Wednesday, 09 March 2005 18:00

News Roundup 9 Mar 2005


Top database makers maintain market ranking: IDC

The top five database software makers kept their market-share rankings in 2004, with Oracle retaining the top slot, but Microsoft saw the fastest growth from 2003, industry researcher IDC said on Monday.

The New York Times/Reuters report (7 Mar.) that IDC said Oracle, long the industry leader, had a 41.3 percent share of the so-called relational database market, based on preliminary 2004 revenue data, with 14.5 percent growth from 2003.

IDC said the market grew by 12 percent in 2004 to US$15 billion, after rising 6 percent in 2003, says the NYT.

Microsoft, the world's biggest software company, retained its No. 3 position with 13.4 percent of the market, and saw 22 percent growth from 2003 to 2004, says the paper.

The paper also says that IBM remained No. 2 with 30.6 percent of the market, and 8 percent growth from 2003, IDC said.

The research group said 2004 database deployments probably grew faster than revenues, citing "strong downward price pressure caused by tight competition among the big three vendors and a little bit by the presence of open source" database products, reports the NYT.

The paper reports that IDC said the US dollar's weakness, especially relative to the euro, resulted in higher incomes for US companies in dollar terms that were "far less spectacular in local currency."

Looking ahead, IDC said it expected Oracle and IBM to aggressively try to take market share from Microsoft in the sector that caters to small-and medium-sized businesses, reports the paper, adding that IDC said all three companies will also face continued competitive pressures from open-source database products, such as Linux.

Search giants consider VoIP

Internet and telecom luminaries are gathering this week in California for Voice on the Net, a conference dedicated to promoting and exploring VoIP, the fast-growing technology for delivering voice calls over Internet Protocol.

The New York Times reports (7 Mar.) that signs of activity in the space are growing, with America Online planning to enter the crowded VoIP arena later this month with its own phone service. That move has heightened speculation that on the horizon are similar announcements from AOL's biggest web rivals--Yahoo, Microsoft's MSN and Google.

The paper says Yahoo and MSN have long offered rudimentary phone service using their instant-messaging software and a PC. Now there are signs that all of the major web portals are exploring whether it makes sense to expand those offerings further.

Yahoo has already launched a PC-based voice service in the United Kingdom. Microsoft plans to embed voice calling into its enterprise instant-messaging software. And rumors continue to swirl about whether Google is building the foundation for its own VoIP project, starting in the United Kingdom, says the paper.

According to the NYT report, Google has not announced plans to offer VoIP service, and while none of the three - Google Yahoo and MSN - has yet outlined a VoIP strategy, the technology is proving hard for them to ignore. Millions of people are signing up for cut-rate and free plans that route voice calls over a broadband connection. Dozens of competitors have jumped into the market, offering VoIP plans for as little as US$14.95 a month, putting new pressure on traditional phone providers, says the paper.

The paper says that all of the portals have begun tentatively checking out VoIP providers to test possibilities, according to sources familiar with the talks.

The NYT adds that one company that has attracted attention among the web giants is Skype, a peer-to-peer VoIP provider based in Europe that lets people make free international calls from their PCs. The appeal in Skype lies in its rapidly growing user base, although the company has not figured out how turn those users into a more powerful and profitable business.

The paper says Skype's web site boasts more than 80 million downloads, 5.6 billion minutes served and more than 1 million people using the service at one time. Numbers like that could tempt someone looking for a VoIP foothold to look at partnering with--or purchasing--the company.

Not everyone believes that VoIP would pay off big for the portals, says the NYT., adding that Yahoo and MSN count some of the Baby Bell local phone companies as partners, discouraging big investments in the space. Yahoo recently extended its deal to bundle its services into SBC Communications' DSL customers, and it takes a cut of revenue from customers who sign up. SBC is also testing Microsoft's Internet television technology for possible use in a new broadband TV service slated for limited launch later this year, reports the paper.

The NYT also says that cable companies in particular are investing heavily in VoIP, with many of them swapping out traditional circuit-switched voice calls to IP-based services. Last year, Time Warner Cable, which never warmed up to the circuit-switched business, began trialing a VoIP service and has since introduced it to all of its markets. At the end of 2004, Digital Phone, as it's called, had 220,000 customers, while Cablevision reported 273,000. Comcast also plans to join the VoIP fray, said the paper.

Radio tags for airline bags - not quite yet

Advocates of new technology which would see airlines put radio frequency identification tags on baggage say that it is ready for use, but that major airlines would each have to invest tens of millions of dollars to adopt RFID luggage tracking.

The New York Times reports (7 Mar.) that for the last several years, the airlines have envisioned sharply reducing the infuriating problem of lost baggagewith the new radio frequency identification, or RFID, tags that identify and track items with a precision unmatched by today's bar code scanning systems.

However, the paper says most airlines are in such dire financial straits that that kind of money could be as hard to come by as legroom in coach (economy).

The NYT quotes a spokesman for Texas Instruments, a supplier of RFID devices as saying that until it's required, I don't think airlines are going to have an incentive to roll it out throughout their entire system. Airlines are concentrating on keeping their doors open for business," said the spokesman.

However, the paper says that by some estimates, the investment needed to move to radio tag technology could be recouped remarkably quickly. Today's bar code scanning systems fail to identify as many as 15 percent to 20 percent of the bags moving past automated checkpoints, leaving increasingly understaffed baggage handling crews to identify visually bags by their tags and to redirect them to the proper flights.

The paper says the industry tracks its bag-handling performance by measuring bags lost per 1,000 customers. While that number was below five in 2004, that stills adds up to millions of bags going astray annually. Chasing down misdirected luggage and paying claims on lost bags can cost US$100 to US$200 a bag, according to industry estimates.

According to the NYT., in test projects at airports, RFID systems, which use scanners to read codes embedded in microchips sealed inside plastic tags, have accurately identified bags 95 percent of the time they passed a scanner. Such results suggest that RFID systems could eliminate more than two-thirds of the lost baggage problem on average, and perhaps do even better as they were fine-tuned, technologists said.

The paper says that according to SITA, a technology consulting group for the airline industry that is based in Switzerland, the airlines could save US$650 million annually from worldwide deployment of radio tags on luggage.

A leading integrator of information technology for the airlines, Unisys, said the back-end computer systems required to process the data are much more complex than people initially understood, and some airport baggage equipment must be modified to support reliable radio tag scanning. The metal bins that hold bags for loading onto airplanes, for example, interfere with radio signals and might have to be covered or replaced.

The NYT says that another challenge for airlines and airports is making certain that the luggage tags can be distinguished from tags in other RFID systems being developed to identify aircraft parts used in maintenance and to track movements of airport service vehicles.

Texas Instruments Lowers Its Sights on Sales

Texas Instruments, one of the world's biggest makers of cellphone semiconductors, has announced that first-quarter sales and profit would be at the low end of forecasts as demand for chips used in televisions falls and clients deplete inventory.

The New York Times/Bloomberg News report (8 Mar.) that in a scheduled update, the company has said that sales would be US$2.91 billion to US$3.03 billion, compared with the US$2.9 billion to US$3.14 billion predicted in January. Net income will be 22 cents to 24 cents a share, after a forecast of 22 cents to 26 cents, the company said.

The paper says chip orders for large-screen televisions and projectors are trailing predictions, Texas Instruments, which is based in Dallas, said. Big phone makers have also reduced purchases to sell off inventory built last year, analysts said.

Texas Instruments has been speeding up production this quarter, anticipating higher growth rates from top clients including Nokia.

The NYT says that Texas Instruments faces stiffer competition from Qualcomm, its nearest rival in the mobile-phone chip business, as they pursue sales of processors for higher-speed handsets. Qualcomm's largest client is Samsung Electronics, a leading cellphone maker. Texas Instruments said in February that it had won its first order for an applications processor from Samsung.

The paper says Qualcomm, based in San Diego, said fiscal second-quarter sales might trail the company's January forecast and profit might be higher than expected.

Texas Instruments is reducing its reliance on Nokia, which accounted for less than 10 percent of Texas Instruments' sales in 2004, compared with about 14 percent in 2003, says the paper.

Microsoft's 'Project Green'

Microsoft, after making several acquisitions to get itself in the business applications game, has now developed "Project Green," an effort that would bring the various products under a single code base in a few years.

But, the New York Times/CNet reports (8 Mar.) that the plan turned out to be both quicker than customers wanted and sooner than Microsoft could deliver.

At its annual Convergence conference yesterday, Microsoft laid out a plan that will get the company there--eventually, observes the NYT/CNet. 

Befitting the event's coastal California locale, Microsoft Senior Vice President Doug Burgum laid out a plan where the commonality will come to the disparate products in a series of waves, report the NYT and CNet.

The paper and CNet say that initially, Microsoft is focusing on a couple of areas. One is drawing each of the business applications closer to other Microsoft products, namely adding business intelligence features that tie into its SQL Server database and portal services from the company's SharePoint product line. The other effort focuses on allowing the products to share a common Web services structure to connect with each other and with other software. That wave starts now, but is likely to continue until 2007.

The NYT/Cnet add that a second wave, running through the end of the decade, is tied to Microsoft's Longhorn era of products and gets the company closer, but not all the way toward its goal of a single shared code base. The company plans to tap advances not just in the operating system, but also in the next version of the company's Visual Studio programming tools, report the NYT/CNet.

Intel Warned by Japan Watchdog

Intel has received a warning from Japan's Fair Trade Commission about unfair business practices, the regulator said on Tuesday, marking the FTC's second such action against a computer industry giant following a similar move against Microsoft last July.

The New York Times/Reuters report (8 Mar.) that Intel immediately disputed the warning, which was issued to the Japanese unit of the world's largest microchip maker and came with no monetary penalty.

The paper says that the antitrust watchdog said the unit stifled competition in the microprocessor market by offering rebates to five Japanese personal computer makers that agreed either not to buy or to limit their purchases of chips made by Intel's rivals, namely Advanced Micro Devices (AMD) and Transmeta. The FTC said such practices had been going on since May 2002 after the inflow into Japan of low-priced personal computers heated up competition in the domestic market, prompting Japanese PC makers to turn increasingly to AMD and Transmeta chips that were typically offered at a discount to Intel products, report the NYT and Reuters.

But, according to the NYT., Intel said its business practices were fair and lawful and expressed concerns the FTC's finding was not based on antitrust principles commonly accepted worldwide. It said it would evaluate the warning before deciding its next step.

Intel's microprocessors, the brains of personal computers, account for nearly 90 percent of the Japanese market, the FTC said. The commission in April raided Intel's Japanese unit in a probe into possible antitrust violations, stirring up decade-old allegations from competitors that Intel's business practices are unfairly aggressive, says the NYT.

Microsoft's warning from the FTC said the software giant should scrap a provision in its licensing contracts with PC makers that prevents them from filing patent infringement suits if they find Microsoft's Windows software contains features similar to their own technology.Microsoft chose not to accept the warning and now the FTC's court-like body is reviewing the matter, says the NYT.

IBM CEO's Pay Rises 12 Percent in 2004

IBM Chairman and Chief Executive Samuel Palmisano received about US$8.8 million in compensation for 2004, a 12 percent increase from 2003, according to the computer giant's annual proxy statement filed on Monday.

The New York Times/Reuters report (7 Mar.) that Palmisano's pay package for both 2003 and 2004 also included 250,000 stock options. His increased pay in 2004 came from the company's long-term incentive plan, which awarded Palmisano US$1.7 million, while his bonus was slightly smaller at US$5.2 million. His salary rose US$110,000 to US$1.7 million.

During 2004, Palmisano also cashed in options worth US$2.8 million, and holds options currently valued at US$35 million, reports the NYT.

IBM, the world's largest computer company, boosted its revenues 8 percent and profits 11 percent in 2004 on strong sales in services and equipment, although it also benefited from the effects of currency fluctuations. Analysts have predicted similar increases for 2005, says the paper.

Sony to Debut Flash - Based Audio Players

Hoping to regain some of its luster in a market dominated by the iPod, the company that brought consumers the Walkman - Sony - is coming out with a big lineup of portable music players.

The New York Times/AP report (8 Mar.) that in unveiling nine new players, Sony is taking particular aim at Apple Computer's slim new iPod Shuffle.

The paper says that's because, like the Shuffle, the new Sony players use flash memory, a storage medium more durable, lightweight and compact than its larger-capacity cousin, the hard drive.

The new Sony players also support the generic MP3 audio format, which is what most people use when converting their music CD collections to digital files. That's a major concession for Sony, which had tried until recently to persuade consumers to only use its proprietary audio format, called Atrac, says the NYT.

The paper says the lineup includes a set of cigarette lighter-sized models, a bit more expensive than the iPod Shuffle but with a much longer advertised battery life -- 50 hours of playback time with a rechargeable battery compared to Apple's 12 hours. And unlike the Shuffle, the Sony players have bright, 3-line screens to display song information, says the paper.

A 512-megabyte model costs US$130 and a 1-gigabyte model costs US$180. Models with an FM tuner each cost US$20 more. By comparison, Apple's shuffle is priced at US$99 for 512 MB and US$149 for 1 GB. The models will be available in May.

The NYT says that a second set of players, set to ship later this month, are roundish, with a diameter slightly larger than a poker chip. They run on AAA batteries, which Sony says will give the user 70 hours of playback time on a single battery.

The paper says analysts don't expect the Japanese electronics giant to dethrone Apple, which holds more than a 60 percent share in the fast-growing portable music player market. But some predict Sony can climb into a No. 2 position by year's end, surpassing a slew of other pocketable players that are based on Microsoft Corp.'s Windows audio format.

Teen Convicted of internet piracy

In the US, an Arizona university student is believed to be the first person in the country to be convicted of a crime under state laws for illegally downloading music and movies from the internet, prosecutors and activists say.

The New York Times/AP report (8 Mar.) that University of Arizona student Parvin Dhaliwal pleaded guilty to possession of counterfeit marks, or unauthorised copies of intellectual property. Under an agreement with prosecutors, Dhaliwal was sentenced last month to a three-month deferred jail sentence, three years of probation, 200 hours of community service and a US$5,400 fine. The judge in the case also ordered him to take a copyright class at the University of Arizona, which he attends, and to avoid file-sharing computer programs.

The paper says the FBI found illegal copies of music and movies on Dhaliwal's computer, including films that, at the time of the theft, were available only in theatres. They included "Eternal Sunshine of the Spotless Mind," "Matrix Revolutions," "The Cat In The Hat," and "Mona Lisa Smile".


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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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