IT Investment Research

Sorry to Say, Red Hat Involved Up to Its Fedora Brim in U.S. Government Research Deception

When I came across the misleading, disjointed MeriTalk BIg Lie progaganda press release about saving the U.S. Federal government billions by using open source, virutalization and SaaS/cloud computing, I said

• This must be some kind of front-group

• I hoped that Red Hat (RHAT) was only casually involved (through sponsorship of a related trade show).

 But it turns out enterprise-software analyst Frank Scavo dug deeper than I had and found more than a casual relationship: 

"Mystery solved. This is definitely a PR stunt. The domain name meritalk.com is registered to Liz Vandendriessche, the same person as named on the press release. A Google search on her name finds her LinkedIn profile, which lists her as a Public Relations Assistant at O'Keeffe & Company, a public relations firm.

"The website for that firm (http://www.okco.com/about-clients.asp) shows a client list with the Federal Open Source Alliance listed. "The Federal Open Source Alliance is comprised of representatives from Hewlett-Packard Corp., Intel Corp., and Red Hat, Inc."

"From the about page at http://www.federalopensourcealliance.com/#About

"The Alliance is focused on leveraging its members’ joint experiences to help Federal agencies deploy open source to meet their technology and business objectives, as well as derive the maximum value from their open source migration initiatives."

 

Thanks Frank. 

It appears Red Hat is going to try to import some European-Union-style front-group propaganda techniques into the U.S.  U.S. taxpayers, hold on to your wallets.  IT users in the U.S. government, like your father always told you, don't believe everything you read in the newspaper.

-- Dennis Byron

Misleading Non-Report Says Feds Could Save Billions on Open Source, SaaS, Virtualization

A front group of some type called MeriTalk has issued a press release claiming the U.S. government could save more than $20 billion over three years by using open source software, SaaS/cloud computing and virtualization.

Actually MeriTalk released 14 .pdf slides that it calls a “report.”  The “report” is one of the weakest pieces of research ever foisted on the public.  In fact, the group admits that the claim is unadulterated cow manure by slyly putting a two-point-type footnote on the savings claim. The footnote says  

“… the Federal government cannot realize the total aggregated savings from the three approaches as, in some cases, they reduce overlapping costs.”

The more than $20 billion would amount to 33% of the Federal infrastructure spending budget for the period. In addition to the absurd footnote that leads off the MeriTalk "report," the finding is based on the absurd assumption that the Federal government currently makes no use of open source software, SaaS/cloud computing and virtualization. I would guess that the U.S. Federal government is the leading user of all three (simply because it is the leading spender on information technology). The logic that gets the “report’s” authors to the $20 billion is tortured at best, a total purposeful fabrication at worst.  The sources for the assumptions are disjointed and based on press reports about press releases about research findings unrelated to the Federal government.
 
A Yahoo Tech News article about the “report” claims that the report was sponsored by Red Hat (RHAT) but the only connection I see is that Red Hat will sponsor a May exhibition, run by MeriTalk, where some of these mind-numbing statistics will be discussed. I am never hesitant to call out Red Hat when they are involved with propaganda front groups promoting so-called Open Standards. But in this case I hope Yahoo did Red Hat wrong by associating it with the “report.”

But MeriTalk must be some kind of propaganda front group because no organization without an agenda—and no press person with a conscience—would release such incredibly misleading data.  It is disturbing—1930s' Nazi-propaganda-like, in fact—to see people being used in this way while jobs are being cut and people are losing their homes.

-- Dennis Byron

How JBoss Is Going to Overtake IBM, Oracle in Middleware

Analysts like me miss the bombastic claims of JBoss founder Marc Fleury. At the JBoss Virtual Conference held February 11, Craig Muzilla, now head of the JBoss division of Red Hat (RHAT) and formerly with MetaMatrix (acquired by JBoss in 2007), had the same sort of statistics to work with as Fleury used to have.  But he lacked the swagger in laying them out.

Consistent with Red Hat’s goal that it will have 50% of the enterprise information technology (IT) work running its Linux and middleware products by 2015, Muzilla promised savings over comparable IBM (IBM) and Oracle/BEA products of 50-80%s. I’m sure that that statistic is technically correct in terms of comparing some price lists. But IT users realize that the JBoss products are not yet truly comparable with Oracle (ORCL) and IBM up and down the middleware stack. 

But Red Hat is working hard to get there.

When asked about market share, Muzilla was intellectually honest and careful to answer instead about market usage (see the difference here). He claimed usage of JBoss software of some type of 30-40% in midsize and large enterprises. Parse that sentence carefully: That’s some type of JBoss product and some type of usage, mostly in developer try-it-you’ll-like it or on on a ad-hoc basis. Still Fleury would have taken that question, doubled the usage rate, and ran with it for 15 minutes.

When served up a softball on the difference between open source and closed source, Muzilla carefully explained the Lesser Gnu General Public License (LGPL) and Red Hat JBoss’ worldwide community structure with no comparison or criticism of other products. Marc would still be answering the question when they turned off the microphones… with a lot of red meat for us analysts and journalists.

Muzilla spoke about how the open source model keeps R&D costs down because project leads are both in and outside the Red Hat organization and even some JBoss customers contribute back.  Of course IBM, which probably overtook Red Hat in terms of open-source-based software shipments in 2008, and others have figured this model out as well. But they tend to apply the formula further down the stack to low margin products that IBM and other bigger companies think of as commodities.

In terms of internal Red Hat metrics, Craig Muzilla noted that JBoss is growing twice as fast as Red Hat’s infrastructure products and JBoss has five times more people in both community and partners ecosystem than at the time of the acquisition.

A key thing looking forward Muzilla said is that JBoss is being revised so that the runtime environment is not dictated. He is expanding frameworks supported from just JEE to Spring, Adobe (ADBE) Flex and Google (GOOG), and so forth.

And he claims now is the “inflexion point where companies are standardizing on open source middleware.”  I believe that’s true.  Of course it’s not necessarily just JBoss open source middleware but JBoss has a good head start on IBM Gluecode and others thanks to Fleury.

(Aside: The Red Hat JBoss Virtual Enterprise was a good take and I believe the recorded sessions are available for a few months on the Red Hat web site.)

-- Dennis Byron

Should Obama Mandate Enteprise Software Socialism in U.S.?

Apparently Scott McNealy of Sun (JAVA), not sensing the Obama administration’s urgency on the matter, is late with his white paper on open source software in government. Or perhaps other information technology (IT) executives who were not asked to submit a white paper felt they needed to play catch-up.  Either way, in these troubled economic times with people losing jobs and homes, it is disturbing to see some software-company executives try to manipulate both the U.S. government and the open source culture with an “Open Letter to Obama” that is really just incomplete and unsubstantiated advertising.

I don’t believe enterprise or open source software has a nationality. But it is a fact that IT users worldwide and particularly in the U.S. are for open choice in software, not open source, in the good old fashioned red-white-blue sense of the words. And the developers of all types of software we use in the U.S. are as diverse ethnically and in terms of national heritage as the USA is.

To a very small extent some American and worldwide IT users will only deploy open-source-licensed software just the way some people will only drink French wine or wear Italian shoes. That’s their right. But overwhelmingly IT in U.S. enterprises chooses whatever technology it takes to get the job done most cost effectively. Private-sector IT in the U.S. has not needed government mandates like the ones suggested by these software-company executives.  The U.S. government does not need mandates either. Such mandates would be a prescription for more economic problems.

IT chose Linux over proprietary versions of UNIX developed by IBM (IBM), Sun and others because Linux did a better job (and IBM—but not Sun—quickly figured out this was a good way to hold down R&D expenses). IT chose the Apache HTTP web server over the Netscape server at the beginning of the Internet revolution because Apache did a better job (and IBM, Oracle (ORCL) and others gave it away with their middleware). Similarly IT chose IBM transaction processing software from the UK, SAP R/3 software from Germany, Business Objects business intelligence software from France, Microsoft Office software from Washington state, Oracle database software from California—all leaders in their categories and all developed by companies based all over the world—because the products get the job done, not because of their license restrictions or software-engineering organizational structure or manipulation of the political system. 

All of these products have good user interfaces, well implemented data structures and are platform independent (depending on what the authors of the open letter to Obama mean by that paragraph).  How they were licensed has made no difference to how they help businesses be more cost effective and be better suppliers to consumers and other businesses.

IT has embraced open source-developed software for its functionality not its politics. There is no place for political posturing in the software market. It would be catastrophic to see the U.S. fall into European style IT development where governments dictate what developers work on, and preordain who will buy the product, by mandating that the government will only buy certain types of products, however that “typing” is done.

Obama has taken "Buy America" out of the stimulus package.  Let's hope he doesn't put "Buy advertising slogans" into it.

-- Dennis Byron

Understanding the Madoff Scandal: Follow the IT, Not the Money

Why is it that the Bernie Madoff scandal so intrigues me?  On February 8, some deep psychological thing had me watching a Congressional hearing about Madoff instead of the golf tournament I would have typically watched on a cold February Sunday afternoon.

I convince myself it's professional, the information technology (IT) angle.  This could be the biggest IT scandal on Wall St. since E.F. Hutton (pick your Hutton scandal; they all required good old Data General computers).

But there is more to it than that. I howl over the millionaire widows and orphans stories in the mainstream media.  On February 7 Reuters Boston bureau led with a California (go figure!) sob story about a 90-year-old guy who lost everything to Madoff.  He can't pay his mortagage.  On his houses.  So he is stocking shelves at the local Piggly Wiggly 12 hours a week to make up for it.  Think about that: 90 years old. Houses plural. Mortgage. And $50 a week net of Social Security is going to make up for the lost income on the $750,000 he thought he had with Madoff?

It has to be a group of five bored guys at the JCHE home in Brighton, MA with great senses of humor saying, "You know what, let's call up Mrs. Bloomberg of Medford's son and make up this story about how stupid we Jews are. I bet he prints it on that little financial news service of his."

I am afraid the deep psychological thing that intrigues me is the antisemitism running right below the surface of the Madoff scandal. I saw an Internet comment this weekend that everyone on the Madoff investors list released February 5 were "dentists, furniture-store owners and jewelers." 

I fear it's going to get worse based on watching the Congressional hearing, which starred the greatest Congressional-hearing paranoid delusional since Howard Hunt (or was it Gordon Liddy?).

I ask myself if I'm fascinated with the Madoff scandal because I am subconciously anti-semitic? No, thank god, I'm just anti-Jesuit. (Truth in advertising: I was taught by the Holy Cross Fathers but one of my kids is a Fordham/Georgetown product.) Am I the only one in America who didn't buy into the story of Loyola/Boston College grad Harry Markopolus?

Of course, as Kissinger said, even paranoids have something to fear. And apparently one of Markopolus' delusions was lucid. But when he brought his charges against Madoff to the Boston office of the Securities and Exchange Commission (SEC) in 2000 and tried to "slip them" to then NY Attorney General Eliot Spitzer in 2004 and visited the NY office of the SEC in 2006, no one believed him.  Could it have been because he says he was "wearing latex gloves" so his fingerprints would not show up on the paper?

As for the incident at the Kennedy Library, I hope someone called the bomb squad.  (As for a Spitzer joke, I don't hit guys when they're down.)

In some tortured logic, Markopolus says he feared that if Madoff knew that Markopolus knew about the scam, Madoff would have Markopolus killed because Madoff did not want the Russian mob--who was investing with Madoff--to know about the scam. But Markopolus was a "Green Beret or a Navy Seal or Delta Force" (he was never clear which). In addition to the implications of that vis a vis the fear factor, couldn't Markopolus just have the CIA or FBI tell the Russian mob about Madoff.  End of Madoff.  End of scam.

Admittedly that solution is based on the fact that I watched a spy movie right after the congressional hearing.  But Markopolus could have gone to the press.  Wait a minute:  he did and a member of his "team," Michael Ocrant, wrote about the fraud in 2001.  And it's been sitting right there on the Internet since that time.  And yet people kept sending Madoff billions. 

The villian here is a guy Markopolus identifed as Ed Mannion (sp?) of the Boston SEC office. But remember Markopolus' paranoid-delusional condition; he may have the name wrong and to Markopolus, Mannion is a hero. I bet Mannion went to BC too. Mannion is a government employee and he knew about this Ponzi scheme for nine years. Could Mannion not just drop a dime on Madoff with a a call to the Commissioners in Washington? No, according to Markopolus, Mannion couldn't do that because of the Red-Sox/Yankee baseball rivalry. I bet Mannion even knows where Whitey is.

It was a good two and half hours of entertainment.

But the antiseitsim is going to get worse because some upstate NY congressmen came on at the end to say the boilermakers or stevedores or some union guys lost $400 million.

And the fawning congresspeople never got around to asking Harry the real question: How? Harry finally volunteered "it was IT" (which of course is why I really listened to the session). But none of the political hacks followed up.

Oh well. Deepthroat told the Washington Post to follow the money. In the Madoff case, it's follow the servers--mabye Sun (JAVA) servers--that printed out the millions of monthly statements over 20 years. (Did I say I didn't hit a guy when he was down?)

-- Dennis Byron

Merril Lynch! Fannie Mae! Good Company, Sun!

I hate to kick someone when there down but Sun (JAVA) announced a new board member, Rahul Merchant, on February 2.  I know nothing about him and I'm sure he is a very nice person. 

But the Sun press release highlights his mega-experience with Fannie Mae and Merrill Lynch.

Huh?

Do any of you Silicon Valley navel gazers read the newspapers? At least Sun did not mention that he originally came out of Lehman.