Month in review - March 2004

10 February 2006

A round-up of the month's key IT industry news, including the EU's anti-monopoly ruling against Microsoft, IBM's takeover of Candle and the release of Novell's desktop Linux initiative

The European Commission (EU) slapped Microsoft with a record $615 million fine for abusing its monopoly of operating systems. It also told the software giant to stop bundling Media Player with Windows to the exclusion of other multimedia players and to open up some of its key interfaces. The ruling sparked waves of fury in the US, and Microsoft wasted no time in saying it was launching an appeal.

Related to the EU ruling, Microsoft announced it will pay Sun Microsystems a staggering $2 billion in order to resolve patent disputes and settle outstanding competition issues. The agreement was seen as a huge victory for Sun, although its plunging revenues and profits forced the company to announce the impending lay off more 3,000 staff. At the same time, Sun founder and CEO,Scott McNealy, decided it was time for some power sharing at the top of the company, handing the president's role (and that of chief operating officer) to executive vice president of software Jonathan Schwartz - perhaps also signalling that Sun's future lies more with software than servers.

Linux inventor Linus Torvalds made a surprise appearance at network operating system developer Novell's annual Brainshare user conference in Salt Lake City. To cheering fans he expressed his consternation over SCO's attempts to make a claim on Linux's intellectual property, whilst displaying his hopes for a future of mass-market Linux adoption.

Meanwhile, Novell released its ambitious plans to bring Linux to the desktop, using a combination the Linux distribution it acquired with its take over of SuSE in January 2004, and Ximian the desktop user interface it acquired in August 2003. Novell also said it planned to release 'Open Enterprise Server' at the end of 2004, a product that will combine open and closed source packages, including the latest version of NetWare, the company's widely installed network operating system and directory services engine.

Hewlett-Packard disclosed that, later this year, it was going to start supplying large companies with Linux PCs and laptops pre-loaded with SuSE Linux Professional. (see Company Analysis section).

In the build up to a final ruling in early May, the European Commission allowed Oracle to present its case for the hostile takeover of Peoplesoft during a two-day hearing. The EC previously indicated that it would block Oracle's hostile bid for PeopleSoft on anti-competitive grounds - just as the US Department of Justice said it would. Oracle, which is challenging the DoJ decision, will get its day in court on 7 June 2004.

Troubled IT services company EDS agreed to sell its product lifecycle management (PLM) unit (made up largely of the Cadcam vendors Unigraphics and SDLC it acquired in the late 1990s) to a consortium of investment firms. Bain Capital, Silver lake Partners and Warburg Pincus paid $2.05 billion in what was described as the largest-ever private technology buyout. Not that the money will sit in EDS's bank account for long; it will go towards reducing the company's estimated $5 to $6 billion worth of debt.

Sun Microsystems rejected IBM's call to open source its Java technology, dismissing the request as "kind of weird". Executive vice president (now president) of software Jonathan Schwartz said: "releasing the Java source code to the open source community would lead to the creation of incompatible versions of the software."

IBM acquired rival systems management software company Candle Corp - a move in that gives IBM the Omegamon suite that has led the mainframe performance monitoring market for the past 20 years. More strategically, it picks up Candle's PathWAI, a highly successful set of tools for managing IBM WebSphere application environments.

The ongoing power struggle at smartphone operating system company Symbian took an unexpected twist when one of its founders and second biggest shareholder Ericsson confirmed plans to buy shares from fellow shareholder Psion in order to block rival Nokia's bid to dominate the venture.

Microsoft pushed back the release of its forthcoming SQL Server database and Visual Studio.Net development tool from the end of 2004 to the first half of 2005, despite the fact that customers have already 'purchased' upgrades under its Software Assurance contract. In addition, the test release of 'Longhorn', the next major update of the Windows operating system due this year, is likely to be delayed until 2005.

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