enables our customers to empower their users by providing easy access to SAP business processes and data through productivity tools and user interfaces of their choice,” said SAP chief technology officer, Vishal Sikka.

Currently planned for inclusion in the first release of project Atlantic is support for SAP workflows, reporting and analytics, and the use of roles from within the Lotus Notes client.

In addition, tools are planned to be included to extend and adapt these roles and capabilities, and to leverage collaborative and offline capabilities inherent in Lotus Notes and Domino products.

The initial release is planned to ship in the fourth quarter of 2008 and will be sold by both companies.

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Oracle acquires BEA, finally

ORACLE has taken another step in march toward domination of the business software market, acquiring BEA Systems after a lengthy struggle for US$8.5 billion (A$9.67 billion).

The deal brings to an end month of acrimony between the companies, after BEA had rebuffed earlier bids from Oracle. It also brings to more than US$35 billion the amount that Oracle has spent on acquisitions over the past three years.

The California-based Oracle has acquired in recent years PeopleSoft and Siebel among dozens of other smaller business software companies.

Oracle chief executive Larry Ellison said the addition of BEA products and technology would enhance and extend Oracle's Fusion middleware software suite.

“Oracle Fusion middleware has an open ‘hot-pluggable’ architecture that allows customers the option of coupling BEA's WebLogic Java Server to virtually all the components of the Fusion software suite,” Mr Ellison said.

“That's just one example of how customers can choose among Oracle and BEA middleware products, knowing that those products will gracefully interoperate and be supported for years to come,” he said.

Mr Ellison said its combination with BEA gave the company a leadership position “at every level of the software stack.”

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Booing IBM stuns Wall Street

IBM has stunned Wall Street with much stronger than expected returns for its fourth quarter, with exceptional growth in international markets.

The company reported fourth quarter revenue of US$28.9 billion (A$32.1 billion), a massive 10 per cent increase over the year-ago quarter.

For the full-year, Big Blue revenue grew 8 per cent to US$98.8 billion.

The company will not release a detailed summary of its Q4 numbers until later this week. But chairman and chief executive Sam Palmisano flagged international markets generally, and the fast growing BRIC economies (Brazil, Russia, India and China) specifically as a driver.

“The broad scope of IBM’s global business – led by strong operational performance in Asia, Europe and emerging countries – drove these outstanding results,” Mr Palmisano said.

“IBM is well-positioned as we begin 2008 as a result of our global business reach, solid recurring revenue stream and strong financial position. We are on track to achieve our long-term earnings-per-share roadmap objective in 2010.”

The weak US dollar helped IBM’s results. The company said its revenue growth would have been a still exceptionally strong six per cent had it not been for currency favourable fluctuations.

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Microsoft’s Raikes to retire

Microsoft Business Division chief Jeff Raikes, a member of the company’s three-man Senior Leadership Team, is to retire from Microsoft after a nine month transition that began this week.

Along with Microsoft chairman and chief technology officer Bill Gates and chief executive Steve Ballmer, Mr Raikes was responsible for developing and guiding Microsoft’s cire business strategy.

The company said it had hired Juniper Networks former chief operating officer Stephen Elop to take over at Microsoft Business Division president, starting at the end of January.

Mr Elop will assume responsibility for the Information Worker, Microsoft Business Solutions and Unified Communications businesses – all previously run by Raikes.

The Server and Tools business will continue to be run by senior vice-president Bob Muglia, but instead of reporting through Raikes will report directly to Steve Ballmer.

Microsoft said Raikes would continue to serve for the next nine months on the Senior Leadership Team to ensure a smooth transition of responsibility.

The appointment of Mr Elop does not represent some kind of generational change. He is 44 compared to Mr Raikes’ 49. But the appointment is a huge step for Microsoft, and represents a fresh set of eyes – and ideas – and the most senior level of management.

While at Juniper Networks, a leading provider of high-performance network infrastructure and a valued Microsoft partner, Mr Elop was responsible for all the company’s product groups, corporate development, global sales and service, and marketing and manufacturing organisations.

Before Juniper, Mr Elop, served as president of worldwide field operations at Adobe Systems, where he was responsible for Adobe’s global sales organisation and all customer-facing functions. He joined Adobe following the 2005 acquisition of Macromedia, where he was president and chief executive.

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Office Live Workspace beta launched

MICROSOFT has started the roll out of its first public beta of its Office Live Workspace product, a kind of hybrid software-plus-services that lets users more easily collaborate across the internet.

Office Live Workspace is a secure online workspace that Microsoft Office users can share Word, PowerPoint, Excel or PDF files – working remotely from virtually any web-connected PC and collaborate on with others.

The services initially gives users 500Mb of storage, and is limited to users in the US, though it is scheduled for roll-out internationally in 2008.

The Office Live Workspace is Microsoft’s hybrid answer to the Google Doc & Spreadsheets service

Microsoft Office director of consumer and small business product management Kirk Gregersen said the product helped solve collaboration challenges by giving everyone in a workgroup access to the same version of a document.

“This is just the start of a wave of new products we’re rolling out to deliver on our vision of software plus services, bringing together the features and performance of software with the convenience and reach of services delivered over the internet,” Mr Gregersen said.

“We think that Office Live Workspace will be important for our 500 million Office customers because it’s one of the first tightly integrated web-based sharing and collaboration services designed to give a seamless experience for Office users,” he said.

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Oracle buys Web apps specialist

BUSINESS software Goliath Oracle has acquired a Dutch software vendor Mobiforce, which specialises in monitoring the availability and performance of web applications.

Oracle said Moniforce’s technology was expected to strengthen its Enterprise Manager suite that lets application administrators to proactively detect and resolve end-user experience and application logic issues.

Moniforce boasts customer spanning key industries, including financial , retail, and government. Financial details of the acquisition were not disclosed.

“The transaction underscores Oracle's strategy of lowering total cost of ownership and delivering higher quality of service for customers running packaged or custom applications in Oracle or non-Oracle environments,” said Oracle Product Development executive vice-president Chuck Rozwat.

Moniforce chief executive Willem-Jan Scholten said real end-user information was essential for improving application usage and business performance – and for lowering total cost of ownership.

“We're proud to become part of the world's largest enterprise software company and look forward to delivering solutions that maximise our customers' return on their application investments by ensuring the highest end-user satisfaction.” Mr Scholten said.

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IBM wins expanded Telstra deal

IT’S not every day that IBM’s global chief rolls into town. So when Big Blue CEO Sam Palmisano blew into Australia for the first time since taking the helm, it was always a good bet that the local subsidiary would make a big announcement.

No surprise that the announcement should involve Australia’s largest company (and a nine-figure number).

IBM said it has expanded its existing seven-year supply chain deal with Telstra, an extension that would deliver $200 million in additional cost reduction benefits to the telecom giant.

Telstra procurement executive director Ian Wheatley said Phase One of the company’s supply chain project with IBM had been a success and the company was on target to save $500 million over seven years.

The next phase of the supply chain transformation program would focus on improving Telstra’s efficiency in ordering, managing and delivering telecommunication parts needed by technicians and engineers to perform network maintenance, fault repairs and activation of customer services.

“In the first phase of our supply chain transformation, we replaced four payment and ordering systems with IBM's out-of-the-box software,” Mr Wheatly said.

“In phase two of the program, IBM will provide a single end-to-end view of our inventory supply chain and enable us to deliver the right part, at the right place, at the right time – improving customer service and reducing costs. This is great news for our customers and shareholders,” he said.

Telstra says it has reduced its procurement costs by $159 million since September last year.

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Microsoft growth surge as Halo returns

SOFTWARE giant Microsoft must be partying like its 1999.

The company announced a revenue surge to US$13.76 billion (A$15.06 billion) for its third quarter to the end of September, a 27 per cent increase over the year-ago period and its faster growth since 1999.

Operating profit and net profit for the quarter were US$5.92 billion and US$4.29 billion respectively, making it a bumper quarter for the company on all measures.

The company pointed to outstanding sales of Halo 3, which achieved the biggest launch day return in game industry history, as one of the reasons for the strong quarter.

But demand had been strong across the board in all its business and entertainment sectors, with continued strong growth expected in the short term.

“This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999,” Microsoft chief financial officer Chris Liddell said.

“Operating income growth of over 30 per cent also reflects our ability to translate revenue into profits while making strategic investments for the future.”

“Customer demand for Windows Vista this quarter continued to build with double-digit growth in multi-year agreements by businesses and with the vast majority of consumers purchasing premium editions,” said Microsoft Platform and Services Division president Kevin Johnson.

Microsoft expects revenue for the full fiscal year to the end of next June to be in the range of US$58.8 billion to US$59.9 billion, with operating income of between US$23.3 billion and US$23.7 billion.

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Big Blue rediscovers appetite for acquisition

US computing giant IBM has rediscovered its appetite for acquisition, buying the Canadian real-time integration and data protection firm DataMirror for US$163.5 million ($187 million) in cash.

DataMirror specialises in software that identifies and captures data that has been added, updated or deleted and allows the changed data to be delivered in real-time to processes, applications and databases.

The DataMirror software ensures continuous, accurate and trusted information is available to decision-makers.

“Organisations need the ability to capture and use information in real-time to help them make better business decisions, better serve their customers and increase operational efficiencies,” said IBM Information Management general manager Ambuj Goyal.

“The combination of DataMirror technology and IBM information management software will help customers bring real-time data analysis closer to actual business processes, allowing them to be more competitive and to generate more value from their information,” Mr Goyal said.

IBM's strategy is to provide customers with the data they need – when they need it – to help them quickly respond to changing market demands, rapidly identify new business opportunities, and improve business results.

For example, with DataMirror technology, a retailer can incorporate information from point of sale systems into a data warehouse in real-time and automatically trigger important business decisions and events, such as replenishing low stock based on current sales and inventory figures.

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EU to rule in Microsoft anti-trust case

THE long-running European Union anti-trust case against
Microsoft will come to a conclusion in two months, with the EU court hearing the case announcing it hand down a decision on September 17.

The case has been one of the longest and most-watched regulator actions in EU history – not least because Microsoft has so vehemently resisted.

The European Court of Final Instance, the second highest court in the EU judicial infrastructure, said it would release its decision at 9.30 in the morning on September 17.

The European Commission fined Microsoft Euro497 million (A$784 million) for abuse of its market power related to the distribution of its Windows desktop and server operating systems.

Much of the court action related to the Microsoft Media Player software. Microsoft was ordered in 2004 to sell versions of Windows without Media Player, as well as to make available the software code underpinning Windows to allow Media Player competitors better access to the Windows desktop.

Microsoft appealed those decisions in the European Court of First Instance in April last year.

In July last year, the European Commission daily fines that have added up to nearly Euros300 million for not adhering to the ruling. Microsoft has paid the fines, but is appealing the decision that applied them – and clearly wants its money back.

While the court ruling is being closely watched, and will give direction to the dispute, it may not be the end.

Microsoft said in a statement: “We look forward to receiving the court's judgement and continue to work with industry and government on the best way to serve the needs of customers and communities in Europe.”

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Yarra Valley Water chooses Oracle

MELBOURNE utility Yarra Valley Water has selected an Oracle platform for a massive rip and replace billing system renewal project.

The company, which is the water and sewerage provider 1.5 million people in the Melbourne area, selected Oracle Utilities package to build a scalable new billing platform.

Yarra said its legacy billing system had grown too difficult and costly to upgrade and maintain. Coupled with changing customer demands, the legacy system could not easily accommodate changes in Yarra Valley Water's business, and persisting with it only increased business risk.

The new billing system will be built on Oracle Utilities applications to deliver the scalability and flexibility Yarra Valley Water requires in updating billing service and maintaining high standards of quality customer care.

“Accelerating our customer service from ‘good to great’ is critical to our business,” Yarra Valley Water managing director Tony Kelly said.

“We selected Oracle Utilities Customer Care and Billing over other competing solutions because Oracle offered the flexibility, scalability and service our company requires to effectively meet the service standards demanded by our customers while remaining cost competitive.”

Yarra Valley Water wanted a commercial-off-the-shelf billing solution that would accommodate the company's specific needs with minimal customization, thereby reducing the costs associated with implementing and maintaining the system and lowering the total cost of ownership.

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Motorola extends Microsoft ERP partnership

MOTOROLA and Microsoft have extended a relationship that lets joint partners develop Microsoft ERP applications for Motorola mobile computing devices.

The relationship, which was announced as part of a launch of new development tools for the Microsoft Dynamics enterprise resources planning software, paves the way for the Motorola partners to port their existing enterprise mobility platforms to the Microsoft Dynamics platform.

Because enterprise mobility solutions require both hardware and software applications, the relationship between Motorola and Microsoft presented new opportunities for both vendors' channel partners, the companies said.

As a result of the agreement, Motorola and Microsoft partners will now be able to join the other vendor's partner community following a qualification process. Alternatively, partners will also be able to work collaboratively with each other to create more comprehensive solutions for their customers.

Motorola is encouraging Microsoft resellers to join its highly-regarded enterprise mobility PartnerSelect program.

"We have been working very closely with Motorola Enterprise Mobility Solutions in the development of our tools and applications for well over a year," Microsoft Dynamics Mobile product unit manager Bjarne Schøn said.

"We are very excited about teaming with Motorola and its mobility solutions partners on a global basis. As a leader in enterprise mobility, Motorola has a strong partner program and the broad coverage needed to support Microsoft Dynamics' efforts to provide mobility solutions to our customers."

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Google turns screws on MS anti-trust complaint

STILL unhappy with the treatment of its search engine by Microsoft , Google has applied to the US Judge overseeing the Microsoft anti-trust case to be allowed to participate as a “friend of the court.”

Google is unhappy about the way Microsoft treats search in its Vista operating system, saying it breaches the consent decree that settled the epic government anti-trust case against Microsoft.

Effectively Google wants better access to Vista desktop real estate. It says Microsoft makes it too hard for its Vista users to shift from Live search to the Google engine.

Last week, US District Court Judge Colleen Kollar-Kotelly said she would revisit the plaintiffs in the case – that is, the Federal and state attorneys general and Microsoft – rather than Google on whether Vista breached the consent decree.

The judges decision followed a request by Google to extend the consent decree and to clarify agreements reached between Microsoft and the anti-trust plaintiffs over Vista search.

In its latest filing, Google says it can offer the court important insight into Microsoft behaviour.

“As the developer of a major desktop search product and the company that brought the desktop search issue to the attention of the plaintiffs, Google has familiarity with the issues raised and is well positioned to provide information to the Court,” the company said in court documents.

Google is concerned that the changes Microsoft has committed to making to its Vista operating system don’t actually address its concerns. In addition to clarification of how that agreement will work, it wants direct input in the proceedings.

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Google turns screws on MS anti-trust complaint

STILL unhappy with the treatment of its search engine by Microsoft, Google has applied to the US Judge overseeing the Microsoft anti-trust case to be allowed to participate as a “friend of the court.”

Google is unhappy about the way Microsoft treats search in its Vista operating system, saying it breaches the consent decree that settled the epic government anti-trust case against Microsoft.

Effectively Google wants better access to Vista desktop real estate. It says Microsoft makes it too hard for its Vista users to shift from Live search to the Google engine.

Last week, US District Court Judge Colleen Kollar-Kotelly said she would revisit the plaintiffs in the case – that is, the Federal and state attorneys general and Microsoft – rather than Google on whether Vista breached the consent decree.

The judges decision followed a request by Google to extend the consent decree and to clarify agreements reached between Microsoft and the anti-trust plaintiffs over Vista search.

In its latest filing, Google says it can offer the court important insight into Microsoft behaviour.

“As the developer of a major desktop search product and the company that brought the desktop search issue to the attention of the plaintiffs, Google has familiarity with the issues raised and is well positioned to provide information to the Court,” the company said in court documents.

Google is concerned that the changes Microsoft has committed to making to its Vista operating system don’t actually address its concerns. In addition to clarification of how that agreement will work, it wants direct input in the proceedings.

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