Checkmarx touts innovation in secure coding

Checkmarx announced technology this week that the company describes as an innovation in secure coding. Static code analysis tools have been used to fight software vulnerabilities but they require that a project be almost completed before scanning can take place, according to the company. The Checkmarx Virtual Compiler lets source code be scanned in real time without using a compiler, giving developers, auditors, and security professionals capabilities for secure coding and fixing flaws at the earliest stages of development, the company said. [ Microsoft also has focused on security for application development. | Keep up with app dev issues and trends with InfoWorld's Fatal Exception blog. ] Most security issues can be traced to code vulnerabilities, Checkmarx said.

This makes security repairs to code costly and nullifies the benefits of static analysis. Security auditors, meanwhile, can conduct audits any time on the code base without having to emulate a developer's environment. "The Checkmarx Virtual Compiler means developers can finally fix code on the assembly line instead of having to wait until the software is almost out the door," said Checkmarx CTO and founder Maty Siman in a statement released by the company. Checkmarx Virtual Compiler lets developers scan un-built code so static analysis can be performed earlier in the development lifecycle, Checkmarx said. Usable in any stage of development, the product supports Linux, Windows and Solaris and languages such as Java, C/C++ and Salesforce.com Apex. This story, "Checkmarx touts innovation in secure coding," was originally published at InfoWorld.com. Checkmarx is offering a free trial of its code analysis, accessible.

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Google Search Page Gets a New Look

Google has introduced a new version of the search engine's home page, which features a sleek fade-in effect that hides all the elements of the page except the logo, search bar, and the buttons. The rest of the elements of the page, such as links to Gmail, Documents, News, Maps, Shopping, etc., will be revealed with a fancy fade-in effect when you fist move the cursor on the screen. When accessing the main Google search page, you will only see the Google logo (or the doodle of the day) and the super-sized search bar (introduced a few months ago) with the search buttons underneath.

Google's new search homepage is now even less crowded, in comparison to Bing, the competing search engine from Microsoft, which overlays different images under the search bar daily and features search queries of interest. The search company says it tried about ten versions of the fading homepage and chose the current one based on "user happiness metrics". Some of the earlier versions of the fade-in Google homepage had an even more minimalistic approach, with the search buttons hidden at first. The fading Google homepage was first noticed a few months ago, when Google was experimenting with different designs. The final version of the fading homepage is now being introduced to Google home pages around the world. Google also introduced a better format for image search results earlier this week. Google explains in a blog post that it was concerned with the time to first action on the new homepage, which could confuse users initially. "We want users to notice this change... and it does take time to notice something (though in this case, only milliseconds!). "Our goal then became to understand whether or not over time the users began to use the homepage even more efficiently than the control group and, sure enough, that was the trend we observed," the Google team explained.

The new image search layout will show a larger image and additional smaller images alongside. In a previous update in November, Google also introduced Image Swirl, which bring layers of similar images into searches.

Grassley seeks proof of jobs from H-1B applicants

WASHINGTON - One of the U.S. Senate's leading critics of the H-1B visa program, Sen. Grassley wants IT consulting companies that hire H-1B workers at third party client sites to prove that there is work waiting for them. Charles Grassley (R-Iowa), is asking immigration officials to toughen their demands for evidence from companies hiring visa workers. The timing of his request to the U.S. Citizen and Immigration Service (USCIS) is no accident or is Grassley's interest.

In a statement accompanying the release of his letter to Mayorkas, Grassley said, that "Employers need to be held accountable so that foreign workers are not flooding the market, depressing wages, and taking jobs from qualified Americans. About a year ago, Grassley released a USCIS study that found either evidence of fraud or other violations in one-out-five H-1B visa petitions . His letter to USCIS Director Alejandro Mayorkas, released Tuesday, also comes just prior to the start of the new fiscal year, Oct. 1 and the release of 66,700 H-1B visas petitions, a number well short of the cap, applied for since April 1, the start of the annual petition process. Asking the right questions and requesting the necessary documents will go a long way in getting out the fraud in the H-1B program." Five months after USCIS completed its fraud study, federal officials arrested about a dozen people and charged with fraud. The U.S. recently expanded the case ; the company is fighting the charges in federal court. One of the cases involved a New Jersey company, Visions System Group Inc. alleged to have set up shell offices in Grassley's home state. Grassley said in his letter that the USCIS should be asking, "companies up front for evidence that H-1B visa holders actually have a job awaiting them in the U.S.," and not end up being "benched," or unpaid until work is found.

In response, a USCIS official said Mayorkas has received the letter and will respond for it. Grassley is also seeking information on the progress the USCIS has made on a number of other issues addressed in the fraud report, including job duties that differ from those described in the petition and failure to pay prevailing wages. Grassley's letter to tougher steps comes at the same time that some immigration attorneys have complained of stepped up enforcement efforts this year, especially with request for more evidence to support a petition. Richard Durbin (D-Ill), have introduced legislation that would toughen the rules on H-1B program, and impose a number of restrictions , especially on Indian firms and their ability to use large numbers of visa holders without hiring a proportional number of U.S. workers. Grassley, along with U.S. Sen. The U.S. can issue up to 85,000 H-1B petitions under the cap, with 20,000 set aside for advance degree graduates of U.S. universities.

IT employment is down generally, and with it, demand for the visa.

Microsoft defends its anti-malware software after Symantec piles on

Microsoft is defending the merits of its free Security Essentials anti-malware software after a top Symantec engineer badmouthed the new release. "Microsoft Security Essentials provides real-time protection that uses behavior monitoring and reputation services to help identify the malicious software as soon as it emerges in the ecosystem and then uses the Dynamic Signature Service to make the newest definitions available virtually real-time, without having to wait for the next signature download," Microsoft said in a statement. 11 security companies to watch Earlier in the week, Jens Meggers, vice president of engineering for Norton products, claimed the newly released Security Essentials is just an unimpressive recycling of Microsoft's discontinued Live OneCare technology for Windows desktops. "It's just stripped down OneCare," Meggers said, citing a report from Dennis Technology Lab that compared Norton AntiVirus 2009 to Microsoft Security Essentials and deemed Norton stronger in malware defense by about a 2-to-1 margin (the test was sponsored by Symantec). Microsoft expressed disappointment in Symantec's claims but did not rebut each of Meggers' remarks. In its statement Microsoft said it "continues to advocate for a defense in depth strategy that includes the use of anti-malware software, but also includes protections such as firewall and user account controls like those found in Windows, browser security like that in IE8 and continuous updates like those provided through Microsoft Update." Microsoft indicated it is offering Microsoft Security essentials for free because "we still see far too many consumers worldwide that do not have up-to-date protection either because they cannot afford it, are concerned about the impact the suites will have on the performance of their PCs, or because they simply do not realize their AV software is not up to date." Offering its software for free, said Microsoft, "will remove some of the barriers in the way of consumers having quality anti-malware protection today."

Experts scrutinize 2009’s most notable IT apologies

We asked Peter Goolpacy and the team at Perfect Apology to rate the quality of the apologies issued by top tech companies and executives this year for their assorted mistakes and misdeeds. Perfect Apology (PA) rating: 8.5 Amazon CEO Jeff Bezos' apology for deleting illegally sold books from customers' Kindle devices, without any warning, was pretty impressive. The following contains their reviews of the apologies and their ratings of the apologies on a scale of 1-10, with 10 being the best. (Here are links to our original article on the "Year in IT Industry Apologies," which includes the complete apologies' text, and a slideshow featuring abbreviated versions of the apologies.) Amazon Kindle apology.

Of course, his second apology to those whose copyrights the company abused by illegally selling these books is still pending - no doubt for several reasons tied to ongoing litigations. Perhaps the most impressive part of this apology was the decision to change Amazon's deletion policy "so that in the future we will not remove books from customers' devices in these circumstances." Presumably, they continue to reserve the right to remove books from Kindles under different circumstances. The initial apology issued by Bezos was reinforced by additional apologies on the main Amazon web site - together they satisfied many of the key ingredients we recommend throughout our site: acknowledging the stupidity of the error, taking full responsibility for the mistake, establishing new procedures to prevent unauthorized deletions in the future, and a refund to those who purchased the copies. There are two problems with the apology. Taking the books back was not the real problem (most users understood the importance of returning the 99 cent books) - what really hurt was Amazon's decision to do this without any warning. First, Bezos could easily have conveyed a clearer appreciation of the harm done beyond simply acknowledging Amazon's stupidity - the unauthorized deletions raise important issues tied to corporate control over personal property and privacy rights that must have seriously damaged the trust many Kindle users have in the company.

The irony that one of the books in question was Orwell's 1984 was not missed by many. The question is whether the 99 cent refund was considered reasonable by most of the customers directly affected by the deletion. Second, the apology certainly satisfied the important prerequisite of expressing regret and taking responsibility, but excessive self criticism (e.g., stupid, thoughtless, painful, self-inflicted, etc.) produces diminishing returns if not followed by some form of restitution - in this case an immediate and "reasonable" refund. Once purchased (especially for only 99 cents) a book like Orwell's 1984 is far more valuable to the owner than the original 99 cents, so losing it was much more costly to them. This would have represented a more significant cost to Amazon and a clearer measure of responsibility and regret.

Amazon's refund could have included a credit to defer at least some of the $9.99 cost to repurchase a legal copy of the book. However, judging by the responses on the Amazon blog, Bezos' apology seemed to hit the right note - the replies were very positive. But its overall quality was affected by excluding any critique, warning or reprimand directed at Sikalosoft, both for the original app and then for the abysmal apology Sikalosoft issued in its defense. Apple iPhone apology (Shaken Baby App). Rating: 7 for Apple; 0 for Sikalosoft Apple's apology was brief and largely effective, because it probably controlled some of the damage. Apple could also have included at least some reference to correctives designed to prevent the inclusion of offensive applications in the future, or a commitment to monitor companies like Sikalosoft that continue to produce offensive apps.

Now, in direct contrast to Apple's apology, the one issued by Sikalosoft made things worse by virtually dismissing the mistake with a joke - "Okay, so maybe the Baby Shaker iPhone app was a bad idea….No babies were harmed in the making of Baby Shaker." Apple missed a good opportunity to improve its apology by slamming the one issued by Sikalosoft. Simply deciding to drop the product, rather than issuing a threat to drop Sikalosoft, might appear insufficient to those who were offended. Pepsi iPhone app apology. The Twitter apology read - "Our app tried 2 show the humorous lengths guys go2 get women. Rating: 1 Pepsi's apology for its iPhone app, which offered advice for picking up women, received one of the lowest ratings by the PA team. We apologize if it's in bad taste & appreciate ur feedback." This was an impressive 99 character long apology.

The app obviously offended some people, so it required a decent attempt at an apology, but it deserved much more than a tweet. Ironically, the problem with this tech apology was the limitations tied to the very technology used to send it. Judging by this tweetology, the Pepsi PR guy is obviously not a Twitter genius capable of crafting the perfect 140 character mea-culpa. We're not saying it's impossible to use Twitter to say sorry; it's just much harder to do it well. Twitter is probably not the best approach for sending business apologies, for many of the reasons we cover on our website - if an apology is easy and painless, it's probably not heartfelt or credible. But there was a far more serious problem with this apology, one that probably made things worse - Pepsi made the common error of including the word 'if' in an apology - "we apologize if it's in bad taste." In other words, the apology applies only if we were too prudish or pompous to appreciate the humour.

So, for content, style and substance we give this one a 1 rating for at least including the following 11 characters "we apologize". T-Mobile and Microsoft Sidekick apology. Telling those who were offended by the app that they screwed up, because they missed the point, is never recommended. Rating: 8.8 The T-Mobile-Microsoft apology was among the strongest of those reviewed by the team. Data breach apologies are particularly damaging because clients have assigned so much faith, trust and confidence in Microsoft and T-Mobile to save and secure their personal data. The strength of the apology was related to the time and effort devoted to carefully explaining how Microsoft was going to fix the problem for Sidekick users, followed by a detailed list of the steps already taken to avoid the same problem in the future. Any failure to protect that data inevitably damages the trust required to retain customers for their product.

Belkin apology for commissioned reviews. The rapid restoration of personal data certainly helped, as did the measures taken to enhance future security measures and backup plans, but a few more words conveying at least some appreciation for the effects of lost access to personal data would have gone a long way towards personalizing the apology. Rating: 8.5 Belkin's admission that one of its employees actually commissioned positive reviews of one of its network products offers another good illustration of a strong apology. We regard our responsibility to our user community as sacred, and we are extremely sorry that this happened." This was followed by a description of the solutions - "We've acted swiftly to remove all associated postings from the Mechanical Turk system. The President (Mark Reynoso) clearly acknowledges the importance of the error, and addresses the potential harm this caused - "We know that people look to online user reviews for unbiased opinions from fellow users and instances like this challenge the implicit trust that is placed in this interaction.

We're working closely with our online channel partners to ensure that any reviews that may have been placed due to these postings have been removed." Reynoso's apology was noteworthy not only for acknowledging the damage to the company's reputation, but for appreciating the implications for the larger online community and the credibility of web-based reviews of tech products. Rackspace apology for cloud outage. Accepting this additional measure of responsibility was impressive. Rating: 6 The Rackspace apology to thousands of customers for yet another outage was certainly lengthy, but there are diminishing returns, even for strong apologies, if the same problems recur. Unless the outages stop, subsequent failures, no matter how minor, are likely to produce a more significant and negative backlash from customers.

A promise to avoid the same mistake in the future carries less weight each time. Repeated apologies, no matter how detailed and sincere, will be less and less effective over time. The effects may be the same, but differentiating apologies will help avoid the impression that the problem can't be fixed. In this case, it would have helped to add a few more details about what caused this particular outage if only to distinguish the events. Major League Baseball Web video apology. There were many fires and we were off working on them and didn't man the blog." The apology was about as close as you can get to saying "s- happens." The "lack of communication" was really only one small part of the problem, but it was unintentionally reinforced by the apology itself.

Rating: 4 MLB's apology for technical problems with its fee-based game video-streaming service was not great - "Apologies for the lack of communication. The MLB video team failed to communicate the nature of the problem, failed to convince users they understood it, and failed to provide any indication that they knew how to resolve it - "We have a lot more to do still to get the [media] player to perform in a more stable manner across the board." There is no clear indication of what "a lot more" actually means, or what measures they plan to take to manage the recurring errors (e.g., instant blog updates; specific tech fixes; some form of compensation or credit for down time; etc.). VMware exec apology to Microsoft. He apologizes for damaging VMware and Microsoft's credibility, but he implied in his apology that only "some" people may have found reason to be concerned about the company's credibility. Rating 4.5 Scott Drummonds' apology for anonymously posting a misleading (and excessively optimistic) YouTube video praising a Microsoft product failed on several levels. The practice of fabricating positive reviews to exaggerate the quality or performance of any product would be viewed by anyone with a conscience as a serious mistake. He should have taken full responsibility for a much larger breach of trust.

Yet Drummonds seems to be apologizing only to those few, with ethical higher standards, who may have been offended. Instead, he simply describes the error without ever addressing the more important issue of the credibility of online reviews - Drummonds should take lessons from Belkin's 8.5 apology. This is a more significant breach of trust that should have been acknowledged in the apology. Keep in mind, Drummonds was not aggressively pushing a product because it was good and deserved the exposure; he was exaggerating the quality of the product by claiming a level of performance it could not meet. Dancer "Woz" apology. In addition to clearly conveying honest regret and remorse for his actions, Woz managed in his apology to elevate the respect people have for those he hurt, while simultaneously establishing a higher measure of credibility for the technology used by DWTS to tally results.

Rating 9 The PA team was surprised by its decision to assign the highest rating (approaching perfection) for the apology delivered by Apple co-founder Steve Wozniak - he mistakenly criticized Dancing With The Stars producers for fabricating audience voting results. In other words, the apology left the situation better for those he hurt and improved impressions people have of the show he originally criticized. In sum, this brief letter accomplished more 'good' than the 'harm' created by the original insult. The heartfelt endorsement by Woz, a widely respected and incredibly successful technology expert, went well beyond anything the show's producers could have accomplished on their own. Google apology for Gmail outage. Rating: 8.5

Cloudera intros Hadoop management tools

Startup Cloudera is introducing a set of applications on Friday for working with Hadoop, the open-source framework for large-scale data processing and analysis. It allows an application workload to be spread over clusters of commodity hardware, and also includes a distributed file system. Cloudera, which provides Hadoop support to enterprises, developed the new browser-based application suite to simplify the process of using Hadoop, according to CEO Mike Olson. "It's an easy-to-use GUI suitable for people who don't have a lot of Hadoop expertise," Olson said. "The big Web properties with sophisticated and talented PhDs have been successful [with it], but ordinary IT shops ... have had a harder time." Hadoop is known for its behind-the-scenes role crunching oceans of information for Web operations like Facebook and Yahoo.

But although the technology is "at its best" when data volumes get into multiple terabytes, Hadoop has relevance for a wide variety of companies, according to Olson. "It's increasingly easy to get your hands on that much data these days," especially from machine-generated information like Web logs, he said. Cloudera and its partners are fine-tuning the suite, which is now in beta, before issuing a general release. The browser-based application set is supported on Windows, Mac and Linux, and includes four modules: a file browser; a tool for creating, executing and archiving jobs; a tool for monitoring the status of jobs; and a "cluster health dashboard" for keeping tabs on a cluster's performance. Hadoop needs many more tools like it, according to analyst Curt Monash of Monash Research. "If Hadoop is to consistently handle workloads as diverse and demanding as those of [massively parallel processing] relational DBMSes, it needs a lot of tools and infrastructure," Monash said via e-mail. "The three leaders in developing those are Yahoo, Cloudera, and Facebook. There's a long way to go."

Scientist who found water on moon arrested for espionage

A scientist who once worked on the Star Wars missile defense project and is credited with discovering the presence of water on the moon is being accused by federal prosecutors of attempting to sell top secret information to a foreign intelligence agency. If convicted, Nozette faces life in prison, the U.S. Department of Justice (DOJ) said. Stewart Nozette, 52, of Chevy Chase, Md., was arrested yesterday on charges of attempted espionage after he was allegedly caught trying to sell classified national defense information to someone he thought worked for Israel's Mossad intelligence agency.

Nozette is a Ph.D in Planetary Sciences from the Massachusetts Institute of Technology and served on the White House National Space Council in 1989 and 1990. He is credited with developing a radar experiment to look for water on the south pole of the moon, the DOJ said. During the nine years he worked there developing "highly advanced technology," Nozette held a special security clearance that gave him access to Top Secret and critical nuclear weapon design information. Nozette worked at the Department of Energy's Lawrence Livermore National Laboratory after his White House stint. He later established a non-profit organization called the Alliance for Competitive Technology (ACT). Bedtween January 2000 and February 2006, Nozette's ACT entered into several agreements to develop advanced technology for the U.S. government. Over the last decade, Nozette also consulted with an Israeli aerospace company that is wholly owned by the Israeli government. The facilities that Nozette's company did work for included, the U.S. Naval Research Laboratory and NASA's Goddard Space Flight Center.

Nozette's arrest yesterday stemmed from an FBI sting operation. But it does mention a trip abroad that Nozette made during which he allegedly had in his possession two computer thumb-drives containing encrypted material. An affidavit filed in connection with his arrest does not say what tipped federal authorities off to Nozette's alleged espionage activities. The thumb drives were apparently not with him when he returned. During a later meeting between the two, Nozette allegedly agreed to work for Israeli intelligence in return for money. According to the affidavit, Nozette was contacted by telephone in September by an FBI agent posing as a Mossad agent.

On two separate occasions after that meeting, Nozette was allegedly video-taped dropping off large manila envelopes into a designated post office box in Washington. The information that Nozette thought he was passing on in return for thousands of dollars in cash included secret and top secret data on satellite systems, early warning systems, means of defense and retaliation against large-scale attack and nuclear weapons. The envelopes contained an encrypted hard drive and pages of information that Nozette had provided in response to a series of questions posed by what he thought were Israeli agents.

Eolas files patent lawsuit against 22 companies

Technology research company Eolas Technologies, which won a US$520.6 million patent infringement case against Microsoft in 2003, has filed a new patent lawsuit against 22 companies including Adobe Systems, Google, Yahoo, Apple, eBay and Amazon.com. All we want is what's fair." Eolas is asking the court to prohibit the defendants from using the patented technology and to pay triple the actual damages for willful infringement of the patents. "Right now, each of these companies is using our invention, but we're receiving no compensation," said Mark Swords, CEO of Eolas. Eolas' lawsuit, filed Tuesday in U.S. District Court for the Eastern District of Texas, claims the tech vendors and other companies have violated two Eolas patents, one for allowing embedded applications in Web browsers, and the second a continuation of the first patent, allowing Web sites to add embedded applications through the use of plug-ins and AJAX (asynchronous JavaScript and XML). "We developed these technologies over 15 years ago and demonstrated them widely, years before the marketplace had heard of interactive applications embedded in Web pages tapping into powerful remote resources," Michael Doyle, chairman of Eolas, said in a statement. "Profiting from someone else's innovation without payment is fundamentally unfair. Representatives of Google, Amazon.com and eBay didn't immediately respond to requests for comments on the lawsuit.

The U.S. Patent and Trademark Office later upheld the first Eolas patent, number 5,838,906 ('906), and Microsoft settled the Eolas lawsuit in August 2007 for an undisclosed amount. Eolas was awarded a $520.6 million judgment in the lawsuit against Microsoft in August 2003. An appeals court threw out that ruling in March 2005 and ordered a new trial to determine the original patent's validity. The Microsoft patent award was used as an example of problems with the U.S. patent systems, with critics pointing to the award as a reason to pass patent reform legislation in the U.S. Congress. Patent reform legislation has been stalled in Congress for several years. Several large tech vendors have pushed Congress for legislation that would make it harder for patent holders to collect huge patent awards, saying awards in recent years have gotten excessive. In late 2003, Tim Berners-Lee, director of the World Wide Web Consortium (W3C), urged the U.S. Patent and Trademark Office to reject the '906 patent.

But Swords noted that the USPTO has now looked at the '906 patent three times and upheld its validity. "One of the criticisms of the patent system has been that weak patents get out," he said. "That couldn't be further from the truth" in this case. The USPTO should invalidate the patent "in order to prevent substantial economic and technical damage" to the World Wide Web, he said then. Eolas, which focuses on building bioinformatics products, would be open to settlements from defendants that are willing to talk, Swords said. He rejected arguments that enforcing the patent would hurt the Web. "We heard this in our lawsuit with Microsoft, that this is going to break the Web," he said. "It didn't." Mike McKool, of law firm McKool Smith and lawyer for Eolas, said he hopes the lawsuit will put an end to the widespread unauthorized use of the company's technology patents. "What distinguishes this case from most patent suits is that so many established companies named as defendants are infringing a patent that has been ruled valid by the Patent Office on three occasions," he said in a statement. The original '906 patent was filed for technology that allows researchers to work together on large data sets, he said. The '906 patent was granted in November 1998. The second patent, number 7,599,985, was granted Tuesday.

Other defendants in the patent lawsuit include Citigroup, the Go Daddy Group, Staples, Office Depot, Sun Microsystems and Texas Instruments.

Today's branch office

This is the second in a series of three newsletters intended to demonstrate that the next generation branch office represents a multi-year migration away from branch offices that are IT-heavy to ones that are IT-lite and that as part of this migration, the WAN plays an ever increasing role in application delivery. Under these programs at least some of the servers, applications and storage are moved out of the typical branch office and are consolidated into centralized data centers. This newsletter will discuss how IT organizations migrated away from having branch offices that are IT-heavy and in so doing, created the performance and management challenges associated with Application Delivery 1.0. Part 1: The Evolving Branch Office As is well known, the cost, control and security issues involved with the IT-heavy model of branch offices that was common at the beginning of this decade has caused the majority of IT organizations to embark on programs of centralization and consolidation of IT resources. As of this year, 40% of IT organizations have consolidated the majority of their servers into centralized data centers and that percentage will increase in 2010. As will be discussed, the fact that so many IT resources have been centralized means that unlike the situation with branches that are IT-heavy, the performance of the WAN has a major impact on the productivity of today's branch office employees.

However, the act of server centralization gave rise to one of the signature challenges associated with application delivery 1.0. That challenge is the poor performance that results from running a chatty protocol such as CIFS (Common Internet File System) over a WAN. To mitigate this and other performance challenges associated with server centralization, IT organizations have begun to make heavy use of WAN optimization controllers (WOC). WOCs are typically appliances that improve network and application performance and reduce bandwidth consumption using techniques such as application-aware QoS, data compression, caching, de-duplication as well as protocol and application-specific optimization. One of the many benefits associated with server centralization is that because there are fewer applications and servers located in branch offices, this allows a greater number of branch offices to function with no on-site IT staff. Another key characteristic of Application Delivery 1.0 is that while most of the management functionality is still focused on individual technology domains, there has been some attempt to deploy application performance management (APM) tools to measure the application response time the end user sees. While there has been a movement to remove servers from branch offices there has also been somewhat of a counter movement to increase the number of appliances in branch offices. In addition, there has been a growth in the number of management tools that facilitate remotely managing branch office IT resources from central sites. In somewhat of a worst-case scenario, a branch office could have separate appliances providing each of the following functions: network and application optimization, firewall, antivirus, intrusion detection and prevention, denial-of-service mitigation and Web filtering.

We have also begun to see the deployment of desktop virtualization. As part of the evolution of their branch offices, some IT organizations have begun to further simplify their branch office infrastructure by deploying a branch office box (BOB). The advantage of the BOB is that it can consolidate several functions (such as WOC, print server, file server, DHCP server, DNS server) into a single physical device, while also allowing all of these capabilities to be managed via a single system management interface. While not as popular as server virtualization, desktop virtualization allows IT organizations to centralize the management of desktop applications including applications hosted at the central site (server-side virtualized applications) and applications that are streamed on-demand to client devices (client-side virtualized applications). Unfortunately, as was the case with the initial centralization of IT resources out of branch offices and into centralized data centers, the latency and bandwidth associated with the WAN can severely hinder the performance of desktop virtualization. In our next newsletter we will discuss the next stage in the evolution of branch offices – the adoption of a branch office design that is IT-lite.

Arm unveils chip to make smartphones faster, cooler

Arm Holdings PLC today introduced a processor for smartphones and other devices that it says will be cheaper, and more powerful and energy-efficient than the two ARM processors it will supplant. The new Cortex-A5 processor will come with one to four processor cores running at up to 1GHz. Based on an efficient 40-nanometer design, the Cortex-A5's cores will run up to 3 times faster than each core in the company's low-end ARM9 product, according to the Cambridge, England-based firm. The company expects that the new chip will also help it ward off incursions from Intel Corp's rival Atom chip . ARM announced the chip Wednesday at its annual ARM TechCon3 conference in Santa Clara, Calif.

The Cortex-A5 also consumes one-third the power of ARM's mid-range ARM11 processor, meaning that it can extend a device's battery life "by at least double, if not more," said Travis Lanier, a product manager at Arm. The Cortex-A5 is due to be released to ARM's 600-plus manufacturing partners in December, the company said. The manufacturing cost of the new chip is about one-fifth what it costs to make the ARM9, which has been installed in more than 5 billion cellphones and other devices, or the ARM11, which is used in Apple's iPhone and iPod Touch. Meanwhile, Intel is readying a 32-nanometer version of the popular Atom netbook processor . The 32nm chip will be the first "low-leakage" version of the Atom, and is expected to be similar to the current Arm CPUs in terms of compactness and power efficiency, making it suitable for mobile phones and tiny devices. The supported software includes Ubuntu Linux, Android and the Firefox browser.

Arm says that the company expects the Cortex-A5 to maintain its edge over the Atom. "This is a very, very tiny processor," Lanier said. "It will be many generations before the Atom can compete with it." The Cortex-A5 will be able to run all of the software that runs on the other Arm Cortex processors - the Cortex-A8 and the Cortex-A9, Lanier said. The Cortex-A5 also supports technology from Neon multimedia technology that can be used to improve video performance. Such devices should begin to appear with Cortex-A5 chips in 2011, Lanier said. Arm expects the Cortex-A5 to be used in low-end to mid-range cellphones, smart appliances such as refrigerators, washing machines and clothes dryers and digital picture frames. At that point, the ARM9 and ARM11 chips will begin phasing out.

The company recently announced that its dual-core Cortex-A9 will be able to run as fast as 2 GHz, enabling it to run in ARM-based netbooks, or smartbooks, laptops and even desktop PCs, says Lanier. The Cortex-A8 and Cortex-A9 will continue to be Arm's mid-range and high-end processors. Lanier said that the Cortex-A5 will come in two flavors: a general-purpose processor running at 1 GHz that consumes about 80 milliwatts; and a low-power, very efficient chip that runs at 500 MHz. "There's almost no [electrical] leakage," Lanier said. That is more suitable for phones, as battery life tends to be key.

Facebook Captchas broken?

Hackers have apparently found a way to automate the creation of new Facebook profiles by breaking the challenge-response mechanism used by the site to ensure that only humans sign up for the service. The pages are being used to spam links pointing to malicious sites. Security researcher Roger Thompson, of AVG Technologies, today said his company in recent days discovered numerous Facebook pages that were clearly created in an automated fashion using malware programs. Users who click on the link are prompted to install rogue anti-spyware tools on their systems, he said.

All of the pages contain the same profile picture but with different user names. So far, AVG has noticed a "couple of hundred" Facebook pages that appear to have been created by an automated malware program. From a security threat standpoint, the Facebook break-in doesn't appear to be particularly serious, Thompson said in his blog. Simon Axten, a Facebook spokesman, said the company is investigating the report and is working on identifying the fake accounts "so we can disable them en masse." In an e-mail message, Axten said that the URL contained in the profiles has already been blacklisted by major Web browsers and have been blocked from being shared on Facebook. And Facebook is sure to deactivate all the new accounts "as quickly as they find them." Even so, the fact that hackers got past Facebook's Captchas highlights a continuing trend by attackers to try and exploit social networks, he said.

The company is using a third-party Captcha company called reCAPTCHA, which was recently acquired by Google and "is about as well-regarded a Captcha provider as there is," he said. Another possibility is that those responsible for the attack farmed out the Captchas to be solved by humans for a price. "On the education front, we encourage users not to click on strange links and to take appropriate steps if they feel their computer or Facebook account has been compromised," he said. Facebook is trying to understand how the new accounts were created, though it is possible that the sign-up process was manual. In a note posted today , the Internet Crime Complaint Center (IC3), which is a partnership between the FBI and the National White Collar Crime Center, warned about the trend. According to the IC3, fraudsters are using spam to promote phishing sites or to entice users to download an application or view a video. Fraudsters are continuing to hijack attacks on social networking sites and are using them to spread malicious software, the IC3 warned.

Users visiting such sites or clicking on the videos and photos then get infected by various pieces of malware. Adjusting Web site privacy settings, being selective about friends and what they are allowed to view and disabling options such as texting and photo sharing when they are not being used are all ways users can protect themselves on social networking sites, it said. Often the spam is disguised to appear as if it were sent from a user's 'friend.' Some attackers also plant malicious ads containing malware downloads on social network sites, the IC3 note warned Users of social networking sites need to be aware of such threats and take measures to address them, the IC3 said.

Missing dot drops Sweden off the Internet

What was essentially a typo last night resulted in the temporary disappearance from the Internet of almost a million Web sites in Sweden - every address with a .se top-level down name. Problems that affect an entire top-level zone have very wide-ranging effects as can be seen by the .se incident. … Imagine the same thing happening to the .com domain, which has over 80 million domain names." The total blackout of .se lasted for about an hour and a half, Pingdom says, although aftershocks are expected to continue. "The .SE registry used an incorrectly configured script to update the .se zone, which introduced an error to every single .se domain name," says Pingdom. "We have spoken to a number of industry insiders and what happened is that when updating the data, the script did not add a terminating '.' to the DNS records in the .se zone. According to Web monitoring company Pingdom, which happens to be based in Sweden, the disablement of an entire top-level domain "is exceptionally rare. … Usually it's a single domain name that has been incorrectly configured or the DNS servers of a single Web host having problems.

That trailing dot is necessary in the settings for DNS to understand that '.se" is the top-level domain. Thanks to well-functioning surveillance system .SE discovered the error immediately and a new file with the DNS data (zone file) was produced and distributed within one hour. … The false information that was sent out affected accessibility to all .se domains for a short time. It is a seemingly small detail, but without it, the whole DNS lookup chain broke down." Sweden's Internet Infrastructure Foundation, which administers .se, issued this statement: "The cause was an incorrect software update, which, despite our testing procedures were not detected. However, there may still be some name servers that have not changed out of misinformation against the real." A spokesperson for .se, Maria Eklund told a Swedish press outlet that the issues may not be completely resolved before Wednesday. "This little mistake is going to affect Internet traffic for two days," she told the newspaper. (Speculation that it's really the fault of newly "internationalized" ICANN begins in 3 … 2 … 1.)

Microsoft defends its anti-malware software after Symantec piles on

Microsoft is defending the merits of its free Security Essentials anti-malware software after a top Symantec engineer badmouthed the new release. "Microsoft Security Essentials provides real-time protection that uses behavior monitoring and reputation services to help identify the malicious software as soon as it emerges in the ecosystem and then uses the Dynamic Signature Service to make the newest definitions available virtually real-time, without having to wait for the next signature download," Microsoft said in a statement. 11 security companies to watch Earlier in the week, Jens Meggers, vice president of engineering for Norton products, claimed the newly released Security Essentials is just an unimpressive recycling of Microsoft's discontinued Live OneCare technology for Windows desktops. "It's just stripped down OneCare," Meggers said, citing a report from Dennis Technology Lab that compared Norton AntiVirus 2009 to Microsoft Security Essentials and deemed Norton stronger in malware defense by about a 2-to-1 margin (the test was sponsored by Symantec). Microsoft expressed disappointment in Symantec's claims but did not rebut each of Meggers' remarks. In its statement Microsoft said it "continues to advocate for a defense in depth strategy that includes the use of anti-malware software, but also includes protections such as firewall and user account controls like those found in Windows, browser security like that in IE8 and continuous updates like those provided through Microsoft Update." Microsoft indicated it is offering Microsoft Security essentials for free because "we still see far too many consumers worldwide that do not have up-to-date protection either because they cannot afford it, are concerned about the impact the suites will have on the performance of their PCs, or because they simply do not realize their AV software is not up to date." Offering its software for free, said Microsoft, "will remove some of the barriers in the way of consumers having quality anti-malware protection today."

Music industry signs online distribution agreement with EU

The European Commission has signed an agreement with the online music industry designed to improve consumers' access to online music across the 27-nation European Union, it said Tuesday. The agreement they reached sets out general principles that will underpin the online distribution of music in the future, leading to "improved online music opportunities for European consumers," the participants said in a joint statement. "European consumers want and deserve better online music offerings," Kroes said in a statement, describing the agreement as evidence of "real progress in this direction." This is the first time players involved in the distribution of music have agreed on "a common roadmap," she said. Online music retailers including Amazon.com and Apple, Finnish mobile phone giant Nokia, royalty rights collecting societies, consumer groups and the record labels EMI and Universal Music Group struck the deal with E.U. Commissioner for competition Neelie Kroes. Apple is optimistic that over the coming year it will be able to make its iTunes online music store available in countries where it doesn't operate at present, the Commission said.

The biggest obstacle to creating a fully functioning online marketplace for music until now has been the reluctance of collecting societies to do away with their traditional approach to the European market, which involved each one maintaining a monopoly over rights collection in its national territory. Meanwhile, EMI expects to sign non-exclusive digital licensing agreements with two of the most obstinate collecting societies in Europe - SACEM of France and Spain's SGAE, the Commission said. The Internet's ability to reach across borders makes it harder for online stores to restrict sales to customers in a particular territory.

CA to buy NetQoS for $200 million

CA Monday announced plans to acquire NetQoS for $200 million, adding application-aware network and systems management products to the software maker's broad enterprise IT management portfolio. The added technology will also boost CA's efforts to manage advanced infrastructures that feature virtual systems and cloud computing environments, the vendor says. "NetQoS technology complements CA's Wily products and will help network and systems engineers better design their infrastructure to ensure application issues don't occur from the start," says Roger Pilc, senior vice president and general manager of CA's infrastructure and automation business unit. "The technologies will help network and systems management be more application aware." The deal, anticipated to close in CA's fiscal third quarter, would augment an already full software lineup grown via previous acquisitions of Wily Technology, Concord Communications and Aprisma. Hottest tech M&A deals of 2009 CA executives say the pending acquisition offers little overlap by way of products and will help CA products diagnose the root cause of application errors within the network and systems infrastructure.

CA executives say NetQoS products, designed for network managers responsible in part for application delivery, will add to the company's Wily products that detect performance problems in the application environment. Customers can visualize the links and relationships between the delivery technologies and the business applications and services with Wily, and understand the real-time application and service activity across those links and relationships with NetQoS traffic flows," says Jasmine Noel, co-founder and principal analyst at Ptak, Noel & Associates. NetQoS tools are able to detect application performance problems using network-centric measures such as traffic flow. "The acquisition is good because NetQoS has a focus on application delivery, so when combined with Wily, it offers a good one-two punch. With some areas of overlap in the former Concord eHealth and Aprisma Spectrum tools, CA's Pilc say the company will work to address issues after the deal closes. NetQoS technology will target network engineers who focus on application delivery where the management of traffic flows is the primary task, rather than the management of thousands of network devices." CA also expects the NetQoS technology to play a bigger role in its virtual and cloud management offerings. Noel says customers should not expect NetQoS tools to get lost in the shuffle as CA could have targeted plans for each product suite. "In terms of portfolio, CA now has two network performance management solutions, eHealth and NetQoS. But I think CA has specific targets for both solutions," she says. "CA's eHealth technology will target network engineers who spend most of their time managing performance of specialized network infrastructure.

With its ability to track flows across virtual and physical elements, NetQoS tools could be coupled with Cassatt assets CA acquired earlier this year, the company says. NetQoS co-founder and CEO Joel Trammel says CA represented the best fit with his company's technology, and customers shouldn't expect any change in products or support as the deal unfolds. With no previous partnerships, the two vendors share some 200 customers and CA's Pilc foresees "very little modification in the NetQoS product set and its approach to customers going forward." That is why NetQoS executives found the deal to be synergistic. NetQoS has more than 1,000 customers worldwide and reported revenue of $56 million in 2008. "We sought out CA because we saw a clear fit with us and the company's success in acquiring Wily, Concord and Aprisma. Industry watchers expect the deal could benefit both parties going forward if CA sales teams focus on the NetQoS suite. "For a small vendor, being acquired could be good because a larger sales force means a bigger pipeline.

We were excited and see the clear fit between tying these acquisitions together," Trammel says. Or it could be bad if it gets lost in the portfolio. Do you Tweet? In the Swainson era, CA has handled its acquisitions fairly well, and with Wily as a tag-team partner I don't see NetQoS getting lost," Noel says. Follow Denise Dubie on Twitter here.  

Intel: Chips in brains will control computers by 2020

By the year 2020, you won't need a keyboard and mouse to control your computer, say Intel Corp. researchers. Scientists at Intel's research lab in Pittsburgh are working to find ways to read and harness human brain waves so they can be used to operate computers, television sets and cell phones. Instead, users will open documents and surf the Web using nothing more than their brain waves.

The brain waves would be harnessed with Intel-developed sensors implanted in people's brains. Researchers expect that consumers will want the freedom they will gain by using the implant. "I think human beings are remarkable adaptive," said Andrew Chien, vice president of research and director of future technologies research at Intel Labs. "If you told people 20 years ago that they would be carrying computers all the time, they would have said, 'I don't want that. The scientists say the plan is not a scene from a sci-fi movie - Big Brother won't be planting chips in your brain against your will. I don't need that.' Now you can't get them to stop [carrying devices]. There are a lot of things that have to be done first but I think [implanting chips into human brains] is well within the scope of possibility." Intel research scientist Dean Pomerleau told Computerworld that users will soon tire of depending on a computer interface, and having to fish a device out of their pocket or bag to access it. Instead, they'll simply manipulate their various devices with their brains. "We're trying to prove you can do interesting things with brain waves," said Pomerleau. "Eventually people may be willing to be more committed ... to brain implants. He also predicted that users will tire of having to manipulate an interface with their fingers.

Imagine being able to surf the Web with the power of your thoughts." To get to that point Pomerleau and his research teammates from Intel, Carnegie Mellon University and the University of Pittsburgh, are currently working on decoding human brain activity. People tend to show the same brain patterns for similar thoughts, he added. Pomerleau said the team has used Functional Magnetic Resonance Imaging (FMRI) machines to determine that blood flow changes in specific areas of the brain based on what word or image someone is thinking of. For instance, if two people think of the image of a bear or hear the word bear or even hear a bear growl, a neuroimage would show similar brain activity. Pomerleau said researchers are close to gaining the ability to build brain sensing technology into a head set that culd be used to manipulate a computer. Basically, there are standard patterns that show up in the brain for different words or images.

The next step is development of a tiny, far less cumbersome sensor that could be implanted inside the brain. Almost two years ago, scientists in the U.S. and Japan announced that a monkey's brain was used to to control a humanoid robot. Such brain research isn't limited to Intel and its university partners. Miguel Nicolelis, a professor of neurobiology at Duke University and lead researcher on the project, said that researchers were hoping its work would help paralyzed people walk again. Charles Higgins, an associate professor at the university, predicted that in 10 to 15 years people will be using "hybrid" computers running a combination of technology and living organic tissue. And a month before that, a scientist at the University of Arizona reported that he had successfully built a robot that is guided by the brain and eyes of a moth.

Today, Intel's Pomerleau said various research facilities are developing technologies to sense activity from inside the skull. "If we can get to the point where we can accurately detect specific words, you could mentally type," he added. "You could compose characters or words by thinking about letters flashing on the screen or typing whole words rather than their individual characters." Pomerleau also noted that the more scientists figure out about the brain, it will help them design better microprocessors. He said, "If we can see how the brain does it, then we could build smarter computers."

Apple introduces its first home server

Among the retooling of the more prominent iMac and MacBook lines earlier Tuesday, Apple quietly introduced its first small-scale server, a $999 box based on the Mac mini that one analyst called the only significant announcement of today. Apple installs the server edition of Mac OS X 10.6, aka Snow Leopard, which costs $499 when sold separately. "This is the one interesting thing about today's announcements," argued Ezra Gottheil, an analyst with Technology Business Research. "It's perfect for a very small business or a classroom, but it will make a sweet home server as well." Apple did not pitch the Mac mini-based server as at-home hardware - instead, it touted the new system as "perfect for any small business or group" - but Gottheil sees it as the company's first move into a potentially broader market. "This wouldn't be bad in the house," he said. "It has a bunch of USB ports, 4GB of memory, it can connect to a home wireless network, and decent if not great graphics." The $999 Mac mini is equipped with a 2.53GHz Intel Core Duo processor, an Nvidia GeForce 9400M integrated graphics chipset - the same as used in the entry-level MacBook and the three least-expensive MacBook Pro models - five USB 2.0 ports, a Gigabit Ethernet connection and single FireWire 800 port. Dubbed the "Mac mini with Snow Leopard Server," the new device is essentially a $799 Mac mini with two 500GB hard drives squeezed into the petite case, compared to the one 320GB drive in the stand-alone mini.

Apple yanked the optical drive from the Mac mini to fit the second hard drive in the case, a potential problem unless users pop for the $99 external SuperDrive. Even though Gottheil trumpeted the Mac mini as a potential rival to Windows in the home server market, he realized that the biggest audience was very-small-to-small businesses. "This is significant," he said. "This says Apple is going to put a real toe-hold in really small business. And unlike the Time Capsule, Apple's backup and wireless device, the Mac mini lacks a built-in router. It's a 'My First Server' device, a 'My First Pony,' for small offices that want to get serious about backup and hosting their own e-mail." Its other selling point, said Gottheil, is the unlimited user allowance that comes with Snow Leopard Server. "You can have as many users as you want connected to this," Gottheil said. "You can't get that from Microsoft for this price." Microsoft has been selling a version of its Windows operating system specially crafted for home servers since 2007; it's working on a Windows 7-compatible edition of Windows Home Server, but has delayed the release of that upgrade, citing the need for additional testing . The Windows 7-ready upgrade is now set to ship before the end of the year. The Mac mini with Snow Leopard Server is available now on Apple's online store, and will ship within 24 hours of ordering.

Windows Home Server supports a maximum of 10 users.

Google Voice Frees Your Voicemail, and Your Number

Until yesterday, signing up for a Google Voice account required you to pick a new phone number - not a pleasant option for those who have kept the same digits for years. When you sign up for Google Voice - which is still not widely available to the public (you need to get an invite or request one) - you can either choose Google one-stop phone number or keep your own for a more pared-down experience. Now Google has enabled users to keep their existing phone numbers and get (most of) the features Google Voice offers, including Google's excellent voicemail service.

Keeping your old digits gives you: Online, searchable voicemail Free automated voicemail transcription Custom voicemail greetings for different callers Email and SMS notifications Low-priced international calling Going for the full-throttle Google experience gives you all of the above plus: One number that reaches you on all your phones SMS via email Call screening Listen In Call recording Conference calling Call blocking If you already have a Google Voice number, you can add the voicemail option to any mobile phone associated with the account. Happily, Google circumvented this problem earlier this month. Some of the awesome benefits are explained in Google's YouTube explanation: Since voicemails are transcribed and placed online, even made publicly available for sharing purposes, there has been some danger of said voicemails appearing in search results. These new features are both freeing and limiting: you can keep your number but sacrifice some of the goodies that make Google Voice a powerful contender in the telephony business. Follow Brennon on Twitter: @neonmadman

Full number portability is likely coming in the future, after, of course, Google deals with AT&T, Apple, and the FCC. But some have high hopes that eventually the opposition will grow to accept and embrace Google Voice.

HP extends data center, campus Ethernet switches

HP this week unveiled enhancements to its data center and campus switching portfolio designed to increase density and tightly integrate switching with blade server systems. The extensions are intended to better align HP's data center and network products for the market and mindshare battle with Cisco. The evolution of Ethernet The products include blade switches designed to reduce cost and improve security in the data center; an 8Gbps FibreChannel Virtual Connect module and firmware upgrade intended to tune bandwidth to application requirements; and new chassis and modules for its ProCurve 5400 and 8200 Ethernet switches to provide an array of configurations depending on network need. Cisco's recently shipped Unified Computing System integrates data center servers, switching, virtualization and storage access, and are viewed as a competitive assault on HP and IBM's traditional data center turf.

The new HP blade switches include the 10G Ethernet ProCurve 6120XG and ProCurve 6120G/XG. The 6120XG sports eight 10G uplinks - one 10GBASE-CX4 Ethernet or one SFP+, five SFP+ that can be either 1Gbps or 10Gbps, and two midplane crosslinks or SFP+. The 6120XG is also Converged Enhanced Ethernet (CEE) "ready," which means it will support an upgrade to the CEE standards for the integration of Ethernet and Fibre Channel in the future. The campus LAN enhancements are viewed as lower cost alternatives to Cisco in that market as well. Those standards are expected for ratification in the first or second quarter of 2010. The 6120G/XG is designed to facilitate the transition from 1G Ethernet to 10G Ethernet. In addition to aiding in the migration to 10G, the 6120G/XG supports the attachment of legacy network equipment in the data center. It features one 10G Ethernet CX4 port for short distance data center links; two 10G Ethernet XFP ports for copper of fiber connectivity; two 1G Ethernet SFP ports; and four 1G Ethernet RJ45 ports. The 6120XG costs $11,500; the 6120G/XG costs $5,500. For the campus LAN, HP unveiled a half-size chassis of its 8212zl switch.

It features six chassis slots and the same hardware and software architecture as the 8212zl.  The 8206zl costs $12,599. New modules for both the 8200zl and 5400zl switches include a 24-port 10/100/1000 PoE+ card, $4,199; a 20-port 10/100/1000 PoE+ board with four SFP ports, $4,199; a 24-port 10/100 PoE+ card, $2,499; and a four port 10G SFP+ module, $4,199. These products are intended to support new bandwidth intensive applications such as video while reducing cost and power consumption. The 8206zl is designed for high-density LAN access, mid-size LAN core and distribution layer applications, and data center end-of-row access and aggregation. HP also unveiled a 1500 watt Power over Ethernet Plus (PoE+) power supply for the lines at a list price of $1,099. The company is also offering bundled configurations of its 5400 switches. It is backward compatible and replaces a 20-port 4Gbps Fibre Channel Virtual Connect module already offered by HP. It also costs the same as the 4Gbps module - $9,499. The Virtual Connect firmware upgrade provides dynamic bandwidth adjustment depending on application requirements, HP says. A 12-slot 5412zl with 96 Gigabit Ethernet ports - 92 ports of PoE+ and four ports of SFP - and two 1500w PoE+ power supplies costs $17,199. A 48-port 5406zl bundle - 40 ports of PoE+ gigabit ports and four SFP ports - plus one 1500w PoE+ power supply costs $8,599. The Virtual Connect 8Gbps FibreChannel module supports 20 ports of 8Gbps uplink and downlink bandwidth. It also supports twice the number of virtual LANs - 128 - per uplink set.

HP would not discuss product plans for data center core switches and 48-port and higher top-of-rack 10G switches, with or without support for FibreChannel-over-Ethernet; nor would it discuss product plans for a FibreChannel-over-Ethernet Virtual Connect module. All products are available now.

Dell-Perot Deal Spells Trouble for Tier-Two Outsourcers

The consolidating IT services market contracted a bit further on Monday with Dell's announcement that it will acquire Perot Systems for $3.9 billion. The fact that Dell paid nearly a 70 percent premium on Perot's stock price to seal the deal confirms "the value of integrating hardware and services for infrastructure management is clearly gaining momentum," says Peter Bendor-Samuel, CEO of outsourcing consultancy Everest Group, which counts both Perot and Dell among its clients. The Texas twosome can hardly match the scale of HP or IBM on the outsourcing front-Perot brings just $2.7 billion in services revenue to the table-but the matchup is clearly made in their image. It also suggests, he adds, that the size of outsourcing/hardware companies will continue to increase in importance.

But Dell, struggling as a hardware manufacturer at a time when infrastructure sales are slow, wants in on the outsourcing business, even if it takes several acquisitions to do it. "Perot's capabilities are focused on a few geographies and industries, which Dell will need to grow or complement with other acquisitions to attain greater scale to compete head-on with the likes of HP and IBM," says Bendor-Samuel. [ Related: Dell Perot Deal: Big Price Tag, Small Industry Impact and FAQ: What the Dell-Perot Merger Means for the IT Industry. ] Neither company is likely to be too worried about the competition at this point. While Perot operates in some high-interest industries-most notably healthcare and government services-its footprint remains relatively small. It's more likely that Dell-Perot will make inroads on smaller deals. "Dell and Perot Systems can exert pressure in this sector, and if played right, could see their market share increase in the midmarket in both products and services," says Stan Lepeak, managing director at outsourcing consultancy EquaTerra. India-based providers who've been attempting to ramp up their infrastructure offerings "must continue to find ways to grow and reach meaningful scale," says Bendor-Samuel. As such, it's the tier-two players that will be watching the Dell-Perot deal closely.

Meanwhile, traditional IT services players who've yet to walk down the aisle with a hardware vendor-such as ACS, CSC and Unisys-may be wondering how wise it was to stay single. "They will be asking themselves how they can grow in the infrastructure space to meet the increased threat posed by the integrated hardware and services offerings of IBM, HP, and now Dell," Bendor-Samuel says. While Dell may be eager to keep Perot clients-and their relatively healthy profit margins-existing customers should proceed with caution (See Five Steps to Take if Your Outsourcer is Sold.) Specifically, clients should assess any impact the deal has on non-Dell hardware options, Lepeak advises. As for integration issues, Dell and Perot may have an easier go of it than most. "Good cultural alignment, close physical proximity for key leaders, and the absence of an entrenched services business at Dell-together with the obvious convergence around the value of Perot as a hardware channel for Dell and Dell as a lead generator for Perot-should make integration much faster and less painful than is the norm for deals of this scale," says Mark Robinson, EquaTerra's chief operating officer. Those most worried about the Perot deal are Dell customers working with other outsourcers. "While growing the legacy Perot Systems' client base, Dell must use caution not to alienate hardware clients who are using other service providers for outsourcing services," says Lepeak.