IT Investment Research

Microsoft must have thought we'd all be on Vista by now

Find out how many HP (HP) AMD (AMD)-based XP PCs there are in the world, multiply by $100 and deduct the result from Microsoft (MSFT) profits over the next four quarters. It's probably peanuts but the rollout of Windows XP Service Pack 3 (SP3) is another black eye for Microsoft quality control and all-around poor planning for customer service and support.

It's probably not as bad as the "Vista-enabled PC" upgrade program in 2007. That Microsoft effort lead to everyone wanting to go back to XP because Vista's performance was so bad, even on so-called Vista-enabled PCs, after waiting months for their promised Vista upgrades. During the Vista-enabled scenario, luckily, my 6-year-old grandson Owen immediately complained that there was no Pinball on Vista. So I quickly returned to XP. No harm/no foul for me but I think there are even lawsuits ongoing on that issue.

So this year it's a poor release of XP SP3. The Microsoft master plan probably said that we all had Vista by now. Actually when I read Greg Keizer's article in PCWorld on May 9 I was happy two ways.

-- First I thought I had screwed up the SP3 download/upgrade somehow only to find that it affected at least all HP AMD-based PCs like mine. And maybe any AMD-based PC.
-- Second, I was happy that I had turned off Windows Automatic Update when I bought the PC (I don't like being that connected with anyone, not just Redmond).

Again, I was able to restore to SP2 pretty easily. But I don't know if the average home PC user would have figured it out. Especially if they had no idea the download had happended overnight because of Windows Automatic Update. Many users of my type PC found their home PC endlessly trying to reboot with probably no idea that Microsoft had automatically updated them to SP3 over nite, putting them in the repetitive loop.

I just left a message on the Microsoft support line, which is promising free SP3 support until April of 2009 (although it takes a little work to find this page so Microsoft may save a few dollars in support costs). I expected that they would inform me when a new version of the upgrade was available to download (although there was no apparent way to let Windows Update know that I had removed SP3 from my system). Instead Microsoft sent me the same steps that Jesper Johansson had posted to his blog on Thursday May 8. I don't see a lot of home PC users easily working their way through this set of instructions (especially since Microsoft's version was missing a few steps).

So see you this weekend Owen. Pinball is up and running again.

Agassi’s legacies, NetWeaver and BPX, are rays of good news to SAP

Shai Agassi resigned from SAP (SAP) 13 months ago. But because of the way large corporations such as SAP work, the Sapphire user conference in Orlando May 5-8 is really his last SAP event. Not much has happened during the first two days of the conference except for new SAP NetWeaver business process management (BPM) capabilities which strengthen SAP’s 21st century technology platform, Shai’s major legacy. These capabilities deliver on the NetWeaver innovation road map of April 2007 which he would have been working on prior to his departure.

Together with the recent release of the SAP 20-F and management comments to financial analysts after the SAP financial-results release of April 30, 2008, the Sapphire NetWeaver BPM announcement also highlights the revenue success the product is having. By my methodology NetWeaver revenue is nearing $2 billion on a trailing 12 month basis (SAP says it’s only a billion euro but I believe it uses a different methodology than I do).

Either way, the key statistic is that SAP says 37% of that revenue is for standalone NetWeaver instances. That does not mean that the user was never previously an SAP user (although that is true in some cases). It means that the middleware is being used for traditional middleware purposes such as integration, web/application serving, software development, etc. irrespective of which applications—SAP’s or other suppliers’ or in-house developed—that the middleware is integrating, serving, developing, etc. It’s not just tying two SAP application instances together (some of the other 63% is heritage SAP BI but the total does not include Business Objects). That makes SAP a major middleware player, right up there with IBM (IBM), Oracle/BEA (ORCL), TIBCO (TIBX), Software AG and implicitly Microsoft, from a standing start just a few years ago.

Also SAP has also quietly put together a community of 350,000 Business Process Experts (BPX) from among its users, integrators and other partners. Agassi was one of the early posters on the BPX when it was launched a few years ago.

In other words, by any measure, SAP is no longer a one-trick pony in the software market. In my opinion, Agassi is the person that foresaw the need for SAP to enter that space aggressively and laid out the plan to get there. Wherever he is today, driving around in one of the “green cars” he’s building in his new endeavor, he can toot his own horn.

Linux Foundation, IDC release new forecasts for Linux ecosystem growth

On April 8, the Linux Foundation [LF] sponsored the release of some very interesting IDC data on the growth of the software market and other aspects of IT spending through 2011. The previous sentence is worded the way it is because although the white paper in which the data appears is "sponsored by the LF," I do not believe the data within it is based on any separate IDC data gathering. Because there is no methodology section, I believe these are crown-jewel IDC numbers based on the time-honored annual IDC methodology for estimating and forecasting information technology [IT] market sizes. Based on historical patterns, IDC has already released 2012 estimates to clients. But the IT market is an aircraft carrier so newer numbers, if they have been distributed, are unlikely to be substantially different than this iteration.

The two major sets of IDC numbers in the white paper estimate the size of the software market itself and the size of the hardware/software/services markets (the ecoystem) that surrounds various software. A third set of numbers looks at the types of workloads that run on Linux servers.

In juxtaposition with the recent open-source related "findings put out by Gartner," which were more qualitative (at least publicly), the IDC white paper and its conclusions paint an interesting postion of how the IT market will evolve over the next few years. Linux-based solutions will replace UNIX- and other-legacy-based solutions as both the Linux and Microsoft (MSFT) Windows ecosystems grow. Underlying that finding, by 2011, IDC estimates that Windows and Windows-based software will have grown to account for 58% of all software spending, from 53% in 2007. Over the same time period, Linux and Linux-based software revenue will triple from 4% of the market to 9% of the market in 2011.

But these two universes could also intermingle and be hard to separate sooner rather than later. The IDC authors hint at possible Microsoft software running on Linux down the road (that is, later rather than sooner). My prediction is that it will happen sooner; Microsoft software has long run on Mac operating software.

A few caveats:
-- Remember Linux does not equal open source. IDC points out that the open-source Sun (JAVA) Solaris ecosystem could also grow during the forecast period, even if the overall UNIX ecosystem contracts.
-- In addition, although it is not clear from the numbers, presumably the Linux ecosystem estimate includes revenue from a lot of non-open-source software such as SAP (SAP) ERP software running on Linux. In fact the projected revenue size of the Linux ecosystem is possibly mostly made up of non-open-source software.

-- Dennis Byron