software

Gilbert B. Kaplan: If China Throws Out Google, We Should Throw Out their Computers

by Gilbert B. Kaplan on March 16, 2010

The concept of reciprocity in trade has a long and storied history, and one that ought to be remembered today. Simply put, if we allow market access for the fruits of the great Chinese industrial machine, creating jobs for 100 million Chinese workers (the number of Chinese employed in manufacturing), they need to allow access to our creative enterprises, such as Google. But not only is Google being forced out by a series of actions and deliberate inactions of the Chinese government, but Google’s affiliate, YouTube, was never even let into China in the first place. It is perennially blocked by their “great firewall”. Nor do most other U. S. websites have unfettered access to China. eBay has left China. Many newspaper websites are regularly censored. The Chinese competitive sites that are willing to go along with the censorship and the dictates of the Chinese government, like Baidu and Alibaba, are the dominant players on the Chinese internet. This is not only a question of freedom of speech. It is also a trade barrier and a major economic problem for the United States. Google alone has over 20,000 employees, many in the United States, and they and the company are undercut by these actions, as are the workers at eBay and other website companies. We are struggling to rebuild our manufacturing sector, but while that occurs, we need to make sure companies like Google have full access to the largest internet market in the world, China. If a company cannot access the largest market in the world for its product it loses enormous revenue opportunities. And as a matter of economies of scale and ability to move down the learning curve, it becomes economically disadvantaged versus its competitors going forward. There had been an implicit agreement about the internet made between China and the United States. The United States agreed to lower all its tariffs on high technology manufactured goods to zero, and we agreed to let in all that China could send over here, no questions asked. What is the result of that? The result is that substantially all United States computers are now made in China. We even went so far as to allow the first U. S. PC maker, IBM, to sell its PC division to a Chinese company, Lenovo. That sale could have been stopped, under a U. S. law called the Exon-Florio Act, but not only did we not stop it, we did not even question it. Why? Because we believed that as China industrialized and moved along the economic and knowledge highway they would become a great market for those goods where we continue to have an advantage, things like search engines, and streaming video, and innovative web sites. We believed they would keep their side of the bargain. But they have not. So we are now in a completely untenable position, as a country and as an economy. The hardware of the internet, computers, disk drives, semiconductors, peripherals, are all made in China, not here. Much of the software of the internet, which is made here, advanced here, and continually reinvented here, is banned from China. So their industries grow, they develop more jobs, their economy avoids the recession. Our economy shrinks, our job base deteriorates, and our creative enterprises suffer because they are denied access to the largest internet market in the world. And the trend is only getting worse. More and more high-tech producers are moving their factories to China, because of subsidies, cheap labor, low environmental standards, and currency manipulation. Ironically, it was only a short time ago that we thought computers and semiconductors were the kind of creative industries we would always keep in the U. S. But they have now basically left our shores, though the even more creative side of the internet has not (yet). The largest computer manufacturing area in the world is in Guangdong Province, north of Hong Kong, where Foxconn employs 200,000 people as a subcontractor to many U. S. and other worldwide computer brands. While this is occurring, thousands of U. S. engineers and assembly line workers are unemployed. The Chinese government wants trade to be a completely one-sided affair where China builds up knowledge and industrial might and trade reserves and we get nothing. If there is any area where we clearly have a comparative advantage it is the complex and dynamically creative space that Google occupies. In 2009, China exported $126 billion of computers and electrical equipment to the United States. We exported a paltry $14 billion to them. Given these favorable terms of trade, one would think they would be careful with our further downstream internet companies, but they are not. Demanding reciprocity is not protectionist and should not subject us to criticism from China, the WTO, or even the most free of free traders. Reciprocity is what the trade agreements of the world are about. We let you sell in our market the goods you can make more efficiently and more creatively. You let us sell in your market the goods and services we produce. If China shuts out our internet companies, we need to shut out their hardware that the internet runs on.

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Gilbert B. Kaplan: If China Throws Out Google, We Should Throw Out their Computers

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Auren Hoffman: To Grow a Company, You Need to Be Good at Killing Things

by on March 14, 2010

Companies are all about building things, not destroying them. When your company is growing, you add lots of things to build the company: employees, investors, products, features, meetings, benefits, processes, reports, code, and more. While it does not come natural for a company (or any organization) to toss things out, every so often you need to look at everything and focus on getting rid of things that are no longer needed, important, or helping the company grow. Timing is also important. Recognizing and throwing out things is hard enough, but doing so early is truly difficult. The biggest flaw of most CEOs (including myself) is that they don’t kill things fast enough (or ever). Maybe every company over a certain size should have a CKO — a Chief Killing Officer. That person’s entire job would be to look at everything the company does and try to kill it. Being able to kill things early is essential to the long-term growth and success of any company. But recognizing that you should be searching for things to kill is the first step to building a better company. Long-term benefits of killing things quickly · Save time and money – Getting rid of something early enough can save a company countless hours of headaches and resources. This is especially important for start-ups that have both time and financial constraints. It can also be the difference a between thriving company and a dead one. · Renewed clarity and focus – By continually re-visiting the various facets of your company, you will streamline not only resources, but also overall goals and strategies since it will force you to weigh the various pros and cons of what you do now and how to prioritize efforts moving forward. Going for the Kill Here are some areas that every company should review and clean up regularly: · Products – A company can only do so many things well. For example, PayPal is great business that makes it safe for people to buy goods and services online. But they initially developed and kept a Palm Pilot beaming application and supported it for many years, way past when they should have killed it. This does not mean you shouldn’t start things — you can start lots of new things as long as you kill them. Google recognized this when they killed Google Answers in 2006 . · Features – Your products may have features once thought to be important, but are no longer necessary or demanded by customers. Slay them. · Code – Software code is worth re-visiting because they can be optimized after their initial implementation. Also, not reviewing code regularly can cause setbacks and long debugging hours after a lot more code has been written on top. Rapleaf holds ” Sweepleaf ” days semi-monthly where engineers do nothing but cleaned up and streamline code. · People – Check-in on employees at set intervals to look out for bad hires or people that are not adding the value they once were. Doing so can help guide people back on track and save a lot of headache later on. Never settle for “average” people. As Reed Hastings is famous for saying: adequate performance deserves a nice severance package. · Meetings – As companies grows, so does the number of internal meetings. Internal meetings are important for communication and to make decisions, but some are legacy meetings that were created for a particular past purpose but are no longer massively beneficial. Strive to kill these meetings. Only keep meetings that are very beneficial to all attendees. There is also attendance creep in meetings where non-essential people are often in attendance. Focus on keeping meetings short, on topic, and with as few people as possible. · Reports – Sometimes the CEO or a board member asks for a report and it keeps getting produced for years after it is valuable. Work to kill these reports, even if they are automated. · Investors – Even investors and board members should be on the chopping block. Some early-stage investors don’t add much value as your company grows. Buy these investors out — many of them will be happy to give up their stock for a decent return. · Processes – Many internal processes (like performance reviews) are really useful. But many of these processes that once were important can later be burdensome. Slay these processes before they kill your company. · HR practices – A lot of HR practices are vestiges of the past or should have never been implemented in the first place. Try to kill all non-essential HR policies and practices as these can be cancers which can turn your company from a fast moving start-up to a bureaucratic maze. One of the first things to look at is all the forms a new employee has to fill out. You might be thinking “Wow, we’re really in bad shape because we are really terrible at killing things.” You’re not in as bad of shape as you think because very few companies are actually good at killing things. So just by recognizing that this is important, you’ll have a leg up on many of your competitors. As your company grows, you’ll have more things — both big and small — that either weigh down growth or are not core to long-term success. The companies that work proactively to get rid of these issues and devote resources to the areas that matter are the ones that will be able to remain nimble, innovative, and win. See comments and comment yourself at: Summation blog: To Grow a Company, You Need to be Good at Killing Things

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Verizon Said to Schedule June Release for Microsoft Phones for Teenagers

March 5, 2010

By Amy Thomson and Dina Bass March 5 (Bloomberg) — Verizon Wireless , the largest U.S. wireless carrier, will introduce two phones from Microsoft Corp. in about May or June that are targeted at teenagers, two people with knowledge of the companies’ plans said. The models will have easy access to social-networking sites and include keyboards for text messaging, according to one of the people, who asked not to be identified because the plans aren’t public. The phones will be made by Sharp Corp. and carry the Microsoft and Verizon Wireless brands, the other person said. Until now, Microsoft has focused on providing its mobile Windows software to phone makers, rather than offering a model under its own brand. The move would parallel Google Inc.’s decision to sell the Nexus One phone, which uses that company’s Android operating system. Microsoft is seeking to recapture a larger share of the phone market after Android and Apple Inc. ’s iPhone lured away customers from Windows. By moving directly into wireless phones, Microsoft and Google could risk hurting their relationships with other manufacturers and service providers. Microsoft will continue to work closely with handset companies that make Windows phones and the mobile carriers that sell them, the person said. Microsoft executive Robbie Bach , who oversees the mobile- phone business, said in January that it would be “very, very difficult” for Google to sell its own phone while keeping manufacturers and carriers for other Android handsets happy. Different Tack With its phone, Microsoft will take a different tack than Google, said the person familiar with the matter. While the Nexus One is only available from Google, Microsoft ’s phone will be sold by Verizon, the person said. The phone stemmed from a Microsoft project code-named “Pink.” Brenda Raney , a spokeswoman for Basking Ridge, New Jersey- based Verizon Wireless, declined to comment, as did Jay Cudal, a spokesman for Microsoft. Chris Loncto , a spokesman for Osaka, Japan-based Sharp, also declined to comment. Verizon is increasing its lineup of smartphones in a bid to get more revenue from data plans, which customers must buy to access the Internet or download applications. Smartphone shipments will increase 46 percent worldwide this year, research firm Gartner Inc. said. That compares with estimates for total mobile-phone market growth of as much as 13 percent. Cliq, Sidekick The phone is intended to address a similar audience as Motorola Inc. ’s Cliq or T-Mobile USA Inc.’s Sidekick, one of the people said. In 2008, Microsoft acquired Danger Inc., which makes the software for the Sidekick. The Cliq includes software called Motoblur, which serves up Twitter messages, pictures and contacts to the phone’s home screen. Microsoft will probably spend more money marketing its new mobile Windows software than the Pink phone, said Matt Rosoff , an analyst at Kirkland, Washington-based Directions on Microsoft. That will smooth over relationships with handset makers and carriers that are Microsoft partners, he said. Microsoft said last month that the software, called Windows Phone 7 Series, will be available in handsets by the holidays. “They will say, ‘Windows phones is where our investment is going. You should be betting on that,’” Rosoff said. “They did keep a team working on the successor to the Sidekick and that’s what this is. This is a legacy of Microsoft being a big decentralized company doing a lot of things and seeing what wins. It’s not quite the same situation as with Google.” Touch Screens Rosoff said the Pink phones won’t run the new Windows software. Windows Phone 7 will offer touch-screen features, letting handsets work more like the iPhone. The software, unveiled at a conference last month, also has a new design and connects with Microsoft ’s Xbox Live online games and Zune music service. Microsoft’s Windows dropped to a 7.9 percent share of the worldwide smartphone software market in the fourth quarter, from 12.5 percent a year earlier, while the iPhone and Android posted gains, according to ABI Research . The iPhone took 16.6 percent of the market in the fourth quarter, up from 10.8 percent the previous year, Oyster Bay, New York-based ABI said. Android climbed to 8.5 percent from 1.7 percent. The Wall Street Journal reported last month that the Pink phones would be made by Sharp and go on sale as early as the spring. Technology Web site Gizmodo posted yesterday what it said were photos of one model. Microsoft rose 17 cents to $28.63 yesterday in Nasdaq Stock Market trading. Verizon Communications Inc. , co-owner of Verizon Wireless, gained 14 cents to $29.27 on the New York Stock Exchange. To contact the reporters on this story: Amy Thomson in New York at athomson6@bloomberg.net ; Dina Bass in Seattle at dbass2@bloomberg.net

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Stocks in U.S. Erase Gains on Fed Beige Book, Bank Limits, Health Overhaul

March 3, 2010

By Craig Trudell March 3 (Bloomberg) — U.S. stocks advanced for a fourth- straight day amid more takeover bids and reports showing the employment market and service industries are improving. Novell Inc. rallied 29 percent, the most since 2003, after shareholder Elliott Associates LP made a $2 billion bid for the software company. Pfizer Inc. , the biggest drugmaker, was said to offer as much as $4.08 billion for Germany’s Ratiopharm GmbH. Eight of ten industries in the Standard & Poor’s 500 Index rose as reports showed the fastest growth in service industries since October 2007 and the fewest job cuts in two years. The S&P 500 increased 0.4 percent to 1,122.75 at 2:11 p.m. in New York, trimming its decline from a 15-month high in January to 2.4 percent. The Dow Jones Industrial Average gained 28.87 points, or 0.3 percent, to 10,434.85. “The employment picture is improving but very gradually,” said Stanley Nabi , New York-based vice chairman of Silvercrest Asset Management Group, which manages $8.5 billion. “I think we’ve had a market correction since mid-January. I think it’s over, and I think the market will creep up from here.” U.S. companies cut 20,000 jobs last month and private employment may grow in March, ADP Employer Services said. Job placement firm Challenger, Gray & Christmas Inc. said planned firings fell 77 percent in February. Stocks extended gains as the Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the economy, rose to 53 from 50.5, beating the median estimate of 51 in a Bloomberg News survey of economists. The Federal Reserve said in its Beige Book business survey that the economy improved in nine of the country’s 12 regions in January and February, while being hampered by snowstorms in the eastern U.S. Six-Week High The S&P 500 yesterday rose to the highest since Jan. 20 on prospects for earnings growth at banks, more corporate takeovers and a possible resolution to Greece’s fiscal problems. The benchmark index for U.S. stocks slid as much as 8.1 percent from this year’s high on Jan. 19 amid concern that a weak job market and widening budget gaps in Greece, Spain and Portugal would threaten the economic recovery. The U.S. economy will benefit from “meaningful job growth in the private sector” over the next few months, said Bruce Kasman , chief economist at JPMorgan Chase & Co. in New York. “We’re pretty close to making a turn here,” Kasman said today in an interview on Bloomberg Radio. “Companies have been increasing the workweek. There is more income being generated.” Novell, Pfizer Novell , a seller of corporate-network software, soared 29 percent to $6.10. Elliott, a money management firm that owns about 8.5 percent of Novell’s shares outstanding, made the $5.75-a-share cash offer public in a letter yesterday to the company’s board. Pfizer slipped 1.5 percent, the most in the Dow average, to $17.34. The company could make a presentation to generic-drug maker Ratiopharm’s management as early as this week to support its bid, said two people with knowledge of the talks. Teva Pharmaceutical Industries Ltd. and Actavis Group hf are also bidding, and Ratiopharm is expected to decide by the end of the month, said one of the people. Nucor Corp. added 2 percent to $43.77. The largest U.S. steelmaker by 2009 sales will buy half of a U.S. unit of Japan’s Mitsui & Co. to jointly expand in the global market for the metal used in appliances, autos and construction. The stake in the Mitsui unit was the second acquisition for Nucor this week. Nucor’s acquisition and AK Steel Holding Corp.’s statement that it would raise prices in response to increasing demand led the S&P 500 Materials Index to a 1.6 percent gain, the most among 10 industries. Crude oil climbed to nearly $81 a barrel in New York, while copper, lead, zinc and nickel advanced in London. Strategic M&A Companies grappling with disappointing economic growth will use takeovers this year to try to improve their earnings prospects, said Bob Doll , BlackRock Inc.’s vice chairman and chief investment officer for global equities. “People will attempt to stay inside of what it is they know” as they search for growth opportunities in a “slow- recovery world,” Doll, who helps oversee about $3.35 trillion at New York-based BlackRock, said in a telephone interview. “It’ll just be a phenomenon in the news constantly all year long, and will act as a bit of a prop to equity prices.” Netflix Inc. slipped 2.1 percent to $67.54. The largest U.S. mail-order movie-rental service was cut to “underperform” from “buy” at BofA-Merrill Lynch. RadioShack Corp. rose 6 percent following speculation that private equity firms may seek to acquire the company, according to a report by Patrick Mortimer , director of options trading at Pipeline Trading Systems LLC in New Hope, Pennsylvania. Staples Inc. fell 3.6 percent for the biggest decline in the S&P 500. Goldman Sachs cut its rating to “neutral” from “buy,” a day after the world’s largest office-supply retailer forecast full-year profit below analysts’ estimates. To contact the reporter on this story: Craig Trudell in New York at ctrudell1@bloomberg.net .

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Toyota’s Recalls May `Not Totally’ Solve Acceleration Issues, Lentz Says

February 23, 2010

By Angela Greiling Keane and Alan Ohnsman Feb. 23 (Bloomberg) — Toyota Motor Corp .’s U.S. sales chief told a congressional committee that there are probably causes of unintended acceleration not yet resolved by recalls of 8 million vehicles worldwide. The recalls under way to reshape accelerator pedals and replace floor mats will “not totally” mitigate sudden acceleration in Toyota vehicles, linked to 34 deaths, Jim Lentz , president of Toyota’s U.S. sales unit in Torrance, California, told a House Energy and Commerce panel today in Washington. “We need to continue to be vigilant and continue to investigate all of the complaints from consumers that we have done a relatively poor job of doing in the past,” Lentz said. Under questioning from Representative Bart Stupak , a Michigan Democrat, Lentz agreed that the company may not know the cause of unintended acceleration in as many as 70 percent of reported incidents. Toyota is fixing or reshaping gas pedals that it says may become stuck or snagged by floor mats while saying it has found no evidence linking electronics to the defects. Testing hasn’t shown electronic flaws, Lentz said in his testimony. Toyota “all but ignored pleas from consumers” to examine complaints of sudden unintended acceleration, Stupak said. “They misled the American public by saying that they and other independent sources had thoroughly examined the electronics system,” Stupak, the subcommittee’s chairman, said today at the first congressional hearing looking at Toyota’s recalls and their handling by the National Highway Traffic Safety Administration . “Toyota and NHTSA have a lot of explaining to do to the American people, to consumers and dealers.” Growth Over Development Toyota President Akio Toyoda is linking the flaws to expansion that made the company the world’s largest automaker. “We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that,” Toyoda said in remarks prepared for his scheduled appearance tomorrow before the House Oversight and Government Reform Committee . “I regret that this has resulted in the safety issues described in the recalls.” Toyota’s American depositary receipts, each equal to two ordinary shares, fell $1.38, or 1.9 percent, to $71.55 at 4:02 p.m. in New York Stock Exchange composite trading . Easy to Crack David Gilbert, an automotive-technology professor at Southern Illinois University in Carbondale, said in testimony that he was able to isolate weaknesses in Toyota’s electronic throttles that aren’t found in units from other automakers. “None were quite as easy as the Toyota system to crack,” Gilbert said. Asked why Toyota wasn’t able to figure this out, Gilbert said “Maybe they didn’t ask the right questions.” Gilbert is being paid for his work by Safety Research & Strategies Inc., a safety advocacy group in Rehoboth, Massachusetts that gathers data from NHTSA and other sources for plaintiff’s attorneys. Gilbert said during his questioning that he contacted the group because the reports about Toyota’s electronic system “piqued my curiosity.” Sean Kane , president of Safety Research, said he’s paid Gilbert $1,800, and reimburses him at a rate of $150 an hour. Consumer Testimony Lawmakers heard from Rhonda Smith of Sevierville, Tennessee, about a 2006 incident. She said the Lexus ES350 she was driving accelerated to about 100 miles per hour (161 kilometers per hour), “with the engine still revving up and down,” for about six miles. She was able to turn the engine off after the car slowed down, avoiding a crash and injury. “Shame on you Toyota for being so greedy,” Smith said. “And shame on you NHTSA for not doing your job. I hope that Toyota and NHTSA will be held accountable for their poor decisions that have cost some people their lives.” “Listening to Mrs. Smith, I feel embarrassed,” Lentz said. “I was embarrassed to hear the story.” Toyota will install advanced brake override systems in all new models beginning in 2011, Lentz told the committee. The company will also retrofit seven current models with the software fix, he said. In November, company said cars recalled for floor mat problem would get brake override software. In January at the Detroit Auto show, the company’s North American chief executive officer said they were expanding that program to all vehicles worldwide. A Toyota internal document sent to the House oversight panel and dated July 6, 2009, said the company saved $100 million through a “negotiated” vehicle recall. The document, obtained Feb. 21, showed the company outlining accomplishments described as “Wins for Toyota,” including the savings. ‘Too Cozy’ The presentation on savings, in a bullet-point format, said of an inquiry into sudden acceleration: “Negotiated ‘equipment’ recall on Camry/ES re: SA, saved $100M+, w/no defect found.” NHTSA may be “too cozy” with the auto industry, Stupak said. The agency also may have focused too much on mechanical causes in response to reports of sudden unintended acceleration rather than on potential electronic causes, he said. “There is no evidence that Toyota or the government agency, NHTSA, took a serious look at the possibility that electronic defects could be causing the problem,” said Representative Henry Waxman , a California Democrat who is chairman of the House Energy and Commerce Committee . “Addressing this problem will require legislation,” Waxman said. “Carmakers have entered the electronic era, but NHTSA seems stuck in a mechanical mindset.” Avoiding Delays U.S. Transportation Secretary Ray LaHood , whose department oversees NHTSA, said in testimony prepared for today’s hearing that regulators pushed Toyota at “every step” to act on reports of unintended acceleration. “By engaging Toyota directly, and persuading the company to take action, the agency avoided a lengthy investigation that would have delayed fixes,” LaHood said. Toyota, based in Toyota City, Japan, said in a regulatory filing this week that it received subpoenas from a federal grand jury in the Southern District of New York on Feb. 8 and the Los Angeles office of the U.S. Securities and Exchange Commission on Feb. 19 for documents related to potential product defects. To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net ; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

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China Eastsea Business Software to delist from AIM

February 23, 2010

China Eastsea Business Software to delist from AIM

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Opera Software suffers 87% plunge in Q4 profit

February 22, 2010

Opera Software suffers 87% plunge in Q4 profit

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Austin Pilot’s Dispute With IRS Began in Early 1980s, Web Site Note Said

February 18, 2010

By Ryan J. Donmoyer Feb. 19 (Bloomberg) — Joseph Stack, the software engineer police say flew a small plane into an Austin, Texas, building housing offices of the Internal Revenue Service, may have been feuding with the U.S. agency for almost 30 years. Authorities said a suicide note posted on a Web site and signed “Joe Stack (1956-2010)” presumably was written by the 53-year-old suspected of deliberately crashing the plane into the building yesterday. The crash injured at least 13 people, with one federal employee reported missing. Two bodies had been recovered at the crash site as of late last night, neither yet positively identified by authorities, the Associated Press reported. In the Web site note, Stack said he lost “$40,000 and 10 years of my life” participating in what tax experts describe as an attempt to avoid taxes by claiming his home was a church. He said he later clashed with the IRS over a law targeting computer consultants suspected of abusing employment tax rules. Stack wrote of raiding retirement accounts after suffering a loss of income following a move to Texas, struggling to report “a boatload of undocumented income” earned by his wife, and trying to write-off a piano, which he called “an expensive new business asset.” Craig Etter , a tax lawyer at Greenberg Traurig LLP in McLean, Virginia, said the employment tax issue has been controversial in the technology industry since it was enacted as a last-minute inclusion in the Tax Reform Act of 1986 , the last time Congress overhauled tax laws. “It caught everybody by surprise,” he said. “It’s not often that legislation carves out one industry to pick on. There were a lot of angry people.” Computer Consultants The law makes it harder for software engineers, computer consultants, and other technical services workers to act as independent contractors, rather than as employees. While some workers prefer to be classified as employees, meaning the employer pays half of Social Security and Medicare taxes that total 7.35 percent of salary, independent contractors can shelter more money from taxes through larger contributions to retirement accounts and by deducting business expenses. Workers in the computer-consulting industry typically want to be classified as independent contractors for that reason, Etter said. Obama Proposal President Barack Obama proposed a crackdown on employment tax fraud in his 2011 budget proposal with new rules to more clearly define when workers should be classified as employees or as independent contractors. In addition, the IRS this month is scheduled to begin auditing 6,000 companies to test compliance with employment tax laws. Businesses duck about $14 billion a year in taxes due to worker misclassification, the Treasury Department estimated in 2005. In the posting, Stack said his tax troubles began when he was working in Southern California in the 1980s. He described becoming involved in an organization that sought to exploit a tax-code section that exempts churches from taxes. “We carefully studied the law (with the help of some of the ‘best,’ high-paid experienced tax lawyers in the business) and then began to do exactly what the ‘big boys’ were doing,” Stack wrote in his note, referring to tax exemptions claimed by the Catholic Church. That “little lesson,” he wrote, cost him “$40,000 and 10 years of my life, and set my retirement plans back to 0.” In a statement yesterday, IRS Commissioner Doug Shulman said his department is “working with law-enforcement agencies to fully investigate the events that led up to this plane crash.” IRS Targeted Stack’s posting, which was taken down from his Web site at the request of authorities, mentioned the IRS as a target. “Violence not only is the answer, it is the only answer,” it said. “Well, Mr. Big Brother IRS man, let’s try something different; take my pound of flesh and sleep well.” J.J. McNabb , a Bethesda, Maryland, author working on a book about tax protesters who has testified before Congress twice on the subject, said the posting echoes the beliefs of such activists. “He fits the mold,” she said in an interview. “Blaming the government for your failures in life is unfortunately a big factor in the tax protester movement.” To contact the reporter on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net .

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Google’s Microsoft Takedown Helped by Rivals: Rich Jaroslovsky

February 18, 2010

Commentary by Rich Jaroslovsky Feb. 19 (Bloomberg) — The browser wars are back in full flower, for which we have Google Inc. and the European Union to thank. Google’s big plans for its Chrome browser seem to have shaken Microsoft Corp. out of its competitive torpor and forced the software giant to pay fresh attention to its own browser, Internet Explorer. Meanwhile, starting next month, the EU will require customers who buy new computers in Europe to be presented with a screen at startup listing a dozen browsers in random order, and given a choice of which and how many they want to install. It’s all part of an antitrust settlement with Microsoft. The result should be a boon to consumers and to online innovation. But you don’t have to be European, or even own a new PC, to download these free programs and start exploring. Non-Microsoft software makers are apt to say the biggest thing that keeps users from switching browsers is ignorance. A surprising number of people, they say, don’t understand what a browser is or does. To them, that big “e” on the computer desktop simply means “the Internet,” and they aren’t aware of the multitude of alternatives for accessing the Web. In the interest of education, Google has created a Web site at whatbrowser.org. It includes links to five browsers — including Microsoft’s as well as Google’s — along with an informational video, benchmark tests and other resources. Google’s Strategy Chrome, which is available in versions for Windows, Mac and Linux, is a key part of Google’s strategy to get computer users comfortable with so-called cloud computing. The idea is for everyone to spend less money and time on programs they buy from software companies (Microsoft, say), and rely more on data and services such as Google Docs , which reside on servers and storage systems on the ‘net. Described this way, Chrome sounds like a Trojan horse to make us all dependent on Google’s own services. And so it is. But for Google’s plans to work, Chrome has to be good. And so it is. The program is fast, flexible and rests lightly atop your computer’s operating system — a fine thing from a security standpoint, because it makes it harder than Internet Explorer for hackers to use as an entrée into your computer’s innards. Best for Macs Mac users probably have it easiest: The best browser comes built right into every computer. It’s Safari, Apple Inc. ’s own program. Apple has managed to avoid the controversy stirred by Microsoft’s similar bundling of Internet Explorer with the operating system primarily because it has only a fraction of Windows’ market share. Safari is also available in a Windows version that I’m less enamored of; I’m more likely to run into Web sites that don’t display properly or work quite right than happens with other Windows browsers. The blame for that probably rests more with those site developers than with Apple; still, with so many good alternatives, it’s seldom worth the effort to figure out just what’s wrong. Personally, I prefer Mozilla Firefox , a descendant of the Netscape browser that Microsoft vanquished in Browser War I. Maintained by an open-source community, Firefox is available for PCs, Macs and Linux computers, and is the second-most-used browser after Internet Explorer. The program benefits from a well-developed ecosystem that includes thousands of add-ons for everything from speeding up YouTube downloads to StumbleUpon , which adds a button that helps you discover and share Web sites that match your interests. Off to the Opera Opera , from the Norwegian company Opera Software ASA , is another good choice. Opera, which has been around since the earliest days of the Web, is available in Mac, Linux and PC versions. And of course, there’s Internet Explorer itself. The current version, IE 8 , was released last year with a slew of enhancements. Microsoft has promised that the next version, will be faster and harder for bad guys to hack into. Each browser has legions of fans, and I’m not quite dumb enough to try to tell you which one is best: I wouldn’t have time enough to answer the hate mail from devotees of all the others. What I can say is that this is the perfect time to break the shackles of habit and try something different. Better still, try them all. ( Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Rich Jaroslovsky in New York at rjaroslovsky@bloomberg.net .

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Dell, Microsoft Prepare to Fight Offshore Tax Increase in Obama’s Budget

February 17, 2010

By Ryan J. Donmoyer Feb. 17 (Bloomberg) — Software and computer companies such as Microsoft Corp. , Hewlett-Packard Co. and Dell Inc. are gearing up to fight an Obama administration plan to curb offshore tax avoidance. The $15.5 billion proposal in President Barack Obama ’s 2011 budget targets what the Internal Revenue Service calls the growing problem of so-called transfer pricing. The technique allows companies to reduce their tax bills by transferring intangible property such as patents, trademarks and licenses to offshore subsidiaries. The Business Software Alliance , a Washington-based trade group that represents technology companies, said it would “educate policy makers” on how the proposal would hurt U.S. companies, jobs and the economy. “The transfer tax on intangibles, which regulates how expenses and profits from overseas subsidiaries are recognized and taxed, would unfairly punish American firms vis-à-vis their foreign competitors,” BSA Chairman Robert Holleyman said in a statement. “The U.S. software industry and many other U.S. businesses would pay a steep price in terms of global competiveness.” While the proposal represents less than 4 percent of the $400 billion in business-tax increases in the budget plan, the debate signals that companies are likely to resist Obama’s efforts to raise their taxes to help narrow deficits the administration estimates will total $8.5 trillion over 10 years. Fair Market Value In the past, lawmakers have been willing to take on offshore tax-avoidance techniques, though Senate Finance Committee Chairman Max Baucus , a Montana Democrat, has said he would prefer to change such rules in the context of a broader tax-code overhaul. Corporations engage in transfer pricing when they sell goods or services between subsidiaries. A globally accepted set of practices is meant to ensure that goods are priced so companies don’t inflate deductible expenses in high-tax countries and taxable income in low-tax ones. Determining the fair market value of intellectual property is difficult, said John Samuels , the top tax lawyer for Fairfield, Connecticut-based General Electric Co. , which gets more than half its sales from outside the U.S. Transfer pricing “is the soft underbelly of the income tax,” Samuels said last month. “Nobody understands it.” Coca-Cola, Merck The Obama administration said this uncertainty creates opportunities for companies to shift their intangible assets to low-tax countries. The proposal in Obama’s budget may also affect companies such as Coca-Cola Co. , and Merck & Co. Inc., which report tax burdens below the top 35 percent U.S. corporate rate through the use of intangible property and global operations. “Any high-tech company that has international operations, which is almost all of them, they’ll be worried about this,” said Stewart Karlinsky , a professor emeritus at San Jose State University who advises technology companies on tax law. The administration proposal would force companies to immediately pay U.S. tax when they receive “excessive returns” of more than 30 percent that are traced to intangible property owned by offshore subsidiaries operating in countries with effective tax rates of less than 10 percent, according to an administration official. The law allows companies to defer U.S. tax on those foreign profits until they are repatriated to the U.S. parent company. 10% Threshold Karlinsky said the 10 percent threshold may be designed to exempt countries such as Ireland, which has a 12.5 corporate tax rate. Subsidiaries in countries without a corporate tax such as Bermuda or the Cayman Islands and those in countries offering temporary tax holidays such as Malaysia or Indonesia are more likely to be affected, he said. IRS Commissioner Douglas Shulman has said his agency is investigating transactions involving intangible property. In December, he announced the creation of a unit to “strategically and systematically administer transfer-pricing issues.” Christina Pearson , a spokeswoman for Redmond, Washington- based Microsoft , the world’s biggest software maker, Dana Bolden , a spokesman for Atlanta-based Coca-Cola, the world’s largest soft-drink maker, and Pamela Bonney , a spokeswoman for Palo Alto, California-based Hewlett-Packard, the world’s biggest personal-computer maker, declined to comment. Jess Blackburn , a spokeswoman for Round Rock, Texas-based Dell, and Amy Rose , a spokeswoman for Whitehouse Station, New Jersey-based Merck, the second-largest U.S. drugmaker, also wouldn’t comment. $200 Billion Kimberly Clausing , an economist at Reed College in Portland, Oregon, estimated last month that U.S. companies used techniques including transfer pricing to shift almost $200 billion in profits out of the country between 1982 and 2004. The Obama administration proposed the change in place of a provision last year to repeal rules allowing companies to disregard foreign subsidiaries in tax havens on their returns. Douglas Nakajima , managing director of Devon, Pennsylvania-based SMART Business Advisory and Consulting LLC, which advises on transfer pricing, said many of the companies that objected to the initial plan may oppose the new one. “I don’t think it has much of a flash as some of the earlier proposals, but it still has the ability to impact business decisions,” Nakajima said. Restricting the use of transfer pricing by U.S. companies may disrupt widely accepted practices that are “the fundamental bedrock of our international tax system,” said Barbara Angus , a principal at the New York-based accounting firm Ernst & Young LLP and a former U.S. Treasury official. To contact the reporter on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net

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Tony Greenberg: Why Good Service Is About Trust

February 16, 2010

I’m a tough customer. I admit it. Takes one to know one. I’m a loud shocking dose of reality for companies that sell me something. I expect too much from them. I’ve given them my money for, and put my trust in; their products or services, and I expect them to value that accordingly. I can be a firm’s greatest ally or its worst nightmare. So when something goes wrong, I want the company to fix it. Now! When it takes too long, I let them know it. When service representatives can’t solve the problem, I want to talk to their bosses, their bosses’ bosses, all the way up to their CEOs. And when a service rep tells me, “My supervisor will just tell you the same thing,” well, there’s nothing I want to hear less. Why am I such a pain in the, excuse me, why am I such an exacting customer? Because I’ve been on the other side of the fence, working in the customer-service business, for my entire career. I answer my own phone. When my customers have a problem, I have a problem. And it’s my job to fix it. My customers aren’t small companies, either. They include some of the world’s biggest movie studios, software makers, and game companies, among others. But if I want them coming back, I have to fix their problems, and fast. So I know what it takes. Just because I’m an extreme case, doesn’t mean I’m alone (extreme, maybe slightly irrational, and definitely passionate, but not strange). I know customers deserve better than most companies give them. Michael Treacy was never more right. Why do firms think they can excel in more than one of these three disciplines: Operational excellence, Product leadership or Customer intimacy. Pick any successful firm and see they are great at one , not all. After all, what’s your time worth? For a business, what’s your customer worth? What happens when a company doesn’t value the time of its customers? As a customer, do you include the cost of bad customer service when you decide to buy from one company over another? Shouldn’t our service providers pay us our hourly rate when they put us on hold? Ahh, that would make them think thrice. And if you don’t value your time in dealing with a company that doesn’t, you should. “We don’t want to push our ideas on to customers; we simply want to give them what they want.” – Laura Ashley Companies spend hundreds, even thousands of dollars to acquire a single steady customer, on the expectation that they will be able to milk that customer for far more money in coming years (figure out your company’s cost of customer acquisitions and their lifetime value here ): The math is pretty straightforward. Yet everywhere we look, there are companies that can’t seem to count. It seems they are quite clear about where their heads are at: * I called T-Mobile on a separate issue and it took 13 minutes to get someone on the line. After multiple ID authentications, the service rep told me he couldn’t help with a problem with that phone line when I called on that phone line. “It’s Our Policy,” they said. I had to call back from a different phone line to get help. You and your policy will send your customers running. My policy is to give my money to someone else. Please don’t ever tell me your policy. Just make me happy. * Credit card companies, especially supervisors, don’t even answer your call. (See Jackie Ramos , the bank employee fired after complaining about exorbitant client charges) Instead, you have to leave a number so someone can call back later, even days later, if you’re around and able to take the call. And rather than putting your photo on your credit card to reduce fraud, they just charge usurious interest rates to “make up for their losses.” Don’t the banks understand that we don’t even know who owns which bank now? In the jumble of bank consolidations post-meltdown, I was sorting out which credit cards were mine and which were my various companies. Certain cards had different names than the actual bank name. My auto-pay and my firms were fully confused. This of course led to overpays, underpays, extortion and usurious charges, credit limit cuts, etc. Thank goodness Bank of America had one rock star, Janet Sassano, whom I found after being up hung up on, hours wasted and insulted by other customer “service” specialists. Sassano, by contrast, was the proverbial princess in shining armor. She took each of my 12 issues and resolved them to my absolute satisfaction. She took great pride in helping me sort out these issues and was pleasant, trusting, and reliable in calling me and my accounting team back and even checked up on us as the months went on. * Toyota has a full-fledged disaster on its hands, one that could scar the company for years, because it didn’t deal quickly with issues tied to its brake and accelerator systems. (The New York Times took a long look at Toyota’s ongoing pattern of slow responses to safety/quality issues, available here .) * I had to go all the way up the Southern California Edison ranks to its CEO to resolve what should have been a simple matter of fixing an online payment snafu. To their credit, that did solve the problem. I addressed them in a 15-point, 22-page document requesting policy, and governance and process-management changes. Also to their credit, they articulately responded in writing about how they would address each of those issues. But why oh why was it necessary to go to the top for something that should have been relatively easy to fix? Then there’s MacMall, a Torrance, CA. based distributor of Apple computers and related gear. It the same firm as PC Mall. If you’re on any technology mailing list, you’ve probably gotten at least 70 of their catalogs, or seen their multi-page magazine ads. I guess poor customer service is a core MacMall positioning element that I could have known about ahead of time. Note their low consumer rating on ResellerRatings.com. If you were ever to consider returning or replacing a product, it would be one of the worst places you could choose. Out of thousands of online resellers, to me it seems like it’s just one step above a phishing site. MacMall execs, I suggest you look at the Apple stores, busting at the seams, and chase the premium services market not the sleazy discount / no service no frills game. I take a lesson and story from my friend Billy Ladin – founder ComputerCraft, one of the first Apple retailers from the 80′s. He was taught lessons from partners Steve Jobs and his former employee, who told him discounts were the only way to survive. Yup, that employee was Michael Dell. I guess in the long run Steve Jobs got it right. It seems he had a tough time finding retailers so he did it for himself. Look at him now. One time I met Jobs, skiing with him on Aspen mountain. We were having lunch, and I was curious as to why he bought 2 apple strudels and no meal. He said, ‘Why should I eat that boring food when I can have this,” as he crunched into his meal. Classic. I wonder if it was the Apples or if the same would be true for chocolate. Everything he makes is exciting. A few months ago, I bought a computer from MacMall for the first time (granted, I have been a customer for years). I should have realized then that trouble was coming when the company wouldn’t let me buy a computer online, have it configured and installed with my software choices, and pick it up at the store two miles from my place. I had to wait four days for the computer to be shipped those two miles to my office and pay for postage. Guess what they said: “It’s Our Policy.” How lovely. They explained that it was a security risk. I asked them how they thought a known customer who puts in a known credit card and will pick up the equipment with his personal ID is a risk compared to international fraud rings that steal products, services, PayPal accounts and more by using a credit card online? Riddle me that, Batman. “Everything starts with the customer.” –Louis Gerstner, IBM Four months later, the computer’s hard drive failed. I went to the Apple Store and had a great experience. But when I went to swap the hard drive for solid-state storage so I wouldn’t be vulnerable to another hardware failure, they told me I couldn’t, because I hadn’t bought the machine directly from Apple. I had to go back to MacMall for that. That led to a long and unsatisfying dance with MacMall, going all the way up to and through its president, who promised in an email to call me. But then he chose instead to tell his store to blow me off. The bottom line: I wanted the hard drive replaced, but needed the bad drive back so I could recover my important data. MacMall wouldn’t let me, and in fact, after a lengthy delay, ultimately refused to do anything to fix the problem because I had complained too much. One MacMall technician was an angel, and I’d like to use that trouper’s name, but I’m afraid it’ll just get him in trouble. Apple’s process wasn’t perfect (some of their policies, later waived, seemed nonsensical). But had I bought Apple’s computer from Apple, my problem would have been fixed, and quickly. Apple gives its managers the flexibility and discretion to solve a customer’s unique problem. They understand that they’re building a relationship of trust with a customer, not just cashing in on a quick purchase. “Above all, we wish to avoid having a dissatisfied customer. We consider our customers a part of our organization, and we want them to feel free to make any criticism they see fit in regard to our merchandise or service. Sell practical, tested merchandise at reasonable profit, treat your customers like human beings — and they will always come back.” – L.L. Bean So who needs MacMall ? They survive on a threadbare margin of just 1.8 percent. They must depend on volume (and those endless ads and catalogs) to generate enough new customers to make ends meet. Margins that thin make it almost impossible for any company to finance a proper customer-service operation, and the evidence suggests that’s not where they spend their money. They spend it on making policies to not serve customer needs. Apple, by contrast, has a secret weapon in its stores: the Genius Bar. If you need help, they answer questions, diagnose issues and solve problems. Even my initial phone call was promptly answered, and the online personnel set up a high-priority appointment at the Genius Bar to analyze the problem in person. A company like Compact Appliance also understands the trust equation. I bought an air conditioner, but it was too loud to use. I had to return it, and called the CEO, who was apologetic, and fixed the problem immediately, even helping me pick out a replacement. Trust me; I’ll use them again and again and again. “There are only two industries that refer to their customers as users.” – Edward Tufte So, saving $50 on a $1,200 computer is nice, but what’s your time worth? There’s probably a reason why a company like MacMall has dozens of negative Facebook posts about it. Too many of us do a terrible job understanding a product’s true cost. It’s not just the purchase price. It’s what it costs to live with that product, and its maker, for years to come, especially if something goes wrong. Companies that skimp on customer service and cut corners on parts are secretly charging you more than you know. So what keeps a customer coming back? Trust. Trust that they’re buying good products. Trust that they’ll get a fair price. And trust that they will be dealt with fairly if a problem arises. And how do they build that trust? It seems the more suck-cessful a firm becomes the worse they usually become… You already know my answer: Only Time Buys Trust . And if a company doesn’t take the time to build and continue to earn customer trust, it deserves to be in trouble. I know every time my company, RampRate Sourcing Advisors, works with a client, it’s another chance to build trust. It’s also another chance to blow it. I can’t let that happen. We don’t let it happen ever. Even if we lose money, it’s our reputation. We need to be better consumers if we expect to get better products. That means holding companies accountable when they shortcut on service, and give us short shrift on quality products. Your time matters at least as much as that little discount you may get. Remember that next time you decide whether you want to buy that computer from MacMall or Apple. So tell me, have you had a bad experience with a company that led you to stop buying its products? Did you shout it out to your comrades and associates? Did you tip your competitor to buy from them…grin? Did you tell others? Did you talk about your problem on Yelp, Twitter, Facebook, or other sites? Did you report them to the authorities? Do Something! Do you include the company’s reputation for reliability and service in the cost of its products? I urge you to tell your stories here by posting to this service manifesto. Pass the link. Shout it out. Lets all try to make our lives easier. “There are only two ways to get a new customer: 1. Solicit a new customer any way you can. 2. Take good care of your present customers, so they don’t become someone else’s new customer.” -Ed Zeitz

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Former Goldman Employee Aleynikov Indicted by U.S. Over Theft of Software

February 11, 2010

By David Glovin Feb. 11 (Bloomberg) — Former Goldman Sachs Group Inc. computer programmer Sergey Aleynikov was indicted on federal charges that he stole trading software from the bank. The indictment, unsealed today in Manhattan federal court, follows appeals to prosecutors by Aleynikov’s lawyer that the government dismiss the charges. Aleynikov must now enter a plea as the case moves closer to a trial. Aleynikov, 40, was arrested July 3 and charged with theft of trade secrets and transportation of stolen property in foreign commerce. At a July 4 court appearance, a prosecutor said the alleged theft is the “most substantial” that New York-based Goldman Sachs can recall. “Proprietary information and trade secrets are sometimes the most valuable assets of a business,” FBI Assistant Director-in-Charge Joseph Demarest said in a statement today. The proprietary code, worth millions of dollars, lets the company do “sophisticated, high-speed and high-volume trades on various stock and commodities markets,” prosecutors have said in court documents. Aleynikov planned to earn three times his salary by joining a new company and engaging in high-volume automated trading, prosecutors said at the time of his arrest. Teza According to the indictment, Aleynikov’s last day at Goldman was June 5, before he left to join Teza Technologies LLC, a Chicago-based firm co-founded by former Citadel Investment Group LLC trader Misha Malyshev . Beginning at 5:20 p.m., he began transferring “substantial portions” of Goldman’s code for its trading platform to an outside server in Germany, the indictment says. “After transferring the files, Aleynikov deleted the program he used to encrypt the files and deleted the computer’s ‘bash history,’ which records the most recent commands executed on his computer,” U.S. Attorney Preet Bharara said in a statement. Teza suspended Aleynikov after his arrest and has since fired him. On July 2, Aleynikov attended meetings at Teza’s office and brought his laptop computer and another storage device, each of which held Goldman’s source code, the indictment says. Defense attorney Sabrina Shroff didn’t immediately return a call for comment. She said at an Aug. 10 court hearing that prosecutors “may be under a false impression” about the case. Only 32 of 1,024 megabits of the software code was transferred, Shroff has said. Dual Citizenship Aleynikov, who is free on $750,000 bond, lives in New Jersey and holds dual U.S. and Russian citizenship. He and his lawyer have said the files that prosecutors said he stole weren’t shared with anyone and he took them so he could work from home. The indictment says Aleynikov transferred thousands of files related to the firm’s trading program over the course of his career, without telling Goldman. Aleynikov worked at Goldman from 2007 until June, the government said in its July criminal complaint. He was part of a team of workers responsible for improving the computer platform. He faces one count of theft of trade secrets, one count of transportation of stolen property in foreign commerce, and one count of unauthorized computer access. He faces up to 25 years in prison. Before joining Goldman, Aleynikov worked for about eight years at IDT Corp., the U.S. vendor of prepaid calling cards, where he led the team responsible for developing routing systems, according to the profile on the social-networking site LinkedIn. Michael DuVally , a spokesman for Goldman, declined to comment. The case is U.S. v. Aleynikov, U.S. District Court, 09-mag- 1553, Southern District of New York (Manhattan). To contact the reporter on this story: David Glovin in New York federal court at dglovin@bloomberg.net .

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SAP Management Upheaval Pits Plattner Against Ellison in Market Share Spat

February 8, 2010

By Ragnhild Kjetland Feb. 9 (Bloomberg) — SAP AG Co-Founder Hasso Plattner may have a bigger challenge as he picks up his rivalry with Oracle Corp. — again. The 66-year-old supervisory board chairman, who’s also the company’s biggest shareholder, is assuming a greater management role at the world’s largest business-management software maker, helming what he said yesterday was an effort to “re-establish trust inside and outside” the company. The Walldorf, Germany-based company’s chief executive officer, Leo Apotheker , unexpectedly resigned on Feb. 7 after SAP’s board decided not to renew his contract that was set to expire at the end of the year. He was replaced by two co-CEOs. The board asked Plattner to advice the new managers on technology and product development, giving him a hands-on role seven years after he stepped down as co-CEO to take on fellow- billionaire Larry Ellison’s Oracle, which says it’s taking business away from SAP. “SAP is still a major actor but it has lost its positive contact to customers,” said Frank Niemann , a SAP software consultant at Pierre Audoin Consultants in Munich. “Hasso is a software guru, a little like the Bill Gates of Europe. He’ll work more on developing technology. He has a very clear understanding of what’s going on in the market. But he can’t force the company in a new direction. That’ll be a challenge.” Apotheker, 56, resigned amid customer and employee discontent, and a failure to boost revenue. He was replaced by board members Bill McDermott and Jim Hagemann Snabe . Both Snabe and McDermott have decades of industry experience, “but neither has been a CEO before and the relationship between them will be interesting and challenging,” said Ross MacMillan , an analyst with Jefferies & Co. in New York. ‘Happy Company’ That may mean a more significant role for Plattner, who in 1972 joined Dietmar Hopp to create SAP with three former colleagues from International Business Machines Corp. “For a public company, profit is everything, but in order to be profitable it must be a happy company, and I will do everything in my power to make us a happy company again,” Plattner said yesterday on a conference call with analysts and journalists, his first in seven years. The management change means SAP is acknowledging the “depths” of its current issues, said JMP Securities analyst Patrick Walravens in San Francisco. “These issues include a convoluted product strategy, loss of market share to Oracle,” as well as trouble adapting to selling software as an online-service, Walravens said. He has an underperform rating on SAP. Product Innovation SAP shares , which reached an all-time high of 71.58 euros in March 2000 — on Plattner’s watch — have since halved. They traded yesterday at 32.56, giving the company a market value of about 40 billion euros ($54.7 billion). Redwood City, California-based Oracle , the world’s second-biggest software maker, has a market value more than double that at $116 billion. Plattner and his two new co-CEOs need to increase software license sales, which dropped 28 percent in 2009 after rising for years. They will also have to improve relationships with clients, which were hurt by an attempt to elbow in an increase in the price of maintenance contracts, said Saverio Papagno , an analyst at AZ Fund Management SA in Luxembourg. “SAP should bring its focus back on product innovation, to avoid losing market share to competitors, rather than cost cuts,” he said. SAP, whose customers include McDonald’s Corp., General Motors Co. and Wal-Mart Stores Inc., slashed more than 3,000 jobs last year, its first such major cut since its creation, helping it beat its own forecast for operating margin. ‘Trim Exposure’ In the near term, the management changes may create turmoil and may backfire, some analysts said. It may slow things down, rather than speed things up as Plattner wants, they said. “These organizational changes tend to freeze activity inside the company, as everyone tries to grab and defend turf,” said Thomas Otter , a Gartner Inc analyst in Ladenburg, Germany. Otter said SAP, whose strategy has been “murky” recently, needs to have a “more compelling technological vision.” “Can this board deliver that? I just don’t know.” On the call yesterday, Plattner said there will be a change in management style, to a “flat” structure; that management will strive to implement “radical changes” when opportunities present themselves; and that changes will be communicated better externally and internally. Michael Nemeroff , an analyst at Wedbush Securities Inc. in New York is not convinced. He said investors should “trim exposure” to SAP until it becomes clear that the potential problems don’t run deeper. ‘Fresh Air’ “Major changes to SAP’s senior leadership could create significant near-term operational risk,” Nemeroff said. To be sure, some analysts called the management shakeup a welcome change. Snabe, currently head of product development, has been credited with improving the productivity in development. McDermott was the head of one of the “stronger sales forces in the software industry,” said Credit Suisse analyst Philip Winslow , in New York. Robert Jakobsen , a Silkeborg, Denmark-based analyst at Jyske Bank A/S said the two new co-CEOs could turn out to be a breath of “fresh air.” He said they will need to build a momentum for SAP inside and outside the organization, through better customer satisfaction and a clearer vision. The company also needs to win market share from Oracle, Jakobsen, said. Battling Billionaires Plattner, who according to Forbes Magazine was the 110th richest person in 2009 with a net worth of $4.5 billion, will be taking on Oracle, whose CEO, Ellison, was ranked fourth-richest by Forbes with a net worth of $22.5 billion. Berlin-born Plattner started at IBM in Mannheim, Germany, after graduating from Karlsruhe University and left four years later with his colleagues. The SAP founders first worked in their homes and on the IBM computer of customer Imperial Chemical Industries Plc to make software to tie together business functions. “There’s lots of debate as to whether Hasso is the right person to bring the company back,” said Ray Wang , a partner at Altimeter Group in San Mateo, California said. “For the next three to six months he brings the vision and direction. To improve the treatment of employees and customers, Hasso is the right person. If there is no turnaround in the next 12-18 months, SAP will be in real trouble,” he said. To contact the reporter on this story: Ragnhild Kjetland in Frankfurt rkjetland@bloomberg.net

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Toyota Pedal Recall May Spur U.S. to Require New Brake Systems

February 5, 2010

By Jeff Green and Margaret Cronin Fisk Feb. 5 (Bloomberg) — Toyota Motor Corp. ’s U.S. recall of 5.6 million vehicles for possible unintended acceleration may spur regulators to require braking technology that prevents such sudden bursts of speed in all future vehicles. So-called brake override systems, which disengage the engine when the brake and throttle are both depressed, are now on many newer autos that use computers instead of cables to control acceleration. Toyota said last month it is adding the equipment on most models, in response to a Sept. 29 recall. “There’s no question,” said Joan Claybrook , a safety advocate and former director of the National Highway Traffic Safety Administration . “We are going to see a brake override system requirement in response to this.” New regulations would build on the government’s history of expanding its safety rules in response to accidents that expose dangerous vehicle defects. Upgrades such as improved fuel tanks, new gearshift designs and air-bag warnings all flowed from federal mandates to automakers since the 1970s. “The most likely outcome of this will be a regulatory catharsis,” said Brian Johnson , a Barclays Plc analyst based in Chicago. “There will probably be some sort of fail-safe system against unintended acceleration.” Cost Estimate Requiring automakers to upgrade braking software may cost $25 to $50 on each vehicle, Johnson said. That expense would rise to a range of $50 to $150 should regulators compel installation of new technology, he said. A NHTSA spokeswoman, Karen Aldana , didn’t respond to a phone call or e-mail seeking comment. Brake override systems work in tandem with the electronic throttle control technology that was unveiled in the late 1980s and is becoming an industry standard as automakers rush to meet safety rules taking effect in 2012. Electronic throttle controls use computer signals, not the mechanical action of cables attached to the accelerator pedal, to adjust a car’s speed. In a conventional auto, releasing the pedal eases the cable pressure, closing the throttle. In vehicles with an electronic control, a brake override unit would cut power to the wheels if the throttle is stuck open. General Motors Co. and Ford Motor Co. now have brake override units on some models, while Honda Motor Co. said it doesn’t have the technology. Chrysler Group LLC said it has override controls on all autos with electronic throttle systems. Toyota’s Response Toyota said Jan. 11 it would install the technology to cover most of its lineup after a 2009 recall. Hyundai Motor Co. and Nissan Motor Co. said they have brake override systems, as do luxury brands such as Daimler AG ’s Mercedes-Benz, which put the units on autos with electronic throttle control. “It would make sense to require a brake override,” said Michael Omotoso , a powertrain analyst at J.D. Power & Associates in Troy, Michigan. “I would be pretty surprised if it didn’t happen soon.” Toyota’s most-recent recall began Jan. 21, covering about 2.57 million vehicles in the U.S. and Canada to fix pedals that may cause the throttle to stick in an open position. The Toyota City, Japan-based automaker halted sales of eight models and shut five North American factories while it rolls out a repair. That followed a separate recall of 5.35 million Toyotas after floor mats in some models interfered with the accelerator pedal and kept the throttle propped open. Pending Lawsuits The world’s largest automaker faces at least 29 lawsuits seeking class action status in the U.S. and Canada, with 17 alleging defects in electronic throttle control systems. At least 10 lawsuits have been filed in the U.S. claiming deaths and injuries caused by sudden acceleration. U.S. Transportation Secretary Ray LaHood said this week the government is investigating whether some sudden speedups can be traced to electronic throttle control systems. Toyota said it has found no unintended-acceleration cases from the technology. “I’m not sure if there are electronic gremlins in these cars that are making them malfunction,” Bill Visnic , a senior editor for auto researcher Edmunds.com in Weirton, West Virginia. “It’s not impossible, but it’s improbable. But, either way, the brake system would prevent it.” After introducing electronic throttle control, Toyota also had a cable on the accelerator pedal as a backup from 1998 to 2002, when it determined the mechanical link was no longer needed, said Brian Lyons , a company spokesman. Override System Had Toyota added a backup system such as a brake override unit to cut power to the wheels, it could have kept most cars from losing control in any unintended acceleration, said attorney Robert Hilliard , who filed a suit on Jan. 29 seeking class action status in Corpus Christi, Texas. He likened the approach to a sky diver wearing an emergency parachute. “Let’s say your first chute doesn’t open,” Hilliard said. “The safety chute doesn’t stop the problem, it just prevents the consequences.” Antony Anderson , a U.K.-based electrical engineering consultant who has testified as an expert witness for plaintiffs in lawsuits, said any federal rule for brake override systems should ensure that the units aren’t run by the computer controlling the electronic throttle system. A case of sudden acceleration may be caused by electronic interference, so brakes guided by the same computer might not work, Anderson said. “If the electronics have malfunctioned, the software is in disarray,” he said. “It won’t accept an additional command.” Regulatory Legacy Regulatory changes spurred a number of the features now taken for granted in modern autos, said John Wolkonowicz , an analyst at IHS Global Insight in Lexington, Massachusetts. Stronger fuel tanks, for example, emerged from the 1978 recall of about 1.5 million Ford Pintos on concern that rear-end collisions could spill gasoline and ignite fires, Wolkonowicz said. So-called shift locks, which require drivers to place a foot on the brake before putting a car with automatic transmission in gear, came in response to sudden-acceleration cases involving Volkswagen AG ’s Audi, Wolkonowicz said. Recalls of Audi 5000 sedans from the 1978 through 1986 model years began in 1982 after more than 1,000 complaints. While NHTSA closed its Audi investigation in 1989, the class action in that case is still pending in Cook County, Illinois. More-recent automotive innovations include monitors to alert motorists to low tire pressure, Wolkonowicz said. Those devices became required after 271 deaths attributed to rollovers of Ford Explorer sport-utility vehicles, which spurred recalls of Firestone tires in 2000 and 2001. Worn, underinflated tires were cited for many of the Explorer crashes. What Next? Claybrook, the NHTSA chief during the Pinto recall, said Toyota’s case may prompt the U.S. to consider criminal penalties for companies that don’t react quickly to safety flaws and boost fines for some infractions to $100 million or more from a cap of $16.4 million. Another likely quick fix is a warning label telling drivers how to stop a vehicle that accelerates unintentionally, said Omotoso, the J.D. Power analyst. Similar advisories were placed in cars after air bags were blamed for deaths of front-seat passengers, he said. “More and more of the direct control of the car is being taken away from the driver, and there is this growing sense of helplessness in the face of technology that’s supposed to help us,” Omotoso said. “You just have to hope it all works.” To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net ; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net .

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Toyota Pedal Recall May Force New Braking System Requirements for All Cars

February 5, 2010

By Jeff Green and Margaret Cronin Fisk Feb. 5 (Bloomberg) — Toyota Motor Corp. ’s U.S. recall of 5.6 million vehicles for possible unintended acceleration may spur regulators to require braking technology that prevents such sudden bursts of speed in all future vehicles. So-called brake override systems, which disengage the engine when the brake and throttle are both depressed, are now on many newer autos that use computers instead of cables to control acceleration. Toyota said last month it is adding the equipment on most models, in response to a Sept. 29 recall. “There’s no question,” said Joan Claybrook , a safety advocate and former director of the National Highway Traffic Safety Administration . “We are going to see a brake override system requirement in response to this.” New regulations would build on the government’s history of expanding its safety rules in response to accidents that expose dangerous vehicle defects. Upgrades such as improved fuel tanks, new gearshift designs and air-bag warnings all flowed from federal mandates to automakers since the 1970s. “The most likely outcome of this will be a regulatory catharsis,” said Brian Johnson , a Barclays Plc analyst based in Chicago. “There will probably be some sort of fail-safe system against unintended acceleration.” Cost Estimate Requiring automakers to upgrade braking software may cost $25 to $50 on each vehicle, Johnson said. That expense would rise to a range of $50 to $150 should regulators compel installation of new technology, he said. A NHTSA spokeswoman, Karen Aldana , didn’t respond to a phone call or e-mail seeking comment. Brake override systems work in tandem with the electronic throttle control technology that was unveiled in the late 1980s and is becoming an industry standard as automakers rush to meet safety rules taking effect in 2012. Electronic throttle controls use computer signals, not the mechanical action of cables attached to the accelerator pedal, to adjust a car’s speed. In a conventional auto, releasing the pedal eases the cable pressure, closing the throttle. In vehicles with an electronic control, a brake override unit would cut power to the wheels if the throttle is stuck open. General Motors Co. and Ford Motor Co. now have brake override units on some models, while Honda Motor Co. said it doesn’t have the technology. Chrysler Group LLC said it has override controls on all autos with electronic throttle systems. Toyota’s Response Toyota said Jan. 11 it would install the technology to cover most of its lineup after a 2009 recall. Hyundai Motor Co. and Nissan Motor Co. said they have brake override systems, as do luxury brands such as Daimler AG ’s Mercedes-Benz, which put the units on autos with electronic throttle control. “It would make sense to require a brake override,” said Michael Omotoso , a powertrain analyst at J.D. Power & Associates in Troy, Michigan. “I would be pretty surprised if it didn’t happen soon.” Toyota’s most-recent recall began Jan. 21, covering about 2.57 million vehicles in the U.S. and Canada to fix pedals that may cause the throttle to stick in an open position. The Toyota City, Japan-based automaker halted sales of eight models and shut five North American factories while it rolls out a repair. That followed a separate recall of 5.35 million Toyotas after floor mats in some models interfered with the accelerator pedal and kept the throttle propped open. Pending Lawsuits The world’s largest automaker faces at least 29 lawsuits seeking class action status in the U.S. and Canada, with 17 alleging defects in electronic throttle control systems. At least 10 lawsuits have been filed in the U.S. claiming deaths and injuries caused by sudden acceleration. U.S. Transportation Secretary Ray LaHood said this week the government is investigating whether some sudden speedups can be traced to electronic throttle control systems. Toyota said it has found no unintended-acceleration cases from the technology. “I’m not sure if there are electronic gremlins in these cars that are making them malfunction,” Bill Visnic , a senior editor for auto researcher Edmunds.com in Weirton, West Virginia. “It’s not impossible, but it’s improbable. But, either way, the brake system would prevent it.” After introducing electronic throttle control, Toyota also had a cable on the accelerator pedal as a backup from 1998 to 2002, when it determined the mechanical link was no longer needed, said Brian Lyons , a company spokesman. Override System Had Toyota added a backup system such as a brake override unit to cut power to the wheels, it could have kept most cars from losing control in any unintended acceleration, said attorney Robert Hilliard , who filed a suit on Jan. 29 seeking class action status in Corpus Christi, Texas. He likened the approach to a sky diver wearing an emergency parachute. “Let’s say your first chute doesn’t open,” Hilliard said. “The safety chute doesn’t stop the problem, it just prevents the consequences.” Antony Anderson , a U.K.-based electrical engineering consultant who has testified as an expert witness for plaintiffs in lawsuits, said any federal rule for brake override systems should ensure that the units aren’t run by the computer controlling the electronic throttle system. A case of sudden acceleration may be caused by electronic interference, so brakes guided by the same computer might not work, Anderson said. “If the electronics have malfunctioned, the software is in disarray,” he said. “It won’t accept an additional command.” Regulatory Legacy Regulatory changes spurred a number of the features now taken for granted in modern autos, said John Wolkonowicz , an analyst at IHS Global Insight in Lexington, Massachusetts. Stronger fuel tanks, for example, emerged from the 1978 recall of about 1.5 million Ford Pintos on concern that rear-end collisions could spill gasoline and ignite fires, Wolkonowicz said. So-called shift locks, which require drivers to place a foot on the brake before putting a car with automatic transmission in gear, came in response to sudden-acceleration cases involving Volkswagen AG ’s Audi, Wolkonowicz said. Recalls of Audi 5000 sedans from the 1978 through 1986 model years began in 1982 after more than 1,000 complaints. While NHTSA closed its Audi investigation in 1989, the class action in that case is still pending in Cook County, Illinois. More-recent automotive innovations include monitors to alert motorists to low tire pressure, Wolkonowicz said. Those devices became required after 271 deaths attributed to rollovers of Ford Explorer sport-utility vehicles, which spurred recalls of Firestone tires in 2000 and 2001. Worn, underinflated tires were cited for many of the Explorer crashes. What Next? Claybrook, the NHTSA chief during the Pinto recall, said Toyota’s case may prompt the U.S. to consider criminal penalties for companies that don’t react quickly to safety flaws and boost fines for some infractions to $100 million or more from a cap of $16.4 million. Another likely quick fix is a warning label telling drivers how to stop a vehicle that accelerates unintentionally, said Omotoso, the J.D. Power analyst. Similar advisories were placed in cars after air bags were blamed for deaths of front-seat passengers, he said. “More and more of the direct control of the car is being taken away from the driver, and there is this growing sense of helplessness in the face of technology that’s supposed to help us,” Omotoso said. “You just have to hope it all works.” To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net ; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net .

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Apple Co-Founder Wozniak Says His Toyota Prius Accelerates Unintentionally

February 3, 2010

By Mehul Srivastava Feb. 3 (Bloomberg) — Count Apple Inc. co-founder Steve Wozniak among Toyota Motor Corp. car owners who say their vehicles accelerate unintentionally. Wozniak’s 2010 Toyota Prius can unintentionally accelerate to as much as 97 miles (156 kilometers) per hour when he uses cruise control to increase his speed, he said in an interview yesterday. Toyota and the U.S. National Highway Traffic Safety Administration haven’t responded to his complaints in the past two months on what may be a software-related glitch, he said. “It’s scary when it happens,” Wozniak, 59, said from San Jose, California. “I’ve had trouble getting both the government safety agency and getting Toyota to listen to me.” The world’s largest automaker has recalled millions of vehicles globally to fix mechanical flaws in accelerator pedals that could lead to sudden unintended increases in speed. The action led to a halt of U.S. sales and production of eight models and prompted Congress to schedule hearings. “I have never heard of this problem with cruise control on Priuses,” a Toyota spokeswoman, Ririko Takeuchi , said by phone from Tokyo Feb. 2. She said she doesn’t know whether the problem has been reported by anyone other than Wozniak or whether Toyota is investigating. The company began shipping to dealers on Feb. 1 steel attachments it says are a fix for sticky gas pedals, which will be replaced in as many as 2.57 million cars in the U.S. and Canada. The repairs will only fix possible mechanical flaws. U.S. Review “We know what the problem is,” Jim Lentz , Toyota’s president of U.S. sales, said in an interview on Bloomberg Television on Feb. 1. “We have the fix.” U.S. safety officials have started to probe electronic throttle systems in Toyota cars as a possible cause of sudden acceleration, as alleged in at least seven lawsuits, according to an official of the Transportation Department, who asked not to be identified while a review of Toyota’s actions continues. Toyota was ordered today by Japan’s government to investigate brake-related problems in the latest Prius hybrid model. The Transport Ministry has received 14 complaints about the model’s brakes since it was introduced in May, said Masaya Ota , an official in the ministry’s recall division. The ministry contacted the company about the issue in August, said Shunsuke Miyaoka , who works in the same division. Electronics are “not part of the issue,” Lentz said during a conference call this week. The company’s credibility would be further damaged if it is proved wrong, said Rebecca Lindland , an analyst at IHS Global Insight. ‘Diehard Loyalists’ “Consumers would view that very negatively,” Lindland, based in Lexington, Massachusetts, said in a phone interview yesterday. “That group of diehard Toyota loyalists is being chipped away as each new recall comes out.” The Japanese carmaker, based in Toyota City, has also recalled 5.35 million vehicles, including the 2004-2009 Prius, because of the risk of “floor mat entrapment” of the accelerator pedals, according to Toyota’s Web site. Wozniak’s 2010 model, which has a steering-wheel mounted dynamic radar cruise control, hasn’t been recalled by the company, but other Prius models he owns have. The safety agency as of Feb. 1 hadn’t found evidence that anything other than sticky or trapped accelerators caused the unintended acceleration, the transport department official said. Mike Michels , Toyota’s U.S. vice president for corporate communications based in Torrance, California, said in an e- mailed statement yesterday that he had “no information” on a continuing investigation by NHTSA of the automaker’s electronic throttle control system. Electronic Signals At least 15 lawsuits seeking class-action status have been filed against Toyota on the issue, seven of which claim an electronic throttle system called ETCS-i is at fault instead of the pedals. While in cruise control, flicking the lever on the side of the steering wheel doesn’t always increase the speed of the car in increments as intended, Wozniak said. Instead, the vehicle would sometimes continue accelerating until one steps on the brake, he said. Wozniak, who owns four Priuses, said he took his car to a dealership, contacted Toyota and called the NHTSA about the issue. He said he believes the acceleration may be caused by a software glitch because the issue occurs in cruise control. Wozniak said he would buy another Prius. Toyota fell 5.7 percent to close at 3,400 yen in Tokyo trading today, the biggest decline in Japan’s Nikkei 225 Stock Average, which gained 0.3 percent. Wozniak made the comments after a Web log posted on the CNET News Web site reported he spoke about his Prius’s cruise control at the Discovery Forum 2010 in San Francisco. “Is my software bug also some code that is in the other Priuses and related to the deadly problem?” he said. To contact the reporters on this story: Mehul Srivastava in New Delhi at msrivastava6@bloomberg.net ; Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

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SAP’s Apotheker Fails to Impress Analysts With `Market Changing’ Software

January 29, 2010

By Ragnhild Kjetland Jan. 29 (Bloomberg) — SAP AG Chief Executive Officer Leo Apotheker failed to impress analysts with the company’s planned Business ByDesign offering, an Internet software service that he dubbed a “market changer.” The world’s biggest business software company’s new product, that allows customers to subscribe and pay on a monthly basis, will begin being sold by July, about three years late. At about 40,000 euros ($55,800) a year for a 25-user outfit, compared with large SAP contracts that go into millions of euros, it may be a drag on margins , said Peter Goldmacher , an analyst at Cowen and Co. LLC in San Francisco. “There’s no way they are going to get the margins they are historically used to in this lower-end market with a cheaper product,” said Goldmacher, who has an “underperform” rating on the stock. “The product is probably fine, but they are going to have a problem selling to a market that they haven’t sold to before.” SAP , whose software is used for payrolls, customer relations management and Apple Inc.’s iTunes download system, is looking for new sales streams after this week reporting a drop in revenue and profit for 2009. The move marks its second effort this month to provide lower-end options to clients faced with a slump in the global economy. On Jan. 14, SAP did an about-face, caving in to customer pressure by unveiling cheaper software- support options. Delayed ByDesign was initially unveiled in September 2007. In April 2008, SAP decided to “modify” the release and said it would take 12 to 18 months longer to reach its target of $1 billion in sales and 10,000 customers , after having expected to meet that goal by 2010. At a press conference this week, Apotheker didn’t say how much revenue the software may generate. “I don’t think we should count on a lot of sales from ByDesign this year,” he said. “We want to go to market first and then talk about the target, rather than the other way around. I’m absolutely certain that SAP’s Business ByDesign will change the market. It is the richest, most complete solution that will be available on the market and if I were a competitor, I would be worried.” The new service puts SAP in the fray with companies that have similar offers for businesses. The competition in this market isn’t Oracle Corp, it’s the likes of NetSuite, Salesforce.com and SuccessFactors , said Thomas Otter , a director at Gartner Research, in Frankfurt. Apotheker said SAP had taken into account costs related to ByDesign when setting its operating profit margin guidance. SAP, based in Walldorf, Germany, said it’s targeting an operating margin of between 30 percent and 31 percent at constant currencies in 2010 from 27.4 percent in 2009. Ambitious “SAP is ambitious to think that they can roll out a volume software-as-a-service product and still maintain and grow margin at the same time,” Otter said. The company reported this week that its fourth-quarter net income slid 12 percent to 727 million euros from 830 million euros a year earlier. Revenue fell 9 percent to 3.2 billion euros. The new service is being tried by 100 small and medium- sized companies, including Park City, Utah-based Skullcandy Inc. and Widnes, U.K.-based Pentagon Chemicals Ltd. Apotheker said the new product will be a “volume- business” by 2011. SAP’s ambitions for the product may be misplaced, said Andy Miedler , analyst at Edward Jones in St.Louis Missouri. “The question is how fast the uptake is out there,” he said. “SAP is facing some pretty good entrenched competitors and is coming a bit from behind.” Latest Technology Hans-Peter Klaey , head of SAP’s small and medium enterprise business, defended the company’s claim the product would change the industry. The new product has an “end-to-end” capability, containing customer relationship management software, human resource software, finance software, and it can add on additional solutions as the market changes, he said “We can do that because it is based on the latest technology,” Klaey said in an interview. “If you look at what’s already out there, they aren’t really based on the newest technology, so we have a big advantage in this regard because we took the time and made it right.” He said feedback from the sales channels and from prospective customers is that “they haven’t seen anything like this from anybody else in the market.” With the product, SAP is targeting companies with between 50 and 500 employees. For a 25-person company, the cost of the software would be no more than hiring an information technology person, he said. ‘Generic Software’ Gartner’s Otter and Cowen’s Goldmacher said they were skeptical about the company’s capacity to manage sales of the product, which small and medium-sized business customers can access through the Internet. “One third of SAP’s revenues come from its 500 largest customers and they are saying now that the plan is to go way down in the market to sell this generic software,” said Goldmacher. “They can’t sell like they’ve historically sold because they don’t have the distribution capability in that market.” To contact the reporter on this story: Ragnhild Kjetland in Frankfurt rkjetland@bloomberg.net

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Microsoft Profit Beats Estimates on Release of Windows 7 Operating System

January 28, 2010

By Dina Bass Jan. 28 (Bloomberg) — Microsoft Corp. , the world’s largest software maker, reported second-quarter profit that topped analysts’ estimates after Windows 7 spurred the first sales increase in a year. Second-quarter net income rose 60 percent to $6.66 billion, or 74 cents a share, beating the 59-cent average estimate of analysts surveyed by Bloomberg. Revenue climbed 14 percent to $19 billion, the company said today in a statement. Personal-computer buyers stepped up orders last quarter as the economy recovered and Microsoft released a new version of Windows. Sales of U.S. PCs running Windows rose about 50 percent over the holiday season, the company said earlier this month, citing data from NPD Group Inc. Microsoft is counting on Windows 7 to trigger a surge of upgrades by consumers and businesses. “Microsoft is in a great position,” sent Brent Thill , an analyst at UBS AG in San Francisco, who recommends buying the shares. “They have one of the best product cycles in the last five years, maybe 10, and it spans across their three biggest divisions.” Microsoft , based in Redmond, Washington, fell 51 cents to $29.16 at 4 p.m. New York time on the Nasdaq Stock Market. The stock climbed 19 percent last quarter, exceeding the 5.5 percent gain by the Standard and Poor’s 500 Index . Today’s earnings report is the first under Chief Financial Officer Peter Klein , who was named to the post in November. Second-quarter sales included $1.71 billion in deferred revenue from previous quarters. Analysts projected total sales of $17.9 billion for the period, which ended Dec. 31. A year earlier, net income was $4.17 billion, or 47 cents a share, on sales of $16.6 billion. No Forecast Microsoft, which stopped giving earnings forecasts in January 2009, didn’t give a specific outlook for profit and sales. Microsoft reiterated an October prediction that it will spend as much as $26.5 billion on operating expenses this fiscal year. PC shipments rose 15 percent worldwide last quarter, according to Framingham, Massachusetts-based IDC, which had predicted 11 percent growth. U.S. shipments were even more surprising. They jumped 24 percent, four times the rate that IDC had projected. Microsoft ’s Windows runs more than 90 percent of the world’s PCs. Many customers skipped the last version of the software, called Vista, raising speculation that buyers will upgrade this time around. Microsoft ’s Bing search engine, released in June, has increased its market share by 2.7 percentage points, according to research firm ComScore Inc. Microsoft had 10.7 percent of the U.S. search market in December, compared with 65.7 percent for Google Inc. and 17.3 percent for Yahoo! Inc. , according to ComScore. To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

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Sun Chairman McNealy Has `Few Regrets’ as Oracle Takeover Nears Completion

January 27, 2010

By Connie Guglielmo and Rochelle Garner Jan. 27 (Bloomberg) — Sun Microsystems Inc. Chairman Scott McNealy , in a final memo to employees yesterday as the company prepares to be acquired, said he has “few regrets” about how the fourth-largest maker of computer servers conducted business. “ Sun did not cheat, lie, or break the rule of law or decency,” McNealy wrote. “While we enjoyed breaking the rules of conventional wisdom and archaic business practice and for sure loved to win in the market, we did so with a solid reputation for integrity.” McNealy, 55, sent his memo to employees of the Santa Clara, California-based company as he readies a handover to Oracle Corp. After Oracle agreed in April to buy Sun for $7.4 billion, the purchase was delayed as European regulators investigated the transaction. Oracle received approval from the European Commission last week, removing one of the deal’s last hurdles. “While it was never the primary vision to be acquired by Oracle, it was always an interesting option,” McNealy said in the note, which thanked employees for “a great 28 years.” Oracle has acquired about 60 companies since January 2005. The $9.50-a-share purchase of Sun is Oracle’s first outside the software market. “To be honest, this is not a note this founder wants to write,” McNealy said in the memo. “Sun in my mind should have been the great and surviving consolidator. But I love the market economy and capitalism more than I love my company.” Severance Pay Sun’s top executives, including McNealy, Chief Executive Officer Jonathan Schwartz and Chief Financial Officer Mike Lehman , won’t be offered positions at Oracle, people familiar with the matter said. The executives won’t resign because they would forfeit severance packages that are triggered by the sale, said one person, who declined to be identified because the plans aren’t public. Schwartz is set to receive $12 million as part of his severance package, McNealy will get $9.53 million and Lehman is due $4.03 million, Sun said in a June 8 regulatory filing. Those sums didn’t include performance-based restricted stock, which Sun said it wasn’t able to value at the time. McNealy co-founded the company in 1982 and was CEO from December 1984 to April 2006. He then handed the job to Schwartz, 44, at a time when Sun was trying to recover from five years of losses. Oracle CEO Larry Ellison is scheduled to host an event today at the company’s headquarters in Redwood City, California, to lay out plans to integrate Sun’s products. Sun rose 1 cent to $9.49 yesterday in Nasdaq Stock Market trading. Oracle declined 15 cents to $23.88. To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Rochelle Garner in San Francisco at rgarner4@bloomberg.net .

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Sun’s Schwartz, McNealy Said to Be Planning to Leave After Oracle Buyout

January 26, 2010

By Connie Guglielmo and Rochelle Garner Jan. 26 (Bloomberg) — Sun Microsystems Inc. ’s top executives, including Chief Executive Officer Jonathan Schwartz and Chairman Scott McNealy , will leave after the $7.4 billion buyout by Oracle Corp., people familiar with the matter said. Schwartz, McNealy, Chief Financial Officer Mike Lehman and other members of the executive team won’t be offered positions at Oracle, said the people, who declined to be identified because the plans aren’t public. The executives won’t resign because they would forfeit severance packages that are triggered by the sale, one person said. Oracle, which has made about 60 acquisitions since January 2005, hasn’t retained the CEOs of large companies it has bought. Those include the $10.3 billion takeover of PeopleSoft Inc., the $5.85 billion acquisition of Siebel Systems Inc. and the $8.5 billion purchase of BEA Systems Inc. Schwartz was set to receive $12 million as part of his severance package, McNealy would get $9.53 million, and Lehman is due $4.03 million, Sun said in a June 8 regulatory filing . Those sums didn’t include performance-based restricted stock, which Santa Clara, California-based Sun said it wasn’t able to value at the time. Schwartz, 44, took over the CEO job from co-founder McNealy in April 2006, a time when Sun was trying to recover from five years of losses. Schwartz and McNealy, 55, didn’t respond to e-mails seeking comment. Deborah Hellinger , a spokeswoman for Oracle, also didn’t respond to an e-mail. Hardware Push Sun, the fourth-biggest maker of server computers, is Oracle’s first purchase outside of the software market. Earlier this month, a Sun executive sent an e-mail to the company’s employees saying that Oracle will “rely heavily” on Sun’s workforce. Last week, Schwartz wrote a memo urging employees moving to Oracle to help the company expand. He told workers who may not be given jobs at Oracle that “Sun is a great brand on your resume.” Sun had almost 27,600 employees in September. Oracle CEO Larry Ellison is scheduled to host an event tomorrow at the company’s headquarters in Redwood City, California, to lay out plans to integrate Sun’s products. The purchase received European Union approval last week, which was among the last hurdles before the transaction is completed. The planned departure of Sun’s executives was reported yesterday by the All Things Digital blog. Sun rose 1 cent to $9.49 at 4 p.m. New York time in Nasdaq Stock Market trading. Oracle declined 15 cents to $23.88. To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Rochelle Garner in San Francisco at rgarner4@bloomberg.net

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Apple Said to Talk With McGraw-Hill, Hachette for Books on Tablet Computer

January 23, 2010

By Spencer E. Ante and Greg Bensinger Jan. 23 (Bloomberg) — Apple Inc. has held talks with Hearst Corp., McGraw-Hill Cos. and Hachette Book Group about putting their publications on its tablet computer, according to people familiar with the discussions. The talks with Hearst focused on the company providing magazine content for the device, said one person, who declined to be identified because the information isn’t public. McGraw- Hill’s education unit is discussing getting electronic textbooks and parts of its online learning system onto the tablet, said two other people. Apple also has talked with Hachette about distributing e-books, another person said. Apple’s tablet, which may be introduced next week, is likely to feature content from book, magazine and newspaper publishers, as well as video from entertainment companies, said Roger Kay , president of Endpoint Technologies Associates, a research firm in Wayland, Massachusetts. “Everyone is expecting e-book capabilities and services,” Kay said. “This generation of tablets is all about the consumer and media consumption.” Mary Skafidas , a spokeswoman for New York-based McGraw- Hill, and Katie Cotton, a spokeswoman for Cupertino, California- based Apple, declined to comment. Sophie Cottrell, a spokeswoman for Hachette Book Group, which is owned by Lagardere SCA, also declined to comment. Apple dropped $10.32 to $197.75 yesterday in Nasdaq Stock Market trading. McGraw-Hill fell 8 cents to $33.26 on the New York Stock Exchange. Lagardere, based in Paris, slipped 1.1 percent to 28.30 euros in Paris trading. Magazine Content Apple and New York-based Hearst, which publishes Esquire and Marie Claire magazines, haven’t reached an agreement, one person said. The discussions focused on Hearst providing magazine content, the person said. Publisher John Wiley & Sons Inc. also has had discussions with Apple about including Wiley content on Apple devices, said Peter Balis, director of digital content sales at Hoboken, New Jersey-based Wiley. “We have had ongoing conversations with Apple about their interest in including educational content,” Balis says. “We will continue to support their efforts in whatever iteration it takes next week.” He declined to comment specifically on the tablet. Electronic Textbooks Apple ’s talks with McGraw-Hill cover how the two companies can market textbooks for the tablet and ways their software development teams can collaborate to publish digital textbooks and educational content from Connect, an online service that delivers educational coursework over the Web, on Apple’s latest device, the two people said. In October, McGraw-Hill announced that it was making 600 titles available as e-books for the Apple iPhone and iPod Touch. To offer those books, McGraw-Hill formed a partnership with ScrollMotion Inc. , a New York-based startup that is working with publishers to develop electronic versions of books. Apple’s interest in educational content underscores the longstanding popularity of the company’s products in schools and universities. For years, Apple has offered discounts for students and teachers. To contact the reporters on this story: Spencer E. Ante in New York at sante1@bloomberg.net ; Greg Bensinger in New York at gbensinger1@bloomberg.net .

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Nitro PDF Software Appoints World-Recognized PDF Authority, Lonn Lorenz, as Director of Product Management

January 12, 2010

SAN FRANCISCO, CA–(Marketwire – January 12, 2010) – Nitro PDF Software, the company that revolutionized the PDF software space with the release of its award-winning Nitro PDF Professional, today announced the appointment of Lonn Lorenz as Director of Product Management. Lorenz joins Nitro from Adobe Systems, where his last role was Senior Product Manager for Scene7. A globally-recognized authority on PDF, Lorenz brings more than two decades of industry experience, and has served as an expert speaker and panelist at leading industry forums including CeBIT, Seybold, and Macworld.

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Google Phone Threatens Droid More Than IPhone: Rich Jaroslovsky

January 11, 2010

Commentary by Rich Jaroslovsky Jan. 11 (Bloomberg) — It’s a nice phone. OK, it’s a very nice phone. But nothing about the new Nexus One smartphone from Google Inc. comes close to warranting the mass hysteria that attended its unveiling last week. The Nexus One isn’t revolutionary. Nor is it an iPhone killer — a phrase we should banish to the Tech Writers’ Hall of Cliches. It is, instead, a sleek phone with some advancements in display and processor technology that will surely be matched and then overtaken by others in the months ahead. True, the rapidly evolving competition among Google, Apple Inc ., Microsoft Corp. and Research in Motion Ltd. is fascinating to watch. And Google’s plunge into e-tailing — the Nexus One can only be bought directly from the company over the Web — has the potential to shake up how phones are sold. Me, though, I find it hard to swoon over a business model. The Nexus One, manufactured by Taiwan’s HTC Corp. to Google’s specifications, is similar in both size and shape to the iPhone — a smidge thinner and lighter, a trifle longer. It runs a new version of Google’s Android operating system that makes modest tweaks to the software that debuted on Motorola Inc. ’s Droid two months ago. Thing of Beauty If anyone ought to feel threatened by the Nexus One, it’s Motorola, which committed to using Android for all its smartphones and now has powerful new competition from its own partner. Just to cite one area, the Droid’s screen used to be my favorite: super-bright, with higher resolution than the iPhone. But the Nexus One uses new technology that provides an even richer display, with deeper colors and blacker blacks. It’s a thing of beauty. Under the hood, the Nexus One uses a Qualcomm Inc. processor that’s the most powerful ever put in a phone. It also has enhanced 3-D graphics, expanded speech-to-text features — you can now dictate your Facebook or Twitter updates rather than type them — a replaceable battery and a memory-card slot. At the same time, the Nexus One shares the shortcomings of previous Android and HTC phones. The number of Android apps trails far behind the iPhone. So does Android’s ability to sync with Microsoft Outlook for e- mail, calendars and contacts, though the Nexus One does come with a version of DataViz Inc.’s Documents To Go software that lets you work with Microsoft Word, Excel and PowerPoint files. Accidental Launches Its app icons, which now whiz onto the desktop instead of rolling up window shade-style, are too small and close together; I too often accidentally launch an app when all I’m trying to do is scroll through them. The included 4 gigabytes of storage is too small and inflexible, with only 190 megabytes set aside for apps. You can’t pinch your fingers together or move them apart to zoom in or out on a screen. The home, back, menu and search buttons below the screen require too much pressure to push, and the trackball seems superfluous except when it glows to signal a new call or message. The company’s real innovation is in how it’s selling the Nexus One and the other Google-branded phones to follow. Most phones in the U.S. are purchased tied to a specific carrier, which subsidizes the cost of the handset in return for your commitment to a service contract. Google is seeking to separate the handset from the service. You can buy it with a service plan for $179, or pay $529 and purchase service separately. T-Mobile At launch, there isn’t much of a choice: The only carrier currently offering a plan is T-Mobile USA, the U.S. mobile-phone division of Deutsche Telekom AG , which charges $79.99 per month. In theory, you can also use a SIM card from AT&T Inc., but the phone wouldn’t be able to use AT&T’s 3G network for data, only its older, slower Edge network. Outside the U.S., Google is shipping the unlocked Nexus One to the U.K., Hong Kong and Singapore. The choices will multiply over time. This spring will see a Nexus One that runs on the Verizon Wireless network, which uses a different technology than AT&T and T-Mobile. Also in the spring, Vodafone Group Plc is lined up to offer a service plan for the Nexus One in Europe. Google is responsible for delivering the phone — the one I ordered on launch day last week arrived in less than 48 hours — and will be the first point of contact if anything goes wrong. Weakening the carriers’ control and compelling them to compete with each other may eventually put more power into consumers’ hands — and, of course, Google’s. While all this is interesting, it’s hardly earth- shattering. When Apple introduced the iPhone in 2007, it changed the entire way people thought about wireless devices, ushering in the era of the mobile Web. The Nexus One? It’s just a very nice phone. ( Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Rich Jaroslovsky in New York at rjaroslovsky@bloomberg.net

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Infor Names Bruce Richardson Chief Strategy Officer

January 7, 2010

Industry Luminary and Leading Enterprise Software Analyst Joins Infor Team

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US- JDA Software announces closing of Its $275m offering

December 12, 2009

US- JDA Software announces closing of Its $275m offering

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TRUSTe Names Chris Babel as CEO

December 8, 2009

Security Software Industry Veteran Will Lead Next Chapter in Company’s Growth

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JDA Software announces pricing of $275m of senior notes

December 8, 2009

JDA Software announces pricing of $275m of senior notes

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Appian Enhances Executive Leadership Team

December 1, 2009

Edward Hughes Joins BPM Software Leader as Senior Vice President for Worldwide Sales

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US- JDA Software Group announces private offering of $275m

December 1, 2009

US- JDA Software Group announces private offering of $275m

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Acronis Adds Ed Filippine as General Manager of the Americas

November 10, 2009

Technology Industry Veteran Brings Extensive Sales Experience to Storage and Disaster Recovery Software Leader

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L-3 Communications Entering The GATE

November 10, 2009

L-3 Communications’ Command & Control Systems and Software (C2S2) is coming to The Government and Technology Enterprise (GATE), the new commercial business campus in Maryland’s Aberdeen Proving Ground. The defense contractor signed a lease for the…

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Nitro PDF Software Announces Appointment of SEEK Co-Founder, Matthew Rockman, as Chairman

November 5, 2009

SAN FRANCISCO, CA–(Marketwire – November 5, 2009) – Nitro PDF Software, the company that revolutionized the PDF software space with the introduction of the first true alternative to Adobe® Acrobat®, Nitro PDF Professional, today announced the appointment of Matthew Rockman as non-executive Chairman. His appointment represents another significant addition to the board of directors, joining Andrew Barlow, co-founder of Hitwise. As a co-founder of SEEK Ltd. ( ASX : SEK ), Mr. Rockman was instrumental in creating one of Australia’s largest, most successful online media companies. Since SEEK’s IPO in 2005, the company has grown to a market capitalization of over $2 billion and has operations in Australia, the United Kingdom, China, Brazil, New Zealand, and Malaysia.

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`Bill Gates of Belgium’ Fights SAP From Farmhouse as Free Software Spreads

October 30, 2009

By Matthew Campbell and Stephanie Bodoni Oct. 30 (Bloomberg) — To find the latest threat to business-software makers like SAP AG and Oracle Corp. , go to an unlikely location: a 150-year-old farmhouse in Belgium. That’s where closely held Tiny Sprl, run by 30-year-old Fabien Pinckaers, develops free business applications that are picking up customers during the recession. The economic “crisis has been very good for me,” Pinckaers said in an interview at the farm in Grand-Rosiere. “Restructuring is very good for enterprise resource planning.” Free programs such as Linux first challenged Microsoft Corp. in software that runs personal computers. Linux has gradually gained enough acceptance that government agencies and even some corporations are willing to try such programs for some of their most important tasks: applications that run billing, payroll and purchasing. That’s been the province of SAP and Oracle, whose products can carry list prices of thousands of dollars per user. Tiny, Openbravo SL and other open-source software providers write programs that are often given away and can be modified by users, not just their authors. The providers make money by charging for maintenance and services. Open-source applications and related services will drive $19 billion of revenue away from traditional, proprietary suppliers in 2012, rising from $7 billion now, according to researcher Gartner Inc. “It ain’t hippie idealism anymore,” said Brent Williams , an analyst at Benchmark Co. in New York. Tiny’s Business Pinckaers, who business magazine Trends said may be “the Bill Gates of Belgium,” predicts revenue will rise to 10.5 million euros ($15.6 million) in 2011 from 600,000 euros in the first half of this year. Tiny’s client list includes France’s postal service and L’Ecole Nationale d’Administration , an elite French university. Tiny’s Open ERP software manages purchasing, human resources and other administrative tasks. Requests for the software have increased by about 20 percent every two months since January, Pinckaers said. Like the Linux open-source operating system, created in Helsinki, Pinckaers’ seven-year-old Tiny may build influence from a headquarters far from Silicon Valley. Pinckaers chose the company’s farmhouse in rural Belgium for its proximity to the Universite Catholique de Louvain, which has a large computer- science department. Tiny has about 75 employees. Pinckaers said he is open to a takeover of Tiny “not today, because I still have a lot of things to do, but in four or five years.” Meanwhile, Tiny will arrange 4 million euros of venture-capital investment by the end of the year, he said. ‘Feeling the Pinch’ Certainly, open-source is a small part of the software market, and these programs sometimes don’t have all the features that can be found in proprietary applications made by traditional suppliers. Still, some analysts said SAP , the world’s biggest maker of business management software, is starting to feel the pinch. Walldorf, Germany-based SAP this week cut its sales forecast as clients in emerging markets and Japan spent less than it anticipated. Software and related service revenue will fall between 6 percent and 8 percent in 2009 before some items. In July, it had predicted the drop would be 4 percent to 6 percent. “When there is an alternative to paying for a license, people will look at it very seriously,” said Jonathan Crozier , an analyst at WestLB Equity Markets in London. “That’s catching up a bit with SAP.” RedHat Revenue The phenomenon started in operating systems, where RedHat Inc., the biggest seller of software based on the open-source Linux program, has picked up corporate customers including Whole Foods Market Inc., Banco Pastor SA in Spain and Union Bank in the U.S. RedHat’s second-quarter revenue rose 12 percent as it attracted clients away from Microsoft and Sun Microsystems Inc. “Prior to the fourth quarter of last year we were seeing some sporadic, slow but solid growth in certain areas of open source,” said Laurie Wurster, a Gartner analyst in Milford, New Hampshire. “Now, open-source producers are getting more interest from companies that wouldn’t even have considered them in the past.” Oracle didn’t respond to a call from Bloomberg News seeking comment. SAP isn’t being hurt by open-source applications, Chief Executive Officer Leo Apotheker said on a conference call this week after giving the forecast. “There is no negative effect from open-source software on our business,” he said. SAP supports open-source software in “certain domains,” so “you’ll find many customers running our software on open- source and we certainly welcome that,” Apotheker said. “For example, we do it for our midsize offering All-In-One. So I think open software is one of the supply chain elements of any software that the customer can run.” Market Openings Still, it may be difficult for established software companies to adapt, said Ken Allen , a portfolio manager at Baltimore-based T. Rowe Price Group Inc., the seventh-biggest institutional holder of Microsoft shares . “Like many types of disruptions, it’s hard for the incumbent companies to harvest them as they’d like,” leaving openings for new market entrants, he said. — With assistance from Simon Thiel in London. Editors: Robert Valpuesta , Cesca Antonelli . To contact the reporters on this story: Matthew Campbell in London at mcampbell39@bloomberg.net ; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

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Certain Software Appoints Olivier Delerm as Chief Marketing Officer

October 29, 2009

Experienced Software Industry Marketer to Drive Growth for Global Events and Meetings Solution Provider

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Mitchell International Adds Leading Technologist to the SmartAdvisor Division Leadership Team

October 28, 2009

Ken Mihara to Lead Development of the Next Generation SmartAdvisor(TM) Software Solutions

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Mitchell International Adds Leading Technologist to the SmartAdvisor Division Leadership Team

October 28, 2009

Ken Mihara to Lead Development of the Next Generation SmartAdvisor(TM) Software Solutions

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BMC Software and Fujitsu enter reseller agreement

October 27, 2009

BMC Software and Fujitsu enter reseller agreement

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Microsoft Faces Challenge Shrugging Off `PC Guy’ Image With Windows 7

October 22, 2009

By Dina Bass Oct. 22 (Bloomberg) — Microsoft Corp. will begin selling the Windows 7 operating system today, an effort to reverse three quarters of declining Windows sales and fend off Apple Inc. ’s gains in personal computers. Windows 7 is Microsoft’s best shot to undercut Apple, which has grabbed its biggest share of the home-computer market since the 1990s, said Roger Kay , an analyst at Endpoint Technologies Associates in Wayland, Massachusetts. The program is Microsoft’s first “worthy competitor” to Apple’s OS X, he said. Microsoft, the world’s largest software maker, gets about 25 percent of its $58.4 billion in annual revenue from Windows. The company’s effort to entice consumers to upgrade to new Windows machines is getting a boost from a computer market that is recovering after three quarters of declines. Apple may still be able to make gains because the iPhone and iPod buoy Mac sales, said Al Gillen , an analyst at market research firm IDC. “Right now, there’s a lot of good karma for Windows 7 — that will help Microsoft stem some of the movement to Mac, but that’s only part of the story,” said Gillen , whose firm is in Framingham, Massachusetts. “The other dimension that’s made Mac attractive is the surrounding ecosystem of iPods and iPhones. They’ve done a good job putting together a sexy and interesting story for consumers.” The rebound in the economy may also help Apple, which lost some market share during the recession as customers avoided pricier Macs in favor of Windows PCs, according to researcher Gartner Inc. Apple’s Share Apple will end this year with 8.1 percent of the U.S. home-computer market, down from 10.3 percent in 2008, according to Stamford, Connecticut-based Gartner. By the end of 2010, Apple will rise to 9.9 percent, Gartner predicts. The rest of the market is almost all Windows. The global picture for Windows is brighter, because Apple doesn’t sell in many developing markets, Gartner said. The Mac will have 4.4 percent share at homes globally by the end of 2009, according to the research firm. Customers switching from Windows are a “major part of our growth,” Apple Chief Operating Officer Tim Cook said in an interview this week. The company’s Mac versus PC ads, featuring John Hodgman as the bespectacled face of the Windows personal computer, mocked Vista as being prone to crash and vulnerable to computer viruses. ‘Fantastic Opportunity’ “Whether it’s Windows 7 or Windows 10 or Windows 95 or 2000 or all the Windows, people are just sick of all the headaches that go along with it,” Cook said. “And so I look at their Windows 7 announcement as just another fantastic opportunity to grab more share.” To win over consumers, Microsoft and partners are offering seven days of special deals on Windows 7 machines. For example, Best Buy Co. will offer a package that includes a Hewlett- Packard Co. desktop, netbook, wireless router and home setup, “all for the price of a Mac,” said Tami Reller , a Windows vice president at Redmond, Washington-based Microsoft. “About 96 percent of the world’s computers are PCs and 4 percent are Macs, and thanks to their advertising I guess everybody kind of knows the difference,” Microsoft Chief Executive Officer Steve Ballmer said in a speech last week. “I like 96, they like 4, I guess. You can’t say they don’t have a good business. They actually have a good business, as do we.” Apple’s increasing market share will still leave room for Windows 7 to thrive, IDC’s Gillen said. ‘Tremendous Success’ “While Apple has had arguably tremendous success, it’s a 1 to 2 point shift, not 5 to 10 percent,” Gillen said. “Anything like that does set off alarm bells in Redmond, but it’s not threatening Microsoft’s core business.” About 80 percent of companies surveyed by New York-based brokerage ISI Group plan to switch to Windows 7 in the next two years. Microsoft’s Windows sales will increase 9 percent to $16.3 billion in 2010, the first full year Windows 7 is on sale, compared with a 10 percent drop this year, according to Sarah Friar , an analyst at Goldman Sachs Group Inc. in San Francisco. Microsoft rose 21 cents to $26.58 yesterday in Nasdaq Stock Market trading . The stock has climbed 37 percent this year. Apple, which has more than doubled this year, advanced $6.16 to $204.92. Brand ‘Rehab’ Microsoft can put a new shine on the Windows brand, which was tarnished because of Vista’s shortcomings, said Al Ries , chairman of Ries & Ries, a marketing strategy firm in Atlanta. “Can they rehab the brand? Sure,” he said. “Look at Bill Clinton or Martha Stewart . David Letterman is going to be fine. When you’re the leader, you can make a mistake and come back.” Trina Gratrix, of Covington, Washington, says she can’t afford the Mac she’d like to buy. Windows 7 is making her feel better about the PC in her price range, she said. She plans to buy a new machine in the next few months. “I feel good about what I hear,” said Gratrix, 35. “I don’t feel like I’ll be settling.” Customers report that Windows runs faster and starts up and shuts down more quickly. Users can more easily organize, clean up and find the files they’re looking for. They can, for example, permanently pin items to the task bar at the bottom of the screen. Users can also grab the title bar of a window and shake it to minimize all the other windows. Windows 7 may also make it harder for Apple to target the software in its ads, said Michael Silver , a Gartner analyst, who says he’s hearing positive feedback on Windows 7 from Mac enthusiasts. “If Windows 7 is successful, it’s going to be hard to make fun of that,” he said. “They won’t have Vista to kick around anymore.” To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

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Kadient Appoints Elizabeth Ricci as Senior Vice President of Products

October 20, 2009

Seasoned Software Executive Provides Leadership and Vision for Product Strategy and Engineering

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One Dozen Small Stocks Survive My Screen Tests: John Dorfman

October 19, 2009

Commentary by John Dorfman Oct. 19 (Bloomberg) — I have nothing against large companies, but my heart belongs to small-cap value stocks. As I see it, the chances of finding a gem in the rough are greater with small stocks. They are less followed by analysts and investors, so the opportunities haven’t been exhaustively picked over. Last week I screened the 2,131 U.S. stocks with a market value between $250 million and $2 billion, using these filters: — Five-year sales and earnings growth averaging 10 percent a year or better. — Debt less than 50 percent of stockholders’ equity. — Price-to-earnings ratio below 15, measured on both the actual earnings for the trailing four quarters and the estimated earnings for 2009. — Price-to-book ratio (stock price divided by corporate net worth per share) and price-to-sales ratio (stock price divided by per-share sales) both below two. Here’s a run-down, in alphabetical order, of the stocks that survived these screens. Aaron’s Inc. , formerly known as Aaron Rents Inc., operates a so-called rent-to-own business. The Atlanta-based company leases appliances and furniture to mostly low-income consumers. If their monthly payments hit a certain total, the customers own the item. If not, they return it when they are done renting it. The industry has been hit with complaints that center on the high ultimate cost of the items, and alleged high pressure tactics in sales and collections. Whatever one thinks of the industry, Aaron’s financial results are attractive. Sales have grown at a 16 percent annual clip the past five years, earnings at 18 percent. This year analysts think it will post record earnings of $1.99 a share. Consistent Earnings Growth Amedisys Inc. , located in Baton Rouge, Louisiana, provides home health-care services and operates walk-in surgery centers. Since 2000 it has increased its earnings each year except for a small drop in 2003. This year analysts expect a 47 percent earnings jump, to $4.86 a share. America’s Car-Mart Inc. operates car and truck dealerships in the South, serving mostly consumers with poor credit histories. That may seem like an iffy business model, but the company must be doing something right. The Bentonville, Arkansas, company posted higher earnings in eight of the past 10 years. Worrisome Transaction American Oriental Bioengineering Inc. , based in Shenzhen, China, sells pharmaceuticals derived from traditional Chinese medicines. Its sales and earnings numbers look fine, but I am concerned about a $70 million real estate purchase in Beijing it made last year. The company has said it plans to use the site as a convention and training center. The wisdom of the transaction has been questioned by analysts , including one at Piper Jaffray who has a negative rating on the stock. Amerigroup Corp., with headquarters in Virginia Beach, Virginia, runs managed-care programs for Medicaid recipients in 11 states. Medicaid is the joint federal and state program providing health care for poor people. Medicaid is a scary area because state and federal governments often face budget pressures to cut benefits. Yet, with the stock trading at less than seven times earnings and 0.25 times revenue, I think the risk-reward ratio looks good. Esterline Tecnhologies Corp. , discussed in last week’s column, makes controls for military and civilian planes, electronic warfare devices, and materials that can resist extreme temperatures. The Bellevue, Washington, company’s stock trades for just over book value and 11 times earnings. EZCorp., JDA Software Austin, Texas-based EZCorp Inc. runs a chain of pawn shops and makes payday loans. After two losing years in 2000 and 2001, its earnings have marched higher every year. Six of seven analysts who follow the stock recommend it. One possible cloud: Payday loans, the fastest growing part of the company’s business, are controversial and may come under increasing regulation. JDA Software Group Inc. , based in Scottsdale, Arizona, makes software used by supply chain managers and Internet commerce businesses. It met the valuation tests when I ran my screen, but narrowly misses a couple of them now. I would consider buying it on dips. Meadowbrook Insurance Group, Inc., out of Southfield, Michigan is an insurance agency that does risk-management consulting and reinsurance brokering among other things. The company has been profitable since 2002, and at less than book value the stock looks cheap. Ignore the Analysts Navigators Group Inc. , based in New York, writes marine, energy and construction-engineering insurance policies worldwide. This year should be its 10th straight year of profitability. Most analysts dislike the stock, but I find it appealing at 13 times earnings and 1.3 times book value. Powell Industries Inc., which I last recommended in this column in 2002, makes equipment used to transmit and regulate electrical power. Among its big customers are utilities, refineries, energy companies and transportation companies. A strong balance sheet, with debt only 6 percent of equity, is one of the draws for this Houston-based company. Rounding out the list is Sterling Construction Co., a civil engineering and construction company also located in Houston. It paves highways, builds bridges, constructs sewers and does other projects for government customers. As a sideline it distributes pet supplies, automotive accessories and lawn-and-garden products. Six of eight analysts tracking the stock recommend it. Disclosure note: For clients and personally, I own shares in Amedisys, Esterline and Powell Industries. ( John Dorfman , chairman of Thunderstorm Capital in Boston, is a columnist for Bloomberg News. The opinions expressed are his own. His firm or clients may own or trade securities discussed in this column.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: John Dorfman at jdorfman@thunderstormcapital.com .

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BMC Software to move to NASDAQ Global Select Market

October 14, 2009

BMC Software to move to NASDAQ Global Select Market

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Closing.com’s SmartGFE(TM) to Be Integrated Into Calyx Point to Provide Instant Good Faith Estimates (Marketwire via Yahoo! Finance)

October 11, 2009

SAN DIEGO, CA–(Marketwire – 10/12/09) – ClosingCorp, an independent real estate data service provider based in La Jolla, California announced today that it will be integrating its SmartGFE(TM) service into Calyx Software’s Point software in November to allow originators to produce instant good faith estimates. Calyx Software is the mortgage industry’s leading provider of loan marketing …

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Mediware Chief Financial Officer Steps Down to Pursue New Opportunity

October 9, 2009

Mark Williams Resigns After Nearly Six Years of Service at the Lenexa-Based Software Company

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Ballmer Turns to 14-Year-Old Son to Be Sure Windows 7 Isn’t the Next Vista

October 6, 2009

By Dina Bass Oct. 6 (Bloomberg) — Microsoft Corp. Chief Executive Officer Steve Ballmer says the company got the wrong impression from early positive feedback on Vista and won’t make the same mistake with the software’s successor, Windows 7. Ballmer established a process for gathering feedback from computer makers, and he’s personally surveying customers — along with his teenage son — to make sure Windows 7 works. Early users, including Continental Airlines Inc. , Starwood Hotels & Resorts Worldwide Inc. and the city of Miami, say they are upbeat about the software. “The test feedback has been good, but the test feedback on Vista was good,” Ballmer, 53, said in an interview last week. “I am optimistic, but the proof will be in the pudding.” Ballmer needs a winner. Microsoft has dropped 54 percent on the Nasdaq since he took over as CEO in 2000. For most of the past year, Ballmer ran the Windows business himself, and he’s counting on Windows 7 to restore investor confidence after corporations and consumers snubbed Vista. About 80 percent of companies plan to switch to the software in the next two years, ISI Group, a brokerage firm in New York, said yesterday. “Windows 7 is important for how Microsoft is seen in the marketplace, especially after how Vista was received,” said Ken Allen , a portfolio manager at Baltimore-based T. Rowe Price Group Inc., the seventh-biggest institutional holder of Microsoft shares. “It will be an important year for how Ballmer is viewed as CEO.” Underestimating? Wall Street is underestimating the impact of Windows 7, which debuts on Oct. 22, said Sarah Friar , a Goldman Sachs Group Inc. analyst in San Francisco. Analysts’ profit estimates for Microsoft, the world’s largest software maker, are 3 percent and 5 percent too low for 2010 and 2011, she said. The company’s Windows sales will increase 9 percent to $16.3 billion in 2010, the first full year Windows 7 is on sale, compared with a 10 percent decline this year, she predicts. “We have big expectations for what Windows 7 can do,” Friar said. Others remain unimpressed with Windows 7 and Ballmer. “Ballmer needs to retire — it’s been a huge disappointment from a shareholder’s perspective,” said Dave Stepherson , a fund manager at Hardesty Capital Management in Baltimore, referring to Ballmer’s tenure as CEO. He helps manage $650 million, including Microsoft shares. Windows 7 won’t change things because it doesn’t have any “must-have” features, he said. Microsoft fell 32 cents to $24.64 yesterday in Nasdaq Stock Market trading. The shares have gained 27 percent this year. Of the 35 analysts following the Redmond, Washington-based company, 24 suggest buying the stock, 10 say hold and one says sell, according to data compiled by Bloomberg. Continental Airlines Continental and Starwood say Windows 7 runs faster than Vista. It starts up and shuts down more quickly, and lets users preview the contents of windows by placing their mouse over the entry on the bottom of the screen. It also supports multi-touch navigation, letting users control the software using their fingers. In the past, companies have typically switched to a new version of Windows when buy new PCs, said Heather Bellini , an analyst at ISI in New York. Because Windows 7 runs on older machines, ISI’s survey saw a “significant jump” in companies saying they will put Windows 7 on existing computers. More Responsive Continental says Microsoft is more responsive to suggestions than it was with Vista, when the airline’s proposed features never made it into the software. Windows 7 now offers those options, such as better mobile access to corporate networks, said Eric Craig, managing director of technology at Houston-based Continental, the fourth-largest U.S. carrier. Because Windows 7 can run on older machines, it’s more appealing to budget-conscious customers, Craig said. Continental can use the software on more than 60 percent of the PCs it already has, he said. Microsoft has developed tools that help customers upgrade operating systems and assess whether their applications will work. “We’re all struggling with the economic reset,” Craig said, adding that Ballmer should get a lot of the credit for focusing on the cost of Windows 7. “He really understands the incredible pressures on us to deliver with what we already have.” Vista debuted in 2007 — two years behind schedule and more than five years after the previous version, Windows XP. Vowing never to go that long again between releases, Ballmer reshuffled executives. He put Steven Sinofsky , known for sticking to deadlines with Office releases, in charge of Windows development. ‘Exciting Product’ Even then, Ballmer said he worried that Windows 7 wouldn’t be exciting enough. That changed two summers ago, when he saw a demo of a math feature. Users could handwrite an equation onto a panel, and the software recognized the notation. Ballmer, who went to math camp as a kid, was impressed. “I said, ‘Yep, this product’s going to be an exciting product,’” he said. To gauge the reception to Windows 7, Ballmer is doing his own polling. A test version of the software has been available since January, giving early adopters a chance to try it out. “He asks everyone he talks to, ‘Are they using Windows 7? What are they experiencing?’” said Tami Reller , a Windows vice president. “He’s his own market-research firm.” 14-Year-Old Critic Ballmer says his toughest critic is his 14-year-old son, who has helped find bugs in the software. He put an early version of Windows 7 on his school laptop about 18 months ago, “probably well before he should have,” Ballmer said. With Vista, many computer and software makers didn’t have compatible products out soon enough. To fix that problem, Ballmer has his lieutenants gather feedback from computer makers in a systematic way and act on it. The new approach has won praise from Hewlett-Packard Co. , Dell Inc. and Acer Inc. , the three largest personal-computer makers. “Windows 7 is the first right thing they have done in the recent five years,” J.T. Wang , chairman of Taipei-based Acer, said in an interview in April. Windows still dominates the market, running more than 90 percent of PCs. Even so, Apple Inc. ’s Macintosh has gained market share since Vista debuted. Apple’s share of U.S. PC sales increased to 8 percent in the fourth quarter of 2008 from 5.1 percent in 2006, according to Stamford, Connecticut-based Gartner Inc. Apple Rivalry “We often hear from our customers that they chose Mac because they’re tired of the headaches with Windows,” said Bill Evans, a spokesman at Cupertino, California-based Apple. He said many existing Windows users will have a “painful upgrade” to Windows 7, giving them a reason to buy a Mac. Some customers put off PC purchases altogether after Vista. And makers of netbooks — the cheap laptops that have surged in popularity this year — have opted to use the older Windows XP because it’s less expensive and doesn’t require powerful hardware. Windows revenue has declined in each of the past three quarters. Vista’s failings, coupled with the recession, may actually help Windows 7, said Loren Loverde , an analyst at Framingham, Massachusetts-based research firm IDC. Corporations are now saddled with aging software and computers, so many may be eager to upgrade. ‘Very Responsive’ “We essentially missed an operating system with Vista — very few businesses migrated,” said Mark McBeth, vice president for information technology at Starwood, the third-largest U.S. lodging company. “Microsoft has been very responsive with Windows 7 and we all know why. They’ve got it right this time, and they want to make sure everybody knows.” James Osteen, Miami’s assistant director of information technology, decided to upgrade his existing PCs to Windows 7 — even though budget cuts may force him to stop buying new machines. He estimates Miami’s government offices can save almost $400,000 a year from Windows 7 because it uses less energy and is easier to install. Other customers, such as Sprint Nextel Corp., the third- biggest U.S. mobile-phone operator, say they are holding off on Windows 7 because of the economy. Ballmer’s record as CEO depends on more than just the success of Windows 7, ISI’s Bellini said. He needs to reach beyond the achievements of his predecessor, Bill Gates , she said. Being able to say: “‘I took what someone else did and maintained it’ is not a bad legacy, but it’s not a great legacy,” said Bellini, who recommends buying Microsoft shares. “His legacy should be: What can he build on his own?” To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

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Companies Seeking Turnaround in New Supreme Court Term as Sotomayor Joins

October 5, 2009

By Greg Stohr Oct. 5 (Bloomberg) — Justice Sonia Sotomayor’s first U.S. Supreme Court term will be heavy on business cases, as companies aim to rebound after a year of high court setbacks. The nine-month term that starts today will affect the fate of imprisoned former Hollinger International Inc. Chairman Conrad Black, the accounting oversight board set up by the Sarbanes-Oxley law and the sales of professional football team caps. The justices also will consider limiting investor lawsuits and making it harder to get a patent covering business methods. The Washington-based U.S. Chamber of Commerce is seeking to avoid a repeat of the 2008-09 term, perhaps the trade group’s worst in a decade. The court allowed more lawsuits against drugmakers, tobacco companies and banks and backed out of a case that might have meant stricter limits on punitive damages. “The business community is anxious to see if the losses of last term were aberrations,” said Thomas Goldstein , a Washington lawyer at Akin Gump Strauss Hauer & Feld LLP and the creator of the Scotusblog Web site, which tracks the court. Whether that trend continues will depend in part on how much deference the court affords the Obama administration, which is urging the justices to allow more investor lawsuits. The Bush administration argued against investors in five straight high court cases, winning all five. In a case involving Chicago-based Harris Associates LP and its Oakmark mutual funds, the Obama administration argues that mutual-fund managers can be sued for charging excessive fees even if they didn’t deceive the fund’s directors. Harris and business groups argue that courts generally should let the marketplace set fee levels, not the legal system. Policy Questions Although that case revolves around the interpretation of the 1940 Investment Company Act, the outcome may turn as much on policy questions as statutory language. The case “could require the Supreme Court to posit its own economic theory of the market,” said Chris Brummer, a securities law professor at Georgetown University in Washington. “How efficient are markets in effect at regulating themselves?” The administration also may back shareholders in a clash over deadlines for fraud suits involving Merck & Co. , based in Whitehouse Station, New Jersey. Investors say the company deceived them about the risks posed by its Vioxx painkiller, which was pulled from the market in 2004 because of links to heart attacks and strokes. Merck, which will become the second-largest U.S. pharmaceutical company when it completes its $41.1 billion purchase of Kenilworth, New Jersey-based Schering-Plough Corp. , argues that the shareholders waited too long to file their suit. The company’s appeal turns on the starting date for the two-year window that investors are given to file some types of federal securities lawsuits. Patent Case The patent case has ramifications for the software, biotechnology and financial services industries. The dispute will mark the first time since 1981 the court has ruled on the types of inventions that are patentable. An appeals court excluded some innovations that don’t have a physical component. The case concerns a bid to patent a way to buy or sell energy at a fixed price based on the expected weather. Companies, trade organizations and other outside groups have submitted more than 45 briefs, signaling wide interest. The case looms as a “blockbuster” that will resolve a “very, very foundational question for patents,” said Cliff Sloan , a Washington lawyer at Skadden Arps Slate Meagher & Flom LLP and an expert in intellectual property law. Conrad Black Black, the former Hollinger executive, was accused by prosecutors of stealing $6.1 million from the Toronto-based company. He was convicted of mail fraud and obstruction of justice and sentenced to 6 1/2 years in prison. His case turns on a favorite prosecutorial tool in white- collar crime cases, a provision that covers mail and wire fraud schemes to “deprive another of the intangible right to honest services.” Black says the provision shouldn’t apply in the private sector unless the defendant intended to impose economic harm on a company or other entity entitled to those “honest services.” By its terms, the honest services provision could apply to anyone who uses a company phone to make a personal call, says Julie O’Sullivan , a Georgetown law professor. “This theory of honest services seems a little strange, but it’s used all the time,” O’Sullivan said. “Why? Because it’s easy.” NFL Case In the apparel case, the question is how much of a shield professional sports leagues should have from antitrust suits. The justices will decide whether the National Football League, headquartered in New York, and its teams must face claims by a company that lost its right to sell caps with team logos when the league struck an exclusive agreement for the Reebok brand of Herzogenaurach, Germany-based Adidas AG , the world’s second- largest sporting goods maker. The NFL contends that, under the antitrust laws, its teams can sell rights to their logos as a group, rather than on a squad-by-squad basis. The Sarbanes-Oxley case might produce a far-reaching constitutional ruling. The case centers on the Public Company Accounting Oversight Board , a private entity whose members are appointed by the Securities and Exchange Commission to be the accounting industry’s watchdog. The court will decide whether the measure violates the constitutional provision that lets the president appoint and supervise executive branch officials. The law is being challenged by Beckstead and Watts LLP , a Las Vegas-area accounting firm, and the Free Enterprise Fund in Washington, which advocates smaller government. A decision that the PCAOB is unconstitutional might prod Congress to revisit the 2002 Sarbanes-Oxley law and restructure the board. More broadly, such a ruling could raise questions about the so-called fourth branch of government – the independent agencies including the SEC that the Supreme Court first upheld in 1935. “That would have a huge impact on the regulatory apparatus,” Sloan said. To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net .

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IntelePeer Expands Senior Executive Team With Appointment of Industry Veteran to Lead AppworX Business Unit

October 1, 2009

Margaret Norton Brings More Than 20 Years of Telecommunications and Software Industry Experience to Drive AppworX Revenues and Profitability

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SpatialKey On-Demand Location Intelligence Software Now Available

September 28, 2009

SpatialKey On-Demand Location Intelligence Software Now Available

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IPod Models Disappoint Investors at Jobs’s Comeback Event as Shares Drop

September 9, 2009

By Connie Guglielmo and Nick Turner Sept. 9 (Bloomberg) — Apple Inc. ’s new iPod lineup, unveiled in Chief Executive Officer Steve Jobs ’s first public appearance since his liver transplant, didn’t add as many new features as some analysts predicted, sending the shares down. Investors may have expected Apple to add built-in cameras to more iPods, said Gene Munster , an analyst at Piper Jaffray & Co. in Minneapolis. Instead, Apple only added a video camera to one model, the iPod Nano. The company unveiled the new lineup at an event today in San Francisco. Apple is counting on the products to renew growth at its iPod division, which accounted for about a quarter of the company’s $32.5 billion in sales last year. The success of Apple’s iPhone, which can play music and videos, has eaten into sales of its older iPod models. The company’s dominant market share in media players also has left less room to grow. Apple , based in Cupertino, California, fell $2.06, or 1.2 percent, to $170.87 at 3:06 p.m. New York time in Nasdaq Stock Market trading. The shares had more than doubled this year before today. In addition to the video camera, the iPod Nano has a built- in FM radio and pedometer. The 8-gigabyte device costs $149, while a 16-gigabyte model goes for $179. Investors probably expected to see a camera on the new iPod Touch as well, Munster said. The iPod Touch uses the same touch screen as the iPhone and can run applications from Apple ’s App Store. Lower Prices Apple also cut the prices of some iPod models. It lowered the cost of the 8-gigabyte iPod Touch to $199. A 32-gigabyte model will have a $299 price, while a 64-gigabyte version will be $399. Apple also unveiled a 160-gigabyte version of its iPod Classic for $249 and cut the price of the 2-gigabyte Shuffle to $59. The Shuffle is available in five colors. The company has introduced new iPods around this time in previous years. The iPod Nano debuted in September 2005, and the iPod Touch came out in 2007. Apple unveiled the first iPod in October 2001. Chief Financial Officer Peter Oppenheimer said in July that sales of Apple’s traditional music players — the Nano, Shuffle and Classic — declined on a year-over-year basis as customers turned to devices like the Touch and the iPhone. Even so, the traditional iPod business is “a great business that we believe will last for many, many years,” Oppenheimer said. Jobs’s Return Jobs, a cancer survivor, last appeared at an event in October, when he introduced Macintosh notebooks. After looking thinner at events throughout 2008, Jobs announced plans in January to take medical leave. He traveled to Memphis, Tennessee, for a liver transplant and returned to work in June. Apple’s iPhone sales have climbed to 30 million, Jobs said today. There are now more than 75,000 applications available at the App Store, and users have downloaded more than 1.8 billion programs, he said. An iPhone version of Electronic Arts Inc.’s John Madden football game went on sale today. The company introduced a new version of Apple’s iTunes store today, improving the way the software syncs up with devices. The company will also sell ring tones for $1.29 each. A feature called iTunes LP will add videos and liner notes to music, an enticement to buy songs in album form. Apple has sold more than 220 million iPods, product marketing chief Phil Schiller said at the event. The company has about 74 percent of the market in the U.S., he said. To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Nick Turner in San Francisco at nturner7@bloomberg.net

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CXT Software Joins DecisionPoint Systems’ MobileArc(R) Field Mobility Program

September 2, 2009

CXT Software Joins DecisionPoint Systems’ MobileArc(R) Field Mobility Program

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