Salesforce CEO maintains Vmware is not into cloud computing

Salesforce Chairman and CEO Marc Benioff pulled no punches on the competition in a roundtable Q&A session at Dreamforce 2011 last week where he said VMware and virtualization are important, but don't fit into his and Salesforce's vision of cloud computing.

"I watched the VMware keynote this week," Benioff added (referring to VMware CEO Paul Maritz's keynote address at VMworld in Las Vegas), "They talked about how they have like 50 percent now of the total market of servers that they are on, if I got the number right, and that they have loaded their software onto 50 percent of all servers and that they're that much more efficient and then they said 'and now they're all clouds.' That's now where you got my attention, because putting virtual machines on servers is great and I understand they call it private clouds, but our vision of cloud computing is not that."

VMware did not respond to CRN's request to comment. In the VMworld keynote last week, Maritz said: "We're not immune from cloud fever, we also tend to use this term a lot." Maritz laid out VMware's cloud stack and discussed its charge into the cloud computing market. Maritz also detailed VMware's Cloud Foundry Platform-as-a-Service play, which will compete directly against Salesforce's cloud development platforms like Heroku and Force.com

But Benioff said Martiz's and VMware's private cloud vision isn't cloud computing as he understands it.

"Our vision of cloud computing is multi-tenancy, shared systems and public networks run as a 24x7 public trusted service …," Benioff continued. "If you're talking about more hardware or if you're talking about more software, it's not about the cloud. And the cloud is really this next generation of computing and that's new software and that's new services."

According to Benioff, Salesforce is targeting companies looking to keep close contact with their customers and to create that relationship, Salesforce's social enterprise combines social, mobile and open cloud elements to transform a business.

"We're not selling components. We're not selling virtual machines," Benioff said. "We're not selling hardware. We're selling social enterprise and it's the cloud that makes it possible." While Benioff said that Salesforce still has a strong relationship with VMware -- which Benioff considers a "tremendous" Salesforce partner -- the pair's VMforce partnership for Java development in the cloud may be dissolving slightly as Salesforce adds Java support to Heroku, a Ruby-based development platform Salesforce acquired last year. Though Benioff said VMware's SpringSource technology is integrated into Heroku for Java.

 Benioff said there's a good way for network managers to determine whether a vendor is offering true cloud computing services or virtualization.

"Some of those companies are software companies," he said, according to CloudPro. "They have versions with numbers after it. That is when you know you are dealing with software; if you hear about versions, you know you are not in the cloud." Benioff also dismissed the notion that virtualization is necessary as a migration tool to the cloud, telling attendees at a Q&A session, "I obviously don't believe that and I don't believe we need more software."

"The deviation between Salesforce and VMware is: VMware, VM, virtual machine; they're about virtual machines and about virtualization," Benioff said. "We have a different approach to cloud computing, which is public services."

Firm Announces Investigation of Juniper Networks

Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Juniper Networks, Inc.

Juniper Networks designs, develops, and sells products and services that together provide its customers with network infrastructure that creates responsive and trusted environments for accelerating the deployment of services and applications over a single network. The company was founded in 1996, and is headquartered in Sunnyvale, California.

Robbins Umeda LLP's investigation focuses on whether the directors and officers of Juniper Networks harmed the company and investors by issuing materially false and misleading statements to investors that have damaged the company's value and reputation. Beginning on July 20, 2010, Juniper Networks's fiduciaries allegedly issued improper statements to investors that failed to reflect adverse material facts about technical issues with the company's SRX product line, the impact of increased competition from rival security providers, and high turnover in the company's sales force.

Also at this time, Juniper Networks's Chief Executive Officer Kevin R. Johnson, along with other senior executives, allegedly engaged in a coordinated insider trading scheme to reap over $146.5 million in illicit proceeds from stock options sold while the company traded at inflated prices.

Then, on July 26, 2011, Juniper Networks issued a press release announcing disappointing second quarter results for fiscal year 2011. The press release acknowledged that growth during the quarter was far below Juniper Networks's previous guidance and that, as a result, the company would be forced to lower its full-year guidance for 2011. On this news, shares of Juniper Networks fell considerably to close to $31.17 on July 26, 2011, and then to $24.66 on July 27, 2011.

Robbins Umeda LLP represents individual and institutional shareholders in derivative, direct, and class action lawsuits. The law firm's skilled litigation teams include former federal prosecutors, former defense counsel from top multinational corporate law firms, and career shareholder rights attorneys.

Oracle, HP, IBM activities come under FBI bribery investigations

There are reports that Oracle is under investigation by the US Department of Justice, the SEC and the FBI for bribery in West and Central Africa. Oracle could face stiff penalties of up to $2 million per incident under the US Foreign Corrupt Practices Act which makes it illegal to bribe a government official anywhere in the world. In 2008 Siemens settled its FCPA case with the Feds for an unprecedented $1.6 billion on fines and disgorgement of profits. this would not be unconnected with several complaints from competitors especially in Nigeria where Oracle is in stiff competition with Microsoft, SAP and even IBM for big bucks government sector businesses.

It is expected that Oracle would cooperate fully and quickly with investigators because Federal sentencing guidelines allow for a reduction in penalties in the event of wrong doing if the firm can demonstrate the incident was an anomaly and that it gnerally has an effective compliance and ethics program in place. But avoiding a fine maybe only half the battle. The biggest bottom line impact could be the potential loss of business upon conviction if Oracle is banned from public sector contracting in many countries. Such was the fate of Siemens.

Important to note that no one knows the scale of the alleged offences under investigation nor the strength of the government’s case at this point in time. However, it is public knowledge about the broader scale of the corruption problem in Africa and its consequences. Take Oracle’s West Africa main base Cote d’Ivoire - it ranks an alarming 146th as one of the most corrupt countries on earth in the Transparency International Corruption Perception Index, life expectancy is a miserable 58 years with an average of 3.3 years of education provision and 23% of the population living on less than $1.25 per day.

In fact, Larry Ellison’s personal net worth of $39.5 billion according to Forbes exceeds Cote d’Ivoire’s GNP of $34.5 billion as estimated by the World Bank. Clearly, West African countries such as Cote d’Ivoire are economically vulnerable and create a vortex of social pressure for anyone doing business there. Under conditions of weak local enforcement and weak internal controls, companies can equally be pressured to succumb to the apparent norm of bribing (demand) or they can take their own permission to do so (supply). The results can be tragic as the German Ministry for International development puts it: "Corruption is one cause of poverty. It impedes poverty reduction. Poverty is one cause of corruption. It impedes the fight against corruption".

News of the investigation comes after a run of high profile challenges to Oracle’s reputation including removal from the Nasdaq OMX Sustainability index for lack of sustainability reporting, removal from the FTSE4Good Index for lack of Human Rights protections and a hostile shareholder resolution demanding a board sub committee for sustainability to ensure Oracle ‘walks its talk’ on sustainability.

HP is also currently under investigation for alleged bribery in Russia and IBM settled its FCPA case earlier this year for $10 million. IBM was accused of bribing for business in China and Korea and was found by the SEC to have had ‘deficient internal controls’. According to FTSE4Good criteria the entire tech industry, if engaged in public contracting in high risk countries, must be rated as high risk for bribery. The leading NGO/ think tank on the issue, Transparency International describes the problem of public contracting in high risk countries in its most recent annual report:

The enormous amounts of money flowing from government budgets through procurement create ideal opportunities for corruption. Contracts can be awarded without fair competition and politically connected companies can be favoured over competitors. Companies within the same industry can rig their bids, so each company gets a piece of the pie. Available research shows that corruption can add on as much as 50 per cent of a contract’s value.

The curious thing about the tech sector’s vulnerability to the risk of corruption is that of late it has celebrated the motherhood and apple pie virtues of sustainability for value creation. Its hard then to square up the problems at IBM, HP and Oracle with the promise of a Smarter Planet, A Connected World and an Eco Enterprise respectively. In recent years sustainability has become something of a gold rush though innovators would do well to remember to also take care of the basic hygiene factors - like corruction.

Oregan releases hybrid media browser with digital terrestrial and over the top video capabilities

Oregan Networks, the leading developer of Internet TV receiver technologies, has launched a new hybrid version 4.2 of its software, which delivers Broadcast and Internet Protocol media functionalities in a single software stack. The company has implemented variants for the Latin American, European and Asian markets that have adopted the DVB-T or ISDB-T digital broadcast standards on their paths towards the digital switchover.

As part of its multi-regional hybrid solution for telecom and broadcast operators, Oregan has emphasised the specific requirements of the emerging Broadband and PayTV markets in Latin America, based on the trend for the ISDB-T standard, adopted by the majority of countries in the region, including Brazil, Argentina, Chile and Peru, to become the second most widely spread Digital TV standard.

The Latin American version of Oregan Media Browser provides a blueprint of essential building blocks for delivery of content over broadband and broadcast networks in the region, namely:

Adaptive bitrate internet streaming capability, allowing network operators to address bandwidth-constrained and peak usage network conditions; Broadcast receiver module, supporting ISDB-T International, also known as SBTVD, for either Free-To-Air (FTA) or Conditional Access System (CAS) protected broadcast video; TR-069 and TR-135 module, enabling bidirectional monitoring and control of the Set Top Box, providing essential QoS information related to the performance of the STB as well as monitoring WAN, LAN and Broadcast network status; Home media networking functions, enabling DLNA 1.5 based photo, music and video sharing; End-to-end server and client solution for Remote Upgrade and management of STBs in the field, featuring security and group management capabilities.

Digital Rights Managements (DRM) and Conditional Access System (CAS) implementations, facilitating studio-approved levels of content protection. Oregan's ISDB-T stack is designed to the SBTVD specifications, also known as ISDB-T International, and has been field proven with broadcasts across countries in Latin America, including Argentina, Chile, and Brazil where is has also successfully passed the certification by ANATEL (Agência Nacional de Telecomunicações), the Brazilian telecoms regulator.

Mark G Perry, Oregan's CEO said, "A recent wave of adoption that swept across Brazil, Argentina, Peru, Chile, Venezuela, Costa Rica and other countries preparing for the digital switchover, has clearly demonstrated the significance of ISDB-T, creating a homogenous and maturing market of scale that will facilitate economical price points for hybrid ISDB-T receivers. Oregan's hybrid STB software stack offers telecom operators and manufacturers a rapid entry to the market, to keep pace with the global trend for browser-based content and media delivery across broadcast and IP domains".

Ceragon sees annual losses...keeps up pressure on Aviat Networks

Shares of wireless equipment maker Ceragon Networks Ltd. edged higher Tuesday even as the company reported broadening losses. Ceragon Networks makes equipment used in high-capacity back-end networks that connect wireless towers to the Internet and other central telecommunications networks.

The company recorded $14.4 in charges from the acquisition of Norway's Nera Networks AS in a $48.5 million deal. "Overall Ceragon remains on track with the Nera integration, which should lead to significant benefits in 2012," said Jefferies & Co. analyst Peter Misek. "Also, our checks indicate that wireless backhaul remains one of the main bottlenecks for surging data traffic, and we believe Ceragon will be a key beneficiary."

The company reported a net loss of $17.4 million, or 48 cents per share, on $110.4 million in revenue for the three months ended June 30. That compares with net income of $2.6 million, or 7 cents per shares, on $60.9 million in revenue for the same period a year earlier.

Excluding special items, Ceragon Networks reported a loss of 4 cents per share for the latest quarter. Wall Street on average had expected Ceragon Networks to report a loss of 3 cents per share excluding items on $106.3 million in revenue for the period. Company shares rose 21 cents to $9.75 in midday trading Tuesday.

Revenues for the second quarter of 2011 reached $110.4 million, up 81% from $60.9 million for the second quarter of 2010, and up 10% from $100.3 million in the first quarter of 2011.

Net loss in accordance with US Generally Accepted Accounting Principles (GAAP) for the second quarter of 2011 was ($17.4) million or $(0.48) per basic share and diluted share, compared to net income of $2.6 million in the second quarter of 2010, or $0.07 per basic share and diluted share.

On a non-GAAP basis, net loss for the second quarter, excluding (a) $1.4 of equity-based compensation expenses, and (b)$14.4, million charges related to the Nera acquisition and integration plan, was ($1.6) million , or $(0.04) per basic share and diluted share. Non-GAAP net income for the second quarter of 2010 was $4.6 million, or $0.13 per basic and diluted share (please refer to the accompanying financial tables for reconciliation of GAAP financial information to non-GAAP).

Gross margin on a GAAP basis in the second quarter of 2011 was 21.4% of revenues. Gross margin on a non-GAAP basis was 31.9% of revenues. Operating loss on a GAAP basis in the second quarter of 2011 was ($16.2) million. On a non-GAAP basis operating loss was ($470,000).

The wireless backhaul business, although decades old, has found some new life in the past few years as cellular carrier companies are having to ramp up their data capacity rapidly to accommodate smartphones and iPads. At the same time, most carriers are planning to convert to HSPA and LTE and while carriers are upgrading their cell towers, they tend to upgrade their backhaul at the same time.

Maravedis, a market research company that has long focussed on the backhaul market reported in May,2011 that the microwave backhaul equipment market is expected to surpass US$ 12 billion by 2016. During 2010 they stated PtP microwave backhaul market reached US$ 4.74 billion.

They also estimated that “During the next 5 years the microwave market will continuously grow, mainly driven by the need for operators to deploy new base stations to provide good quality of experience over LTE networks.”

Aviat Networks has a small but significant share of in the wireless backhaul business. They have lost share to the likes of Ceragon and Dragonwave who focused on IP packet transmission while companies like Aviat were making the majority of their revenue from transmitting the legacy TDM circuits that have been typical in the telco industry.

However, the older line companies are gradually getting caught up as they produce more competitive and more IP oriented products. Aviat has lost market share during the past five years, but still is one of the larger shareholders in the industry. They have continued to invest in R&D, while restructuring the business and reducing expenses in other parts of the business.

According to VineSecurity.com, Aviat still has a relatively healthy balance sheet. "IF our optimistic assumptions for growth and profitability could be achieved, we believe the stock could justify price in the $7 range. This indicates that the stock price has already been discounted to reflect recent poor performance" said the report. At current prices near $4.20 the market is already being cautious about Aviat." We agree with the market and we plan to wait and see how the new management executes. If we see a couple of quarters of steady handed execution, we would consider buying at current prices".

Imation to Emphasize Data Security at 2011 Flash Memory Summit

Imation cryptography and information security expert Kevin Vlasich will share the company's insights on flash memory security at the sixth annual Flash Memory Summit on Aug. 8, in Santa Clara, Calif. In addition, Vlasich will also outline the best technology practices for highly secure flash design.

Conference goers will hear Vlasich present “Tradeoffs in Secure Flash Design,” during the pre-conference workshop on Aug. 8 from 1 to 4 p.m. Vlasich will discuss considerations for hardware and software design in secure flash memory devices, emphasizing considerations for data confidentiality, integrity and legal compliance while preserving portability and performance. Immediately following the workshop, Vlasich will serve as a panelist for a discussion, “Future of Flash Security,” from 4 to 5 p.m.

Imation, a global technology company dedicated to helping people and organizations store, protect and connect their digital world, provides a leading portfolio of products designed to secure “data at rest” on storage media and devices. Imation's Defender Collection™ is the industry's broadest portfolio of products to secure information stored on portable devices, including USB flash drives that feature 256-bit AES encryption, FIPS 140-2 Level 3 validation and TAA compliance, and options for strong password and biometric authentication.

Data security is an important strategic growth opportunity for Imation, which has recently acquired data security companies ENCRYPTX and MXI Security, adding to Imation's data security technologies and product portfolio.

Vlasich, a Certified Information Systems Security Professional (CISSP), oversees information security technology for the Imation Defender Collection of secure portable storage devices and media. In addition to his expertise in cryptography, Vlasich is an experienced computer and network security specialist in firewall development, intrusion detection and prevention, virus scanning and strong authentication.

The Flash Memory Summit is a three-day event that brings together consumer electronics companies and those specializing in computers, communications, military/defense systems, industrial and process control, test equipment and instrumentation. Attendees will learn about the latest developments, tools and market trends in flash memory.

Aviat Appoints Michael Pangia as President/CEO…ships Radios to Wataniya Telecom Maldives

Aviat Networks, Inc. a leading provider of wireless transmission solutions announced that Michael Pangia, who was Aviat Networks' SVP and Chief Sales Officer, has been appointed President & CEO and a member of the Board of Directors. Former CEO Chuck Kissner will continue as Chairman of the Board of Directors.

Kissner became CEO on June 28, 2010 to lead a transformation of Aviat's business. Pangia has led the Sales and Services operations of the company since he joined inMarch 2009 and was part of the management team that led the restructuring and turnaround efforts over the past year.

During that time, the company has reduced costs, refocused its business, introduced new products, stabilized its top line, and streamlined operations.

"I'm delighted that the Board has expressed their confidence in me and the management team going forward," said Pangia.  "We made tremendous progress over the last year on many fronts, and believe we are now well-positioned to move Aviat to the next stage.  We now have a company with better operating leverage, a strong pipeline of new products, and an enthusiastic customer base.  I expect the transition to be a smooth one, and look forward to reporting our Q4 FY11 and full year results in August."

"The Aviat Networks team accomplished its goals over the past year," said Kissner.  "As expected, we essentially completed our fiscal 2011 restructuring program to reduce operating costs, continued to roll out innovative new products, and saw the resumption of strong demand for our products and services.  We now have a strong roadmap for the future."

Prior to joining Aviat Networks, Pangia held a number of executive positions at Nortel Networks in Sales, Operations, and Finance.  As President of the Asia Region, he had P&L responsibility for $1.8 billion in sales.

On May 5, 2011, the Company provided revenue guidance of $105 million to $120 million for the fourth quarter FY2011, based on backlog, business trends and operational changes, and some supply risks specific to Japan.  “Although we have not yet finalized and completed all reviews of the financial results for the fourth quarter, we now believe revenue for the fourth quarter FY2011 will be in the range of $115 million to $120 million.  In addition, we expect to report that the orders book-to-bill ratio was greater than 1 and that the company's cash balance increased from end of the previous quarter.  As the company is still assessing revenue as part of its year end close, this guidance is subject to change until fourth quarter and full year fiscal 2011 results are announced in August. Also, given the need to complete the year end audit, this is the only guidance we intend to provide at this time”.

In a related development, Aviat Networks has announced that it will supply its recently introduced Aviat WTM 6000 trunking microwave radios to Wataniya Telecom Maldives. Since 2008, Aviat Networks has served as the sole microwave backhaul provider for Wataniya Telecom Maldives as it moved from 2G to 3G. Now, WTM 6000 long-distance trunking radios will support its transition to Next Generation Networks and eventually to 4G Long Term Evolution (LTE) wireless, with up to 4Gbps aggregate IP-data throughput in the backhaul network.

Specifically, Aviat Networks will: Supply end-to-end turnkey products and services to deploy high-capacity WTM 6000 radios in Wataniya's backhaul to extend its existing backbone of Aviat Networks' TRuepoint 6500 radios. Radios will be used as the core elements to backhaul 2G, 3G and leased-line traffic from Wataniya customers.

They will also provide network design and logistics services to support the Wataniya backhaul network expansion. "Based on superior performance of its TRuepoint 6500 radios and superb execution of our 2008 network rollout, we've chosen Aviat Networks for the next phase of our network build," said Stephen Smith, chief operating officer of Wataniya Telecom Maldives. "We're impressed by WTM 6000's performance characteristics and our prior experience with Aviat Networks' technical competency in link engineering over difficult all-water terrain while still completing the project on time. We're confident that WTM 6000 supported by Aviat Networks professional services will enable a smooth evolution to Next Generation Network operation and then to 4G."