Briefs: November 6, 2006

MICROSOFT, NOVELL INK LINUX PACT
bridge Linux

The CEOs of both companies said they have been crafting a far-reaching pact over the past six months that will result in improved interoperability between Windows and Linux and that contains a new "patent covenant" that will free their mutual customers from potential legal liabilities when deploying joint Windows-Linux solutions.

Microsoft committed to distribute 70,000 coupons for SUSE Linux Enterprise 10 to customers who want Linux in Windows environments. Both companies also pledged to align sales and marketing teams to promote use of Windows and SUSE Linux together.

Microsoft CEO Steve Ballmer said the two companies will remain rivals in the operating system and applications software business. But he emphasized that cooperation on all fronts—technical, legal and business—will help both companies since most customers mix open-source and proprietary software at their sites.

FORMER CA CEO KUMAR GETS 12-YEAR PRISON SENTENCE
Former CA CEO Sanjay Kumar last Thursday was sentenced to 12 years in prison for his role in a $2.2 billion accounting scandal at the company.

Kumar, 44, was handed the sentence and an $8 million fine by U.S. District Court Judge Leo Glasser in Brooklyn, N.Y. Kumar could have been sentenced to as much as 20 years.

"I know that I was wrong, and there was no excuse for my conduct," Kumar said to the judge before being sentenced, according to published reports. Kumar's lawyer, Jack Cooney of the law firm Davis Polk and Wardwell, could not be reached for comment.

In April, Kumar and co-defendant Stephen Richards, once a top CA sales executive, pleaded guilty to a nine-count indictment charging them with securities fraud, conspiracy and obstruction of justice, making false Securities and Exchange Commission filings, perjury and making false statements. The two had originally pleaded not guilty.

The indictment was revised in July 2005 to include charges that Kumar authorized what amounted to a $3.7 million bribe in 2003 to keep a business client from disclosing CA's illegal accounting practices. The indictment alleged that Kumar was determined to hide an illegal practice of maximizing CA's earnings through the use of a "35-day month practice," which enabled the company to book licensing revenue it hadn't yet received.

CA as a company avoided prosecution by agreeing to undertake strict compliance and record-keeping procedures, and it set up a restitution fund of $225 million to repay past and present shareholders for losses caused by improper accounting activities.

WESTCON GROUP PREPS VARs FOR E-RATE OPPORTUNITIES
Westcon Group's three divisions this month plan to hold e-learning seminars on the federal government's E-rate program, which provides grants to fund telephone, Internet and IT infrastructure projects for schools and libraries.

The E-rate TeleTrack seminars educate VARs on the types of grants, application procedures, equipment to purchase and ways to connect with potential customers via the Internet, said Ron Sheps, vertical markets manager of Westcon Group.

More than 24,000 schools participate in the program, applying for a slice of the $2.25 billion available, Sheps said. The application period for the program begins Nov. 14 and ends Feb. 7, 2007. E-rate grants must include a VAR name, so applying schools already must have partnered with a reseller. The government pays VARs directly.

The training is free to Westcon, Comstor and Voda One partners and is offered on Nov. 7 and Nov. 9. The first course is for solution providers looking to learn about the programs or to refresh their knowledge. The second is geared for solution providers with more E-rate grant experience and focuses on expediting the federal government's payment process, which can take 90 days or more.

NEW INGRAM MICRO DIVISION OFFERS MOBILITY SUPPORT
Solution providers looking to get into the mobility business have another resource at their disposal with Ingram Micro's new Mobility Division.

The distributor has formed relationships with wireless carriers like Verizon Wireless, Sprint/Nextel and Cingular as well as with device manufacturers and ISVs including Palm, Nokia, Motorola, Research in Motion (RIM) and Good Technology to help VARs overcome the hurdles in offering mobile wireless solutions.

The distributor will offer sales and technical training to solution providers in person and online, as well as back-office support and device activation. Solution providers also will have access to Ingram Micro's network of marketing and sales support.

Activation and dealing with carriers have been pain points for VARs, said Ken Bast, vice president of vendor management for mobility, security and networking at Ingram Micro U.S., and Ingram Micro is offering support and instruction on how to incorporate wireless mobile devices into their product portfolios.

"IT resellers have kind of steered away from this because it's the world of the carriers. Our goal here is to make it easier for them to be part of it," Bast said. "We engage with the carrier. We go through all of the headaches for activations like turning on 200 phones for an enterprise."

HP TO PUSH THOUSANDS OF NAMED ACCOUNTS TO CHANNEL
Hewlett-Packard said it plans to move thousands of named direct accounts to the channel as part of a new sales engagement strategy.

Under the revamped channel sales plan, HP said that the approximately 50 enterprise solution providers working with HP's Technology Solutions Group's (TSG) direct-sales force will now move back under the control of the Solution Partners Organization (SPO).

John Thompson, HP's outgoing vice president and general manager for SPO Americas, said the company took multiple named-account lists from its various business units and combined them into one named account list. As a result, he said, HP "ended up moving thousands" of accounts previously engaged by HP on a direct basis to the channel. He declined to specify the number of accounts that will be moved to the channel.

"We want to drive this non-named space aggressively with partners," Thompson said.

Meanwhile, HP said it would abandon its plan to have TSG manage about 50 HP enterprise partners. HP said it wanted to more tightly integrate those partners with its direct enterprise sales force in a strategy implemented last Nov. 1. But HP enterprise solution providers tapped last year for that effort say they have seen little new business as a result of the alliance.

HP also is realigning its business-unit sales teams into common territories, according to Thompson. He said HP previously had different territories for different business units, which created confusion among solution providers because they had to work with sales reps from different territories for printers or Unix servers, for example.