The most recent articles from Computing

Red Hat posts Q2 profit of $21m

Tom Young — 2008-09-26T11:31:00.000Z

Tom Young, Computing, Friday 26 September 2008 at 11:31:00

Growing virtualisation market proving lucrative for open source firm

Red Hat, the largest provider of Linux software, has posted a 16 per cent rise in Q2 2008 profits to $21.1m (£11.5m) from $18.2m (£10m) in the year ago quarter.

Revenues totalled $164.4m (£89.4m), up 29 per cent from $127.3m (£69.2m) in the same quarter a year ago.

"Our performance this quarter demonstrated strong demand for our products and services, good execution and the consistency of results afforded by our subscription business model," said Charlie Peters, chief financial officer at Red Hat.

"Key factors to our growth include the value message, the cost efficiencies of open source solutions and our world-class customer service."

In early September, Red Hat announced the acquisition of Qumranet which is expected to accelerate the time-to-market to deliver an expanded virtualisation solution portfolio to the rapidly growing virtualisation market.

"Our goal is to deliver a comprehensive virtualisation solution from server to desktop which will enable our customers to deploy any application, anywhere, anytime," said Jim Whitehurst, chief executive at Red Hat.

Open source group joins approved education supplier list

Janie Davies — 2008-09-22T12:43:00.000Z

Janie Davies, Computing, Monday 22 September 2008 at 12:43:00

Sirius Corporation added to Becta framework for schools IT provision

Open source software supplier Sirius Corporation has joined an officially-sanctioned list of education IT providers.

Becta, the agency responsible for IT in schools, chose 12 suppliers after inviting both proprietary and open source groups to tender for its new framework agreement in May.

Sirius welcomed the official recognition that open source can compete on a level playing field, and said that it demonstrates what it can offer the education sector, according to John Spencer, head of education at Sirius.

"We are pleased to have shown that open source software is ready for educational institutions and that Sirius has the resources to support its increasing use. Students, schools and the taxpayer can now use open source software with the assurance of an EU-backed scheme."

Local authorities and schools can use the Becta framework to buy ICT products and services above the EU procurement threshold value of £139,893 from approved suppliers providing levels of service aligned with educational needs.

Open source's dark side

David Boutcher & Bob Stankey — 2008-09-17T12:22:00.000Z

David Boutcher & Bob Stankey, Computing, Wednesday 17 September 2008 at 12:22:00

Businesses need to be very careful with open-source software as legal compliance has become increasingly important

Increasing numbers of businesses are using open-source software to develop technology – the obvious attraction being the possibility of using, modifying and distributing the open-source code without paying a fee to the developer. But the business and financial risks surrounding the use of open source must also be taken into account because they can have a substantial impact on the value of a business.

A firm’s IT systems and software are among its most important assets. As a result, a company’s rights to protect and commercialise its technology have become more significant when the firm is up for sale or looking for investors. In particular, open-source software can have a dramatic effect on due diligence and deal negotiations. It also prompts companies to add disclosures to their offering memoranda and shareholder communications about business model risks resulting from their use of open source.

The reasons for this are rooted in the key differences between open-source software and other types of licensed software. This can mean companies that use open source may not fully own or control their products. Open-source software is, of course, not put in the public domain with no strings attached – it comes with licence terms and conditions chosen by the program’s author.

If a company uses code that is subject to a “reciprocal” licence such as the general public licence (GPL) to create a product, it must make that product’s software available in source code form so that others can use, modify, distribute and incorporate that code into other software – without charging a licence fee. Companies will be subject to these reciprocal obligations even if the firm depends on software licensing revenue or the sale of equipment containing embedded software – which may mean that business leaders have to make their most valuable asset available for free to anyone who wants it.

Large companies such as IBM and Oracle may not have to charge for their technology – they can make money selling profitable consulting services, hardware and databases alongside their products built on open-source software. But for smaller companies, relying on open source can present risks to their main sources of revenue.

The recent trend of taking companies to court for open-source software licence violations has heightened awareness of the issues among venture capital investors and mergers and acquisitions (M&A) advisors.

In 2006, a German court found the network device manufacturer D-Link had violated the GPL by distributing certain Linux operating system software as part of its products. In 2007 and 2008, the authors of a set of open-source utilities called BusyBox sued Verizon Communications and several other companies for GPL violations, which resulted in the companies making settlement payments and releasing their source code on the internet. And last month a US appeals court ruled in a precedent-setting decision that violations of open-source software licence terms can result in liability for copyright infringement.

Sophisticated buyers are now also familiar with the problems faced by Cisco after spending $500m (£283m) to purchase Linksys, the manufacturer of home networking equipment. Shortly after the acquisition, Cisco was forced to release online the source code for various products that Linksys had created using open-source software.

Today, sophisticated buyers carefully review the software code used by target companies they wish to purchase. If a buyer cannot identify the licences governing its use of software, the sellers of the target will run into trouble during due diligence because of legal uncertainties over intellectual property rights. If the code review also reveals that a company being sold has been using open-source software in developing its products or key internal systems, buyers now take a close look as part of technical due diligence at how the software has been used.

Recently, some buyers have been factoring in the potential cost of rewriting software or licensing alternative software from another source into the costs of the acquisition where the open-source software is part of code that is important to the target company’s business. If the required rewriting appears to be extensive or alternative software is only available at a significant additional cost, the buyer might even be justified in seeking an adjustment to the purchase price. At a minimum a buyer will require detailed additional warranties if it is found that the target has made extensive use of open-source software.

In seeking to avoid these problems, investors and acquirers increasingly expect companies that rely on software to adopt compliance policies that control how, and in what circumstances, software code is acquired from third-party sources and incorporated into a company’s products. These policies may require that no open-source code will be used, or they may create a process that allows developers to ask senior management to approve the use of certain identified applications or tools. These policies would usually also include formal licence management processes and a pre-release licence compliance check before a product is issued.

In summary, for companies about to be sold, senior executives must be able to respond to due diligence enquiries about intellectual property (IP) ownership and use of open-source software – and to demonstrate that IP issues have been properly managed and do not threaten future revenue streams. The same is true for investors venture capitalists, eager to protect their returns and possi ble exit, are also requiring that their portfolio firms manage open-source issues appropriately.

Good IP management has always been the hallmark of a well-run company, but with the increased focus on open-source software risks in venture capital and M &A deals, the stakes are now much higher.

David Boutcher is a partner at Reed Smith, where he heads the Europe and Middle East corporate group; Bob Stankey, also of Reed Smith, is a partner specialising in technology.

Oldham schools go open source

Tom Young — 2008-09-16T15:58:00.000Z

Tom Young, Computing, Tuesday 16 September 2008 at 15:58:00

25,000 children to use system from Sirius Corporation

Oldham Council is using open source software to deliver internet connectivity to its schools.

The system will serve content delivered to Oldham's 112 primary and secondary schools - approximately 25,000 school children.

The council is using the open source Squid web proxy, MySQL and Linux in combination with Websense filtering technology.

David Honeywell, programme manager at Oldham Council, said: "We like MySQL because it's free and simple to use if you have a background in Microsoft databases.

"Squid is also the basis of large web-filtering solutions deployed to schools elsewhere in the UK."

The system was built by open source services group Sirius Corporation.

Last month education procurement agency Becta invited 21 suppliers to tender for £80m worth of proprietary and open source software supply for schools.

Northern Ireland urges more councils to join in

2008-08-21T06:30:00.000Z

Computing, Thursday 21 August 2008 at 06:30:00

Councils across Northern Ireland are being encouraged to join an open-source software movement

The Northern Ireland Department of the Environment has advised the province’s 26 councils to join the Local Authority Customer Relationship Management (LA CRM) partnership, which develops its system collaboratively with councils across the UK under the lead of Belfast City Council.

John Price, modernisation lead in the local government policy division of Northern Ireland’s Department of the Environment, said he had encouraged Northern Irish councils to adopt LA CRM.

County Antrim, the one other council in Northern Ireland that has implemented LA CRM, is being used to promote the software.

“We are showcasing it and encouraging other councils to use it,” said Price. “We suggest it might be a good idea to at least try a pilot of LA CRM.”

The government was attracted by the collaborative ethos embodied in LA CRM, according to Price. “We can build a community with it, and the community keeps building it, developing it and keeping it alive,” he said.

This would allow councils to influence the development of CRM systems to match their needs more closely.

Alan Neilly, who runs LA CRM from Belfast City Council’s IT section, said: “With the comprehensive spending review, a lot of funding for customer relations has dried up. Councils are asking how to continue their CRM strategy and what might be cost effective.”

In the 10 years since LA CRM was implemented at the London Borough of Newham Council, it has gone into 17 councils around the UK, including Barnsley, Leicester, Sheffield and Wolverhampton.

Copyright win for open source

Phil Muncaster and Janie Davies — 2008-08-20T17:06:00.000Z

Phil Muncaster and Janie Davies, Computing, Wednesday 20 August 2008 at 17:06:00

Initial UK reactions to ruling that gives open source copyright protection are positive

The open-source community celebrated last week when the US Court of Appeals found that users failing to abide by the terms of open-source licences could be found guilty of copyright infringement.

The ruling was hailed as “huge” by Stanford Law School professor Lawrence Lessig. Computing canvassed opinion from the UK and found the ruling was broadly welcomed.

Jennifer Carlton, senior programme manager at Intellect, said: “Intellect welcomes the ruling in the US Court of Appeal. Open-source licences are just as important for compliance as those purchased from proprietary vendors. Software use must still comply with the terms and conditions. This can include an obligation to share any changes made with others in the community. Giving the same protection to open-source software as to traditional software models ensures that open source has a sustainable future.”

Mark Taylor, chief executive of software developer Sirius said: “It is great news. It means it is no longer viable to say there are all sorts of risks associated with open source. And it will make a difference in terms of market and media perceptions. Proprietary suppliers have been claiming it is risky and that tactic is less likely to work now.”

Laurent Lachal, head of open source at analyst Ovum, said: “Open source is a large movement and this is one relatively minor licence among many open-source licences, so even if the ruling had not come, it would not have made the open-source movement collapse. But it is a nice step forward that one of the licences is enforceable, which is a good thing.”

Matt Asay, vice president of business development at open-source firm Alfresco, said the ruling would send out a strong message to any firm looking to use open-source code in its products.

“I know a range of open-source projects where firms took their code with impunity on the assumption no one could do anything,” he said. “So this ruling gives all open-source licences stronger ground to say ‘you must respect our intellectual property’.”

Ian Lynch, a member of the Open Schools Alliance and the provider of the Ingot ICT qualifications in open systems, said: “This ruling means anyone abusing open-source copyright will be punished to an extent that makes it not worth doing. It is more an insurance against anyone doing it in the future since I am not aware of any major infringements. The ruling removes a potential unexploded bomb.”

Open source gets legal protection from US court

Phil Muncaster — 2008-08-15T12:26:00.000Z

Phil Muncaster, Computing, Friday 15 August 2008 at 12:26:00

Stick to licences or risk copyright infringement, users told

The open-source community was celebrating this week after a US Court of Appeals decision found that users failing to abide by the terms of open-source licences could be found guilty of copyright infringement.

The ruling was hailed as "huge" by Stanford Law School professor Lawrence Lessig.

"In non-technical terms, the Court has held that free licences such as the Creative Commons licences set conditions on the use of copyrighted work," he wrote in a blog posting. "When you violate the condition, the licence disappears, meaning you're simply a copyright infringer."

The dispute revolved around whether commercial software developer Matthew Katzer had ignored the terms of the open-source Artistic Licence when he took the code of Robert Jacobsen and used it to develop his own commercial software.

The rules of an Artistic Licence state that anyone using free open-source code must attribute the author, highlight the original source of the files and explain how the code has been changed.

Laurent Lachal, head of open source at analyst firm Ovum, said the ruling is unlikely to change firms' perception of open source software or the likelihood of them investing in it.

"Open source is a large movement and this is one relatively minor license among many different open source licenses, so even if the ruling had not come it wouldn't have made the open source movement collapse," he added. "But it's a nice step forward saying that actually one of the licenses is enforceable, which is a good thing,"

Matt Asay, vice president of business development at open source ECM company Alfresco said the ruling would send out a strong message to any firm looking to use open source code in its products.

"I know a range of open source projects where companies came along and took their code with impunity on the assumption no-one could do anything," he explained. "So this ruling gives all open source licenses stronger ground to say 'you have to respect our IP'."

Carbon Trust funds datacentre simulation project to cut emissions

Ambrose McNevin — 2008-07-02T16:54:00.000Z

Ambrose McNevin, Computing, Wednesday 2 July 2008 at 16:54:00

Open source tool in development to measure workload-based data centre carbon output

The BCS and the Carbon Trust are developing a Java tool to simulate energy use in datacentres in the hope of driving down carbon emissions.

The Carbon Trust is financing the project, with the amount of funding directly related to the expected carbon savings. Funding is described as “substantial” though no figures have been disclosed.

The Carbon Trust said it has no measurement yet on how much carbon it expects to save through the project. The tool is expected to be ready for deployment in March 2009.

Liam Newcombe, director of developer Romonet, is building the tool. He said it is impossible to find meaningful measurements for server energy use as different vendors choose different things to measure.

“You cannot just stick a power meter behind a blade rack and start measuring. We want to develop an open source tool that can be used by all the industry,” he said.

“The variables are wide. It depends on workloads, time of day and even location. We are creating a simulation tool which looks at workload by applications, server set-up and even utility feed.

“So if, for example, I want to do virtualisation I can analyse what I will save. We can do the analysis that reduces expenditure and risk. This is key because energy is the new capital cost.”

IT would benefit from a closer understanding of the emissions it is responsible for, said Hugh Jones, solutions director at the Carbon Trust.

“One needs to make a fact-based investigation into where the main emission points are and what can be changed cost-effectively. There is no doubt that emissions caused by datacentres are rising,” he said.

The plan is to target new and existing datacentre operations. The argument concerns measuring the amount of energy IT uses against what it saves and finding a meaningful way to charge for it. Measuring the supply side in terms of IT use and managing the demand side in terms of the incentives for accountability is crucial, said Newcombe.

“We must answer the important business question: ‘What is my return on investment?’ If we can do that for each business process that is supported by IT, we are making progress,” he said.

Novell reports linux revenue rise

Computing — 2008-05-30T10:10:00.000Z

Computing, Computing, Friday 30 May 2008 at 10:10:00

Second quarter revenues flat but software maker turns a profit

Software maker Novell reported second quarter Linux revenue of $29m (£14.5m) from flat total revenue of $232m, profit reached $2m compared with a $12m loss for the same period last year.

Product revenue from Identity and Security Management was $31 million of which Identity and Access Management was $27 million, up 13 per cent year-over-year. Workgroup product revenue of $92 million was down one per cent year-over-year.

"Our business continues to gain momentum, with strong product revenue growth in Linux, Identity and Systems and Resource Management," said Ron Hovsepian, president and chief executive of Novell. "We are encouraged by our results and remain confident we will achieve our financial objectives for fiscal 2008."

Microsoft experiments with subscription based Office

Computing — 2008-04-21T00:00:00.000Z

Computing, Computing, Monday 21 April 2008 at 00:00:00

Project "Albany" is a first-time trial for subscriptions to use Office products, while China gets Microsoft/Novell enterprise level Linux interoperability

Microsoft is piloting a subscription service for its Office product suite for the first time in the US.

The firm said that "Albany" was in beta mode. It would offer US consumers access to Office and other applications via a subscription service. The move is being seen as the latest effort of Microsoft to react to the changing software market. Microsoft said if it went ahead the service would launch before the end of 2008.

Meanwhile at the other end of the market and on the other side of the world, Microsoft and Novell announced an extension of their Linux interoperability deal in China. Microsoft is helping unsupported Linux users move to the enterprise level Suse distribution as supported by Novell. Under the extension of the agreement, SUSE Enterprise server and Windows compute cluster server will run in dual boot configurations.

The moves are further evidence that Microsoft is segmenting its sales approaches.

Tories would decentralise state information, says David Cameron

Tom Young — 2008-04-04T00:00:00.000Z

Tom Young, Computing, Friday 4 April 2008 at 00:00:00

Large scale, centralised IT projects would be avoided in favour of "modular components"

Tory leader David Cameron has said that the Conservatives would avoid large-scale central IT systems such as the NHS National Programme for IT.

Cameron also praised open-source development, saying it would help smaller companies grow.

“We will follow private sector best practice which is to introduce open standards that enables IT contracts to be split up into modular components," he said.

"So never again could there be projects like Labour's hubristic NHS supercomputer,” - an reference to the National Programme.

Cameron said the Tories would create a level playing field for open source software in IT purchasing and open up the procurement system to small and innovative companies.

Addressing the National Endowment for Science, Technology and Arts in London Cameron said the reason for government IT failures was a desire to run large "closed" systems that "reduce competitive pressures and lead to higher risks and higher costs."

Cameron talked about open-source models such as Linux as a prime example of how liberating information could be beneficial to the economy.

Much of the speech by Cameron looked at how a more open approach to information could reform public services - the same topic covered by minister for transformational government Tom Watson in a speech earlier this week – prompting a disagreement between the parties over who came up with the ideas first.

Green light for green patents

Neon Kelly — 2008-01-14T00:00:00.000Z

Neon Kelly, Computing, Monday 14 January 2008 at 00:00:00

Sharing intellectual property will speed up development, say eco collective IT suppliers

The patents for 31 eco-friendly technologies have been released to the public domain under a new green partnership lead by IBM.

The computer giant has teamed up with Nokia, Sony and document management firm Pitney Bowes to form the Eco-Patent Commons collective.

The group hopes to accelerate the spread of environmentally beneficial technologies, while promoting business opportunities through collaborative ventures.

"In addition to enabling new players to engage in protecting the environment, the free exchange of valuable intellectual property will accelerate work on the next level of environmental challenges," said IBM senior vice president John Kelly.

The patents are available from the web site of the World Business Council for Sustainable Development, which is supporting the project.

Citrix completes Xensource acquisition

Neon Kelly — 2007-10-23T00:00:00.000Z

Neon Kelly, Computing, Tuesday 23 October 2007 at 00:00:00

Deal will help provide server and desktop virtualisation services

Thin-client specialist Citrix Systems has completed its $500m (£245m) acquisition of open source software firm Xensource.

The VMWare rival will help Citrix to provide server and desktop virtualisation to businesses. The company predicts that the market for these services will grow to nearly $5bn over the next four years.

Xensource staff will now form the core of Citrix's virtualisation and management division.

“The XenSource products, team and culture are a great addition to the Citrix family,” said Citrix chief executive Mark Templeton.

“The combination of Citrix and XenSource brings together application, desktop and server virtualisation to deliver more innovation, choice and flexibility to the market, including our installed base of more than 200,000 customers worldwide.

"As application delivery becomes a top issue for IT and the world becomes more dynamic, we find it important to be sure we are providing customers the most cutting-edge technologies out there.”

Online software is in demand

Tom Young — 2007-10-11T00:00:00.000Z

Tom Young, Computing, Thursday 11 October 2007 at 00:00:00

Office software provided over the internet will change licensing models

With software on demand offering the potential to challenge Microsoft’s desktop dominance, some of the IT industry’s biggest names are scrabbling for a piece of the action.

The past few weeks have seen a variety of products launched by suppliers targeting the corporate market.

Last week, Adobe and IBM introduced word processing and email applications, respectively, that are hosted and accessed in real time online rather than being installed on in-house systems.

The week before, Microsoft announced trials of online versions of its Office suite.

Yahoo is acquiring Zimbra, a hosted email service, as part of its strategy to expand into the business market.

And Google is also in the race. The Google Apps online suite was launched earlier this year and a partnership with Capgemini, announced last month, will deliver and support the software for the consultant’s corporate clients.

The search giant is also buying hosted messaging service Postini, which rivals IBM’s Lotus Notes and Microsoft Exchange.

The software-on-demand model has much to recommend it. It offers a degree of choice in desktop applications for the first time since Microsoft Office.

And it has the potential for greater agility in responding to rapidly changing business requirements because the applications are no longer a static, capital asset on internal servers.

Tools available online can be updated more quickly, and security could be improved because virus patches can be released and updated in real time.

There are also licensing benefits. Software as a service could help get around what are often perceived to be restrictive and lengthy licensing arrangements.

Many large users are interested, according to Ollie Ross, head of research at the Corporate IT Forum (Tif) user group.

“There is not wide-scale adoption yet, but increased numbers of IT chiefs are investigating the advantages that these newer subscription models might bring to their businesses,” said Ross.

But adoption will be approached cautiously.

“Many firms will limit early deployments to low-risk areas of the business,” she said.

“While freeware is now commonly used in back offices, anywhere customer-facing is still broadly considered out of bounds.”

The key for Microsoft’s challengers will be to persuade potential business users that software on demand is reliable, said Forrester analyst Duncan Jones.

“Initial corporate reaction will be to prevent moves towards the new model,” he said.

Take-up will also be affected by concerns over the compatibility of documents, advertising, and security and support issues.

Smaller businesses could be at the vanguard because they are more likely to be persuaded by the cheaper prices and lower capital investment.

But once the model gains widespread consumer and small business support, large companies will follow, said Jones.

“If staff are using these tools, eventually large corporates will be won over – if they are reassured that there are appropriate security measures,” he said.

For business users, the upside of all the jostling among suppliers will be the effect on prices.

Microsoft’s Office suite accounted for revenues of $4.6bn (£2.26bn) – a third of total sales – in the company’s most recently reported quarter, so threats to its business will be taken seriously.

And Google has signalled its intent by entering the corporate email market at a competitive $50 (£25) per user per month.

SAP offers £3bn for Business Objects

Tom Young — 2007-10-08T00:00:00.000Z

Tom Young, Computing, Monday 8 October 2007 at 00:00:00

Deal price is 20 per cent premium over share price

Global applications provider SAP is to buy business intelligence specialist Business Objects for €4.8bn (£3.3bn) early next year.

The €42 per share offer represents a 20 per cent premium over Business Objects' closing share price on Friday.

"Together, SAP and Business Objects intend to offer high-value solutions for process and business-oriented professionals," the two firms said in a joint statement.

SAP aims to more than double its customer base to 100,000 by 2010, largely by targeting more small- and medium-sized companies.

The move comes after rival Oracle posted strong first quarter results last month, and promised another year of aggressive acquisitions.

Business Objects offers some of its software on demand over the web, a new service to be offered to small and medium business clients by SAP.