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In brief: Fiorina sees no ‘fourth-quarter budget flush’

Sep 27, 20044 mins

Plus: Microsoft to give governments Office 2003 source code; Authorize.Net struck by DDoS; Oracle extends PeopleSoft bid; Sanjay Kumar pleads not guilty to securities fraud charge; Commerce One may file for bankruptcy.

Not expecting a rush of IT spending during the last three months of the year, HP Chairman and CEO Carly Fiorina said last week that IT buyers have become smarter and more discriminating in their IT purchasing than they were five years ago. She added that they now realize that technology spending sometimes can be a “bad thing.”

Speaking to financial analysts at the Banc of America Securities Investment Conference in San Francisco, Fiorina dismissed the idea that corporate budget surpluses would drive an IT spending increase in the fourth quarter. “For each of the last three years and certainly this year as well, there’s been a lot of talk that we’re going to see a fourth-quarter budget flush,” she said. “I just don’t see it happening . . . because customers have gotten a lot more sophisticated.”

Microsoft last week said it would give governments access to the source code for Office 2003, one of the company’s two primary revenue generators, as part of its nearly 2-year-old, no-fee Government Security Program. The shared source offer, which is similar to a program to share Windows desktop source code, gives national governments and international organizations access to source code and technical information about Office 2003. Microsoft said the British government, one of its most loyal overseas customers, is among the first participants. The move comes at a time when Microsoft is coming under increasing pressure from open source software, especially OpenOffice. Governments in Germany, Hungary, France, Italy and just last week Iran have either adopted or are seriously considering open source projects.

Card-payment processor Authorize.Net, which provides an Internet gateway for credit- and debit-card authorizations on behalf of 100,000 merchants and their online shopping customers, last week suffered a crippling distributed denial-of-service attack for several days from an unknown source. The distributed DoS attack, which disrupted Authorize.Net’s payment processing and strained the resources of its customer support center, was reduced to an intermittent network delay by last Wednesday.

Lightbridge, which owns Authorize.Net, received a demand for money associated with the distributed DoS attack, said spokesman Glenn Zimmerman. While Lightbridge was not at liberty to provide details about the possible attackers or the extortion because it is working with the FBI to investigate the crime, Zimmerman said the firm did not bend to the attacker’s demands for money. Lightbridge said it will also quickly be deploying technologies aimed at mitigating distributed DoS attacks.

Oracle has again extended its $7.7 billion cash offer for PeopleSoft. Shareholders now have until Oct. 8 to tender their shares. Last week’s extension came two weeks after a federal judge in San Francisco sided with Oracle by ruling that an acquisition of PeopleSoft would not be anti-competitive. The Department of Justice sought to block the hostile takeover on those grounds and battled Oracle during a four-week trial in June. Oracle is offering $21 per share. The offer has been extended several times already and was set to expire on Sept. 24. PeopleSoft is fighting Oracle’s takeover attempt as its board of directors has unanimously rejected each of Oracle’s offers as inadequate.

Former Computer Associates CEO Sanjay Kumar pleaded not guilty last week to charges of securities fraud and obstruction of justice stemming from a two-year investigation into accounting fraud at the software company. Kumar’s arraignment in U.S. District Court in Brooklyn, N.Y., came after the company agreed to pay $225 million to past and current shareholders to settle charges the company improperly booked $2.2 billion in revenue.

Stephen Richards, CA’s former head of worldwide sales, also pleaded not guilty last week to fraud and obstruction charges. Kumar denied any wrongdoing in a statement issued by his attorneys and said he expects to be exonerated. CA’s former general counsel and senior vice president, Stephen Woghin, pleaded guilty last week to similar charges for his role in what the government called a company-wide accounting fraud scheme.

Commerce One, a provider of supplier-relationship-management technology and former high-flyer during the dot-com boom, said last week that it might file for bankruptcy.

The company said in filing with the Securities and Exchange Commission that operating expenses continue to outpace cash flow, and that it has about $700,000 left on hand. “We’re currently considering our alternatives, including a significant reduction or discontinuation of our operations, other expense reductions, and/or a sale of all or a portion of our assets. We are currently pursuing discussions with potential buyers of our assets, including our supplier-relationship-management business,” the company said in its filing.