IBM

Tech news from around the web:

  • Yahoo is looking to allow users to create new accounts using their Google and Facebook identities, reports TechCrunch. This follows a successful trial on Flickr last year, where after Google credentials were allowed to be used, the site saw a 20 per cent increase in sign-ups.
  • The Seattle Times says that Starbucks is to expand its “pay-by-phone” program to 6,800 of its US stores, plus more than 1,000 outlets inside Target outlets, following a trial in Seattle. The coffee company’s cardholders load an application onto their iPhone or BlackBerry smartphones which then displays a barcode that’s scanned at the register to pay for drinks.

 

IBM said on Wednesday that it will spend $20bn on acquisitions over the next five years as it reaches for $20 EPS by 2015. Big Blue may need some new products, as the FT’s Lex column writes that the company may struggle to hit its ambitious new targets by relying on internal growth alone.

The question, however, is how much further profitability can be improved for a company unlikely to grow sales rapidly. IBM can tout the benefits of automating processes that currently require human interaction, and an improving economic environment should also help to improve consulting margins for the next two years. But operating margins of 15 per cent in outsourcing and consulting are already better than its US and European competitors. 

Richard Waters

IBM’s promise five years ago to release 500 of its patents to the open source world was a milestone in Big Blue’s support for community-developed software.

So the news that it now plans to assert its legal rights in the case of at least two of those patents could mark an unfortunate watershed. And, to borrow an accusation often directed at arch-rival Microsoft, it is certain to sow FUD in open source circles.

The apparent inconsistency has been unearthed by European open source advocate Florian Mueller, who recently led the quixotic and ultimately unsuccessful effort to persuade Brussels to prevent Oracle from assuming control of MySQL when it bought Sun. 

Chris Nuttall

Android phones loomed large at the CTIA show in San Diego this week, while the FCC chairman made the trip to the West Coast to warn the wireless industry’s convention of a looming spectrum crisis.

AT&T and others blamed heavy-duty data users and smartphones like the iPhone for a 5,000 per cent increase in data traffic over three years.

It has also been a big week for antitrust cases, as Europe finally ended its battle with Microsoft and the US began one with IBM.

We discussed all of this and more in our weekly FT techtalk – a live, multimedia chat with the FT’s tech correspondents. Read the transcript below and  join us again next week – at 0800 Pacific time (1500GMT, 1600BST) here on Friday. 

Richard Waters

As the Department of Justice gets further along with its investigation into how IBM maintains its dominance of the mainframe market, Lacy Edwards is certainly someone it will want to talk to.

Mr Edwards is the boss of Neon Enterprise Software, a small Texas company that is trying to make a living around the edges of the mainframe business.

Big Blue, however, is having none of it. It has written to some of Neon’s customers warning them that if they buy the company’s software, they could be in breach of their licences from IBM – even though it confesses it has yet to get a close look at Neon’s technology.

Does that sound like a case of FUD, designed to scare customers away from a rival’s product? That’s certainly the way Mr Edwards sees it. 

Chris Nuttall

Due to the enormous cost and technology involved, less than a dozen people have had their DNA fully decoded, or “sequenced”, to date.

But IBM has come up with a method that could make this affordable for everyone – DNA sequencing could be more than a million times cheaper using chips with holes just three billionths of a metre wide, it says. 

David Gelles

It is perhaps with good reason that Larry Ellison does not speak in public that often. Whenever he does, the famously bombastic Oracle chief executive seems certain to trash his rivals, make bold predictions about Oracle’s future, and wander off topic.

Last night at a meeting of the Churchill Club, Mr Ellison said that Sun Microsystems was losing $100m a month as European regulators scrutinise Oracle’s proposed takeover of the struggling hardware maker.

On the economy, Mr Ellison said it would be at least another five years before the US begins to recover. He said it would not be a V shaped recovery with a sharp rebound, or a W shaped recovery with a double dip, or a U shaped recovery with a pause before an uptick, but an L shaped recovery — “down and not coming back up.” 

David Gelles

Chris Nuttall

  • Twitter is facing death by a thousand cuts – well, at least 310, anyway. That is the number of confidential internal documents that Mike Arrington of TechCrunch says he has been supplied with by an anonymous hacker, who obtained the information from a Twitter employee’s account with Google. The leak has caused red faces both at Twitter, which also revealed that personal internet accounts of co-founder Evan Williams had been hacked before, and Google, which defended the security of its Gmail and Apps services.
  • The PC market is looking up. Sales were stronger in the second quarter than industry analysts had predicted, suggesting that the industry could be bottoming out as consumers begin to spend more. Worldwide PC sales slipped only 3.1 per cent by volume from a year earlier, about half the retreat expected by market researcher IDC and less than half of the first-quarter’s 6.8 per cent drop.

 

  • IBM chief executive Sam Palmisano told invited analysts and investors Wednesday that the tech powerhouse was still on track for 2009 earnings of $9.20 a share and that it intends to keep spending on acquisitions, developing-world markets and research through the downturn. He singled out risk analysis and other analytics as a major growth opportunity, saying it would be “as big as” enterprise resource planning software in five years.
  • Facing mounting pressure from law enforcement agencies around the country, Craigslist said it would remove the “erotic services” section of its massive classified advertising website. In its place will be a new “adult services” section, where ads will be vetted by a Craigslist employee before being posted.