Vogel Internet, Information Technology and e-Discovery Blog : Texas Internet, Information Technology, eCommerce & E-Discovery Lawyer & Attorney Peter S. Vogel : Gardere Wynne Sewell Law Firm : Dallas TX

With a barrage of antitrust headlines it hard to know which one has the greatest impact on the Internet and IT community. But clearly New York’s antitrust filing against Intel in Delaware is near the top of the list. Why Delaware? Apparently NY is using the on-going Advanced Micro Devices (AMD) antitrust suit against Intel as a form of piling on, not to mention that AMD is building a new $4.2 billion plant in NY. NY’s antitrust claims are a lot like the EU antitrust findings that Intel’s business practice of paying computer manufacturers rebates and incentives for using Intel chips rather than those of AMD (or anyone else).

Oracle’s Plan to Acquire Sun Hit an EU Roadblock

Apparently the EU is not pleased that Oracle, the database market leader, intends to acquire Sun which owns the open source database product MySQL without selling off MySQL. The EU is concerned about Oracle’s competitors Microsoft and IBM even though Oracle is the dominant database company. But some think that Oracle’s acquisition of Sun and My SQL will be transformational to the IT industry by providing a different market against Microsoft.

Challenge to EU Browser Settlement

Google, Mozilla, and Opera are still concerned about the Microsoft settlement even though the EU approved Microsoft’s plan to allow customers a choice of browsers, not automatically only provide Microsoft’s Internet Explorer. Net Applications recent market share reports indicates that “Internet Explorer has a 67 percent share of the global browser market,... Firefox has 24 percent, Apple’s Safari, 4.4 percent, Google’s Chrome, 3.5 percent, and Opera, 2 percent.” On the surface it seems that Microsoft’s competitors should be able to increase their EU market share based on the settlement, but stay tuned to see how the EU reacts to these new complaints.

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On the heels of Dell’s purchase of Perot Systems, Xerox announced that it was purchasing Affiliated Computer Systems (ACS) for $6.4B. Dell just agreed to buy Perot Systems for $3.9B. Now that 3 major hardware companies have purchased outsourcing vendors the outsourcing/sale of hardware market will get more interesting. ACS claims it is the “world's largest diversified business process outsourcing (BPO) firm, ACS is a $6.5 billion company with revenue growth of 6 percent and new business signings of $1 billion in annual recurring revenue during its fiscal 2009.”

Other Developments with Perot Systems

Apparently not everyone at Perot Systems thinks the purchase by Dell is so wonderful as some Perot Systems’ shareholders filed suit to stop the sale. In the meantime Perot Systems announced that it will acquire BearingPoint China Consulting and made the following statement:

BearingPoint China Consulting has earned numerous industry awards. In 2008, the China Software Association and ERP world.net ranked the firm among the "Top 10 IT Consulting Firms" in China, and named CEO Machan among the "Top 10 People of the Year in the IT Industry" in China. The firm also was chosen as "Most Trusted Consulting Firm" in 2007 by the China Enterprise Confederation.

Of course this acquisition is subject to U.S. Bankruptcy Court approval as well as that of the Chinese government. It seems that Perot Systems is not sitting idle while the Dell acquisition is taking place.

Where are We Going? Proprietary Systems?

What’s going on in the outsourcing world with these major acquisitions? One answer might be that outsourcing vendors will now try to tie their customers to them more closely by creating special hardware/software systems that make leaving more difficult and expensive. Remember a year ago that Oracle and HP announced that specialized hardware systems for Oracle databases. Sounds a lot like the old minicomputer days when every hardware manufacturer had a proprietary operating system and as a result customers found it cost prohibitive to change vendors…hard to image in today’s world of Windows Servers and Linux. Time will tell.
 

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Watching the world economy meltdown in the past year it’s not much of a surprise that Google value increased by about 25% to number 7 in the world with an estimated value to an $32B! Other technology companies did not fare as well as reported by BusinessWeek and Interbrand:IBM increased by about 2%, Microsoft lost about 4%, Intel declined by 2%, and Oracle lost 1%. So Google’s growth during the down economy means that Google must be doing many things right.

Google Could Become The Leader Source of News

With the announcement of Fast Flip Google now has a site where users can get all the news they need without ever leaving Google. Google reports that the “service is being initiated with the cooperation of about three dozen publishers, including major news outlets like BBC News, The New York Times, The Washington Post and Newsweek; magazines like Cosmopolitan, The Atlantic, Esquire and Good Housekeeping; and Web-only publications like TechCrunch, Salon.com and Slate.” In the meantime Microsoft added a service to Bing called Visual Search which adds a new way to view news and expand the uses of Bing search engine. Given the troubles in the newspaper world is any wonder that Google and Microsoft have new plans to take greater roles in news?

Google Finally Using DoubleClick to Boost Display Ads

After making a fortune on small text ads now Google will make redirect its energy to boosting display ads. No one should be surprised by Google use of DoubleClick to migrate to displays ads and be in direct competition with Yahoo! Yahoo! is the current king of display ads and Google’s move will definitely impact Yahoo!’s advertising revenue. We need to stay tuned to see how things play for Google and Yahoo! Stay tuned.
 

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A recent review of a vendor’s proposed contracts for a new ERP (Enterprise Resource Program) system reminded me why so many implementations fail and lead to litigation - vendors generally underestimate the scope of the systems (on purpose to keep the price tag low, or just don’t know what they are doing) and as a result a large number of ERP implementations are failures. Actually Y2K may be the blame since as 2000 approached many companies decided to replace aging systems, many of which were silo applications systems did not share data (like HR not sharing data with accounting). So SAP, Oracle, PeopleSoft (now part of Oracle), and many others offered unified systems to allow companies to share data between all business operations and activities referred to as ERP systems.

The Ten Commandments of IT Contracts Apply

Since an ERP system includes software, hardware, implementation services, and on-going support clearly I believe that my Ten Commandments of IT Contracts apply. My Ten Commandments are based on negotiating and litigating hundreds of IT contracts:

1st Commandment – No Computer Project is ever completed on time
2nd Commandment – No Computer Project is ever complete
3rd Commandment – If you cannot see the software, it does not exist
4th Commandment – New versions of operating systems never work
5th Commandment – There are no Industry Standards
6th Commandment – Do not buy brand new hardware
7th Commandment – Do not buy brand new software
8th Commandment – Sales people have answers to every question
9th Commandment – Sales people know absolutely nothing
10th Commandment – Individuals who negotiate contracts are never around later

After posting my blog on the Ten Commandment two clients offered Commandments 11 and 12:

11th Commandment - Any IT development project large enough to have its own acronym name (BEST, BIGGEST, CYCLONE, etc) will fail
12th Commandment– Before every project, select a scapegoat and do not invite that person to meetings

Surely some readers may have others Commandments to offer, so please let me know.

What’s Different about ERP Implementations?

Often times a third party is responsible for the ERP implementation and on-going support, and the software vendor only offers a license. Depending on the software and vendors in any particular market this may be the norm. But the ideal circumstance is that the software vendor for the ERP system also does the implementation and on-going support, but prudent contract negotiations are still required.

The EPR vendor whose contracts I reviewed recently included two agreements, one a license and another for system implementation. However if the implementation does not go well, the customer should not be stuck with the software. So my advice to the customer is to sign one agreement for all software, implementation services, and on-going support. Other critical components were missing from this proposed vendor agreement – a schedule of events and a statement of work. Customers should never sign contracts to acquire ERP systems if there is no precise schedule of events and clear responsibilities of the parties in a statement of work. Detailed schedules and complete statements of work provide help because this forces the parties to think through what will happen, and payments can be based on the completion of major milestones in the schedule based on the statement of work.

With a little planning and foresight disastrous ERP implementation systems can be avoided, but it’s critical that customers user lawyers and consultants who have been through the wars to avoid major disasters.
 

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