Briefs: October 16, 2006

McAFEE CEO OUT AMID OPTIONS FIASCO

The company intends to restate past financial statements by around $100 million to $150 million after an internal review found it will have to record additional charges for stock-based compensation expenses over a 10-year period.

McAfee said Samenuk was retiring, while Weiss' employment had been terminated by the board. Dale Fuller will act as interim CEO and president, it said.

"I regret that some of the stock option problems identified by the Special Committee occurred on my watch," Samenuk said in a statement.

Fuller joined the McAfee board in January and served more than six years as CEO and president of Borland Software. The company also said the board appointed Charles Robel as nonexecutive chairman of the board and that it would start looking for a new CEO.

SCANSOURCE TO REVIEW STOCK GRANT PRACTICES BACK TO 1994
ScanSource plans to review its stock option grant practices in response to a newspaper article questioning whether the distributor backdated grants to several executives.

The company has selected a special committee consisting of independent board members, assisted by independent legal counsel and advisers, to review its option grants dating back to its initial public offering in 1994. ScanSource issued a statement about the review, but executives declined to comment further.

Last week, the Charlotte Observer reported that ScanSource granted options on 18 dates since 1995 and seven times the stock was at its lowest point for at least a month on either side. In two more cases, the price was at the second-lowest point during that two-month period. In all but two instances, the stock dropped before the grant then increased, according to the paper.

For example, four executives sold 62,500 options on Jan. 10, 2000, when the stock closed at $40 per share. However, the filings said the grants were made on Dec. 6, 1999, when the stock closed at $33.62, according to the paper. The difference netted the executives $398,750.

Raymond James and Associates conducted its own review of ScanSource's recent options practices and did not detect any irregularities, according to Chris Quilty, senior vice president of technology research at Raymond James.

"We believe the paper's study may be primarily referring to options grants issued before 2002," Quilty wrote in a report about the issue.

MICROSOFT PREPS VISTA WITH UPGRADE COUPON, ROAD SHOW
Microsoft is pushing Vista hard for the holiday shopping season—even though the Windows upgrade won't be available until early 2007.

Last week, the software giant announced again that it remains on track to release Windows Vista to volume license businesses in November and provide worldwide general availability in January.

Sources say Microsoft will also make available on Oct. 26 a free Express Upgrade coupon to Vista for buyers of Windows XP PCs to pump up PC sales through the holiday season.

Although the Windows upgrade won't be available until late January, and Microsoft won't confirm news about the coupon, the company said last week that more than 250 new PCs, peripherals and software applications have been certified for Vista and will ship in the fourth quarter.

The 250 products are either optimized and certified for Vista under its Certified for Windows Vista program or have been proven compatible with Vista and will carry a "Works with Windows Vista" label.

To prepare system builders, Microsoft will kick off a 23-city road tour called Ready To Rock with partner Intel on Oct. 24 to train and prepare system builders about Vista, Office 2007 and Intel's Core 2 Duo processors. The road show will end on Dec. 14.

Microsoft also announced last week that the Internet Explorer 7 browser upgrade will be available for download within two weeks and that Windows Media Player 11, which also will be integrated in Vista, will be available as a standalone application download on Oct. 24.

LANDESK PROCESS MANAGER AVAILABLE FOR MOBILE DEVICES
Network systems management vendor LANDesk Software has extended the reach of its Process Manager software to handhelds.

The new capabilities are part of LANDesk Process Manager 3.0, said Kevin Auger, director of service management solutions at LANDesk. By bringing handhelds like the BlackBerry and the Pocket PC into the Process Manager envelope, LANDesk now enables administrators to control Process Manager via handhelds and integrate the devices more closely with a network's overall management scheme, he said.

Process Manager is LANDesk's extended network management toolset, and reflects its strategy to compete with enterprise network management systems such as CA Unicenter, Hewlett-Packard OpenView, IBM Tivoli and others.

Built from tools that LANDesk obtained in its January acquisition of NewRoad Software, Process Manager extends the reach of the LANDesk Management Suite from PCs and workstations to servers and other network devices.

LANDesk also has integrated version 3.0 with its LANDesk Service Desk product to better support incident, problem and change management.

Pricing for Process Manager 3.0 ranges from about $35,000 for companies with less than 1,000 employees to about $190,000 for businesses with more than 10,000 employees, according to LANDesk.

MICROSOFT SERVICES CHIEF TO RETIRE AFTER 19 YEARS
Rick Devenuti, senior vice president of Microsoft Services and IT, is retiring, Microsoft said last week.

A 19-year Microsoft veteran, Devenuti will stay on through the end of the calendar year. The news was announced internally in an e-mail from Microsoft COO Kevin Turner.

A Microsoft spokesman said Devenuti is leaving the software giant to spend more time with his family. A successor will be named in a few weeks, according to the company.

Devenuti oversaw Microsoft's managed services effort. The company's deal to provide managed services for Energizer Holdings stirred up angst among solution provider partners, who viewed the move as an incursion onto their services turf—a charge that Devenuti always refuted. He maintained that Microsoft was merely trying to learn lessons by implementing and supporting its wares in heterogeneous environments.

In his e-mail, Turner said that when Devenuti took over Microsoft's enterprise services and IT unit in 2003, he created a three-year plan for the business. "Microsoft is currently in the second year of that plan, achieving record performance in FY06," Turner wrote.

Some VAR partners focusing on enterprise accounts say there has been confusion around Devenuti's role at Microsoft, as well as that of Simon Witts, vice president of the company's Enterprise Partner Group.