Archive for July, 2010

SAP reports strong second quarter growth

July 28th, 2010

SAP has reported software and related service revenues of €2.3bn in preliminary financial results for the second quarter of 2010, up 16% compared with a year ago. Software revenues alone were up 17% to €637m and total revenues were up 12% to €2.9bn. Profit after tax was up 15% to €491m.

Bill McDermott, co-chief executive of SAP, said large, mid-sized and small enterprises are continuing to invest for growth across many industries

SAP also announced that it has completed the cash tender offer for all outstanding shares of common stock of Sybase. Sybase will operate as a separate company under current chief executive John Chen and remain focussed on its core database and information management business, SAP said.

In its business outlook, SAP said it expects software and software-related service revenue for 2010 to increase between 9% and 11% excluding the contribution of Sybase of six to eight percentage points.

Not a bad set of results and one indication that IT spend is on the up again after many months of crushing recessionary austerity.

Negotiating IT Maintenance contracts

July 19th, 2010

CIOs and IT directors are attempting to slash IT maintenance costs, as a matter of urgency, to free up their budgets.

On the one hand, hardware and software maintenance represents the single largest IT expense for many organisations, but it’s also a huge source of revenue for IT vendors. This conflict presents many problems for IT consumers.

Gartner has recently produced a list of recommended negotiable items:

  1. The right to regular, appropriate, predictable updates to software products
  2. The right to clearly defined response times and IT support levels based on application criticality and other business factors
  3. The right to reasonable, predictable percentage ranges for yearly maintenance fee increases – or decreases – as well as long-term caps on increases in maintenance costs
  4. The right to end or change support at any time for products that are not in use
  5. The right to reasonable, predictable levels of support throughout product and contract life cycles
  6. The right to reasonable, clearly defined maintenance and support for legacy systems

As a starting point for any contract negotiations, this is a good way to get started.

CA becomes CA Technologies

July 13th, 2010

Name change; it’s one way of leaving the past behind. For the second time in just five years, the company formerly known as Computer Associates, and then CA Inc, is changing its name. The previous name change was an effort to distance itself from a financial scandal that saw then CEO Sanjay Kumar plead guilty to fraud charges in 2006. But that rushed change of identity left the firm with a name that it now says doesn’t convey enough about what it does. It’s also not great for search engines: incoming CEO William McCracken said he was fed up with searching for ‘CA’ and getting results for the state of California. Hence the latest rebranding, say hello to CA Technologies.

CA Technologies has IBM to thank for its 30-plus years in business. The company was only able to exploit its focus on mainframe software thanks to IBM’s decision in 1969 (albeit under regulatory pressure) to unbundle the sale of mainframe hardware from mainframe programs and services.

With revenue up 2% in 2010, and profit up 15%, CA Technologies is looking in pretty good shape. The change of name is neither here nor there, but the enhanced focus on virtualisation and cloud will help maintain the company’s relevance to the modern IT organisation.

Let’s hope the new CA Techologies has finally shaken off some of the shackles and dubious sales practices of the past.

Gartner says “IT Buyers are focussing on reducing IT costs”

July 5th, 2010

There’s nothing new under the Sun. Just when we were all starting to wonder what IT Buyers in the USA did between 9 to 5, Gartner has used it’s time wisely and taken the time to find out. 

IT buyers in the USA have a high focus on IT costs, according to Gartner. It would appear that IT buyers in the US pay less attention to business innovation in IT as a driver for using IT services. The survey revealed companies belonging to all sizes, showed a movement away from aggressive adoption, and indicated their top driver is to reduce the operating costs of IT and to ensure IT availability. In addition, 60% of US buyers had renegotiated service contracts in the past two years, while 47% said they had found cost savings by using offshore services delivery, and 40% indicated the use of technology as a service as an IT cost reduction driver.

So now you know; or maybe you knew anyway.