Briefs: February 20, 2006


The company reported sales of $15.2 billion for its fourth quarter, ended Feb. 3, compared with $13.5 billion for the same quarter a year earlier. Dell posted earnings of $1.01 billion, compared with $667 million for the year-ago period. Dell&'s earnings per share were 43 cents, eclipsing the average of Wall Street estimates of 41 cents.

Executives admitted their customer service reputation has taken a hit.

“We ceded some ground on a core attribute of our Dell direct model, and that is our unparalleled customer satisfaction experience,” Dell CEO Kevin Rollins said in a conference call with financial analysts. “As a management team, we deem this unacceptable.” He said Dell&'s priority was to “drive personal accountability across the entire organization.”

Dell executives also said they expected revenue for the current quarter of between $14.2 billion and $14.6 billion. The average of Wall Street estimates was for Dell to show revenue of $14.76 billion.

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Sony, continuing its push to grow channel market share, said it has reached a deal to begin shipping its VAIO notebooks through distributor Synnex.

The IT products unit of Sony said in a statement Tuesday that Synnex would pick up the line of VAIO professional notebooks, including the BX, TX and new SZ series. Synnex already had been an authorized distributor of Sony LCDs and storage products.

Earlier this year, Sony said it would provide some additional financial incentives through the channel to boost its VAIO lineup, and began offering $500 trade-in payments on any working Dell notebooks. Since re-engaging with the channel more than two years ago, Sony has maintained a strict, two-tier distribution policy.

A Sony spokesman said among the existing distribution partnerships the company now maintains are with companies including Ingram Micro and Tech Data. Sony executives said a Synnex distribution relationship would help the company reach a greater number of sales in the small- and mid-sized business segment—an area the company says is strategic for its VAIO line.

IBM is knocking 50 percent off select middleware sold with its quad-core pSeries servers in an effort to bring price parity to its multicore server offerings.

Karl Freund, vice president of IBM&'s pSeries server line, said business partners can immediately offer up to 50 percent off IBM software, such as WebSphere Application Server and DB2 Enterprise Edition, when sold with an IBM quad-core p5 5100Q, 510Q, 520Q, 550Q or 560Q.

Freund said IBM was not ready to provide details on which software SKUs would be covered under the new promotion. But he said the software licenses would be available to business partners immediately through their local pricing teams. The promotion will be available until the end of the year.

“Our intention is to cover all of it. Twenty percent of the product that drives 80 percent of the revenue will be covered under this promotional banner,” Freund said.

The discount resembles a similar promotion offered a month ago by rivals Sun Microsystems and Oracle in which Sun partners can offer customers a free Oracle Enterprise Edition database license with the purchase of UltraSparc IV or IV+ servers. Customers would be responsible for paying annual support and maintenance fees.

Additionally, Oracle recast its own software licensing policy for multicore processors in December by charging 50 percent of its database license fee per core, down from a previous 75 percent per core. Oracle is charging 25 percent of a license per core for servers based on Sun&'s eight-core T1 processor.

Freund said IBM&'s discount on licenses is designed to bring price parity to its multicore offering as companies seek to reposition licensing costs for dual-core and higher CPUs. “Our quad-core products are targeting a price-sensitive market, and they expect lower-priced software to come with it,” he said.

Oracle last Tuesday said it had acquired Sleepycat Software, an open-source database vendor.

Reports have swirled for weeks that Oracle was poised to buy JBoss, Zend and Sleepycat. The Zend deal apparently is off the table, and JBoss CEO Marc Fleury has been dodging questions about the rumored Oracle buyout.

Terms of the Sleepycat deal weren&'t disclosed. The agreement adds Sleepycat&'s Berkeley DB to Oracle TimesTen and Oracle Database Lite, according to Oracle.

“Sleepycat&'s products enhance Oracle&'s market-leading database product family by offering enterprise-class support to customers who need to embed a fast, reliable database at a lower cost,” said Andrew Mendelsohn, senior vice president of Oracle Database Server Technologies, in a statement.

Berkeley DB is a popular open-source database, with Sleepycat claiming approximately 200 million deployments. Like MySQL, another leading database, Berkeley DB can be bought via commercial or public license.

Oracle last week also bought Swedish communications software maker HotSip AB. It&'s uncertain if deals for Zend or JBoss are still in the works, but Oracle clearly is still seeking acquisitions.

Ingram Micro earned $84.4 million, or 51 cents per share, in the fourth quarter on sales of $7.96 billion. Analysts expected earnings of 48 cents per share for the fourth quarter, ended Dec. 31, according to Thomson Financial/First Call.

Ingram&'s North American fourth quarter sales were $3.27 billion, an increase of 4 percent vs. year-ago sales of $3.14 billion. European sales were $3.01 billion vs. $2.99 billion in the year-ago quarter.

“Our 1 percent growth in Europe is affected by currency. In the quarter, the effect of the euro took about 9 percentage points of growth. That&'s still good growth,” said Kevin Murai, president of Ingram Micro. “I&'d love to see North American sales be higher than that. Our focus is to grow the top line, but profitably.”

For the first quarter ended April 1, Ingram said it expects net income to range from $54 million to $59 million, or 32 cents to 35 cents per diluted share, on sales from $7.3 billion to $7.5 billion.

Ingram Micro is undertaking a diversification strategy regarding both the technology it sells and the regions in which it sells, Murai said.

“The more diverse we get, the more business risk we take out. From a geographical standpoint, we can stand to afford investment in China now because other parts are generating good profit,” Murai said.

Another example is Hewlett-Packard getting aggressive on pricing in Europe, he said. “We can manage through that because HP is not as big a vendor to us as to other competitors,” Murai said.