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Rumor:Nortel to buy Force10Networks?

Thats the word on the street … Check out http://news.tmcnet.com/news/2006/09/18/1901468.htm

Add comment September 26th, 2006

Rumor: HP to buy CA?

That would be a big one. But people say that HP today can’t fight IBM in mainframe territory. Almost every IBM mainframe account uses CA. So the acquisition can give HP access to most IBM accounts. Also CA’s stock is relatively cheap.

Add comment September 16th, 2006

Should Exxon Mobil buy General Motors or Ford?

Market Cap of Exxon Mobil: $404B; Market Cap of GM: $17B

They could buy them wothout blinking an eye. Think of the cell phone market, the phones are sold or leased by the carriers, not by the phone manufacturers. Sprint, Verizon, ATT sell us phones, not Qualcomm or Motorolla. Similarly Exxon could sell you cars and fuel at a monthly lease price.

The structure of the lease also would fit well: fixed number of miles and if you go above it there is some charge. Also concepts of roaming etc. fit well … and the economics should work given mostly people are local or withing state. Further with the availability of technologies like OnStar you can prevent theft etc.

Don’t know if it would trigger any anti-trust regulation. But it would surely change the auto-world as we know it.

Add comment September 16th, 2006

Rumor: Motorola to buy Juniper?

This is a wild one. It has been circulating for some time. I can’t say I understand it, except that maybe Zander does not like Chicago and wants to move back to the Bay Area. It does make sense from a market perspective: both the companies sell to carriers … one for the core of the wired network and one on the wireless side. But they are still selling to the same companies.
From a core technology point of view, I am sure Juniper stuff can be used on the wired and wireless part of the network. So maybe the combination creates a one-stop shop?

Add comment September 6th, 2006

Should Apple and Google merge?

Should they? They both have a common enemy. Google for the longest time has been trying to get consumers to park more of their data with google. All efforts like 2GB storage with gmail or desktop search, or hosted office seem to be steps in that direction.

Apple offers a very different solution: iTunes today indexes all the music files, videos and also your contacts and calendar. It is trivial for it to do email and other files on your desk also. People who use iTunes and iPod swear by it and really trust and like it. If that becomes a conduit to google that could be powerful.

What would Apple get out of it?

Add comment September 4th, 2006

Rumor: Oracle to buy Redhat?

There has been a rumor going around that Oracle will buy Redhat. When you ask people why — the responses are very random at best. Some say Oracle has a banking mindset now with Charles Phillips is President … so they are looking for companies with good maintenance revenue streams and are looking at it as a financial transaction.

There is also some talk about this being an extension of the Oracle Unbreakable campaign. That campaign is widely mis-understood … what Oracle was offering there was 24×7 support with SLA that a problem will be resolved in certain amount of time. If a customer reports a problem, the open source community may not address the issue for months, so Oracle said we will fix the problem and give the code back to the open source community. This was to give customers confidence to adopt Linux as their platform.

There are some interesting symbiotic relationships in the open source space. SAP is supposedly a big promoter of MySQL. One view of this is that it is advantageous for a company to commoditize the stack beneath it. As the dollars charged for the stack below would naturally flow to the application and also returned to the customers. From this point of view it might make sense for Oracle to buy RedHat as most of its implementations today run on Solaris or HP-UX or even AIX. And it could offer the OS stack for free, get a maintenance revenue stream and also make the oracle solution more cost-effective with little impact on the price of Oracle.

Add comment September 3rd, 2006

IBM buys MRO: non-IT, IT asset convergence?

IBM’s acquisition of MRO for $740M took some people by surprise. On the surface it was not clear why IBM paid a premium: it shared a large percentage of customers with MRO. Also Tivoli does have enterprise asset management capabilities. As several news articles reported MRO was strong for non-IT asset management: physical assets like tractors,
factory equipment, carts etc. The real question was why get into that business?

Party conversation says IBM is just trying to catch up with HP, after selling off its PC business to Lenovo, HP is ahead in terms of revenue to be the largest computer company. But that can’t really be the reason, can it?

In an insightful conversation with a senior executive, he pointed out that the non-IT assets are getting similar to IT assets. For example, Caterpillar is adding capability to track tractors using IP address and RFID tags, and several IT assets are becoming like non-IT assets. The two business seem to be converging and over the next 10 years or so they will begin to look very similar.

A completely disconnected event: it is rumored that one of the bidders in a recent Service Desk bid was PeopleSoft (or Oracle) bid along with Microsoft. Where they were using PeopleSoft’s system which tracks chairs and tables along with employees as the base to extend to IT assets also.

But maybe it does make sense.

Add comment September 3rd, 2006

Is AIM a viable option to go public?

Every month or so someone talks about going public on AIM (Alternative Investment Market) in UK. The requirements to go public are less strict: there is no SOX requirement, no minimum revenue etc. Almost every investment firm also has a “AIM” specialist you can talk to.

The conversation almost always drifts to liquidity and the general belief that the market is not liquid. So it depends on why you want to go public, for some companies they are looking for currency to buy other companies, or simply because larger companies like to buy from public companies. Those objectives are not met by getting listed on the AIM. Or atleast that is what the impression seems to be.

It does help with personal liquidty, but I haven’t come across a company which has done this yet. I am not even sure it is better than doing something like a DPO (direct public offering) which you can do both in Canada or the US. It is rumored Google contemplated doing a DPO. But in the long term investors prefer that someone has benchmarked the company to not be a fly-by-night operation.

Add comment September 2nd, 2006

Is tech a buyers market?

I heard recently “to go public these days you need the unbounded potential of the dot-com days and the solid fundamentals of large company”. That comment crystalized several disconnected snippets of conversations over the past several weeks. During lunch a CEO was said his company is doing 20M annual booking but where should it go next? Sarbanes Oxley has raised the bar to 60-70M but even then unless you have a strong quarterly growth and good visibility into future quarters it is tough to get out.

So where are the exits? The larger companies are acutely aware of these facts. Coupled with the presence of a large number of companies with similar technology, it seems like for the next couple of years tech will be a buyers market.

Add comment September 1st, 2006