Software News

Icahn Calls for Sale of BEA Systems 1 day ago


SAN JOSE, Calif. (AP) — Billionaire activist investor Carl Icahn on Friday called for the sale of BEA Systems Inc., a business software maker whose stock price has sagged with the growth in open-source software and under pressure from larger competitors such as IBM Corp. and Oracle Corp.

In a filing with the Securities and Exchange Commission, Icahn reported owning 33.4 million of BEA's shares, or an 8.5 percent stake in the San Jose-based company.

Icahn's stake was worth $426.5 million based on the stock price before the filing. After the filing, BEA shares rose 49 cents, or nearly 4 percent, to close at $13.25 Friday.

BEA's stock has declined steadily over the past year. Before Icahn's filing, the stock price was down 24 percent since its 52-week high last October, a drop that wiped out about $1.5 billion in shareholder wealth.

In the filing, Icahn blamed consolidation in the technology industry for hurting the business of independent software companies like BEA.

He said BEA's stock is undervalued and a sale would help drive up the price if BEA were bolstered by the resources of a larger company that could boost sales while stripping out duplicate costs.

Icahn said he intends to meet with BEA's management to discuss possibly selling the company and might seek to nominate people to the board of directors.

Last week, Icahn, known for his forceful investment tactics, was elected chairman of struggling homebuilder WCI Communities Inc. He launched an aggressive campaign to take control of the company's board in April after shareholders rejected his $22-per-share offer.

BEA makes software that supports business activities such as billing, supply chain management and securities trading, by communicating between those programs and back-end systems like databases.

Such business software has been in high demand as companies move more of their tasks onto the Web, but competition has held down prices.

BEA's market value stood Friday at $5.2 billion, many times less than the value of its monster-sized competitors. Microsoft, the world's largest software company, had a market capitalization of $272.3 billion on Friday, while IBM stood at $156.6 billion and Oracle at $102.6 billion.

BEA shares have traded between $10.50 and $16.77 in the past 12 months.

Analysts said BEA has failed to stir enthusiasm among investors.

"You're not seeing a whole lot of excitement there," said Rob Enderle, principal analyst with Enderle Group, a technology consulting firm in San Jose, Calif. "And this class of software, because of open source, it's much harder to get people interested in it unless you're doing phenomenally well in sales — which BEA has not been."

BEA's current financial figures aren't available because the company hasn't filed its financial statements going back more than a year. BEA has delayed filing is reports since the quarter that ended in July of last year while it completes an internal investigation into its stock options practices.

In February, BEA announced that it needs to restate its finances from 1998 through 2007 and expects to record non-cash compensation expenses of $340 million to $390 million before taxes.

Several current and former executives agreed to repay their gains from mispriced options, and the company restructured its human resources department.

Also on Friday, BEA said it has received an additional notice from the Nasdaq that it remains out of compliance because of the delayed filings and its shares remain in danger of being delisted.

BEA said it plans to file its delayed reports, excluding the most recent quarter, "as soon as practicable" after receiving comments from Securities and Exchange Commission officials. The company released some unaudited information in an annual report for last fiscal year.

------------------------------------------------------------------------------------------------

Software-As-A-Service Firm Now Also Platform-As-A-Service


Sep. 14, 2007 (Investor's Business Daily delivered by Newstex) --

Salesforce.com, the leader in software-as-a-service, is expanding into platform-as-a-service.

The company plans to unveil the service, which it says makes it easier to write software applications via the Web, at its annual user show in San Francisco on Monday.

The new service is called Force.com, and it's slated to be available by early next year. Salesforce.com (NYSE:CRM) CRM says it will help more users create their own business applications online.

The new service will make building an application almost as easy as writing a spreadsheet, says Denis Pombriant, managing principal of Beagle Research.

"This is significant," he said. "Nobody has done anything like this before."

Salesforce.com expects the service to become a catalyst for more users on its AppExchange software Web site. Partners and outside developers already post and sell their custom applications on the AppExchange site. Force.com is expected to bring more traffic to the site.

How might it work? Say a sales rep needs to access contact info from a mobile device in the field. Or, say a manufacturer wants to enter supplier orders into a kiosk on the shop floor. Force.com will give them templates to build the needed data tables and business logic to run and integrate such processes.

Salesforce's arrangement with clients is to be paid a certain fee per user of its online software or platform. So the more users who use the platform, the more revenue for Salesforce, says Ariel Kelman, the company's senior director of platform product marketing.

"In this way, we can increase the strategic importance of our platform to manage all kinds of business information on-demand," he said.

Force.com includes a graphical program called Visualforce that lets users create all sorts of new visual appearances for their user interface. Until now, users could only make slight changes to their standard Salesforce.com screen view.

"This will enable the developer to build any type or style of application on-demand," Kelman said. "It gives them infinite flexibility."

For instance, an insurance claims adjuster could modify the look of his application by reducing multiple tabs and buttons to a few simple elements, such as a color-coded box for each claims function.

Salesforce Chief Executive Marc Benioff has championed a growing industry trend known as software-as-a-service, or on-demand software. With on-demand software, users don't buy licenses or load disks onto their computers. They access their software by way of an Internet subscription.

This approach cuts down on software costs and complexity. Users don't have to manage servers in data centers. Salesforce hosts the data centers off-site. The company also makes regular software updates for users at no extra cost.

Salesforce calls Force.com the next logical step in its evolution. The ultimate goal is to create a simple platform for clients to run most any business process over the Net, says Kelman.

"Customers really want to focus on creating innovation, not infrastructure," Kelman said. "This service means that customers can take an idea onto a Web browser and build a whole business on-demand."

Software giants SAP SAP, Oracle ORCL and Microsoft (NASDAQ:MSFT) MSFT are all gearing up their own on-demand services to lure more midsize business clients. SAP plans to debut its on-demand service in New York City on Wednesday.

But the big guys have reacted late to the software-as-a-service trend, says analyst Pombriant. He points out that Salesforce has an eight-year head start.

"The entrenched software vendors are trying to do enough to keep up," he said. "But often when there is such a disruptive innovation, the incumbents tend to move slowly and get to market late, and they never really catch up."



Newstex ID: IBD-0001-19593760

Originally published in the September 14, 2007 version of Investor's Business Daily

------------------------------------------------------------------------------------------------


Microsoft, IBM, And Business Objects Start Delivering Software Via Virtual Appliances


It's early in the game. But VMware's founder predicts virtual appliances will be the "predominant" way it delivers software.

By Mary Hayes Weier Charles Babcock
InformationWeek
September 15, 2007 12:01 AM (From the September 17, 2007 issue)

Businesses are on the hunt for cheaper, less complex ways to deploy software--one big reason software as a service has gained so much attention. Now interest is picking up in the nascent market for virtual appliances, a concept driven by VMware that offers some of the same appeal.

These software bundles contain everything you might get in a server tuned for a specific purpose--say, security or data warehousing--except there's no hardware. Instead, the application and an operating system optimized for that software are formatted to run in a virtual machine environment.

Among the benefits of virtual appliances is simplified data center management. Since the application vendor has optimized the virtual appliance, including stripping out anything in the operating system not needed to run the app, there's no painstaking physical server configuration to get the appliance running well. That could also cut deployment time, letting IT deliver new business services faster. Unlike SaaS, the data's in-house, which some companies prefer with sensitive information.


Virtual appliances will be the predominant delivery platform, Rosenblum says

Virtual appliances will be the "predominant" delivery platform, Rosenblum says

The virtual appliance model has its drawbacks. For one, a company needs a virtual server environment like VMware's ESX Server, something many small and midsize companies haven't invested in and might not have the expertise to manage. Also, larger companies may not want to give up the flexibility of fine-tuning and reconfiguring software. Managing a large virtual environment also can add complexity.

There's not a wide range of business software options yet, either, as virtual appliances come mostly from small vendors. But that could change quickly.

VMware launched its Virtual Appliance Marketplace last November and now offers about 600 appliances on its Web site. Some of the marketplace's vendors, such as Blue Lane, whose software secures virtual machines, have made a name in their niches. VMware co-founder Mendel Rosenblum predicts virtual appliances will become the "predominant way we distribute software."

More big guns are joining. Business Objects, the largest pure-play business intelligence vendor, last week began selling its Crystal Decisions reporting software as a virtual appliance to run in a VMware environment. Business Objects plans to have more of its software available, for sale directly or through VMware's marketplace, as virtual appliances next year. Just one other BI vendor, Panorama Software, offers a virtual appliance on VMware's marketplace.

Virtual appliance versions of Microsoft's Exchange Server and SQL Server are among the most popular downloads on VMware's marketplace, along with various firewalls and other security systems. IBM last month released an e-mail security virtual appliance that runs on VMware and will support other virtual environments in the future. LeftHand Networks last week introduced a storage area network appliance that runs on VMware.

HOW SUCCESSFUL?
Virtual appliances are being downloaded from VMware's marketplace at a rate of more than 2,500 a day, but it's hard to tell what success that translates to, since many are likely 30-day product evaluations. If someone downloading an appliance decides to license it, that's done directly with the software appliance maker.

For now at least, VMware says virtual appliances make the most sense for small companies, whose small IT staffs struggle to implement, configure, and install software applications. As more companies invest in virtual server environments, virtual appliances look like a viable rival to approaches such as SaaS and hardware appliances. "You could consider virtual appliances as a local software as a service, where you can have most of the provisioning and management benefits associated with SaaS while keeping your data in control," says Srinivas Krishnamurti, director of product management and market development at VMware.

App vendors like Business Objects know they need to provide software any way companies want it. So it's also offering its software on hardware appliances sold by IBM and Netezza, and it has 50,000 subscribers to its hosted software service. They both appeal to small and midsize companies, a customer base growing 50% faster than big-business customers, says VP Todd Rowe.

Most companies are in the early days of their virtualization strategies, focusing on quick returns from server consolidation. When those savings dry up, many will look at virtual appliances as a way to get more value out of their virtual infrastructure.


------------------------------------------------------------------------------------------------


Yahoo Acquires News Aggregator Site BuzzTracker; Expanding Yahoo News Into Software-Driven

Yahoo (nasdaq: YHOO - news - people ) has announced a small acquisition in the news space: it has bought news aggregator and blog tracking site BuzzTracker.

The site’s founder Alan Warms has joined as GM and VP of Yahoo’s news division.

Chicago-based BuzzTracker aggregates content from news sites and blogs, then organizes the content into various topics.

The software is also being used as a white-label on other sites such as TVWeek.com.

No price was disclosed, but should be in single-digit millions. Warms writes about it here on his blog.

So it looks like with adding the automatic aggregation capabilities of BuzzTracker, Yahoo news will expand from beyond a directory/human-driven news aggregation site.

This will also move it into Google (nasdaq: GOOG - news - people ) News and Digg territory, while Google is trying to move into the human-editorial side with the AP/AFP/PA deal announced last month.

------------------------------------------------------------------------------------------------