Briefs: February 13, 2006

GATEWAY CEO INOUYE RESIGNS

Inouye is leaving to “pursue other interests,” Gateway said in a statement. He took over the CEO post in 2004 when Gateway acquired eMachines, where he was CEO.

Snyder is a former Gateway president and COO. The company said it will search for a permanent replacement while Snyder serves as acting CEO, and Inouye will serve in an advisory role to help with the transition. Gateway said it expects to complete its new CEO search by late summer.

Last week, Inouye reported that Gateway&'s fourth-quarter operating earnings missed analysts&' estimates. During last week&'s earnings conference call, Inouye gave no indication that a change in the company&'s top executive ranks was in the offing.

As interim CEO, Snyder said the company planned no major changes to Gateway&'s strategy, but would re-evaluate its operations in both direct sales and its channel-based professional sales.

CDW OPENS VEGAS DISTRIBUTION CENTER TO SERVE WEST COAST
CDW opened its new 513,000-square-foot distribution center in North Las Vegas last Thursday. The facility will serve customers in the Western United States and complements the reseller&'s existing 450,000-square-foot facility in Vernon Hills, Ill., according to John Edwardson, CDW chairman and CEO.

The Las Vegas facility can handle 96,000 outbound cases of IT products every day, compared to a maximum of 45,000 cases per day at the Vernon Hills, Ill., facility. It also includes 25,000 square feet for product configuration, more than three times the size of its first facility.

Meanwhile, CDW reported January sales of $513.9 million, an 8.5 percent growth over the year-ago period. The public sector segment reached percentage growth in the mid-teens and corporate sales increased in the mid-single digits, according to the company.

KOREAN ‘DAWN RAID&' OR ‘VISIT&': INTEL/AMD BATTLE RAGES ON
Advanced Micro Devices stepped up the rhetoric in its antitrust battle with rival Intel over alleged monopolistic practices last Thursday, issuing a press release stating that the Korean Fair Trade Commission conducted “dawn raids” on Intel offices in that country. And AMD Chairman and Chief Executive Hector Ruiz told the U.S. House of Representatives that antitrust laws needed to be enforced to ensure “fair and open competition.”

Korean officials conducted a raid of Intel offices in Korea as part of an investigation into Intel&'s business dealings with four South Korean PC makers, AMD said.

Intel described the events differently. “There was a visit to our offices in Korea, but to characterize it as a dawn raid is a mischaracterization,” a spokesman said. Intel disclosed in June that the KFTC was conducting an investigation, and the company has cooperated, he said.

“It is not unusual for regulatory agencies to look at successful companies, and [Intel is] extremely successful,” he said. “We&'re cooperating [in Korea] much like we do with regulators around the world.”

Meanwhile, Ruiz testified before the House Committee on Government Reform on the competitiveness of U.S. companies in world markets. “We have a responsibility to ensure no one is sheltered from competition,” he said. “That means that the enforcement of antitrust laws … is critical to the creation of a sustainable competitive society.”

BORLAND SOFTWARE TO SEGUE INTO QUALITY AND TESTING
Borland Software said last Wednesday it would buy Segue Software, a maker of software quality and testing systems, in an all-cash deal valued at about $100 million.

Also, the company said it would seek a buyer for its IDE business. It has hired Bear, Stearns and Co. to manage the process.

Borland said it would pay $8.67 per share and has entered voting agreements with Segue shareholders who own about 21.5 percent of the company. Segue shares closed at $6.92 on Tuesday.

Borland expects the deal to be completed in the second quarter.

CEO Tod Nielsen said the purchase was part of a strategy to move beyond software development and into the software delivery business.

JUNIPER NETWORKS TO UPGRADE ACCELERATION APPLIANCES
Juniper Networks this week plans to roll out an upgrade to its DX lineup of application acceleration appliances, its first update to the product family since acquiring it through its purchase of Redline Networks in May.

With version 5.1 of the DX operating system, Juniper is adding a new Web-based user interface, a wizard for creation of customized rules, new global load-balancing capabilities and integration with its Secure Access SSL VPN line. Juniper also is rolling out a new three-tier licensing structure that lowers the entry-level price for customers that only require basic load balancing and SSL termination features. Licenses range from $15,000 to $70,000 per box.

Optional global load balancing capabilities require an additional license, priced at $4,995. The upgrade is scheduled for availability in March.

ORACLE TO CUT 2,000 JOBS AFTER SIEBEL SYSTEMS BUYOUT
Oracle will cut some 2,000 jobs in the wake of its Siebel Systems acquisition, but the lion&'s share will come from Oracle, not Siebel.

“We&'re keeping 90 percent of Siebel support, development engineers, 90 percent of Siebel sales and sales engineers,” Oracle CEO Larry Ellison told financial analysts and reporters on a conference call last Thursday.

“The 2,000 number should not be subtracted from the 4,700 Siebel employees [coming in] but from the total roll of 57,000 employees,” said Oracle co-president Safra Catz. “There will be reductions throughout the company in many places. Less than half are coming in fact from Siebel.”

Some cuts will come from back-office functions and non-technical marketing people. And many will come from Oracle&'s own CRM development group, Ellison said.

“As we move to Fusion and next-generation CRM, we had more people than we needed to develop Fusion—a large number are coming from that duplication of effort,” Ellison said.

Fusion is the name of Oracle&'s upcoming standards-based foundation that will underlie the next generation of functions now provided by Oracle, PeopleSoft, JD Edwards and Siebel applications.

In addition, Oracle plans to highlight Siebel&'s analytics know-how and will push those tools not only as standalone products but with its middleware, Ellison said, calling those tools a “hidden jewel” of the $5.85 billion Siebel acquisition, which was completed last week.

Siebel&'s analytics technology will “absolutely” be the foundation of Oracle&'s business intelligence effort going forward, Ellison said.