Significant Industry Announcements, With Commentary

By Geoffrey James
Computer Associates announced acquisition of Niku, a company that focuses on IT governance. Niku’s main product, Clarity, calculates the cost of IT spending so customers can allocate resources strategically. It purports to deal with the full IT life cycle, from investment selection, through execution and delivery of initiatives, to results assessment.
Our take: In the wake of the Sarbannes Oxley act, CIOs increasingly are being held to account for making certain their company complies with regulatory standards. CA rightly identifies this as an opportunity to make additional software sales. In software sales situations, however, CA generally operates at a disadvantage due to its dicey reputation for buying companies and turning them into cash cows. While they may have no intention of doing this in the case of Niku, you still can use the Niku purchase as an opportunity to sell a competing product in the corporate governance space.
IBM introduced the IBM System z9 mainframe with security and virtualization capabilities the company says, “can enable it to act as the hub in a new era of collaborative computing.” It is designed to process one billion transactions per day, more than double the performance of its predecessor, the zSeries z990 mainframe, at its launch. IBM executives say this is the first of a new generation of mainframes whose role will be to facilitate management security and systems resources across the entire corporate IT network.
Our take: There was a time when most pundits thought the mainframe was dead. IBM has continued to refine its mainframe technology, however, and is riding the wave of back-end computing and the continued growth of the Internet. Sales reps in the enterprise software space should view IBM’s continued interest in mainframes as an opportunity to sell infrastructure products, particularly in partnership with IBM.
Microsoft announced worldwide availability of Windows Genuine Advantage (WGA), a feature intended to protect customers from software counterfeiting. Validation via WGA will be required for all customers using Windows Update, Microsoft Update for Windows content and the Download Center (DC). Security updates remain available to all Windows users, with or without WGA validation. 
Our take: Microsoft is determined to reduce the software piracy that drains revenues and profits from their business model. Because Microsoft is a monopoly, however, the company must move slowly lest turning off nonregistered software creates a backlash against the company. Microsoft’s attempts to reduce piracy basically are good for the entire industry, which has suffered for years from this multibillion dollar problem, especially if they’re accessible like WGA to other software vendors.
Oracle announced that 230 companies have registered for Oracle’s OFF SAP program, theoretically expressing an interest in migrating from SAP to Oracle. The program includes a 100% license credit for SAP R/3 customers that switch from SAP to Oracle applications, a SAP Migration program, financing and additional conversion help and information. 

Our take: It’s not so much the numbers that are interesting – after all, 230 registrants doesn’t necessarily mean 230 sales. What’s interesting is the way Oracle has become so aggressive in going after its competitors using a marketing approach that often disguises the lack of a real competitive offering. Ideally, you want people to move to your product even if you don’t offer special financing.