consolidation

As the software industry consolidates, vendors gain while customers lose

The Wall Street Journal carried a story the other day about the winners and losers in the software industry's rush to consolidation. As you might guess, many of the benefits consolidators promise never pan out. In fact, industry consolidation - whatever the industry - tends to lead to higher prices because it constrains choice for buyers.

While the voluminous deal activity has meant a bonanza for shareholders -- many software stocks have soared this year, partly because of the hot merger landscape -- Mr. Gonick's [CIO, Case Western Reserve University] experience highlights the flip side: As the big software companies flesh out their integration plans internally, customers on the outside are left with unanswered questions about their future. It often takes years for software makers to integrate all the products they have bought -- if they manage to at all -- making it hard for customers to decide what to buy in the meantime. Some customers worry about losing negotiating power in the long run as the number of product choices dwindles. And all the dealmaking can crimp a CIO's ability to plan, since it's unclear which software makers will survive.

What can be done about it? Not much.… Read more

IBM to acquire Cognos for $5 billion

IBM on Monday announced plans to buy business intelligence software company Cognos in a $5 billion all-cash transaction.

The acquisition, which was rumored for several months, continues IBM's strategy of acquiring companies to fill out its software portfolio and boost earnings growth.

Cognos, a public company based in Ottawa, Canada, provides tools for building business reports and business performance management dashboards.

The software will complement IBM's existing set of products for data warehousing and information management.

Cognos' existing products will "match nicely with (IBM's) middleware and software products," Steve Mills, senior vice president and group … Read more

Big Blue scraps servers for big power savings

IBM intends to undertake a massive server consolidation in an effort to make its data centers more "green."

The computing giant on Wednesday said it will transfer the computing load now on 3,900 servers onto about 30 System z mainframes running Linux.

That transfer will reduce power consumption at IBM's 8 million square feet of data centers by 80 percent over the next five years.

Earlier this year, IBM officially launched what it calls its Big Green Innovations program to offer products and services around environmental conservation and energy efficiency.

Data centers represent large consumers of … Read more

The New York Observer on the New York Times on News Corp.

There's something kind of funny about a blog entry around a recent article in one outlet indicating that another newspaper is working on an expose about yet another media outlet, but that really is what this post is about. According to Michael Calderone at the New York Observer, "The New York Times is currently undertaking a major news investigation, led by managing editor Jill Abramson, into News Corp.'s business dealings throughout the world, according to a source with knowledge of the project."

Amidst the heavily hyped negotiations between Murdoch's minions and the Bancroft family who currently own the Wall Street Journal, The New York Times has apparently decided to mount their own investigation in an effort to examine what should be expected from the possible merger. While there is no clear indication what spin the Times will put on the story, it seems unlikely that the paper will conclude that Rupert Murdoch is the patron saint of news media. The New York times is one of the last major independent media outlets (along with the Wall Street Journal - for now), and it's altogether possible that News Corp. may eventually set it's sites on the Times, so I think it is safe to anticipate that this article won't be a puff piece.