Is Acer Doomed?

Taiwanese PC maker Acer reported worse-than-expected quarterly loss. Actually, it had been expected to be bad, but no one had predicted it would be this bad.

For the fourth quarter, the world’s No.4 PC vendor reported a net loss of $254 million. The company had posted a worse-than-expected net loss of $446 million in the third quarter and a $112.31 million loss in the same quarter of 2012. In short, its troubles have been getting worse for more than two years.

At the end of last year the company named former Taiwan Semiconductor Manufacturing Co sales executive Jason Chen as its new CEO and launched a new initiative to integrate hardware, software and cloud services. It will be a while before the new broom can sweep out two years of doom, so many are expecting more doom to emerge. Acer relied too heavily on making low-end laptops, which weakened its brand, it also missed the shift to mobile.

Acer’s senior executives are taking a 30 per cent voluntary salary cut starting January, the company said in a statement.

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Is SAP Searching In The Clouds?

Esoteric business software maker, which no one is really certain what it does, SAP is debating whether to accelerate moving more of its business to the cloud.

The move would be a change in strategy which might initially have only a small impact on its sales. Co-chief executive Jim Hagemann-Snabe said the change would generate more sales by 2017 particularly in markets like the US where there is a big push onto the cloud.

Talking to a Morgan Stanley investor conference this morning, Hagemann-Snabe said that this would have impact on the 2015 level, I don’t expect enormous impact but it would have some impact because you are delaying some revenues. In the long term however it makes a lot of sense, which is not the sort of thing people expect from SAP.

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Can Acer Go High-End?

Most popular for its low-cost laptops, Acer doesn’t really inspire thoughts of premium products. But building high-end hardware could be the Taiwanese vendor’s best chance as it looks for a way to rescue its struggling business.

With consumers flocking to tablets and smartphones, Acer’s once-thriving PC business has been left in the dust. Quarterly financial losses have become routine at the company and its PC shipments declined more sharply in the past year than at any other major vendor, according to IDC.

The grim situation forced CEO J.T. Wang to resign from his post last Tuesday. Acer will also cut 7 percent of its global workforce and has assembled an advisory committee to come up with a new strategy, the company announced.

Bright spots are hard to find. The Wintel model that propelled Acer for years and helped it become the second-largest PC vendor in 2009 has been falling apart amid the demand for mobile gadgets. And Windows 8 and Intel’s Ultrabook strategy have failed to resuscitate the market.

It hasn’t helped that Acer is so reliant on sales to consumers, said IDC analyst Bryan Ma. The entire PC industry has been hurt by tablets, but Dell and Hewlett-Packard have at least managed to find cover selling PCs to businesses, which are still buying them. And Lenovo has capitalized on its position in China, now the world’s largest PC market.

“Acer didn’t really have the commercial PC business to protect themselves. That’s why they were hit harder,” Ma said.

Acer — whether to its benefit or detriment — has instead gained a reputation for low-priced PCs. Even in tablets it has tried to undercut rivals — its Iconia W4, an 8-inch Windows 8.1 tablet, starts at US$329.99, while its Iconia B Android tablet goes for $129.99. The low prices have helped keep the company on consumers’ radar, but at the expense of profits.

One option for Acer is to build a brand as a higher-end PC player. It took a step in that direction last year with the Aspire S7, a Windows laptop with a slender, aluminum chassis that sells for $1,200 and up. That product and its successors have had some success for the company, with sales of 2,000 to 3,000 units per month, said James Wang, an analyst with research firm Canalys.

“I think Acer has started to learn they are able to sell some expensive products,” he said.

Selling higher-end PCs could help stop the bleeding in Acer’s finances, but with the overall PC market still shrinking it’s unlikely to help it expand in any meaningful way. “You can’t really expect vendors in desktops and notebooks to find growth,” Wang said. “You win in the market by not falling in shipments.”

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SAP To Stop Offering SME

The maker of expensive esoteric software which no-one is really sure what it does, SAP has decided to pull the plug on its offering for small businesses. Business weekly Wirtschaftswoche said SAP would stop the development of a software dubbed Business By Design, although existing customers will be able to continue to use it.

SAP insists that development capacity for Business By Design was being reduced, but that the product was not being shut down. Business by Design was launched in 2010 and was supposed to generate $1 billion of revenue. The product, which cost roughly 3 billion euros to develop, currently has only 785 customers and is expected to generate no more than 23 million euros in sales this year.

The Wirtschaftswoche report said that ever since the SAP product’s launch, customers had complained about technical issues and the slow speed of the software.

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Is Lenovo Eyeing Blackberry?

Lenovo reportedly has joined the list of possible Blackberry buyers, with the firm reportedly having approached the struggling Canadian phone maker.

The Wall Street Journal reported that Lenovo, despite previously denying that it was mulling a Blackberry buy (paywalled), has been given the thumbs up to cast an eye over the Canadian company’s books before making it a possible offer.

If reports are to be believed, Lenovo has joined a list of possible buyers that includes Intel, Cisco, SAP, Google, Samsung and LG.

Specific details of Lenovo’s possible acquisition are yet to be revealed, but as a newcomer to the smartphone market Lenovo recently admitted that it is selling more smartphones than tablets and PCs in China, despite being one of the only PC makers to continue showing sales growth.

However, Lenovo’s smartphone portfolio is yet to appear the UK, and the firm hasn’t seen much success outside China. However, picking up Blackberry could help Lenovo enter the global smartphone market, and the firm could be looking to take over from Blackberry as a phone maker focused on business professionals.

Lenovo might have a hard time closing a buyout deal for Blackberry, though. Rumours about a takeover have already led to speculation that such a buyout would struggle to get approval from the US and Canada, due to the company’s Chinese ownership and the fact that Blackberry does business with sensitive parts of both governments.

Blackberry didn’t comment on a possible Lenovo buyout, but instead put out its usual vague statement. A company spokesperson said, “The special committee, with the assistance of Blackberry’s independent financial and legal advisors, is conducting a robust and thorough review of strategic alternatives.”

Lenovo declined to comment on the report.

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Sharp Shows MEMs

Sharp on Monday unveiled its latest prototypes of a new kind of display screen that it says brings several advantages over today’s liquid crystal display (LCD) screens.

The screens, called microelectromechanical systems (MEMS) displays for the tiny moving parts they contain, are being developed by the Japanese company in partnership with Qualcomm and were on show at the Ceatec electronics show just outside of Tokyo.

Behind each pixel in a MEMS display is a backlight that flashes red, green and blue in fast succession, and in front of it is a tiny shutter can be opened to let light through.

Synchronized to the backlight, the shutter can control the amount of each color of light allowed through. The eye perceives these flashes as the desired hue.

In contrast, today’s LCD screens create colored pixels using three filters. The filters swallow about two thirds of the brightness of the backlight before it leaves the display, said Akira Imai, deputy general manager of Sharp’s new business development center.

The MEMS display can allow all the light through, so the intensity of the backlight can be reduced using less power for the display, said Imai.

In a portable gadget, the screen often consumes more power than any other component, so reducing its demands can have a big impact on battery life.

The screens on show at Ceatec were 7-inch models with 800 pixel by 1,280 pixel resolution. The colors were bright and the screen image was sharp, although people viewing the screens did tend to see a brief flash of red, green and blue pixel each time they turned their eyes away from the display. That’s something Sharp is working on, said Imai.

Sharp also showed a version of the screen working in several low power modes.

The development work with Qualcomm began earlier this year when the U.S. company said it would invest $120 million into Sharp. The money, which was invested in two parts, was accompanied by Qualcomm’s MEMS expertise. Sharp has a long history in flat-panel display technology, especially LCD, and has recently been working on a new type of display called IGZO, on which the MEMS display is partly based.

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Oracle Goes After SAP’s HANA

Oracle has upped its game in its fight against SAP HANA, having added in-memory processing to its Oracle 12c database management system, which it claims will speed up queries by 100 times.

Oracle CEO Larry Ellison revealed the update on Sunday evening during his opening keynote at the Oracle Openworld show in San Francisco.

The in-memory option for Oracle Database 12c is designed to ramp up the speeds of data queries – and will also give Oracle a new weapon in the fight against SAP’s rival HANA in-memory system.

“When you put data in memory, one of the reasons you do that is to make the system go faster,” Ellison said. “It will make queries go faster, 100 times faster. You can load the same data into the identical machines, and it’s 100 times faster, you get results at the speed of thought.”

Ellison was keen to allay concerns that these faster query times would have a negative impact on transactions.

“We didn’t want to make transactions go slower with adding and changing data in the database. We figured out a way to speed up query processing and at least double your transaction processing rates,” he said.

In traditional databases, data is stored in rows, for example a row of sales orders, Ellison explained. These types of row format databases were designed to operate at high speeds when processing a few rows that each contain lots of columns. More recently, a new format was proposed to store data in columns rather than rows to speed up query processing.

Oracle plans to store the data in both formats simultaneously, according to Ellison, so transactions run faster in the row format and analytics run faster in column format.

“We can process data at ungodly speeds,” Ellison claimed. As evidence of this, Oracle demoed the technology, showing seven billion rows could be queried per second via in-memory compared to five million rows per second in a traditional database.

The new approach also allows database administrators to speed up their workloads by removing the requirement for analytics indexes.

“If you create a table in Oracle today, you create the table but also decide which columns of the table you’ll create indexes for,” Ellison explained. “We’re replacing the analytics indexes with the in-memory option. Let’s get rid of analytic indexes and replace them with the column store.”

Ellison added that firms can choose to have just part of the database for in-memory querying. “Hot data can be in DRAM, you can have some in flash, some on disk,” he noted. “Data automatically migrates from disk into flash into DRAM based on your access patterns. You only have to pay by capacity at the cost of disk.”

Firms wanting to take advantage of this new in-memory option can do so straightaway, according to Ellison, with no need for changes to functions, no loading or reloading of data, and no data migration. Costs were not disclosed.

And for those firms keen to rush out and invest in new hardware to take advantage of this new in-memory option, Ellison took the wraps off the M6-32, dubbed the Big Memory Machine. According to Ellison, the M6-32 has twice the memory, can process data much faster and costs less than a third of IBM’s biggest comparable machine, making it ideal for in-memory databases.

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U.S. Cloud Vendors Hurt By NSA

Edward Snowden’s public unveiling of the National Security Agency’s Prism surveillance program could cause U.S. providers of cloud-based services to lose 10% to 20% of the foreign market — a slice of business valued at up to $35 billion.

A new report from the Information Technology & Innovation Foundation (ITIF) concludes that European cloud computing companies, in particular, might successfully exploit users’ fears about the secret data collection program to challenge U.S. leadership in the hosted services business.

Daniel Castro, author of the report, acknowledges that the conclusions are based, so far, on thin data, but nonetheless argues that the risks to U.S. cloud vendors are real.

Indeed, a month prior, the Cloud Security Alliance reported that in a survey of 207 officials of non-U.S. companies, 10% of the respondents said that they had canceled contracts with U.S. service providers after Snowden’s leak of NSA Prism documents earlier this year.

“If U.S. companies lose market share in the short term, it will have long-term implications on their competitive advantage in this new industry,” said Castro in the ITIF report. “Rival countries have noted this opportunity and will try to exploit it.”

To counter such efforts, the U.S. must challenge overstated claims about the program by foreign companies and governments, said Jason Weinstein, a partner in the Washington office of law firm Steptoe & Johnson and a former federal prosecutor and deputy assistant attorney general specializing in computer crime.

“There are a lot of reasons to be concerned about just how significant those consequences will be,” Weinstein said. “The effort by European governments and European cloud providers to cloud the truth about data protection in the U.S. was going on well before anyone knew who Edward Snowden was. It just picked up new momentum once the Prism disclosures came out.”

Weinstein contends that European countries have fewer data protection rules than the U.S.

For example, he said that in the U.K. and France, a wiretap to get content can be issued by a government official without court authority, but that can’t happen in the U.S.

“U.S. providers have done nothing other than comply with their legal obligations,” he said. But because of Snowden’s leaks, “they are facing potentially significant economic consequences.”

Gartner analyst Ed Anderson said his firm has yet to see any revenue impact on cloud providers since the Prism disclosures, but added, “I don’t think Prism does U.S. providers any favors, that’s for sure.”

Nonetheless, Anderson added, “I think the reality is [the controversy] is likely to die down over time, and we expect adoption to probably continue on the path that it has been on.”

One reason why U.S. providers may not suffer is because “the alternatives aren’t great if you are a European company looking for a cloud service,” he said.

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Oracle Issues Massive Security Update

Oracle has issued its critical patch update advisory for July, plugging a total of 89 security holes across its product portfolio.

The fixes focus mainly on remotely exploitable vulnerabilities in four widely used products, with 27 fixes issued for the Oracle Database, Fusion Middleware, the Oracle and Sun Systems Product Suite and the MySQL database.

Out of the 89 security fixes included with this update, the firm said six are for Oracle Database, with one of the vulnerabilities being remotely exploitable without authentication.

Oracle revealed that the highest CVSS Base Score for these database vulnerabilities is 9.0, a score related to vulnerability CVE-2013-3751, which affects the XML Parser on Oracle Database 11.2.0.2 and 11.2.0.3.

A further 21 patched vulnerabilities listed in Oracle’s Critical Patch Update are for Oracle Fusion Middleware; 16 of these vulnerabilities are remotely exploitable without authentication, with the highest CVSS Base Score being 7.5.

As for the Oracle and Sun Systems Products Suite, these products received a total of 16 security fixes, eight of which were also remotely exploitable without authentication, with a maximum CVSS Base Score of 7.8.

“As usual, Oracle recommends that customers apply this Critical Patch Update as soon as possible,” Oracle’s director of Oracle Software Security Assurance Eric Maurice wrote in a blog post.

Craig Young, a security researcher at Tripwire commented on the Oracle patch, saying the “drumbeat of critical patches” is more than alarming because the vulnerabilities are frequently reported by third parties who presumably do not have access to full source code.

“It’s also noteworthy that […] every Oracle CPU release this year has plugged dozens of vulnerabilities,” he added. “By my count, Oracle has already acknowledged and fixed 343 security issues in 2013. In case there was any doubt, this should be a big red flag to end users that Oracle’s security practices are simply not working.”

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Oracle Changing Berkeley

Oracle has changed the license of its embedded database library, Berkeley DB. The software is widely used as a key-value store within other applications and historically used an OSI-approved strong copyleft license which was similar to the GPL.

Under that license, distributing software that embedded Berkeley DB involved also providing “information on how to obtain complete source code for the DB software and any accompanying software that uses the DB software.”

Now future versions of Berkeley DB use the GNU Affero General Public License (AGPL). This says “your modified version must prominently offer all users interacting with it remotely through a computer network … an opportunity to receive the Corresponding Source of your version.”

This will cause some problems for Web developers using Berkeley DB for local storage. Compliance has not really been an issue because they never “redistributed” the source of their Web apps.Now they will have to make sure their whole Web app is compliant with the AGPL and make full corresponding source to their Web application available.

They also need to ensure the full app has compatible licensing. Practically that means that the whole source code has to be licensed under the GPLv3 or the AGPL.

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