Focal Points:

• Microsoft was always going to struggle to get coverage of its TechEd developer conference, and particularly its Windows Phone 7 plans, in the week of iPhone 4. But it is trying its best, outlining the WP7 strategy for its most natural market, the mobile enterprise. In addition, details of one of the first WP7 handsets likely to hit the market this year, the LG Panther, leaked online.
• It is expected that LG and HTC, the most loyal supporters of Windows Mobile, will be first to announce handsets based on the OS upgrade and on the three chassis designs specified by Microsoft. Both should opt initially for the design geared to high end smartphones, and are expected to release gigahertz 'superphones' akin to HTC's high end Android models.
• The Panther certainly appears to be targeting that increasingly busy space, running the Qualcomm Snapdragon processor, plus a 3.5-inch AMOLED touchscreen and HD video support alongside the 5-megapixel camera (rather downscale for LG).
• Meanwhile, Microsoft executives told TechEd developers that the firm was not neglecting its traditional business market, despite its focus in recent events on the consumer and multimedia attributes of WP7. It will build a new Office Hub into the platform, which will provide an integrated location for all the user's documents, including those created with OneNote, Excel, Word and Powerpoint. This will be a default feature in all WP7 devices and will integrate with Exchange Server and SharePoint Server.
• Initially, WP7 handsets will sync with Exchange Server 2007, Exchange Server 2010 and the current version of Exchange Online; later, syncing with Exchange Online 2010 and SharePoint Online 2010 will be added. According to ZDnet.com, another future update will be secure connectivity for Communications Online and other Microsoft BPOS (Business Productivity Online Suite) applications. These are the firm's hosted, software-as-a-service (SaaS) offerings, and enhanced mobile support is a key element of their strategy, especially in the wake of SAP's acquisition of Sybase. Among the rumored changes for BPOS on the mobile front is a dedicated SaaS apps store.
• For CRM (customer relationship management), ZDnet says Microsoft will allow developers of front end apps, for its Dynamics CRM back end, to sell their products in the WP7 Marketplace, though the firm will not provide a WP7 version of its CRM platform in its own right.
• In other Marketplace news, Microsoft confirmed the app store will be the only one allowed to carry certified WP7 programs; and that it will be a "porn-free zone". It will open a secure subsection of the Marketplace to developers, to make beta releases available to select groups of triallists. The firm has hinted it will allow enterprises to use the store framework to distribute applications to their employees, but has not added details yet. All WP7 applications must be written in managed code, without native raw socket access, one of the most controversial rules and indicative of Microsoft's desire to maintain Apple-style control over its store.

Editor’s Postscript: Although there has been a lot of hoopla in the trade press about how Microsoft is copying Apple, ultimately, it will not matter who first came up with the idea (store); what matters is how successful Microsoft or Apple is with the strategies that they choose to follow.

Focal Points:

• Recently, Baidu and Symbian created a joint venture - the Box Computing Joint Laboratory - to develop a 'box computing' platform for Symbian.
• The Symbian Foundation has been establishing an increasingly strong position in China, especially since China Mobile joined the group last year and on the back of intense activity by Nokia. Now the Foundation has signed another influential player, Chinese search engine Baidu, which is the default option on most smartphones in the country and is looking to extend its reach round the world.
• This would be an important development for Symbian, since most initiatives to provide PCs and mobile products with a secondary, instant-boot operating platform have focused on Linux. Symbian said it would open up its technology to allow Baidu to develop wireless box computing within its middleware.
• "Baidu has played a leading role in internet services, especially in China, and we look forward to having them share their expertise with the growing Symbian community," said the Foundation's executive director Lee Williams, in a statement. "Additionally, we expect the integration of 'box computing' services in the Symbian platform to stimulate third party developers worldwide to create a large body of innovative applications, leveraging Baidu's market leading search and inquiry platform."
• The partners will provide a box computing platform, complete with a set of APIs, to vendors and operators as well as third party developers. They also plan to share the outcome of their activities with the industry to broaden support for the concept, and make the results available through Symbian's open source processes.

Editor’s Note: Instant-On technology is a necessary component of ubiquitous access to web-services, rapidly growing application portfolio and the internet. Experton Group expects that this feature will become part of the standard feature set of any and all internet access platforms.

Focal Points:

• Oracle announced it intends to slice more jobs related to its acquisition of Sun, which occurred in late January of this year. The job cuts will come mostly from employees in Europe and Asia, and amount to additional restructuring costs projected between $675 million and $825 million. Oracle had originally estimated total restructuring costs to be $325 million, and expects charges and redundancy eliminations to occur through calendar year 2011. Oracle has called the Sun acquisition, and particularly the Java programming language, the most important acquisition the company has ever made. Plans for the combined entity are to help Oracle leverage efficiency gains into an integrated systems approach that provides more efficient and stable solutions.
• With HP touting its integration of EDS is ahead of schedule and delivering benefits to the vendor and its customers, the company is aiming to deliver new offerings and improve delivery capabilities. HP announced a new, $1 billion initiative to improve automation and standardization in its Enterprise Services business using the lessons proven in its own internal transformation efforts. The move will significantly reduce its number of global data centers by half, and employ a streamlined set of applications, management frameworks, networks, and supporting toolsets to deliver could-based, outsourced, and on-premises services. Approximately 9,000 jobs will be reduced in this effort, though the company believes another 6,000 new ones will be necessary to drive business and support the business. The company expects for its investment to pay for itself in savings alone by 2013.
• Though the Linux server business grew approximately 20 percent year-over-year, Novell has fared nowhere near as well. In its recently announced second quarter results, the company posted revenues of $204 million, down more than five percent from $216 million in 2009. The company has previously declared its intention to restructure its business and is soliciting offers and considering recapitalization alternatives. Novell's  net income of $20 million, up from $16 million the prior year, is demonstration that the company is working to squeeze the most out of its 3,500 employees and business strategies. The company's cash positions remain strong at $980 million, down just 1.1 percent from the year prior, showing that the company is in no immediate danger.

Experton Group believes Oracle, like many others before it, is seeing that so-called synergies are a lot harder to come by when integrating giant, radically-different business together. A few mere months ago, the firm promised to grow Sun to profitability rather than cut its costs to do so. Sun has already lost many high-profile and workaday talent. Additionally, Oracle's strategies to deliver a tightly integrated hardware/software environment and effectively manage Sun's myriad hardware strategies within Oracle's software competencies remain unclear. IT executives should expect Oracle's past proclivities for eliminating undesired businesses and integrating valued assets into tactics that limit enterprise choice and flexibility to manifest accordingly. While it is still too early to predict casualties with reasonable certainties, IT executives should to evaluate migration options. IT executives should require future enterprise-critical Oracle investments be accompanied by necessary out-clauses and/or penalties should shifts in the company's strategy be determined detrimental. HP's EDS integration has provided the company with significant best practices and technical knowledge. IT executives should expect HP to select relatively heterogeneous target environments as it attempts to automate and modernize its data centers and services offerings. IT executives of enterprises that are HP strategic partners should get HP executives to explain its strategy and roadmap for data center automation, people, processes and technologies and apply elements as appropriate. Other IT executives should try to glean this story from other sources and see how it can be applied to their environments. Despite Novell's inability to radically transform itself from a legacy provider of collaboration and networking services into an enterprise Linux server vendor, the company has done a relatively good job of holding down the fort. Though the company performance is significantly off from its competitors', Novell's existing cash on hand, contract relationships, and intellectual property stack make it attractive to potential suitors. IT executives invested in Novell infrastructure offerings should feel secure with their investments, although IT executives should validate their Novell contracts contain clauses that protect them in case of the vendor's acquisition – regardless of who the buyer is.

Focal Points:

• According to the U.S. Department of Labor Bureau of Labor Statistics, total nonfarm payroll employment grew by 431,000 in May – most of it reflected the hiring of 411,000 temporary employees to work on Census 2010. Private-sector employment improved by a mere 41,000, far below expectations causing overall concern about the rate of improvement of the U.S. economy. The U.S. economy has only added 573,000 net new jobs this year while 3.4 million jobs have been lost since the Stimulus Package was passed last year. The International Monetary Fund (IMF) projects the world’s largest economy to expand at a slower pace over the next five years than the 3.2 percent average during the past five decades. The IMF notes the government's total debt rose past $13 trillion for the first time this month and predicts the total amount owed will surpass GDP in 2012. Meanwhile, there is a risk of a renewed recession in Europe, according to U.S. economist Nouriel Roubini. He expects economic growth at best to be zero in the Euro zone.
• According to a biannual survey by Dice Holdings, a specialized career websites provider, more than half the U.S. companies surveyed said they plan to hire more professionals in the last six months of this year, with an increasing number also willing to pay higher salaries to new recruits. The survey included 800 companies, government entities and recruiting companies. About 52 percent of the employers and recruiters surveyed anticipate hiring more career professionals in the second half of 2010 than they did in its first half of the year. A quarter of employers and recruiters see salaries for new hires rising, compared to just 10 per cent reporting salary increases for new hires six months ago. Additionally, 69 percent of respondents believed that layoffs were not likely to occur in their companies within the next six months, an improvement over last November's 61 percent. Of the companies intending to hire more, 49 percent projected they would add up to 10 percent more employees compared to the first half of 2010, while 28 percent planned to increase hiring by 11 to 20 percent.
• IDC predicts global IT spending will increase by 3.8 percent in 2010 while Gartner Group projects a growth of 4.1 percent and forecasts national and international government IT spending to grow by 6.2 percent. Purchases of hardware equipment are expected to rise by 6.4 percent while software spending expands by 3.1 percent, according to IDC. However, the firm estimates IT services expansion will only gain 1.5 percentage points. Lastly, Gartner forecasts the banking and financial services sector to grow by 4.6 percent.

Experton Group believes the economy appears to be at an inflection point and could tip either way. Actions being coordinated by the G20 and other governments do not bode well for the private sector, nor the governments long-term. Therefore, Experton Group expects economic growth to stagnate in most countries, which will translate to revenue uncertainty or constrained revenue growth for most companies.  IT executives should expect budgets to become tightened in the latter half of the year. IT executives should look to self-funding projects to improve the odds of gaining executive approval and help close any financial gaps.

Focal Points:

• Nokia's Research Center worked with CEA-Leti on the project and will demonstrate the results at a conference next month. They will show an RF front-end circuit that allows data exchange between a reader - typically a mobile phone - and a memory tag, at speeds of 112Mbps, far faster than RFID. The circuit has already been implemented in a prototype data exchange system called Nokia Explore and Share.
• The system uses a combination of pulse-based UWB, in the 7.9GHz UWB band, for fast data transfer over short distances, and narrowband UHF for synchronization and remote powering. The same circuit can manage physical layer communication at both ends of connection, so the same RF front-end can be used in the tag and reader to save cost. The circuit can power itself from the narrowband signal, or there is a battery mode for increased reading distance. France-based Leti makes the circtui. The companies will present their project at the VLSI Symposium in Hawaii on June 15-18.
• Also in the world of near-field communications, Telefonica O2 aims to be the first operator with fully commercial payment services using the contactless technology, NFC (Near Field Communications). The carrier will launch such offerings, integrated into handsets, in the UK, Spain and the Czech Republic in late 2010 or early 2011, Michiel Van Eldik, Telefónica's group director for new business and innovation, told Reuters. The firm already has a commercial pilot in the Czech city of Pilsen, using Nokia 6212 NFC phones, preloaded for use with local transport services. They can also be used to buy tickets and to shop in participating stores.

Editor’s Note: It is apparent that the interest and investment in wireless technology is far from peaking. Experton Group feels that as each vertical technology matures, it will be added to existing handhelds (phone, laptops and tablets).

Focal Points:

• According to a new Accenture survey, nearly two-thirds of 125 global insurers do not consider their current distribution strategies as competitive. As a result, insurers plan to invest $84 million, on average, over the next three years to improve their mobile capabilities, digital marketing, including social networking, and channel integration, the survey indicated. Only a small percentage said that they are currently investing in improving mobile technologies, digital marketing, and channel integration (19 percent, 34 percent, and 36 percent, respectively). The survey also found that a higher percentage are planning on or are considering increasing their investments in these areas (62 percent, 49 percent, and 44 percent, respectively).
• Additionally, the survey results indicate that insurers plan on increasing efforts to tailor their marketing strategies to specific customer segments. Approximately one-quarter of respondents said that they will customize their products, promotions, channels, services, and pricing strategies over the next three years. The survey found that only 14 percent of insurers are currently doing this.
• Insurers cite the emergence of new technologies, changes in customer needs and attitudes, new regulations, and advice in the distribution of insurance products as the main factors contributing to the shift in investment priorities. According to Accenture, over 60 percent of insurers said that all services will be available online within the next three years. However, only 21 percent predict these services will be available on mobile devices within this time.

Experton Group believes the insurance industry is not the only sector late to market to recognize the shifts in consumer demands. Early adopters that integrate the newer distribution channels into their business processes (and not make them separate silos) will gain a leadership advantage. However, the processes need to be customer-centric and user friendly rather than product or provider based otherwise customer adoption and usage will be limited. IT executives in a number of industries still have an opportunity to show corporate and line of business executives how to innovate using new technologies to drive revenues and market share. IT executives should take advantage of this window of opportunity and demonstrate their leadership, business acumen and innovation capabilities.

Focal Points:

• What is clear is that Microsoft's decline is far more to do with its own mistakes than the good decisions of competitors. Even with a strong looking Windows Phone 7, the firm has little prospect of a real mobile play outside its niche markets. In his research note, Barclays Capital's Israel Hernandez cut his price target on Microsoft to $32 from $35. His main concerns are underperforming shares, depressed by decelerating PC growth and the failure to balance this with mobile growth - a failure just accentuated by the recent reorganization of the entertainment and devices division. The reorganization was lame and just seemed to put more control in the hands of Ballmer, who has never shown any instincts for this market. And many believe the whole unit should be dismantled, removing the conflicts of interest with OEMs, diverting dollars from hardware to software, and leaving Microsoft to focus on web and cloud services, and on its 'post-Windows' OS Midori.
• Hernandez is concerned that, however good WP7 may be, it needs to dominate the tablet and smartphone market in order to be a success, which means tens of millions of sales. There are so many alternatives now, that this seems unlikely - some of them coming from companies which were previously loyal Windows licensees, like HP after its acquisition of Palm.
• Hernandez wrote: "We view the mobile/tablet/smartphone market as a strategic imperative for Microsoft, not so much for the immediate revenue opportunity but more so because of the potential competitive impact on the core Windows franchise over the long term…In our view, the inroads that Apple and now Google have made with smartphones and tablets have created a scenario whereby a new generation of consumers is increasingly looking beyond Windows for their basic computing needs, especially with more and more content and applications available in the cloud and accessed through a browser, obviating any need for a Window-based machine."
• By contrast, Apple appears to have plenty of growth in mobile, even though it, like Microsoft, pursues a closed and tightly controlled model under a veneer of web services. The Bank of America research note, from Scott Craig, says there is plenty of upside left for the iPhone, which is nowhere near saturation. Craig lifted his price target on Apple to $325 from $300, writing that the iPhone has "multiple tailwinds" that will continue to drive sales, and arguing that Wall Street's consensus estimates "meaningfully underestimate Apple's gross margin potential".
• Craig sees upside for the iPhone in foreign markets, and also on the US, especially if and when it reaches other operators. "We believe the iPhone can grow 20-30% in the US over the next several years, excluding the addition of Verizon, on overall smartphone growth and customer preference for the iPhone within AT&T existing subscriber base, despite the perceived existing network quality issues and perceived saturation," Craig wrote. The addition of Verizon would be "potential upside to our model". Craig maintained his iPhone sales forecast of 34.5m units for the 2010 fiscal year but raised his 2011 target from 37.5m units to 43.5m. He raised his iPad forecast for this year to 3.75m units from 2.5m.
  

Editor’s Note: It is interesting to note that while the iPad was not developed as competition to the netbook, it has from a market perspective, overtaken netbook sales. While there are definitive differences between the functionality of the iPad and netbooks, it appears that the proliferation of applications, wireless communication and cloud computing is positioned to eliminate or reduce the significance of those differences.

Apple itself does not market the iPad as a replacement for the laptop. However, when you look at the way in which the iPad is being used, namely email, texting and internet queries, it appears that the iPad is catering to an underlying market that does not need all of the functionality in a netbook or assumes that the new apps will deliver the bulk of the missing functionality.

Another observation is that consumer preferences are changing. While most members of the new generation have mobile phones, ironically the use of the voice option has been replaced by texting. This is supported by recent articles in the trade press announcing AT&T’s intention to eliminate unlimited texting.

Focal Points:

• With its acquisition of Sterling Commerce from AT&T Inc., IBM aims to help customers in banking, communications, healthcare, manufacturing, and retail verticals (for starters) better integrate key business processes across networks and business processes. Clients will be able to leverage solutions using on-premises and/or cloud-based offerings. IBM believes Sterling Commerce's technology complements its middleware portfolio, particularly its Cognos business intelligence and business performance software and iLog rules management and supply chain optimization technology. Sterling has more than 18,000 global customers and was originally acquired by AT&T in 2000 $3.9 billion.
• Netezza announced improvements in both revenues and profit in its first quarter, which ended in April. Revenues grew almost 29 percent to $59.2 million while the company achieved a profit of $2.7 million, up from a small loss in the same quarter last year. Although 82 percent of revenues were derived from existing clients, the company has won an additional 20 customers and predicts steady growth will continue as investments in business analytics is growing. A new version of the Netezza TwinFin software stack, arriving this summer, will improve appliance performance by as much as 200 to 300 percent. Additionally, a new TwinFin appliance will allow analytics software providers to run code directly on the appliance rather than requiring a separate box.
• McAfee is acquiring privately owned Trust Digital to bring streamlined management and security solutions to the mobile device market. Trust Digital's management tools work on all the leading handheld platforms except those from Research in Motion Ltd., and are capable of helping operators and administrators deliver security and device management. Capabilities include centralized deployment, policy implementation and enforcement, and user assistance, all of which can be managed from a centralized management and reporting console. McAfee aims to integrate these offerings with its McAfee ePolicy Orchestrator console, to integrate management and security resources across mobile and desk-based endpoints. The acquisition price is undisclosed.

Experton Group believes Sterling Commerce's sound product and customer base has largely languished under the last ten years of AT&T ownership, thus parent company's willingness to sell it for 65 percent less than its 2000 purchase price. IBM has been investing heavily in business and technology automation solutions and the synergies between its existing solution set and Sterling Commerce's functionality have palpable potential to deliver solutions that leapfrog the competition. IT executives should expect IBM to invest quickly and heavily to integrate Sterling Commerce functionality throughout the IBM middleware portfolio with integrated offerings arriving within the next 12 months. Netezza's prospects are certainly brighter now than any other time in the recent past; however, competition in the data warehousing and business analytics market is heating up rapidly as corporate investment in analytics builds. Though the company is a major player, it will either become an intellectual property acquisition target or suffer greatly as IBM, Oracle Corp., and others exert their infinitely more powerful market force. McAfee has snapped up a good technology and solution provider in Trust Digital. The company has been working aggressively to transform itself from a security provider to an integrated management and security vendor offering both hosted and traditional software offerings. Secure and consistent management of mobile platforms looks a bit like the Wild West right now, and IT executives should watch to see how well McAfee can transform Trust Digital's products into a logical and integrated extension of their other enterprise platform offerings.

Focal Points:

• According to reports out of Asia, the IT sector is expected to hire over 2,000 executives in the current fiscal year, as companies have concrete business plans and are on an expansion mode. The trend is seen across Asia Pacific, India, and South America, and across different verticals, the study added. The report also found that organizations are not only hiring on a large scale, but that they will also offer generous salaries to lure potential CXO talent.
• IT spending across all industries will increase this year compared to last year, and is likely to exceed $2.4 trillion, according to a new Gartner Group report. National and international governments will show the strongest growth, with IT spending forecast to grow over six percent worldwide. IT spending in the banking and securities industry will rebound almost five percent to $396.9 billion, the report added. Meanwhile, IT spending recovery will be much slower in the manufacturing and natural resources sectors. The report expects those sectors to grow around three percent to $428.9 billion. Banking and securities, and communications, media and services will experience the greatest growth through 2014, growing at five year compound annual growth rates (CAGRs) of 5.2 percent and 4.6 percent, respectively. Manufacturing and natural resources, and wholesale trade will experience the weakest growth through 2014, growing at five year CAGRs of 3.0 percent and 3.1 percent, respectively.
• The latest BLS numbers show a net gain of 8,800 IT jobs in April, an improvement over a net loss of 6,800 IT jobs in March 2010. According to the Department, The Management and Technical Consulting Services segment added 7,300 jobs for the month, bringing the total net job gain during the past seven months to 25,500. Meanwhile, a Manpower survey found that one-third of employers worldwide are facing a shortage of talent. In Asia Pacific, the situation is worse, with two in every five companies having difficulty filling positions. In the U.S., 14 percent of employers report a shortage, while figures for the U.K. and Norway are nine percent and 11 percent, respectively, the report added. In Australia, Hong Kong, Mexico, Peru, and Taiwan, 40 percent or more employers say they cannot find the right talent, while 50 percent or more of employers say that in Argentina, Brazil, Poland, and Singapore.

Experton Group believes the IT sector growth rates will be less robust than projected, due to a slowing down of economic growth globally. Continued uncertainties in the markets along with government actions and mandates will hamper growth and therefore hiring. Additionally, CEOs are looking to make their organizations more agile with greater variable costs, which do not bode well for expansion of internal IT staff. IT executives should understand the corporate strategies on fixed versus variable costs, asset ownership, and hiring along with growth projections and then construct hiring, retention, succession planning, and training programs that map to corporate directions. Contingent workforce and outsourcing alternatives should also be pursued.

Focal Points:

• The company has released the suite of tools initially for Android and iPhone, with other operating systems to follow. It is also targeting the rising variety of devices connected to the internet using Wi-Fi, such as tablets, media players and the iPod Touch.
• Included in the new portfolio are mobile versions of familiar PC apps such as Norton Antivirus, as well as some modules specifically for new devices. Antivirus is initially for Android only and will detect malware as well as scanning gadgets and alerting users to suspicious behavior.
• Norton Mobile will be available in beta release in June, and Android is its key target despite the creation of an iPhone version, because it is a more open - and therefore potentially vulnerable - platform. While Apple uses a closed software distribution model based on App Store, Android phones can take software from outside the Marketplace - from the web, third party stores, email attachments and so on. Dan Nadir, director of product management for Symantec, commented to ConnectedPlanet: "Android is more open than other platforms. There's more potential for something to go wrong."
• Among the facilities of Norton Mobile are a call blocking service, a blacklist for suspicious apps detected in Google or third party stores, and an option that allows customers to access any files stored in Norton's Online Backup and Norton 360 cloud storage services. Called Norton Connect, its users can download files directly to the device or share them with others by creating network emails with secure links to the files. Symantec is also providing a remote security solution, which will wipe or lock a smartphone if it is lost or stolen.

Editor’s Note: As mobile devices acquire more capabilities, basic infrastructure safeguards need to be put in place. It is unfortunate that this is not planned for up-front as opposed to adding these safeguards after a device has been released.

It is also interesting to note that Apple uses a closed software distribution model that eliminates certain types of risk. However, with the growing number of application software sources, the closed system model by itself is not enough.

While it makes more sense to place the safeguards on the device itself, this in turn will further increase the complexity and maintenance of the device.

There are two ways to deal with this challenge. Require a docking station connected to the internet or rely on wireless updates.