Microsoft at the altar

All dressed up and no place to go? Microsoft’s deadline for its US$41.2bn bid for Yahoo! has come and gone and the company remains undecided about what to do now. The fact is that the world’s biggest software company needs to act if it wants to prevent itself sliding into the status of a yesterday’s man in the fast-changing tech world.  It’s shares have dropped 20% this year and last week it announced a 11% fall in quarterly earnings. It’s not even certain that an agreed purchase of Yahoo! - a clear second to Google in the online world - would return Microsoft to a growth path.

The company, however, is sitting on an embarassment of riches thanks to its near monopoly of the PC operating environment to date. It’s net cash as of March 31st was a stunning US$11.8bn, up from US$7.6bn a year ago. In its latest quarterly statement, Microsoft stated that about 9% of its pre-tax earnings came from investment income. If it can’t find a home for this money, it’s going to become a bank, not a technology company. In the meantime, it remains a very rich groom indeed.

The Oracle

While not exactly blue skies, there was a distinct lack of storm clouds in Oracle’s third quarter results released this week. True, the company came in at the low end of its own expectations, saying that software licensing revenues were up 16% for the quarter ended in February. It had been hoping for a jump of between 15-25%.

But Oracle’s recent acquisition strategy is providing a nice updraft. With a much stronger application software than IBM - and a wider middleware line-up than SAP - Oracle is now the only company other than Microsoft able to sell a full “stack” of software to corporate customers.

The results speak for themselves - new database and middleware licenses were up 20% in the quarter. And overall, Oracle took in $1.3bn in net income, an increase of 30%, on revenues which grew 21% to $5.3bn. The company’s CFO says that its taking more time to close deals these days but predicts that current quarter will see sales growth of 10-20%. 

If the US is on the brink of recession, maybe someone should tell the folks at Oracle?

Shattering the mobile experience

There’s been a lot of activity around mobile software platforms and application development this week. Microsoft has made its Silverlight web platform available on some of Nokia’s phones, Google has revealed that its own Gears platform can now be used on Windows Mobile devices and Apple is getting ready to launch its software development kit for the iPhone later today.

It makes the mobile sector sound like a rich emporium for the end user. But it really goes to show just how fragmented the industry has become. Take the iPhone, for example. It may be a great-looking device – possibly even a revolutionary design – but it presents third-party application developers with a tough choice. Do they invest precious time in writing a version of an existing application for the iPhone? Or is it better to invest those resources in coming up with a new application for a Symbian handset?

Making that decision probably means spending even more time analysing the market and trying to figure out whether the iPhone will become a serious rival to Symbian smartphones. And meanwhile the customer is left waiting.

Sadly, things look set to get even worse with the summer arrival of Android, Google’s hyped operating system for mobile phones. Android is eagerly awaited by those who reckon it will lower pricing and improve the experience of using mobile applications. Yet it’s described as “another bloody platform” by Carl Uminski, the chief technology officer of Trutap. That’s telling, because Trutap is exactly one of the third-party application developers Google would assume is on its side.

Uminski’s not the only one feeling exasperated. Charles Wiles says he’s working to bring Windows-compatible software to Android and other capable web browsers. Who is he? The product manager for Google Gears.

Oracle vs SAP - The gloves come off

Jason Karaian at GTF’s sister site, cfo.com, reports that Oracle’s suit against SAP is a sign that the industry’s nasty infighting is getting even nastier.

 Oracle is suing SAP  for allegedly hacking into its customer-support database and stealing sensitive information that it used to lure customers from its fierce rival. The argument is over TomorrowNow, SAP’s support-services arm, one of many third-party maintenance firms chipping away at Oracle’s high-margin, vendor-provided support for JD Edwards, PeopleSoft, Siebel, and other recent acquisitions.

Jason points out that, “dripping with snark and venom”, Oracle’s complaint makes compelling reading for anyone interested in the enterprise software industry. In attacking SAP, however, Oracle isn’t doing itself any favors. For example, the company maintains that TomorrowNow, with its relatively small staff, couldn’t possibly offer deep discounts on maintenance services without extensive access to pilfered proprietary information, because of the hundreds of regulatory updates, bug fixes, etc that a customer would need to maintain Oracle software.

This isn’t the first time that Oracle’s and SAP’s dirty laundry has been washed in public, cfo.com points out. When Oracle was fighting for antitrust clearance to purchase PeopleSoft, a document dump by the DoJ provided an inside glimpse at the tactics top vendors use to lure customers, including several revealing memos on the extent of discounts they were willing to offer. There were also plenty of colorful E-mail exchanges, including Oracle boss Larry Ellison declaring that  “best of breed is dead - except at dog shows, “ while another Oracle executive eagerly passed on to colleagues advice on dealing with the DoJ from a “master,” the soon-to-be-incarcerated ex-CEO of Computer Associates, Sanjay Kumar.

While it’s too early to tell which way the chips will fall, ultimately this spat can only hurt both of the participants. Smaller competitors are no doubt looking on with undisguised glee.