Dell to Acquire Perot Systems for $3.9 Billion, Creating Comprehensive, Customer-Focused IT-Solutions Company

ROUND ROCK and PLANO, Texas, Sept. 21, 2009 — Dell and Perot Systems have entered a definitive agreement for Dell to acquire Perot Systems in a transactiondell valued at approximately $3.9 billion. Terms of the agreement were approved yesterday by the boards of directors of both companies.

The acquisition will result in a compelling combination of two iconic information-technology brands. The expanded Dell will be even better positioned for immediate and long-term growth and efficiency driven by:

  • Providing a broader range of IT services and solutions and optimizing how they’re delivered;
  • Extending the reach of Perot Systems’ capabilities, including in the most dynamic customer segments, around the world; and,
  • Supplying leading Dell computer systems to even more Perot Systems customers.

Complementary Capabilities

Dell and Perot Systems share several key characteristics and our products, services and structures are overwhelmingly complementary. They have similarly strong, relationship-based business cultures. People in both organizations are recognized for helping customers thrive by using IT for greater effectiveness and productivity. The combination also provides some compelling opportunities for improved efficiency, which will benefit our customers even further.

Dell’s global commercial customer base spans large corporations, government agencies, health-care providers, educational institutions, and small and medium enterprises (SME). The company’s large existing services business includes breakthroughs in the concept and delivery of modular services, as well as expertise in infrastructure consulting and software-as-a-service. Dell is a leader in computer systems, including standards-based network servers, and in the fast-growing segment of data-storage hardware.

Perot Systems provides world-class services, including in applications, technology, infrastructure, business processes and consulting. The company is a leading provider to clients in health-care, government and other commercial segments, from SMEs to the largest global institutions. Perot Systems has a large and growing base of customers and service-delivery capabilities in North America; Europe, the Middle East and Africa; and Asia.

Over the past four quarters Dell and Perot Systems had a combined $16 billion in enterprise-hardware and IT-services revenue, with about $8 billion from enhanced services and support.



Net Neutarlity

internet-mapAfter months — nay, years — of wrangling over network neutrality (the notion that all internet traffic should be treated equally, and that service providers should not be allowed to treat differently or charge extra for certain types of traffic or data from certain websites) is back.

Today the Federal Communications Commission has proposed two new rules for how Internet traffic should be treated, hamstringing ISPs that have degraded certain types of traffic (mainly peer-to-peer transfers) and, in some cases, ISPs that may have started collecting money from certain content providers in exchange for a “fast track” for their content.

In a blog post, FCC chairman Julius Genachowski said that he was undoing all of that in a quest to “preserve a free and open Internet, helping to ensure a future of opportunity, prosperity, and the vibrant flow of information and ideas.”

The two new rules being proposed are simple and as follows. Again from Genachowski’s post: “The first says broadband providers cannot discriminate against particular Internet content or applications. The second says broadband providers must be transparent about their network management practices. These principles would apply to the Internet however it is accessed, though how they apply may differ depending on the access platform or technology used. Of course, network operators will be permitted to implement reasonable network management practices to address issues such as spam, address copyright infringement, and otherwise ensure a safe and secure network for all users.”

And with that, the idea of ISPs charging extra just because you watch of lot of YouTube — or blocking you from visiting the site — goes out the window. Naturally, network neutrality advocates, who’ve lobbied for such rules for years, are dancing in the streets. ISPs are less celebratory.

What’s next? The FCC goes into formal lawmaking mode next month and will need to put the new suggested rules out for public comment. The final rules, however they evolve, will then have to be approved by three of the FCC’s five commissioners. But none of those appear to be substantial obstacles to network neutrality ultimately being implemented. Net neutrality looks like it will soon be here to stay.


U.S. Leadership in IT Industry is Growing, Even in Tough Economic Environment

WASHINGTON, — The Economist Intelligence Unit’s annual study, sponsored by the Business Software Alliance (BSA), reveals thatit countries in Asia, Latin America and Europe are taking deliberate steps to improve their technology environments, although the U.S. remains the leader in providing the most competitive conditions for the information technology (IT) industry.

The United States still ranks first in the world in the annual IT Industry Competitiveness Index, which was conducted by the Economist Intelligence Unit, the business information arm of The Economist Group. The United States scored a 78.9 out a possible 100 in the index. However, the U.S. lost ground to competitors in a number of areas, while Finland jumped from 13 in the 2008 rankings to number two in 2009 and surpassed the United States in the quality of its business environment.

Source: Reuters

Get ready for virtualization to affect you, too

VMware CTO Stephen Herrod

VMware CTO Stephen Herrod

(Credit: Screenshot by Stephen Shankland/CNET)
SAN FRANCISCO–If the average person has heard of virtualization at all, the idea probably left little impression beyond something to do with running corporate data centers packed with computing hardware.

But the era in which virtualization directly affects ordinary folks, too, is on its way.

The company in the forefront of the technology, an EMC subsidiary called VMware, drew 12,488 people to its VMworld conference here this week, and one theme of the show was the growing push to move the technology beyond the server realm. Initially that means PCs, but the company demonstrated its technology on mobile phones, too.

What is virtualization? Simply put, it lets a single computer run multiple operating systems at the same time in compartments called virtual machines. Each instance of an operating system runs on a virtualization layer rather than on the actual computer hardware. The company in charge of that foundational layer has tremendous power in the computing industry.

VMware has competition from Citrix, Red Hat, Microsoft, and others, but for now its head start, corporate alliances, and solid technology give it a lead in the market. Most of VMware’s business comes from virtualizing servers, which lets companies replace a host of largely idle machines with one that’s running full tilt, but the company is working to expand into many new markets.

Employee-owned IT
Before it met its present success in the server market, VMware got its start on PCs. Virtualization proved useful, for example, for developers who wanted to switch rapidly among different versions of an operating system to test their software or different versions of a browser to test their Web pages. VMware also can help people run Windows, Linux, and Mac OS X on the same machine–but again, that’s not a mainstream need.

But as VMware sees it–and I think there’s some merit to this belief–virtualization could become more widely used as a way to smooth the differences between people’s own computer preferences and their employers’ needs.

In the “employee-owned IT” vision, virtualization could let people put a corporate-managed virtual machine on an personal computer. The corporate partition would run only company-approved applications and could connect to the company network; the personal half could run the chaos of other programs that cause corporate IT folks to grind their teeth.

VMware has a technology–formerly called Virtual Desktop Infrastructure and now sporting the more palatable name of VMware View–that also could fit into this idea. With it, the brains of a PC actually run on a central server, with a person’s local machine serving as a mechanism to show the display and capture mouse clicks and keystrokes. So an employee’s corporate PC could actually be housed at the corporate and piped over the Net to wherever the employee happens to be.

VMware’s View demonstration featured graphics acceleration using Microsoft’s DirectX 3D graphics and full-motion video–albeit a with some jerkiness. Hardware support in newer Intel and AMD processors also speeds virtualization performance.

VMware View is latest twist on a technology called thin client computing. That approach has found a solid niche in some large businesses but that never has caught on widely. In my opinion, though, the greater challenge comes from an entirely different way of attaining the same centralized goals: cloud computing.

Cloud computing, in which applications run over the Web in Web browsers rather than natively on PCs, provides another way to provide access to corporate resources. It can’t do everything, but it’s gradually maturing as a way to run software. And it has the advantage of requiring only a modern browser rather than VMware’s software.



Microsoft Hit With Two More Patent Suits

microsoft3A Texas judge’s order that Microsoft pay more than $240 million in damages to an obscure Canadian firm and stop selling its popular Word program within 60 days appears to have triggered more patent suits against the software maker in the plaintiff-friendly Lone Star State, InformationWeek has learned.

Allvoice Developments US, a provider of speech recognition systems, and mobile software developer EMG Technology both filed suits against Microsoft in recent days in the U.S. District Court for Eastern Texas, where judge Leonard Davis a week ago ruled in favor of Toronto-based i4i in its action against Microsoft.

Allvoice claims that speech recognition support built into Windows XP and Windows Vista violates its patent on the technology. Allvoice also alleges that Microsoft discussed using its technology in Windows but later rejected it. Allvoice is seeking unspecified damages against Microsoft.

EMG, meanwhile, contends that Microsoft’s Windows CE, PocketPC, and Windows Mobile products infringe its patent for viewing Web content on a mobile device. EMG also lists investment broker Scottrade and Southwest Airlines in its complaint.

EMG is seeking unspecified damages.

While the actions might ordinarily be dismissed as nuisance suits brought by patent trolls (EMG, which has a barely functioning Web site, previously filed a case against Apple), Judge Davis’ stunning order last week in favor of i4i shows anything’s possible in the Eastern Texas federal court jurisdiction.

A 2006 New York Times article labeled the Eastern District’s Marshall, Texas base “the patent lawsuit capital of the nation, where plaintiffs are more likely to get a favorable judgment.” Some of the Court’s rulings have raised concerns about software patents and sparked calls for reform.

Davis last week took the unprecedented step of ordering Microsoft to stop selling Word 2003 and Word 2007 in the U.S. within 60 days. The decision shows just how far Eastern Texas jurists are willing to go—not only at the expense of corporations but also at that of consumers—to protect what they see as patent plaintiff’s rights.

Microsoft said it plans to appeal Davis’ ruling. On Friday, the company filed an emergency motion that would forestall its having to post a bond against the millions in dollars in damages Davis levied against it—including $40 million the judge imposed for what he said was Microsoft attorneys’ trial misconduct.

Source: InformationWeek

Judge orders Microsoft to stop selling Word

SEATTLE — A federal district court judge has ordered Microsoft (MSFT) to stop selling Word in the U.S. — and the tiny company behind the lawsuit is digging in for a David vs. Goliath showdown.

Toronto-based i4i, which has 30 employees, claims that Microsoft violated an obscure patent related to Extensible Markup Language or XML. It’s a key software component of many websites and computer programs, including Word.

Judge Leonard Davis agreed Tuesday, ordering Microsoft to pay $290 million in fines and stop selling Word in the U.S. in 60 days. That could derail a core business for the world’s largest software maker.

As part of Microsoft Office, Word is used by hundreds of millions of people worldwide. Office accounted for more than $3 billion in sales in the company’s last fiscal year.

“It’s not a question of fear or pride or anything else,” Loudon Owen, i4i chairman says. “We’re very respectful of Microsoft, but when you’re in the right you have to persevere.”
FIND MORE STORIES IN: Microsoft | Research In Motion

Microsoft plans to appeal. “We are disappointed by the court’s ruling,” said Microsoft spokesman Kevin Kutz in a statement. “We believe the evidence clearly demonstrated that we do not infringe and that the i4i patent is invalid.”

I4i, which mainly makes software for drug and defense companies, obtained the patent for a “customized XML” tool in 1998. XML is a specialized alphabet that can capture any kind of computer file as a regular text.

Microsoft started using XML as an alternative way to save Word files in Word 2003 and made it the default format for all Office files in Office 2007.

This made it easier for Microsoft and its partners to create programs such as accounting software that generates reports in Word formats, says Rob Helm, analyst at research firm Directions on Microsoft.

I4i sued Microsoft in 2007, claiming that Word uses the patented process. Now, “Microsoft is behind the eight ball and has 60 days to see if it can get the federal appeals court to stay the injunction,” says Henry Sneath, a Pittsburgh intellectual property lawyer.

No one expects Microsoft to actually pull Word off the market. It’s a big company with deep pockets that has faced many legal challenges over the years. It could win the appeal, settle with i4i, or even buy out the company.

Source: USA Today

L.A. weighs plan to replace computer software with Google service

google_cloudsIf OKd by the City Council, the plan would shift protection of internal data and public records from the city to the Internet giant. The LAPD has raised concerns about shielding arrest information.

Frustrated by a slow and antiquated computer system, the city of Los Angeles is weighing a plan to replace its e-mail and records retention software with a service provided by Google, a move that could allow the Internet giant to retain sensitive records transmitted by the police and other municipal agencies.

If approved by the City Council, responsibility for protecting the internal data and public records would be shifted from the city to Google, according to a report submitted this week to a council committee that will weigh the proposed $7.25-million contract.

Mayor Antonio Villaraigosa favors the effort to modernize the e-mail system, which his spokesman, Matt Szabo, described as “Pac-Man-era technology.”

The current system “has got to be the slowest, most inefficient, crash-prone e-mail system in the history of mankind,” Szabo added.

Los Angeles Police Department spokesman Lt. John Romero said it would be inappropriate for his agency to comment while a contract is being negotiated. But acting City Administrative Officer Ray Ciranna, the city’s top financial advisor, said the LAPD has raised questions about Google’s ability to shield sensitive arrest information.

“Of all the city agencies, they certainly have been the one that’s the most concerned,” Ciranna said. “They don’t want any information that, for any reason, gets un-encrypted and you have sensitive information being leaked out.”

Washington, D.C., is the only major city using Google e-mail and office applications, but others are contemplating a switch, according to a Google official. The applications and data would be housed on Google servers, not on city property, and accessible via presumably secure Internet connections.

‘Cloud computing’

That system, known as “cloud computing,” would eliminate the need for the city to store programs or information on individual in-house computers. “Government agencies at all levels — federal, state and city — are looking to cloud computing as a way to advance innovation while decreasing costs,” Google spokeswoman Aviva Gilbert said.

The contract, which could cover a maximum of five years, would need approval from the full council and Villaraigosa’s signature. A high-level official with the city’s Information Technology Agency, which has handled the bidding process, said he expects the LAPD to join the Google e-mail system once it receives assurance from the state’s Department of Justice that arrest records will be protected.

“Until they get the full approval, they can’t join the e-mail system,” said Kevin Crawford, assistant general manager of the technology agency.

The contract will come up for review Tuesday before the council’s three-member Information Technology and General Services Committee.

Gilbert, the Google spokeswoman, said cloud computing has proved to be reliable and secure, with Motorola, Genentech and other companies adopting it.

Still, questions about such applications were raised by the media earlier this week after Twitter Inc.’s cloud-based computer system was broken into and confidential documents were copied. The hacker appears to have guessed the password for an employee’s personal e-mail account and worked from there to steal confidential company documents.

Internally, city officials also have asked whether Google, as keeper of the records, would be forced to respond to public information requests. “Release of this data by Google without appropriate review by the city attorney could compromise the city’s position regarding pending or potential litigation,” the report states.

City officials hope to have the Google system installed before Dec. 31. If the council misses that deadline, the city could be required to pay for continuing maintenance on the current GroupWise e-mail system. City workers have complained that the existing system crashes frequently and lacks sufficient memory, among other things.

Peter Scheer, director of the California First Amendment Coalition, said the switch to Google also could improve access to public information, especially by attorneys or reporters.

Google has “remarkably sophisticated” search capabilities and provides a huge amount of database storage at minimal cost, Scheer said. “If you’re asking for information, it’s more likely you’ll get a more complete and accurate response to your request, sooner rather than later.”

Paul Weber, president of the Los Angeles Police Protective League, which represents the city’s police officers, said the LAPD has not discussed the proposed contract with his union and cautioned it to move in a “deliberate manner.”

‘Serious breach’

Last month, the league accused the LAPD of a “serious breach of privacy” involving officers in the 77th Street Division’s Gang Enforcement Unit. Officers in that unit who were being audited found that their names and serial numbers had been sent to recipients of the Police Commission’s meeting agenda, according to a letter to officers.

“If the department were to have their information compromised, it would seriously impact the public’s confidence in our department and impact our ability to police the city,” Weber said.

Scheer said it’s in Google’s own financial interest to ensure that data remain secure. If the company’s systems suffer any sort of breach, they could potentially lose billions of dollars of business. “The bigger Google is, the more careful they are going to be about protection of rights and privacy and rights of access,” he said.

Source: LA Times