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IBM turned its Cloudscape Java database system over to the open source community, putting the product's code in the hands of the Apache Software Foundation. IBM bought Cloudscape as part of its 2001 Informix acquisition and estimated its value at $85 million. The database - now renamed Derby - is targeted at low-scale applications, such as running a small web site and is closely linked to IBM's WebSphere development and deployment environment.

Microsoft retaliated against Linux by saying it would release a low-cost, pared down version of its Windows operating system - initially in South East Asia. The software maker has seen the open source operating system become widely adopted in the area. Microsoft is yet to set a price for the new product, but said 'Windows lite' would be "the most affordable operating system to date". It also added that it has no plans to make the operating system more widely available.

Hewlett-Packard (HP) removed three of its key executives following disappointing results for its second quarter ending 31 July. Enterprise servers and storage systems revenues were down 5% year-on-year. All those culled in the management shake-up were from the Compaq side of the business, which HP bought two years ago, including second in command Peter Blackmore, head of its enterprise division.

Ford Motor Company pulled the plug on an Internet-based purchasing system provided by applications and database giant Oracle, after four years of failed attempts to solve integration, performance and software quality problems. The eVEREST project, based on Oracle's 11i e-commerce applications suite, aimed to provide online purchasing capabilities to Ford procurement staff worldwide, and provide their suppliers with sophisticated portal capabilities. Ford said it would revert to its proven legacy system which is still in place. Ford will write off costs rumoured to be around $200 million.

Computer Associates (CA) launched a $1 million cash giveaway to promote innovation in its Ingres Version 3 database, which it released to open source in May 2004. CA will offer up to $400,000 to whoever can come up with a toolkit that enables database users to easily migrate from rival products (such as Oracle and DB2) to Ingres r3.

Relations between British Sky Broadcasting (BSkyB) and its IT services partner EDS finally collapsed. EDS had been contracted to build and run a customer relationship management (CRM) system for two BSkyB UK call centres. But after spending £170 million on the unsatisfactory project, BSkyB has started court proceedings to recover costs.

Hewlett-Packard fuelled its ambitions to be a premier services company in Europe with the acquisition of managed services provider Synstar for £163 million.

IBM cherry-picked twin IT services companies based in Denmark: Maersk Data and DMdata, adding 3,800 staff and inheriting large outsourcing contracts with their former owners, shipping giant Maersk and Danske Bank.

Open source enthusiast Bruce Perens unveiled a new entrant to the Linux market. UserLinux offers the same functionality as other enter- prise Linux distributions, but without the cost. It will enter public testing in September.