Month in review
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All the stories of the month, including BearingPoint bankruptcy protection and DEFRA's thin client revelation
Global IT and management consultancy BearingPoint filed for Chapter 11 bankruptcy protection in the US. The company, formed after accounting firm KPMG spun off its consulting division in 2000, has outstanding debts of $2.23 billion. Reports suggest that its major creditors were expected to start calling in that debt in April. BearingPoint’s insolvency-induced reorganisation will, according to CEO Ed Harbach, “significantly improve our financial profile and further enhance our ability to compete in the marketplace”. The company had 17,100 employees, according to its 2008 legal filings.
The UK’s Department for Environment, Food and Rural Affairs (DEFRA) abandoned a decision to adopt thin client computers after examining the extra cooling that the move would require in its data centres. Questioned by parliament on what efforts the department had made to reduce the carbon footprint of its IT infrastructure, DEFRA minister Jane Kennedy MP said that while had “DEFRA carefully considered the promotion of ‘thin clients’, evidence to date has shown that the increased electricity consumption of these server rooms renders this technology less attractive than previously thought from an energy efficiency perspective”.
US investment bank Merrill Lynch decided to abandoned much of its contract work with scandal-ridden Indian outsourcer Satyam, according to Indian newspaper The Economic Times. The company plans to move the work over rival IT services giant Tata Consultancy Services, although the banking group has not stated whether the move is a direct reaction to Satyam’s corruption scandal. In September 2008, Merrill Lynch was acquired by Bank of America, which is a major customer of TCS. Meanwhile, Satyam’s crisis management team drew up a structure for the acquisition of the company.
Nigerian cyber-criminals hacked into one of Justice Secretary Jack Straw’s email accounts, sending bogus messages to “a significant number” of his contacts, including his constituents in Blackburn. The emails claimed that Straw, who founded the National High-Tech Crime Unit in 2001 as Home Secretary before closing it down in 2006, had lost his wallet in Nigeria while travelling to promote a charity called ‘Empowering Youth to Fight Racism’. The emails asked recipients to wire $3,000 to help the politician return home. Straw described the demands as “obviously ridiculous”, although he added that “in a lot of cases [such scams] do get people to cough up.” The Justice Minister’s Hotmail account was suspended by Microsoft after the incident was reported
