Month in review
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All the top IT industry stories from October 2008
Security firm Symantec announced it was acquiring UK-based managed email provider MessageLabs for $700 million, saying it plans to incorporate the company’s email and web security services into its software-as-a-service (SaaS) platform Symantec Protection Network (SPN).
Sun Microsystems posted a $1.7 billion first-quarter loss, with $1.45 billion of that coming from the reassessment of the write-downs associated with historical acquisitions, most notably its $4.1 billion purchase of Storage Technology in 2005. The company also reported a fall in revenue of 7% to $2.99 billion. CEO Jonathan Schwartz blamed the economic downturn, saying there was “a new reality in the marketplace…Certainly, along with our customers, Sun is experiencing a slowdown as a result of the challenging economic climate.”
Microsoft-owned enterprise search vendor FAST was raided by police at its Oslo headquarters and charged with accountancy fraud. The Norwegian police economic crimes unit was called in after the country’s financial watchdog reported the search firm to the unit in May, citing a possible violation of accounting practices. Police attorney Baard Thorsen said the charge related to accounts before Microsoft purchased the company for $1.2 billion in February. “We think FAST recognised revenues that there was no basis for,” Thorsen told Reuters. In an ironic twist, FAST customers include both the Norwegian police and the country’s Ministry of Justice.
The head of BT Global Services Francois Barrault resigned after the company warned of a sharp decline in profits at the division. A profit warning issued by the services arm said while BT Global Services had grown its revenues for the most recent quarter by 15%, its quarterly profits are expected to be down to £120 million, well below analyst expectations. The company said that cost savings it had been planned for the quarter had not materialised. Barrault is being replaced by current group financial director Hanif Lalani.
Merrill Lynch CEO John Thain announced that thousands of IT jobs at the investment bank will be lost as a result of its merger with Bank of America next year. The company, which employs around 60,000 people worldwide, has shed 5,000 jobs in the past 18 months. Most of the roles threatened involve back-office functions such as IT and finance. Bank of America agreed to acquire Merrill Lynch for $50 billion last month, as it teetered on the edge of collapse. The deal, expected to be completed early 2009, will unite one of largest high street banks with the world’s second-largest investment bank.
