DOJ tries to step in front of IBM mainframe biz steamroller

IBM's mainframe business has over the years been somewhat of a steamroller, rarely slowing down to take a look at the little things in its way it may have crushed. NetworkWorld Extra: How to really bury a mainframe 15 genius algorithms that aren't boring Not to diminish what is a preliminary DOJ investigation but the background to this one sounds little like things are just going in a circle. Word today that the Department of Justice has begun a preliminary investigation into whether IBM has abused its monopoly in mainframe computers will likely fall under the category of things the Big Iron slowed down for but ultimately ran over anyway. To start, published reports say the Computer and Communications Industry Association, had complained to the DOJ recently about some unsavory IBM IBM's behavior.

One of those rivals was T3 Technologies, which just last week lost civil suit it had filed against IBM. According to the Financial Times, the judge said T3 did not have a case to make because IBM had licensed the technology in the past to two of the company's suppliers, rather than to T3 directly. Thus the DOJ began asking for information about the mainframe market to IBM rivals. He added that the suppliers, which had brought complaints of their own, also lacked a case, since IBM had acted within its rights to stop licensing its old software when it moved on to a new generation of technology. But T3's IBM angst runs deeper. T3 Technologies has an ongoing antitrust complaint against IBM with European regulators as well.

The company was a strong supporter of fellow IBM mainframe clone maker Platform Solutions (PSI), a privately held company with whom Big Blue had traded lawsuits with over Big Iron technology until 2008 when IBM had enough and just bought the company outright. The DOJ abandoned a 1956 antitrust consent degree against IBM in 2001, but said that IBM could be subject to a new antitrust lawsuit if it engaged in anticompetitive behavior. Long time IBM critic CCIA also weighed in at the time calling the IBM/PSI acquisition a black hole: "It sucks the life out of the market and destroys the matter. " The deal transforms a market with potential for competition into one "with little prospects for anything but complete domination by IBM," said CCIA President and CEO Ed Black. "When it comes to violations of competition law, IBM appears to be an unrepentant recidivist," he said. As in the new case, rivals say IBM has shut out other mainframe vendors by ending support for older mainframe systems and not licensing its mainframe software to rivals. Will all of this hurt IBM? Seems unlikely.

CCIA's complaint against IBM alleges that the company has refused to issue licenses for IBM's mainframe OS to competitors, as required in a 1970s antitrust consent decree with the DOJ that was terminated in 2001. In some cases, IBM has yanked the OS license from customers trying to switch from IBM mainframe hardware to a competitor's," charges Black. According to a recent study of 300 end users by researchers at IDC nearly one-half of said they plan to increase annual spending on mainframe hardware and software. The study says IBM's strategy of building specialty processors for the mainframe, such as the Integrated Facility for Linux (IFL) System z Integrated Information Processor (zIIP) for ERP and CRM transactions and z Application Assist Processor (zAAP) processors for Java and XML transactions are key to ongoing success of the platform. Many mainframe users reported that they can plan another wave of investments in the System z platform over the next 2–5 years, citing the system's high availability, reliability, and security for mission-critical applications as major drivers, IDC stated. IBM has engaged in some price cutting to make some of these processors more palatable though. IBM acknowledged "new pricing" for the IFL processors, but did not offer specific numbers.

According to a Network World article IBM has cut in half prices for some specialty Linux processors. Another source said the price changed from $90,000 to $47,500 for IFLs running on the System z Business Class mainframe. This summer IBM reported that System z mainframe server revenue decreased 39% year-over-year in the second quarter, while overall company revenue declined 13%. But IBM's mainframes haven't been immune to the economic downturn.

Netbooks propel global semiconductor sales

Chip sales are growing by the month, partly driven by growing netbook sales and falling laptop prices, market research firms said on Friday. Consumers are drawn to the lower prices of netbooks, which account for close to 17 percent of total laptop unit shipments worldwide, SIA said. "Growing sales of netbook personal computers ... have created an important new market segment, filling a gap between 'smart cell phones' and conventional laptop PCs," said George Scalise, president of SIA. Netbooks have small screens and keyboards and are designed to run basic Internet and productivity applications. Global semiconductor sales grew by 5 percent from July to August as consumers picked up more laptops, especially netbooks, said the Semiconductor Industry Association in a study.

Laptop prices have fallen by close to 14 percent compared to last year and the memory used in these devices has increased 25 percent, SIA said. Semiconductor sales also rose in July compared to June, iSuppli said on Friday. That has contributed to growing chip sales, which totaled $19.1 billion in August. The August sales growth points to a slow recovery from the steepest downturn the industry has faced in close to a decade, the research firm said. Consumer electronics - including mobile phones and laptops - accounted for a bulk of the semiconductor sales.

Semiconductor sales grew across all major regions, with the Americas recording 5.4 percent growth and sales in Asia-Pacific growing by 5.3 percent. Semiconductors like processors, and storage devices like flash memory go into devices such as PCs and cell phones. However, chip sales fell by 16 percent compared to August 2008, SIA said. Semiconductor sales to the consumer electronics sector increased by about 28 percent in the third quarter compared to the second quarter, iSuppli said in a statement. "This reveals a pattern of solid sequential growth for the first two months of the third quarter," iSuppli said. ISuppli predicted a third-quarter revenue decline of 16 percent on a year-over-year basis. Companies like Advanced Micro Devices and Dell have also said PC shipments could recover as users upgrade PCs with Microsoft's upcoming Windows 7 OS, which is due this month.

ISuppli earlier this week projected that semiconductor revenue could grow by as much as 13.8 percent in 2010. Intel CEO Paul Otellini last week said that its chip shipments were stabilizing as PC unit shipments showed signs of recovery. IDC in July reporting stronger-than-expected PC shipments for the second quarter of this year, boosted by a strong interest in laptops and lower prices. However, IDC warned that laptop shipments were affected by weak enterprise spending, which may pick up next year as companies look to upgrade to newer hardware and software. PC shipments fell by 3.1 percent, less than IDC's original projection of 6.3 percent for the second quarter. Semiconductors also include chips that go into cars.

Chip sales to the automotive sector grew by 30.2 percent, boosted by efforts like the "Cash for Clunkers" program in which discounts were offered by the U.S. government for trading in old for new vehicles, SIA said.

VMware ties disaster recovery to vSphere, lifting obstacle to adoption

VMware's Site Recovery Manager is now supporting vSphere, eliminating one of the obstacles preventing customers from upgrading to the latest version of VMware's virtualization platform. VMware on Monday released SRM version 4, with support for vSphere and other upgrades including a "many-to-one failover [that] protects multiple production sites with automated failover into a single, shared recovery site." Because Site Recovery Manager did not immediately support vSphere, numerous customers have delayed upgrades from 3.5, acknowledges Jon Bock, product marketing manager for VMware's server business unit. vSphere 4, the successor to ESX Server 3.5, was unveiled in April but until now did not work with Site Recovery Manager, VMware's software for recovering virtual machines in case of disaster.

Now that SRM supports vSphere, adoption should accelerate, he said. "vSphere was a significant change that we had to update the add-on products for. But the months-long delay is similar to delays often seen between the release of a new operating system and add-on products, he said. "A customer who has important production applications on ESX 3.5 is probably not going to upgrade to vSphere 4 the day after it's released," Bock said. In a perfect world, we'd love to have all the new releases of products released on the same day as the platform," Bock said. vSphere is still not supported by VMware View, the vendor's desktop virtualization software. Lifecycle Manager just gained compatibility with vSphere in a new release a few weeks ago. VMware View will be compatible with vSphere in its next release, expected in 2010, according to a VMware spokeswoman.

In addition to support for vSphere, Site Recovery Manager now supports NFS storage, along with Fibre Channel and iSCSI, which were already supported. "We have a lot of interest in NFS from customers looking at using that in important applications," Bock says. VMware provides an integration module to partners, and most of the major storage companies have made their products compatible with Site Recovery Manager. SRM works by integrating tightly with storage array-based replication. Shared recovery sites, the other new feature, could be useful for companies with multiple branch offices, Bock said. The new version of SRM is available now and costs $1,750 per processor.

Overall, the new release is "focused on expanding the use cases for Site Recovery Manager," he said. SRM was first released in June 2008 and has been purchased by more than 2,000 customers, Bock says. Virtualization offers inherent advantages when it comes to disaster recovery, since it eliminates the need to recover the actual physical server an application was running on, Bock notes. That's still a small portion of VMware's 150,000 customers overall. Some customers have been using SRM not for disaster recovery but to move applications from one site to another when they are switching data centers, he said.

SRM support for vSphere was a highly anticipated feature, says ITIC analyst Laura DiDio. "Disaster recovery and backup are in every customer's top five checklist of things you must have," she says. Still, disaster recovery is the main purpose for the software. Follow Jon Brodkin on Twitter

Study shows open-source code quality improving

The overall number of defects in open-source projects is dropping, a new study by vendor Coverity has found. The vendor has set up a Web site through which open-source projects and developers can submit code to be analyzed. Coverity, maker of tools for analyzing programming code, received a contract in 2006 from the U.S. Department of Homeland Security to help boost the quality of open-source software, which is increasingly being used by government agencies. The vendor assigns projects to a series of "rungs" depending on how many defects they resolve. "Defect density" has dropped 16 percent during the past three years among the projects scanned through the site and some 11,200 defects have been eliminated, according to Coverity's latest report.

They are Samba, tor, OpenPAM and Ruby. Four projects have been granted top-level "Rung 3" status, after resolving defects discovered during Rung 1 and 2, Coverity said. The Scan site has so far analyzed more than 60 million unique lines of code from 280 projects, according to Coverity. Coverity's scanning service employs static analysis, which is used to check code for security or performance problems without having to run an application itself. More than 180 projects have developers actively working to scan open-source projects.

This is preferable because "testing every path in a complex program as it runs requires constructing a large number of special test cases or structuring the code in special ways," Coverity said. "Static analysis [tools] won't tell you that your business process is working correctly ... but they will tell you that the code itself is technically solid, and follows the kind of programming best practices you'd expect to see from code that has gone through a proper code review," said Forrester Research analyst Jeffrey Hammond via e-mail. The tools tend to be most helpful for finding "structural 'anti-patterns' in code, poor programming practices that can result in performance and security issues like memory leaks and buffer overflows as well as more exotic conditions like errors due to parallel execution of code in a multicore CPU environment," he added.

Adobe to buy Omniture for US$1.8 billion

Adobe has agreed to buy Web analytics company Omniture for US$1.8 billion in cash, the companies said Tuesday. On a conference call Thursday, executives wouldn't say if there was a bidding war with other companies to buy Omniture. The price San Jose, California-based Adobe is paying for the company, which is $21.50 per share, is at a 45 percent premium over Omniture's average closing price for the last 30 trading days, Adobe said.

Adobe, known for multimedia design, Web-development and document-creation software such as Flash, Dreamweaver and Acrobat, said the purchase will help the company add Web analytics and optimization capabilities directly to those products. He said a recent Forrester study found that 73 percent of companies doing business on the Web had some kind of analytics technology in place. "It's a ubiquitous technology that is in high demand at companies that are placing any parts of their business online," he said. This kind of ability to measure what kinds of media, Web applications or Web pages are popular with users is becoming essential as more and more business is being done on the Web, particularly in the area of online advertising, said Forrester senior analyst John Lovett. For designers, developers and online marketers using its tools, this new capability will help them streamline how they create and deliver relevant content and applications, Adobe said. On a conference call Tuesday, Adobe CEO and President Shantanu Narayen said that the idea for a merger grew out of conversations with Omniture's CEO, Josh James, and with customers who wanted more out of the digital media they were creating using Adobe's products. Advertisers, advertising agencies, publishers and online retailers can improve the experience of their end users and get more out of their digital media through the new analytical capability, the company said.

For example, Narayen said people were using Flash to create online advertisements, but wanted a way to better understand click-through rates so they could see which ones were working. Similarly, Adobe, too, found it wanted more information from the ads and digital media it was putting up on its own site. They thought there might be a way for Adobe to build that into their products, and "a number actually wanted us to integrate with solutions like Omniture," he said. Omniture had been an Adobe partner for some time, and in conversations with James, Narayen said the two realized their companies had "the same vision" for how digital media and rich Internet applications could include Web analytics and optimization technology. The deal creates a "big opportunity" to allow content creators to potentially measure the impact of everything they do, Lovett added.

Forrester's Lovett said the deal will put Adobe a step ahead of other companies creating tools for developing digital content. "The combination of these two technologies makes sense - it's the creative meeting the measurement side of things," he said. Following the close of the deal, Omniture will become a new unit within Adobe, the company said. The companies expect the deal to close in the fourth quarter of Adobe's fiscal year, which ends Nov. 27. Omniture's CEO James will join Adobe as senior vice president in charge of that business unit, reporting to Adobe President and CEO Shantanu Narayen.