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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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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Is Apple Doomed?

The necromancy department of Apple has been summoning the spirit of Steve Jobs in the hope of turning around its current dismal growth figures. For a while now, even amongst Apple fanboys, there has been a belief that Jobs’ Mob has gone done the tubes since Jobs croaked.

It is a myth of course, Jobs’ specialty was not innovation but to market a working ideas as if it were his own. But either way Apple is attempting to try and convince everyone that the new iPhone was personally designed by its former CEO. Even after being dead for a while now, and having no impact over the disasters the company has since suffered, Jobs apparently was on board for the iPhone 5S.

According to Apple’s government liaison Michael Foulkes, Jobs oversaw the design of two models of iPhone to go on sale after his death. We suspect that it will take full resurrection before anyone takes this particular spin seriously. If Jobs could really see into the future and predict where his toys would be three years after he died, we would have thought he would have also seen that was a stupid idea not to accept conventional medical treatment for his cancer until it was too late.

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Can Blackberry Be Sold?

Struggling smartphone maker BlackBerry is reviewing several options that could include joint ventures, partnerships or an outright sale, as the company’s leading shareholder steps down from its board in a possible prelude to taking a different role.

BlackBerry, which pioneered on-your-hip email with its first smartphones and email pagers, said on Monday it had set up a committee to review its options, sparking debate over whether Canada’s one-time crown jewel is more valuable as a whole or snapped up piece by piece by competitors or private investors.

The company said Prem Watsa, whose Fairfax Financial Holdings Ltd is BlackBerry’s biggest shareholder, was leaving the board to avoid a possible conflict of interest as BlackBerry determines its next steps.

The resignation of Watsa, often described as Canada’s version of Warren Buffett, suggests Fairfax may be part of a solution.

BlackBerry, once a stock market darling, has bled market share to the likes of Apple Inc and phones using Google Inc’s Android operating system, and its new BlackBerry 10 smartphones have failed to gain traction with consumers.

Blackberry shares rose 7.5 percent to $10.80 in New York and C$10.84 in Toronto in afternoon trading. But the shares remain well below the levels seen in June, before the company reported dismal results that included poor sales of the BlackBerry 10 phones it viewed as key to a successful turnaround.

The share price peaked at about C$150 in June 2008.

A clean balance sheet makes the smartphone seller an enticing takeover candidate. Like Dell Inc, it is a tech icon in need of a turnaround. But BlackBerry’s cash flow is worse, meaning leverage would be extra risky.

The company’s assets include a well-regarded services business that powers BlackBerry’s security-focused messaging system, worth $3 billion to $4.5 billion; a collection of patents that could be worth $2 billion to $3 billion; and $3.1 billion in cash and investments, according to analysts.

But the smartphones that bear its name have little or no value, and it may cost $2 billion to shutter that unit, the analysts said.

Analysts expressed skepticism about the new committee, noting that BlackBerry announced similar steps more than a year ago when it hired JPMorgan and RBC as financial advisers. A source said both are still involved in the strategic review.

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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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Will SoftBank Raise The Stakes?

SoftBank Corp President Masayoshi Son may get a less than enthusiastic reception when he comes to the United States this week to meet Sprint Nextel Corp’s major shareholders, as he tries to drum up support for the Japanese company’s proposed takeover of the No. 3 U.S. wireless service provider.

SoftBank’s billionaire founder, who proposed a $20 billion deal for a 70 percent stake in the U.S. wireless carrier, said on Tuesday that he would discuss the deal with shareholders in a bid to fight off rival Dish Network, a U.S. satellite TV provider, which offered Sprint a $25.5 billion bid.

The executive for the Japanese mobile operator may have a tough time selling the deal, as several shareholders have told Reuters that SoftBank would need to raise its bid in order to win their vote at Sprint’s June 12 shareholder meeting.

Two big Sprint shareholders, Paulson & Co and Omega Advisors, have publicly said the Dish offer looks better than SoftBank’s. Other shareholders said on Tuesday that they would go to meet Son during his trip but they were skeptical about his arguments against Dish.

While Dish’s offer would provide more cash upfront to shareholders, Son has argued that Dish would not be good for the company as it would require Sprint to take on a heavy debt load. He also promises a July 1 close for the deal and warned that Dish regulatory approval may not come until 2014.

Robert Lynch, the director of research for Westchester Capital Management, which owned over 14 million shares in Sprint at the end of December, said that the prospect of a quicker deal close would not be enough to win over his company’s vote.

“We think right now that Dish has a better offer on the table. We think SoftBank’s going to have to improve their offer,” Lynch said, noting that SoftBank’s comments about the prospective debt leverage from a Dish deal were overdone.

“We think the leverage is manageable. We think there are synergies here. While raising the leverage is something we looked at we think its not as big of a obstacle as SoftBank is saying,” Lynch said.

A big Sprint investor who asked not to be named said they were happy to meet with Son while he is in the United States but that they were hoping to convince him to raise his bid.

“If Mr. Son wants to own Sprint he will have to raise his bid,” said the person from a top 25 Sprint shareholder who did not want to be quoted by name ahead of the meeting.

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Will Oracle Retire MySQL?

The founder of MySQL Michael Widenius “Monty” claims that Oracle is killing off his MySQL database and he is recommending that people move to his new project MariaDB. In an interview with Muktware Widenius said his MariaDB, which is also open source, its on track to replacing MySQL at WikiMedia and other major organizations and companies.

He said MySQL was widely popular long before MySQL was bought by Sun because it was free and had good support. There was a rule that anyone should get MySQL up and running in 15 minutes. Widenius was concerned about MySQL’s sale to Oracle and has been watching as the popularity of MySQL has been declining. He said that Oracle was making a number of mistakes. Firstly new ‘enterprise’ extensions in MySQL were closed source, the bugs database is not public, and the MySQL public repositories are not anymore actively updated.

Widenius said that security problems were not communicated nor addressed quickly and instead of fixing bugs, Oracle is removing features. It is not all bad. Some of the new code is surprisingly good by Oracle, but unfortunately the quality varies and a notable part needs to be rewritten before we can include it in things like MariaDB. Widenius said that it’s impossible for the community to work with the MySQL developers at Oracle as it doesn’t accept patches, does not have a public roadmap and there was no way to discuss with MySQL developers how to implement things or how the current code works.

Basically Oracle has made the project less open and the beast has tanked, while at the same time more open versions of the code, such as MariaDB are rising in popularity.

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Will Zynga Survive?

Nobody expected Zynga’s results for this quarter to be great, so nobody was exactly surprised when the company announced a decline in almost every number that matters. It turned a small profit, but that’s a bright spot in an otherwise deeply unimpressive set of results. The really important figures – the number of people playing and, crucially, the number of people paying – are all down. Zynga’s business may not be hemorrhaging money, but it’s losing audience, and in a business so heavily focused on scale, that’s a really bad thing.

The company likes to present itself as being on the cusp of a turnaround, or perhaps already embarked upon a slow but steady turn. If so, it’s the oddest turnaround imaginable. The firm’s MAUs – Monthly Active Users – dropped from 292 million to 253 million year on year, so nearly 40 million people have simply stopped logging in to a Zynga game even once a month. Worse still, though, is the disproportionate fall in the number of Monthly Unique Payers – those who make at least one transaction during a month-long period. This number fell from 3.5 million to 2.5 million, a precipitous year-on-year drop of almost 30%.

It bears emphasising just how bad that actually is. For a social gaming business, MUPs are the real customers. There is huge value to having a large audience (MAUs), of course, and companies need to be very careful about not trying to force players into becoming paying customers before they’re good and ready – but ultimately, non-paying users are like footfall in a store. They’re not customers, in a strict business sense. Zynga’s not-quite-so-bad loss of 13% of its players (MAUs) is a side-show compared to the fact that it’s lost 30% of its paying customers (MUPs). Imagine, by comparison, a shop loudly announcing that the number of people walking past its window had fallen 13%, distracting from the fact that the number who came in and bought something had fallen 30%.

Of course, the two figures are related, and the disproportionately large drop in MUPs figures into that relationship to some degree. The process of encouraging players of a social game to spend money is focused around a number of principles, but the key temptation lies in buying items or currency that will give you the ability to match or overtake your friends’ progress, or to create a fantastic character, farm, castle or whatever which will “impress” the many friends who are also playing the same game.

For that psychology to work, of course, you actually need to have lots of friends playing the game. Most social games, as the name suggests, don’t work terribly well if you don’t have friends active in the game. “Active” is a key aspect here too – if you see that your friends are losing interest, logging in less often or spending less time tending to their farm, castle, town or whatever, then you also tend to lose interest rapidly. Hence, a game that gives the impression of being “in decline” – with players losing interest in some visible manner – will likely experience a precipitous decline in revenue, because even though lots of people are still playing, the sense of decline removes the key psychological drive to spend money on the game. (It doesn’t help, of course, that social game operators have established a pattern of shutting down unsuccessful games rapidly, which creates a feedback loop in which players are unwilling to spend money on a game they think might be in commercial trouble.)

The psychology of what Zynga is experiencing is clear enough, then, but the figures on the bottom line are still pretty dreadful. Whatever the reasons or the mechanism, the company is losing paying customers, and that kind of damage is extremely hard to recover from.

A stark contrast to Zynga’s woes can be found on the other side of the Pacific, where mobile developer GungHo this week topped a $9 billion valuation on the Osaka Stock Exchange, making it into a larger mobile gaming company than even fellow Japanese giants GREE and DeNA. GungHo’s valuation is ridiculous, a bubble that will inevitably pop in relatively short order, but there’s a genuine success driving the excitement – a single game, Puzzle and Dragons, which is the most successful mobile game in Japan (and is launching in other territories as well). Puzzle and Dragons reportedly makes about $2 million a day; it certainly makes enough to justify prime-time adverts in evening slots on Japanese TV.

GungHo is an extreme example of a phenomenon which is completely unavoidable in the social and casual game sphere. Mobile utterly dominates this sphere. Facebook, it turns out, was a flash in the pan in gaming terms. Smartphones, and to some extent tablets (though they’re arguably more “midcore”), are the social gaming platforms of today. Zynga, for all its cash (the company still has plenty of liquid assets), its clout and its former dominance, still hasn’t made a successful transition to being a mobile-first company. Clinging to the wreckage of the Facebook social gaming model which it so successful exploited (in doing so, perhaps hastening the downfall), Zynga is being overtaken time and again by smaller companies who have mobile gaming in their DNA from the outset. With this week’s results came a fresh claim that the company will be focusing more heavily on mobile, but a good, nimble firm would have accomplished that focus shift 12 months ago, at least. Zynga right now feels like it’s plodding along in everyone else’s wake.

The other great white hope for the company, of course, is gambling. It has cautiously launched gambling services – what it calls “real money gaming” – in the UK, and wants to expand into other territories. Plenty of pundits like to tap their noses sagely and suggest that Zynga will become a gambling giant down the line – although in doing so, they’re just following in the well-worn footsteps of a large number of video games industry pundits, executives and even developers who have regarded the gambling industry with something like the avaricious wonder of wannabe prospectors hearing about a new gold rush.

I don’t see any gold rush for Zynga in “real money gaming”. Investors and executives consistently overstate the allure and possibilities of this kind of gaming, because by dint of being investors and executives, they tend to be exactly the sort of person who is very attracted to gambling risks (you wouldn’t have an investment, or a career, anywhere within spitting distance of tech stocks otherwise). Moreover, by moving into the online gambling arena, Zynga is entering a market that’s already incredibly crowded with companies who are deeply, deeply expert in this field – not just in the customer-facing psychology of the casino, but also in the legal and regulatory minefield of operating a gambling enterprise online. Many major markets simply aren’t open to this kind of business; most others require you to jump through all manner of hoops simply in order to set up shop. The notion of Zynga having an open goal in “real money gaming” is born either from complete naivety or utter desperation – it could make money in the gambling business, but it has its work cut out for it.

It’s worth highlighting, all the same, that Zynga did make a small profit this quarter – it may only be one bright spot, but it’s bright all the same. The company’s scale still also arguably works in its favour, allowing it to buy talent and IP that smaller firms could never afford. Yet after several grim quarters, it’s also worth highlighting that talk of a “turnaround” is optimistic at best. Something about Zynga – its culture, its leadership or a combination of both – is blocking this company from moving in the agile, intelligent way a firm in its position desperately needs. Inventing fairy stories about the magical potential of gambling games or constantly reassuring the world that a pivot to mobile is definitely happening any day now won’t cover up the cracks for much longer. If Zynga wants the world to buy the “turnaround” story, it needs to start showing evidence; if not, it needs to start making big changes, starting right at the top.

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Will Intel Drop Itanium?

Intel has scaled back plans for its next Itanium chip, prompting observers the question Intel’s commitment to the chip.Intel said the next version of Itanium, codenamed Kittson, will be a 32nm part. It will not migrate to a more advanced process. The new chips will use the same socket as the existing Itanium 9300 and 9500 chips.

Analyst Nathan Brookwood said the move is Intel’s idea of an exit strategy.

“It may very well be that Itanium’s time has come and gone,” he said.

Gartner analyst Martin Reynolds told Computerworld that Itanium might see a new process in the future, if it proves successful enough to make the investment worthwhile. However, he does not expect any more major updates to the architecture.

Itanium launched in 2001 and it quickly became a running joke in the industry. It never achieved the volumes expected by Intel and AMD seized the opportunity to take on Intel with 64-bit Opterons. However, Itanium soldiered on for years, although many vendors stopped developing software for the chip.

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