Also: IBM joins Liberty Alliance; Microsoft sees record quarter; California state agency suffers security breach; Cisco to buy Perfigo; Verizon expands FTTP plans;Quantum to grab Certance
Qwest last week agreed to pay $250 million to settle charges by the Securities and Exchange Commission that the company committed “massive financial fraud” by improperly booking $3.8 billion in revenue and deceiving investors about it. In a 56-page complaint, the SEC alleged that Qwest executives approved a scheme to book one-time revenue from the sale or trade of fiber-optic capacity as recurring revenue from operations. Qwest agreed to the settlement without admitting or denying the allegations.
IBM has become the latest company to join the Liberty Alliance, a global consortium aimed at developing standards for managing user identities. IBM joins Oracle and Intel as a backer of the effort, which Sun leads. Liberty Alliance was established in 2001, but IBM initially was reluctant to back the consortium, choosing instead to pursue its own identity management standards. But as Liberty gained momentum, customer demand pushed IBM to work with Liberty’s specifications. IBM signed a deal earlier this year with Orange SA, France Télécom’s mobile division, to create a single sign-on service for Orange’s 50 million cellular phone customers that complies with the Liberty specifications. The initiative is one of the largest so far using the Liberty guidelines, and is touted by the consortium as a vote of confidence in its work.
Microsoft set a record for revenue and profit in its fiscal first quarter, but the company saw a drop in unearned revenue, an indication that renewals in its volume-licensing program could be slowing. For the fiscal first quarter of 2005, Microsoft reported an 11% increase in profit over the same quarter a year ago from $2.6 billion to $2.9 billion. Revenue was up 12% with $9.19 billion in fiscal first quarter 2005 over the $8.22 billion from the same quarter in 2004. Analysts polled by Thomson First Call had been expecting revenue of nearly $9 billion. But the news wasn’t as rosy on unearned revenue, which is a reflection of the health of Microsoft’s volume licensing programs, which include Select, Open and Enterprise Agreement contracts. Unearned revenue was down $395 million from $8,177 billion to $7,782 billion, slightly more than Microsoft has predicted, over the final quarter of 2004, which ended in June.
California’s Health and Human Services agency last week disclosed that a computer hacker broke into the network of the University of California at Berkeley where a researcher had stored the names, addresses, telephone numbers, Social Security numbers and birth dates of people giving or receiving care under California’s In-Home Supportive Services program since 2001. UC Berkeley indicated the security breach occurred at the end of August and that it notified the state at the end of September. A state official said the FBI and state agencies are investigating.
Cisco last week announced the intent to acquire privately held Perfigo, a firm that markets a product called CleanMachines, for $75 million. Cisco indicated that the CleanMachines software, which evaluates desktop machines and scans for vulnerabilities for purposes of policy enforcement, would help play a role in the Cisco-led Network Admission Control program launched last year with anti-virus vendors McAfee, Trend Micro and Symantec. Cisco already licenses CleanMachines and made it available to Cisco customers.
Verizon last week said it is expanding its fiber-to-the-premises rollout to six more states. The carrier plans to deploy FTTP facilities and services to homes and businesses in Virginia as well as in parts of Delaware, Maryland, Massachusetts, New York and Pennsylvania – bringing to nine the total number of states where FTTP work is underway. The company had previously announced FTTP deployments in California, Florida and Texas. Verizon plans to pass 1 million homes and businesses with the new technology this year, and 2 million additional homes and businesses next year. The carrier also said it will hire between 3,000 and 5,000 new employees by the end of next year to help build the network, and will invest $800 million in FTTP this year. The fiber facilities will support Verizon’s new FiOS data service, which offers download speeds of 5M, 15M and 30M bit/sec. Upstream speeds are up to 2M bit/sec for the first two products and 5M bit/sec for the third.
Storage vendor Quantum last week announced it will buy Certance, a manufacturer of tape-based storage devices. The $60 million transaction, which is subject to antitrust review, is expected to close by year-end. Certance sells storage devices for small and midsize businesses based on the digital audio tape/digital data storage and Linear tape open tape formats.
