IBM's new server to counter Oracle

International Business Machines (IBM), the largest computer-services provider, is introducing new server systems today, aiming to bolster its leading position as software rival Oracle Corp enters the market.

The Power7 systems will be tailored for specific projects, such as running electrical grids or financial analytics, Rodney Adkins, senior vice president for systems and technology, said last week in an interview. The systems, made of integrated servers, software and storage, will start selling this month.

The release marks the first new systems since Adkins took over IBM’s hardware division in October, after predecessor Bob Moffat left the company amid the Galleon Group insider-trading scandal. IBM’s focus on project-specific systems, along with investments in research and development, will help it gain market share even as Oracle starts selling similar servers with its acquisition of Sun Microsystems Inc., he said.

“It’s easy in this industry to say, ‘I have this piece, I have this piece, I have this piece, now I have it all,’” said Adkins. “It really requires innovation.”

With the purchase of server maker Sun, Oracle Chief Executive Officer Larry Ellison has said he plans to challenge IBM by selling computers packaged with software customized for industries, such as retailing.

Global sales of high-end servers will be about $14 billion this year, according to Framingham, Massachusetts-based researcher IDC. IBM held 40 percent of that market in the third quarter, IDC’s most recent report. Hewlett-Packard Co. had 27 percent, followed by Sun with 26 percent.


Hardware Sales
Hardware sales make up 17 percent of Armonk, New York-based IBM’s total revenue, which topped $95 billion last year. The company is the world’s third-largest software maker, trailing Microsoft Corp. and Redwood City, California-based Oracle.

IBM offered to buy Sun for about $7 billion last year, according to people familiar with the matter. Oracle ultimately acquired Sun for $7.4 billion, and the deal closed last month.

IBM rose 52 cents to $123.52 in New York Stock Exchange composite trading on Feb. 5. The shares had fallen 5.6 percent this year before today.

Yahoo to go for weeklong shutdown

Yahoo says it will close its offices from Christmas through New Year's to help save money. The cost-cutting move ends a year in which Yahoo's revenue declined for the first time since 2001.

It's the first time that Yahoo has required most of its 13,200 employees to use vacation time or unpaid leave during the holidays. Only employees performing essential duties will be working from Dec. 25 through Jan. 1.

Yahoo Inc, based in Sunnyvale, California, has eliminated about 2,000 jobs and shed other expenses since September 2008. The streamlining has helped offset a 12 percent decline in Yahoo's revenue through the first nine months of this year.

Several other Silicon Valley companies traditionally close most of their offices during the holidays.

Google pays no tax on £ 1.6 bn in UK

Internet search giant Google has not paid any tax on its 1.6 billion pound advertising revenues in Britain last year, a media report says.

"Google, the Internet giant whose informal corporate motto is 'don’t be evil', did not pay any tax on its 1.6 billion pound advertising revenues in Britain last year," the Sunday Times reported.

Google legally avoided paying more than 450 million pound in corporation tax to HM Revenue & Customs in 2008, as it diverted all its advertising earnings from customers in Britain to its Irish subsidiary, the newspaper said.

Citing accounts filed with the Companies House in the past week, the daily said, "Google's 2008 UK corporation tax bill amounted to just 141,519 pound -- and that was tax on the interest generated by its cash pile in UK bank deposits."

Vince Cable, the deputy leader of the Liberal Democrats, has urged Google to "pay its fair share" of tax.

"Google’s reputation will be severely damaged if it continues to behave in this way. It is ducking its social responsibility," Cable told the Sunday Times.

Cable further added that "avoidance like this is hard to stomach at the best of times. But when the country is in recession and everyone is feeling the pain, it really sticks in the throat -- it means higher taxes for the rest of us".

Google, however, said its structure complies fully with UK tax rules and that the company makes a "substantial" contribution to tax receipts wherever it operates.

At present, about 13 per cent of Google's global revenues, come from the UK, and 770 staff are based at its London offices.

Austin Mitchell, the Labour MP for Great Grimsby who campaigns against tax avoidance, said, "Google isn't just sucking money out of local newspapers and other people who rely on advertising for a living -- it's also draining money out of the public finances."

Meanwhile, Peter Barron, director of communications for Google in northern Europe, told the newspaper: "Google makes a big investment in the UK, with over 800 employees, and we make a substantial contribution to local and national taxation.

"But the fact is that our European headquarters is in Dublin. We comply fully with the tax laws in all the countries in which we operate."

Quoting accountants the report said that if Google had paid tax on its 1.6 billion pound advertising revenues in Britain, it could have raised about 450 million pound for the public finances -- "enough tax to fund three NHS hospitals, buy at least eight Chinook helicopters or pay the annual salaries of about 15,000 policemen.”

12 little-known facts about IBM

Few companies are as well known as the IT giant IBM. The US-based company popularly known as 'Big Blue' is the global leader in hardware, software, services and consulting space. The company has who's who of the global business world as its clients and is among the top chipmakers in the world.

But few know that IBM is also the highest patent earner, has a long list of tech inventions to its credit and makes 35 of the world's 100 most powerful supercomputers.

eWeek has compiled a list of little-known facts about IBM. Here are few from the list.

Humble beginning
IBM was founded in 1896 as Tabulating Machine Company by Herman Hollerith in New York. It was incorporated as Computing Tabulating Recording Corporation on June 16, 1911, and was listed on the New York Stock Exchange in 1916. It became IBM in 1924 when Thomas J Watson took over.

Headquartered in Armonk, Town of North Castle, New York, the 283,000 square foot IBM building is located on a 25 acre site. With presence in more than 170 countries, IBM Global Services is among the world's largest business services provider.

Highest patent earner
In 2008, IBM became the first company to ever earn more than 4,000 US patents in a single year. According to the company, 2008's patent issuances were nearly triple that of Hewlett-Packard's and exceed the issuances of Microsoft, Hewlett-Packard, Oracle, Apple, EMC, Accenture and Google combined.

Inorganic kitty
Since the acquisition of Lotus in 1995, the company has been on an acquisition spree. IBM has bought more than 130 companies since then. Some of the companies acquired by the Big Blue include: Mainspring Business Strategy consulting, Informix Corporation Database Software, CrossWorlds Software, Metamerge, Trellisoft, Think Dynamics, Aptrix, Daksh e-Services, Venetica, Network Solutions Pvt Ltd.

Tech edge
IBM has a long list of technologies to its credit. The list includes: magnetic stripe, UPC bar codes, floppy disks, hard disk drives, vacuum tape drives, relational databases, Random Access Memory, RAMAC, the world's first computer disk storage system. IBM introduced the first computerised golf scoreboard at the 1967 Greater Dallas Open.

Women-friendly
With over 4 lakh employees worldwide, IBM is among the largest IT employer in the world. The company also boasts of a high number of senior women employees. According to reports, the company employs more than 1,000 senior women executives from mere 185 in 1997. Also, 65 per cent of IBM’s women executives are working mothers. More than 130,000 IBM employees and retirees are registered with the company's global volunteer programme called 'On Demand Community'.

Powers gaming giants
IBM provides processor chips that power world's top gaming giants, including Sony PlayStation, Nintendo Wii and Microsoft Xbox 360. In May 1997, Deep Blue (chess computer), a chess-playing computer developed by IBM created history by defeating world champion Garry Kasparov.







Global banks use IBM's mainframe
IBM's mainframe, the company's line of business computers, continues to be the choice of almost all top banks in the world. IBM in the first quarter of 2009, announced that its System Z mainframe business grew 37% in emerging markets such as China and India.









Nobel winners
Five IBMers have won Nobel Prizes for physics. Their names include Leo Esaki (1973), Gerd K Binnig and Heinrich Rohrer (1986), J Georg Bednorz and K Alex Mller (1987),

In addition to Nobel prizes, IBM researchers have been recognised with seven US National Medals of Technology, five National Medals of Science and 21 memberships in the National Academy of Sciences.





Supercomputer leader
According to TOP500 list of Supercomputers, IBM is a provider of 35 of the world's 100 most powerful supercomputers. Till recently, IBM's supercomputer Roadrunner held the top spot on the list of the World's top 10 fastest supercomputers.

However, according to the recent ranking, the world's fastest supercomputer is Cray XT5, also known as Jaguar. Jaguar bags the no. 1 spot, beating IBM's Roadrunner, which has been holding the top crown since past 18 months.



IBM's 3D avatar
In 2007, IBM researchers in Switzerland unveiled details of prototype visualization software that let doctors view medical data of patients using a 3D avatar of the human body. The Anatomic and Symbolic Mapper Engine (ASME) provides an interactive 3D model of the human body that displays health information at a glance. This helps doctors to visualise the medical history of their patients.

The company is also credited for playing a key role in developing the heart lung machine, for having invented the first continuous blood separator which is used to treat leukemia patients, and has helped develop the field of relaxometry which plays a role in medical magnetic resonance imagery (MRI).

Smart toll project
The company is credited for implementing a project that brought down traffic emission in Stockholm and channelised traffic movement. IBM worked with the City of Stockholm, Sweden to implement a smart toll systems to reduce gridlock, lower emissions and save the city’s residents time and money.

The system reduced traffic by 25%, and the city saw a drop in emissions from road traffic up to 14%. Greenhouse gases have fallen 40% in the inner city.

Revenue

IBM announced its third-quarter 2009 net income was $3.2 billion compared with $2.8 billion in the third quarter of 2008, an increase of 14%. Total revenues for the third quarter of 2009 was $23.6 billion, 1% up from the second quarter of 2009. IBM ended the third quarter of 2009 with $11.5 billion of cash on hand and generated free cash flow of $3.4 billion, excluding Global Financing receivables.

At the end of 2008, IBM recorded $103.6 billion in revenue, $12.3 billion net income and $109.5 billion total assets.

Microsoft to hire 400 Yahoo employees

Microsoft Corp will hire at least 400 workers from Yahoo Inc if government regulators approve the companies' proposed Internet search partnership, and Yahoo will receive $150 million to cover any unexpected costs during the switch to new technology.

The details emerged in a regulatory filing that elaborated on an agreement announced last week. Sunnyvale-based Yahoo said then that an unspecified number of its 13,000 employees would be offered jobs at Microsoft after the Redmond, Washington-based software maker assumes control of the search results and search advertising on Yahoo's Web site.

The transition is supposed to begin early next year, assuming the alliance is approved by antitrust regulators in the United States and Europe.

Microsoft will pay $50 million annually during the first three years of the 10-year contract to supplement the revenue that Yahoo will receive from the ads appearing alongside its search results. The $150 million in guaranteed payments weren't mentioned last week.

The filing said Yahoo can use the $150 million to pay for unforeseen transition costs. Yahoo's stock has fallen by about 15 per cent since it unveiled the Microsoft deal, largely because announced terms didn't include a large upfront payment.

The disclosure probably won't ease the disappointment much, given analysts had anticipated Microsoft paying $1 billion to $2 billion for access to Yahoo's search engine.

Most of the revenue from the Microsoft deal will flow from ad commissions. Yahoo will receive 88 percent of the search ad revenue during the first five years of the contract. After that, Yahoo's commission will range from 83 percent to 93 percent, depending on whether it still handles some of the ad sales in the partnership.

The main reason Yahoo decided to turn over its search engine to Microsoft was to save money. If Yahoo wants to save even more on technology, it
has the option of adopting Microsoft's online mapping service replace of its own, according to the filing.

Yahoo Chief Executive Carol Bartz has already made it known she isn't impressed with Yahoo's online maps. As it is, transferring 400 workers to Microsoft would prune Yahoo's current payroll by about 3 per cent.

Yahoo will lay off some workers if the Microsoft deal goes through, Bartz said last week. Tuesday's filing didn't provide any layoff projections. Although it also has been jettisoning workers because of the recession, Microsoft finished its latest fiscal year end in June with 93,000 employees -- an increase of about 2,000 people from the previous year.

Microsoft is counting on the Yahoo partnership to help it reverse years of losses in its online operations and siphon some traffic -- and ad sales -- from Internet search leader Google Inc.

Yahoo's search engine is the second largest, making it the quickest way for Microsoft to gain ground on Google. Even so, Microsoft and Yahoo combined have less than 30 percent of the US search market compared to 65 percent for Google, according to comScore Inc.

To keep Yahoo happy, Microsoft will have to produce ad revenue per search that is within a certain percentage of Google's industry-leading rate. If Microsoft doesn't hit the target, Yahoo can abandon the partnership before the contract expires.

The filing didn't specify how close Microsoft has to come to Google's revenue per search. Microsoft estimates that Google gets 7 cents in ad revenue for every search, while Yahoo gets 4.3 cents and Microsoft gets 3.9 cents, according to a PowerPoint slide Microsoft mistakenly posted online.