HP turned the smartphone space on its head Wednesday with its surprise purchase of Palm. At first blush, the deal would appear to help both companies, but it is far from a sure bet to save Palm's line of webOS devices.

HP turned the smartphone space on its head Wednesday with its surprise purchase of Palm. At first blush, the deal would appear to help both companies, but it is far from a sure bet to save Palm's line of webOS devices.

This news is the result of a large number of bad decisions and miscalculations on both HP and Palm's parts. Before today, HP had no legitimate play in the vital smartphone space, and Palm's good software was dying a slow death in bad hardware. Both companies needed a fix, and HP's $1.2 billion acquisition of Palm looks to be the salvation each firm so desperately needs.

Let's spin the clock back a few years to gain some perspective, starting with Palm.

Palm defined the smartphone with its Treo line of handhelds. The Treos married the PDA form factor with a cell phone and birthed a new device segment that is now responsible for hundreds of millions of units sold per year. Palm used its own operating system, Palm OS, which was an evolution of its Palm Pilot OS. With the Treo 600 and later Treo 650, Palm suddenly had serious clout and sold its devices by the boatload. It even had a good developer story, and plenty of applications for users to buy.

Then some interesting things happened. RIM introduced its first BlackBerry devices and Microsoft created "Pocket PC Phone Edition." With these devices, RIM and Microsoft officially became much tougher competitors with Palm. Based on the success of its mobile email system, RIM grew quickly. Microsoft did too, with its strong enterprise base. This all added up to a healthy and competitive smartphone market.

The problem is, Palm stalled in developing its base operating system and its hardware. Palm, for one reason or another, decided to stick with its Treo line of devices, despite the fact that the competition was fielding more attractive hardware with more advanced capabilities. Palm eventually went so far as to license Windows Mobile from Microsoft, because its own software -- good though it was -- just wasn't strong enough for business users. Then the iPhone was announced. Then Android. While those devices (and their operating systems) broke new ground, Palm made only the most evolutionary upgrades to its line of devices. It also made a bunch of silly moves to separate its hardware and software businesses.

Palm was in trouble. Its sales were dwindling, and with no future for Palm OS, it had to make a drastic move. Enter Jon Rubinstein. Palm stole its now-CEO from Apple, where Rubinstein headed up development of the famous iPod.

Rubinstein began work on a brand new system that was different from the ground up. Taking advantage of all that the web and wireless networks have to offer, Palm announced webOS in January 2009. The OS looked so strong, Palm's outlook suddenly seamed bright again. The problem? Palm wrapped webOS in the Palm Pre, a device of middling design and build quality. It followed the Pre with the Pixi, another device of middling design and build quality. To make matters worse, it sod the devices solely through Sprint (which has its own problems).

The list of shoulda-coulda-wouldas goes something like this: Palm should have launched with every U.S. and foreign carrier possible. It should have moved faster to bring better devices to market. It should have aimed for the high-end instead of fielding $99 devices that -- on a spec level -- barely compete with feature phones.

The result? Palm isn't selling enough phones, it isn't making enough money, it needs to be propped up by some bigger, stronger entity with some cash to burn.

Enter HP, the supposed White Knight.

A few words on HP's history. HP made some really, really solid Pocket PC-based PDAs. In the early 00s, it was churning out solid hardware that was appealing and business friendly. They were expensive, and didn't have cellular radios, but they were good enterprise devices at the time.

But smartphones, as we know, pretty much killed the PDA market off entirely. HP's acquisition-merger with Compaq yielded some interesting fruit that unfortunately fell to the ground and rotted. HP has pushed out Windows Mobile-based smartphones under the iPAQ brand over the course of the last few years, but they've been mediocre at best. Not only were most of the unattractive handsets, they were not designed well and cost a lot of money. HP also made the mistake of making devices that would only work on AT&T's (then Cingular's) network.

HP has continued to make iPAQ smartphones, but I couldn't tell you who on earth is buying them. They're not bad, but they're not great either. Lacking any sort of carrier distribution, however, pretty much means they are DOA.

HP's story? It know smartphones are important, but it hasn't been able to execute. Its iPAQ's stink, and HP knows it can't sit back and cede this entire market to Apple, RIM, Microsoft, Google and others.

So, it only makes sense that HP would do the right thing for both itself and Palm and buy up the listing smartphone maker, right? HP gets a smartphone strategy with carrier deals and Palm gets more money to back it up. Sounds like a win-win. But is it?

Based on statements made by both Palm and HP, they think this is the answer. HP said quite clearly that it intends to invest in Palm's webOS and is already considering bring the platform to other form factors. Palm's CEO gets to stay the helm of the product he's built, and he's very excited about the future of Palm's products. But there are a few problems.

First: Palm's developer story doesn't come remotely close to that of the competition. We all know the numbers here. Apple's iPhone Apps Store has some 150,000+ apps, Google's Android Market has around 50,000, RIM's Apps World has 6,500. Palm's has a meager 2,000 or so. Apple and Google are already so far ahead of the others, it's possible the other platforms will never catch up. HP's buy-out of Palm does not improve the developer story at all. Without developers who are committed to writing apps, webOS can't have a future -- or at least can't have a future that is as full and rich as its competitors.

Second: Integrating the firm's is going to take time. There's no way the combined companies are going to be able to do anything to speed up the current device line-up. Palm still needs to sell phones. It has to get better hardware to market ASAP if it is going to do that. Seeing that Palm has really only created two new phones in the last 18+ months, I am not hopeful that it has something hiding up its sleeve. There's going to be a new iPhone by summer. The new BlackBerry OS will be available by September. Microsoft will introduce the new version of its mobile platform by November. Palm needs to be able to head these off and convince buyers that webOS is the way to go. It's not going to do that without better hardware. If Palm had good hardware in the pipeline, it wouldn't have sought out a sale so soon.

Third: Both firms have a history of making bad decisions and bad hardware. Two wrongs don't make a right. Just because HP will back Palm up doesn't mean that Palm's existing pipeline is any better than what we've already seen from either company. Whatever device happens to be the first to come to market that was developed jointly under both firms after the acquisition needs to be a smash hit on every level. Every feature will need to be class-leading from the get-go. I am not convinced they can do this.

Fourth: The competition is fierce and unrelenting. Killer new smartphones aren't being released once per quarter or every six months by Apple, RIM, Google and others, they're being announced nearly every week. Speed is a serious and real issue here. The competition is already fielding devices with 8- and 12-megapixel cameras. The Palm Pre has a 3-megapixel shooter, the Pixi a 2. They need to get new devices to market ASAP to head off the existing threats.

In the end, this deal does at least one thing: it gives Palm time. With HP's resources, it won't die a quick death and will have at least a fighting chance instead. But Palm needs to go from a featherweight to a heavyweight. It needs to bulk up and win a few rounds, or its going down for the count.

By Eric Zeman
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The popularity of accessing government information online supports the mission of the Open Government Directive, research shows.

The majority of Internet users in the United States are going online to search for government information and access government services, according to a survey unveiled this week.

The findings of the survey by Pew Research Center's Internet and American Life Project lend support to the Open Government Directive, which calls for the federal government to use the Internet and other technology to better engage with the public.

The survey found that 82% of Internet users -- or 61% of all American adults -- looked for information online or completed a transaction on a government Web site in the year preceding the survey.

The report surveyed 2,258 adults aged 18 or older in the United States between Nov. 30 and Dec. 27, 2009 in telephone interviews. This particular Pew project gathers information on the cultural, political, and societal effects of the Internet.

The survey identified that people's online interaction with the government generally fit into one of three categories: data driven, in which people are searching for information that's been made available online; activities that involve online platforms such as blogs, e-mail, or text messaging; and participatory activities in which people can provide feedback.

In terms of data-driven behavior, the survey found that 48% of Internet users have looked for information about a public policy or issue online pertaining to local, state, or federal government, while 35% have researched official government documents or statistics.

A total of 31% of online adults used some of the Internet and communication technologies the government has recently adopted -- such as blogs, social networking sites, e-mail, online video, or text messaging -- to interact. The survey called these individuals "government social media users."

In terms of participatory engagement with the government, which is a relatively new experience, 23% of Internet users said they participated in online debates around government policies or issues. However, much of this discussion happened outside of government Web sites, something the government appears to be trying to change by implementing new technologies like crowdsourcing. Crowdsourcing platforms allow people to submit ideas and vote and provide feedback on those ideas about how to better serve citizens.

People also more and more seem to be doing business with the government online, according to the survey. Fully 41% of those surveyed said they've downloaded government forms, while 33% have renewed a driver's license or completed an auto registration online.

A total of 23% said they have gotten information about or applied for government benefits online, while 15% paid a fine, such as a parking ticket, online.

By Elizabeth Montalbano
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Enterprises can realize cost and security benefits through desktop virtualization, but only if they have a clear implementation plan.

Desktop virtualization is seeing rapid adoption in the enterprise, as more and more businesses are looking to cut IT administration costs while realizing the security benefits associated with this centralized computing model.

Indeed, Gartner predicts that 60% of enterprises will employ some form of desktop virtualization by 2012, compared to less than 10% as recently as 2008.

One of the catalysts for this uptick is the arrival last year of Windows 7—Microsoft's newest OS is sparking a wave of upgrades, and IT managers are taking the opportunity to simultaneously evaluate alternative architectures.

But experts say tech departments shouldn't rush into desktop virtualization without a carefully drawn roadmap.

"This is not a technology that can be implemented like turning on a light switch," said Sumit Dhawan, director of product marketing for desktop delivery at Citrix Systems, on Monday during an Interop Las Vegas presentation called A Roadmap to Windows 7 with Desktop Virtualization.

"It's more like a journey," said Dhawan. With that, Dhawan laid out a five-step plan that organizations can use as a blueprint for implementing desktop virtualization.

The first step, said Dhawan, is to "start simple." IT departments can see an immediate payoff from desktop virtualization by identifying small groups of workers that present the biggest challenges in terms of desktop management. Such workers might typically include offshore teams or contract employees.

"I wouldn't expect you to do pilots with your executive team," said Dhawan.

Next, organizations may want to consider building a single, virtual desktop image for internal knowledge workers, such as headquarters-based productivity staff, branch office workers, or support center employees.

Another candidate might be a group that's been previously identified as candidates for an upgrade to Windows 7, Dhawan said.

The third step sees IT rolling out virtual desktops to the general workforce. One of the most effective ways to accomplish this is to consider a hosted service, such as Citrix's FlexCast offering. In a possible fourth step, enterprises can extend virtualization beyond the so-called four walls by implementing an apps-on-demand model for some workers. While not technically desktop virtualization, apps-on-demand allows key workers to log-in to critical apps from virtually any device, while bypassing the rest of the desktop overhead.

"You don't need to deliver the whole desktop to an iPhone," said Dhawan.

Finally, organizations may want to add local VM technology to their virtualization architecture to allow employees to work offline.

Changes to applications and data are automatically synchronized with their server-side counterparts when the worker logs back in. Such an option might make sense for power users who maintain multiple desktop images or numerous, customized apps.

Regardless of how they get there, a large percentage of enterprises are likely to end up employing desktop virtualization technology, Dhawan predicted. "PC computing as we know it is ripe for a change," he said.

By Paul McDougall
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Numerous enterprise IT organizations claim to be implementing private clouds—data center architectures from which end users can tap information and applications on-demand, from internally managed servers.

But does that really fit the definition of cloud computing, an IT model that, some argue, necessarily adds a third-party, external service provider to the equation?

A private cloud "is simply what IT should have been doing for the past 20 years," said BitCurrent founder Alistair Croll, Monday at an Interop Las Vegas session called, "Private Clouds Are Just Another Name For IT Done Right."

Croll argued that the mere implementation of certain technologies associated with the cloud—virtualization, scripting and automation, single sign-on and the like—do not in and of themselves add up to cloud computing.

"All those things are good, but they don't make you a cloud," said Croll, who added that owning a corporate jet does not make a company an airline.

Some vendors, particularly those pitching "cloud" offerings to in-house IT departments, begged to differ.

John Stetic, a director of product management at Novell, argued that there's little difference between an external or internal cloud from the perspective of the end user business unit. "It's simply another shared services model," said Stetic.

For their part, third-party providers of cloud services insist that cloud computing, by definition, implies the existence of an outside vendor that specializes in providing IT services from over the wall, usually under a metered pricing model.

"There are technical aspects and business aspects (of cloud computing)," said Steve Riley, senior technical program manager at Amazon Web Services. "You can duplicate the technical aspects, but not the business aspects," said Riley.

"And in-house, you can't reach infinite scale," Riley added. Of course, a decade ago the IT industry embraced terms like ASP, utility computing, and on-demand computing to describe services very similar to those offered by today's "cloud" vendors.

So the better question may be this: Does cloud computing, whether external or internal, really represent anything new?

By Paul McDougall
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A revamped advertising partner program promises to make life easier for ad agencies.

Google on Monday announced that that its Google AdWords API will soon be available for free to its ad agency partners. Previously, Google charged for API access.

The AdWords API allows developers to create applications that communicate with the AdWords platform. Such applications, typically used by ad agencies, allow things like the automatic generation of keywords, ad text, and URLs, and the integration of AdWords data with ad inventory management systems.

In conjunction with the change, Google said it is ending its Google Advertising Professionals (GAP) program and replacing it with a new Google AdWords Certification program for ad agencies overseeing AdWords accounts on behalf of advertisers.

Google's goal is to make it easier and more appealing for ad agencies to utilize its tools and APIs. Doing so may also mend some fences: Ad agencies' objections helped derail Google's planned partnership with Yahoo in late 2008.

The company also wants to help establish more meaningful metrics for establishing the expertise of those working with AdWords.

"We've had a lot of great feedback from agencies and today we're announcing changes designed to offer them better training and more rigorous certification in AdWords proficiency, and to lower costs for those who help advertisers get the most out of AdWords," said Penry Price, VP of global agency development, in a blog post. "We're also making it easier for advertisers to find certified agency partners to work with them on digital advertising."

The new AdWords Certification program will offer: training material to help ad agencies understand search; more challenging certification exams that have been designed to test the application of knowledge rather than rote memorization; advanced-level exams for establishing expert knowledge in search advertising, reporting, and analytics; and an improved Certified Partner online badge designed to provide advertisers with clearer information.

Google said it will begin accepting applications from agencies seeking preferred AdWords API pricing on May 26, 2010.

By Thomas Claburn
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A flawed antivirus software update misclassified a critical Windows XP file as a malicious program, sending PCs into endless reboot cycles.

Many companies and people on Thursday were fixing thousands of Windows PCs that went haywire as a result of a seriously flawed software update sent by antivirus vendor McAfee.

The update distributed at 3 a.m. Eastern time Wednesday misclassified a critical Windows XP system file, called svchost.exe, as a malicious program. As a result, McAfee's AV software was instructed to detect and remove the threat, sending affected PCs into fits of rebooting that made the machines useless.

Hours after the blunder, Barry McPherson, executive VP of technical support at McAfee, said the company believed the snafu "impacted less than one half of 1% of our enterprise accounts globally and a fraction of that within the consumer base." However, media reports and Twitter postings indicated the problem was bigger.

Steve Shillingford, chief executive of tech forensics firm Solera Networks, told USA Today that one large U.S. multinational company saw 50,000 PCs go into a reboot frenzy as a result of the destructive update. Solera was in the process of helping the client clean up the mess, which could only be corrected manually by a technician at each PC.

Meanwhile, the Associated Press reported that a third of the hospitals in Rhode Island were forced to suspend treatment of non-trauma patients in emergency rooms. In Kentucky, state police officers had to shut down computers in their patrol cars while technicians tried to correct the problem.

According to Twitter posts by Intel employees, the chip also may have been affected, but the company couldn't be reached for confirmation, the AP said.

Meanwhile, Twitter and McAfee's comment page were packed with PC owners blasting the antivirus vendor in what will likely become a public relations nightmare for McAfee.

"Your company deserves to fail. Your 'protection' is far worse than any virus you're supposed to protect us against," an angry customer said.

Another appeared dumbfounded as to how McAfee could have failed to detect the flaw before distributing the update. "How the hell could this have not been picked up as an issue before the update was issued? Don't you guys do any real-world testing? Disgraceful."

At roughly 2 a.m. Eastern time Thursday, McPherson said the McAfee support unit was still working with customers either on the phone or online to fix affected PCs.

"Having talked to literally hundreds of my colleagues around the world and e-mailed thousands to try and find the best way to correct these issues, let me say this has not been my favorite day," McPherson said in the company blog. "Not for me, or for McAfee. Not by a long shot."

McPherson went on to say, "Mistakes happen. No excuses."

By Antone Gonsalves
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The No. 1 reason is cost savings, but remote access, reliability, and features also factor in.

E-mail is hot again. Major vendors, from Microsoft and Google to IBM and Cisco, are vying to provide this venerable communications application. While Microsoft Exchange is the on-premises champ, e-mail delivered as an online service resets the competition, as customers large and small look to reduce costs and eliminate operational headaches.

The competition has just started. Of the roughly 996 million business mailboxes worldwide, IDC estimates, only 2%--20 million--were software as a service in 2009. But when it comes time for companies to upgrade their e-mail, they must consider SaaS options. GlaxoSmithKline, Coca-Cola Enterprises, Panasonic, and the city of Los Angeles are among the jumbo accounts--tens of thousands of employees--that have moved their e-mail to the cloud.

Although Microsoft is the e-mail market-share leader on-premises, it's betting that most customers will move to the cloud. "We'll look back in five years and say, 'Why would anyone run their own e-mail?'" says Tony Scott, CIO of Microsoft, whose 90,000 in-boxes run on the vendor's own SaaS environment. Stephen Elop, president of the Microsoft Business Division, says half of the company's Exchange, SharePoint, and Dynamics CRM revenue will come from service-based products within four years.

E-mail can be divided into three categories: premises, hosted, and SaaS. SaaS is built on a multitenant architecture and delivered over the Internet. With a hosted service, the e-mail servers might reside on a customer premises and be managed remotely or operated off the customer premises, but each customer gets dedicated servers and storage.

SaaS e-mail's market share doubled since 2007, IDC estimates. Fourteen percent of companies that use outsourcing have SaaS e-mail, our InformationWeek Analytics survey of 530 business technologists finds.

What's the draw of SaaS? First, companies can get substantial cost savings, as SaaS's multitenant architecture allows for economies of scale. Second, companies don't have to sacrifice features or availability to get those savings. Third, IT departments can employ fewer people by handing over time-consuming and costly maintenance to a provider, and they can focus some of those people on more strategic tasks. Fourth, some companies find that SaaS e-mail makes it easier to give employees the mobile access they're demanding, such as from home PCs.

Why Now

As you can see from our table on p. 24, SaaS e-mail providers offer services for as little as $3 per user a month. The recession kick-started market growth, as companies considered options that might have otherwise seemed too daring.

Take Sanmina-SCI, a nearly $6 billion-a-year global contract manufacturer. Sanmina-SCI moved more than 16,000 employees from premises-based Exchange to Google Apps as part of a company-wide push to reduce costs. "We looked at servers, backups, personnel tied up in running things," says CIO Manesh Patel. "When we ran that analysis and did the comparison, it was a fairly compelling case to move to the cloud." The move saves the company about $10 per month per employee, Manesh says, which works out to about $1.9 million a year--a figure any CIO would be happy to bring to a budget meeting.

At Blue Man Productions, which runs the popular Blue Man Group shows, the cost of maintaining e-mail servers for its 500 employees in five U.S. cities, plus Berlin and Zurich, ran into six figures, says company IT manager David Wharton. Switching to a SaaS-based Exchange offering from AppRiver cut the cost by a third, he says.

By Michael Healey
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A Wisconsin resident blames Google for Web content that links her name to a drug for sexual dysfunction.

Google on Tuesday was sued in a Wisconsin court for allegedly violating the privacy rights of Beverly Stayart, an animal rights activist and the CFO and director of business development at Stayart Law Offices, the firm filing the complaint.

The lawsuit claims that Google is responsible for suggesting the search term "bev stayart levitra" as a user types "bev stayart" and is profiting from this association through the sale of ads on search results pages triggered by those keywords.

Levitra is a sexual dysfunction drug, and thus a term to which some might wish to avoid being linked.

"Google is misleading consumers, in Wisconsin and throughout the world, by selling the keyword phrase 'bev stayart levitra' and placing 'sponsored links' advertisements for Levitra, other male sexual dysfunction drugs, and other medicines and products on the page 'bev stayart levitra' on Google's Web site," the complaint states.

Filing a lawsuit, and the publicity that follows through articles like this one, will unfortunately only strengthen the association of the terms.

Google didn't immediately respond to a request for comment.

Eric Goldman, associate professor of Law at Santa Clara University School of Law, doesn't think the complaint has much merit, noting that the plaintiff lost a similar "mockable" claim against Yahoo last year.

In a blog post, he says that the claim fails to grasp that a search for the term "bev stayart levitra" may return ads based on "levitra," regardless of the presence of the the plaintiff's name or other keywords.

That's aside from the fact that Google is only indexing Web pages created by others. By virtue of her visibility online, Stayart's name appears to have been co-opted by "sploggers" (those who create spam Web pages) to drive traffic to their pharmaceutical sites.

Nonetheless, Goldman acknowledges that the lawsuit points to an issue that could become problematic for Google in the future: publicity rights in the context of domain names.

Google has a policy for dealing with the sale of keywords that are trademarked, but publicity rights are governed by a different set of rules.

Whereas trademark claims have to establish that another party's use of the trademark confuses consumers, there's no such requirement to assert a publicity rights claim. Thus a domain name, or keyword search term, that's also a famous person's name, could have legal protection not available to mere trademarks.

"Publicity rights are very powerful because they don't require consumer confusion," he said in a phone interview. "I don't think we've seen the last of this."

By Thomas Claburn
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Microsoft on Thursday reported earnings for its fiscal third quarter ended March 30.

Windows 7 screen shot

The software maker said earnings per share for the period increased 36%, year-over-year, to 45 cents. Net income climbed 35%, to $4.01 billion, on record revenue of $14.5 billion, a 6% gain from the year ago quarter.

Wall Street analysts surveyed by Thomson First Call were, on average, expecting Microsoft to report quarterly EPS of 42 cents on revenue of $14.4 billion.

Microsoft officials said the company is enjoying gains in its core software business and other areas. "Windows 7 continues to be a growth engine, but we also saw strong growth in other areas like Bing search, Xbox Live and our emerging cloud services," said Microsoft CFO Peter Klein, in a statement.

"Our record third-quarter revenue along with continued rigor on cost management resulted in exceptional EPS growth," Klein said.

Microsoft's results were mixed across its various product lines. Sales in the company's key Windows unit were up 28%, to $4.4 billion. Microsoft released Windows 7 on October 22nd. The extent to which businesses and government agencies adopted the OS will be key to helping Microsoft recover credibility in the enterprise market.

Corporations shunned Vista, Windows 7's predecessor, out of concerns about price, intrusive security features, and lack of compatibility with older applications. As a result, most businesses still run their PCs on Windows XP, an OS that is almost ten years old and for which Microsoft is phasing out support.

Microsoft also saw modest gains in its Server and Tools division, where sales increased 2.4%, to $3.6 billion.

Revenue from the company's Business unit was off 6%, to $4.2 billion, as customers remained on the sidelines in anticipation of the arrival of Office 2010, which is set for release in June. In addition to the standard versions of Word, Excel, PowerPoint, and OneNote, Office 2010 also includes free access to Web-based editions of the apps.

Sales in Microsoft's Online Services unit were up 12%, to $566 million, while revenue from the company's Entertainment & Devices group, which is home to the Xbox and Windows Games products, rose 2.2%, to $1.7 billion.

Microsoft shares closed up .19%, to $31.39, in trading Thursday.

By Paul McDougall
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There will be no more investment in development tools to bring Flash content to the iPhone.

Adobe on Wednesday abandoned what in recent weeks has become a clearly quixotic quest: Its desire to give Flash developers a way to bring Flash content to Apple's iPhone, iPod, and iPad devices.

As far back as 2008, Adobe has been promising a way to bring Flash content to the iPhone. At the company's MAX 2008 conference in San Francisco, CTO Kevin Lynch suggested that all it would take to bring Flash 10 to the iPhone would be a bit more work on the code and "to pass the taste test of Apple's head chef," better known as Steve Jobs.

Since January, following Apple's iPad announcement, it has become evident that Jobs doesn't have the stomach for Flash, a point hammered home by recent changes to the iPhone OS 4.0 Developer SDK Agreement, which includes wording that bans any development tool that relies on any programming language other an Objective-C, C, C++, or JavaScript.

While this sweeping prohibition sent shock waves through the developer community, raising the possibility that hundreds of games developed with popular third-party tools like Unity3D could be banned, the emerging consensus is that Apple's broadly worded prohibition has a single very specific target: Adobe's Flash CS5 Professional Packager for iPhone.

Apple, despite many requests, has not publicly disclosed how it intends to interpret its apparent ban on third-party developer tools.

But Adobe's Mike Chambers, principal product manager for developer relations for the Flash Platform, said in a blog post that he believes that Apple's new contractual language for developers will be used against Adobe.

"While it appears that Apple may selectively enforce the terms, it is our belief that Apple will enforce those terms as they apply to content created with Flash CS5," he said.

Such enforcement, if extended to currently approved apps in the iTunes App Store, could lead to the removal of over 100 apps.

Because Adobe has come to believe that Apple is aiming directly at Flash, Chambers says that his company has decided not to develop its Flash-to-iPhone technology any further.

"We will still be shipping the ability to target the iPhone and iPad in Flash CS5," he said. "However, we are not currently planning any additional investments in that feature."

"The primary goal of Flash has always been to enable cross browser, platform and device development," he said. "The cool web game that you build can easily be targeted and deployed to multiple platforms and devices. However, this is the exact opposite of what Apple wants. They want to tie developers down to their platform, and restrict their options to make it difficult for developers to target other platforms."

Apple did not respond to a request for comment.

What Chambers did not say, through a source with knowledge of the company has confirmed, is that Adobe has been laying the groundwork for a possible lawsuit against Apple, calling other companies affected by the iPhone OS 4.0 developer contract to gauge possible support.

Asked to comment, Adobe said its policy is not to comment on legal matters or rumors.

While it remains to be seen whether Adobe will actually file such a suit, the company is clearly signaling its intent to support Apple's competitor in the mobile space, Google's Android platform.

Not only is Chambers declaring that he will shift his focus from the iPhone to Android devices, but Adobe has featured the head of Google's Android effort, Andy Rubin, in a guest blog post, one that declares Google's support for Adobe and its technology.

Rubin's comments take aim straight at Apple's restrictions.

"Google believes that developers should have their choice of tools and technologies to create applications," said Rubin. "By supporting Adobe AIR on Android we hope that millions of creative designers and developers will be able to express themselves more freely when they create applications for Android devices."

By Thomas Claburn
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Carriers can leverage software-as-a-service (SaaS) options to segregate the core applications and technologies that support their business models from the non-core utility applications and technologies typically required to support the operation of the business.

Insurers need to segregate the core applications and technologies that support their business models from the non-core utility applications and technologies typically required to support the operation of the business but not necessary to enhance the performance of the business. At Harleysville, we take this approach in order to most effectively position our resources and investments to drive innovation and differentiation.

For these non-core utility applications, software as a service (SaaS) has become a compelling alternative. SaaS allows an enterprise to conduct vital business functions without the concern for the support, upgrades and personnel associated with non-core functions. Rather, much like the utilities we use in our homes, the insurer simply can count on the fact that they work, they're maintained and service is available when needed. But insurers should not stop there.

Beyond SaaS are the emerging "platform/infrastructure as a service" (PaaS/IaaS) models, which provide the technologies and platforms required for running the business operations and building and running custom Web applications. The significance of these models is that they eliminate the need to acquire the expensive and underutilized infrastructure components that are necessary to build, test and operate business applications. This means that desktop support, servers, databases, security and application framework build outs are no longer needed within the enterprise. Rather, they are available over the Web, and consumers pay only for what they consume -- nothing more.

Leveraging these models undoubtedly makes the need for standards in the enterprise essential. Imagine if none of the appliances you bought had standard plugs and adapters. How useful would it be when you got one home and tried to hook it up with the utilities in your home?

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Big Blue's strong quarterly report indicates growth may be returning to the tech sector.

IBM on Monday reported first quarter earnings that surpassed Wall Street analysts' expectations.

For the period ended March 30, the tech bellwether recorded a 13% increase in net income, to $2.6 billion. Revenue climbed 5% to $22.9 billion, while earnings per share rose 16%, to $1.97.

On average, analysts surveyed by Thomson First Call were expecting EPS of $1.93 and revenue of $22.75 billion for the quarter.

IBM chairman and CEO Sam Palmisano said the company's performance in the first quarter was boosted by IT market trends and IBM's own efforts.

"We drove significantly improved revenue growth rates from the fourth quarter across our businesses and geographies," Palmisano said, in a statement.

"We had strong results in strategic investment areas, including growth markets, business analytics, and Smarter Planet solutions," Palmisano said.

IBM showed solid results across its various product lines.

Sales of business and technology services, which account for about half the company's top line, were up 4%, year-over-year, to $13.7 billion. Software sales jumped 11%, to $5 billion, while hardware sales climbed 5% to $3.4 billion.

IBM raised full-year earnings guidance to at least $11.20 EPS.

The company's stock traded flat most of Monday as investors stuck to the sidelines in advance of the earnings report. IBM shares were up .47%, to $131.24, in early afternoon trading.

The stock closed up 1.22%, to $132.23.

IBM shares have weathered the tech recession better than issues from most of the company's peers. IBM's earnings have held up despite some top-line growth challenges as the company has shifted a greater percentage of work to low-cost destinations like India and South America in recent years.

IBM also has sought to keep a lid on costs by developing and deploying a range of automation technologies that allow the company to provide IT services more efficiently, in some cases via remote data centers and cloud-based offerings.

By Paul McDougall
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Privately held health IT providers could be prime acquisition targets for larger companies seeking health information exchange solutions, report says.

As the health care industry braces for a slew of technologies that capture, store, protect, and exchange patient data, many small healthcare information technology providers will be gobbled up by larger competitors, an IDC report predicts.

The report, entitled Vendor Assessment: Industry Short List for Health Information Exchange Technologies, said many health IT vendors are small to medium-sized, privately held companies and could be prime acquisition targets for larger companies seeking health information exchange (HIE) solutions.

"Typical of nascent markets, the HIE vendor market is volatile with new entrants and market consolidation. Mergers and acquisitions have been the dominant vendor strategy to build out the HIE technology portfolio," the report said.

As mergers and acquisitions transform the vendor market, these firms will also have to contend with the challenge to deploy HIE technologies that serve integrated delivery networks and health or hospital systems as well as regional health information organizations (RHIOs) and statewide or national HIEs that have competing entities.

"The healthcare environment is a challenging one. There are lots of processes and legacy systems that are not interoperable and they can be difficult from which to extract data. Many HIE tools have gotten better at being able to create an interoperable platform despite those proprietary applications in different parts of a hospital," said Lynne Dunbrack, Program Director at IDC Health Insights and author of the report.

According to Dunbrack, health IT vendors will have an easier time installing HIE technology across integrated delivery systems such as hospitals that have established connectivity to their affiliated community-based physicians making it easier to access patient information.

Dunbrack said it will take a year for these hospital networks to implement HIE technology, but believes that it will take more than double the time for the same implementation to occur among RHIOs and statewide or national organizations tasked with establishing HIE's.

RHIOs are healthcare organizations that collaborate within a geographically defined region or community. They establish a governance structure, develop and manage a set of contractual terms, arrange electronic data exchange, and develop and maintain HIE standards. RHIOs and national health organizations such as the Department of Veterans Affairs, will have a tougher time developing HIE's, the document said.

Much of the problem has to do with bureaucratic red tape which at the state and national level involves longer periods of time to collaborate between organizations as decisions on what technology to buy, who will do the job, and budget approvals in a constrained financial climate are taken into consideration.

According to the report:

"Despite federal and state funding under the Health Information Technology for Economical and Clinical Health (HITECH) Act to spur statewide initiatives, this segment will evolve very slowly because of the following challenges: budgetary constraints at the state level during this economic crisis; other health IT projects competing for resources; coordinating the efforts already under way by enterprise and regional HIEs; lack of stakeholder cooperation; and resolving privacy and security concerns. Federal funding for the matching programs will not begin until fiscal 2011, which will also impede progress."

By Nicole Lewis
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Outsourcing management gets even more important. Yet that's something many IT shops aren't doing well.

When it comes to outsourcing, everyone has a tale of woe. My favorite comes from a software vendor that outsourced a new development project: "They were amateurs and couldn't hit a deadline. It's also why we switched from PHP to Java. It was the wrong platform to start." Many will grumble in agreement, recalling their own horror stories.

However, bigger questions loom. Who picked the platform? (The unhappy customer did.) Did the customer check the work daily? (No.) Did it have automated status reporting? (It didn't.)

Outsourcing is a key part of every modern IT group. Problem is, we still don't seem to do it that well. Twenty-nine percent of the 530 business technology professionals responding to the InformationWeek Analytics 2010 Business of Outsourcing Survey have fired a vendor within the last 12 months. You can blame the partner--or grab a mirror.

Two big trends jump out from this year's survey of companies using IT outsourcing, and both speak to the importance of IT managing outsourcing better.

One is the growth of cloud computing and software-as-a-service initiatives--and the disturbing trend of IT trusting performance monitoring to the vendors. The other is the fact that IT outsourcing is moving up the stack, as vendors take over increasingly strategic functions. Nearly six of 10 IT shops outsource some critical function--management, engineering, or development; almost one-fourth keep executive and management functions in-house but look to outsource everything else. As companies rely more on outsiders, a lack of oversight, management, and even monitoring can have catastrophic consequences.

Our survey shows a continued rise in all types of outsourcing, everything from traditional hardware services and staffing to cloud applications and full-blown data center operations.

However, there are some serious levels of dissatisfaction. With end-user support and development of customer-facing applications, more than half of survey respondents say outsourcing has delivered lower quality. Cloud computing and SaaS get more favorable reviews, with the majority saying it has delivered better quality and 44% planning to expand use. However, there are problems there, too, with almost six out of 10 respondents relying on their cloud vendors to monitor their own performance.

Most IT shops have set the right goals for outsourcing: Freeing up staff for more strategic initiatives is the most-valued benefit, just above cost savings and better alignment of IT staff and costs with business trends. They're also worried about the right problems: unforeseen costs, communication problems, and the time required to manage subcontractors.

Cloud Growth Means Challenges

Cloud computing blurs the lines between what had been conventional outsourcing and internal operations, and it will test IT's management and control policies. But IT pros like what they're getting so far. Most companies (55%) using some kind of cloud computing or SaaS product think it's delivering better quality--with 37% citing that sweet spot of higher quality at lower cost. Interestingly, almost one-fifth say cloud/SaaS delivers better quality but at a higher cost. That higher cost story isn't one cloud computing providers usually tell, so it's a trend to watch closely.

Compare those findings to the dissatisfaction with the more mature category of outsourced end-user support: 59% of survey respondents say it's delivering lower quality than in-house support, including 13% who think it both costs more and provides lower quality. Just 28% say outsourcing improved support quality. So much for a great help desk. In customer-facing application development, over half think outsourcing has lowered quality. Cloud's relatively higher satisfaction helps explain why it's poised to grow.

Unfortunately, IT isn't preparing properly for cloud's growth, which could lead to some nasty surprises. Only 17% say they directly monitor the performance and uptime of all of their cloud and SaaS applications. A quarter monitor only mission-critical items, and a shocking 59% rely on their vendors to monitor themselves. It would seem logical that IT leaders could take all they've learned in the past decade of conventional outsourcing and use it to police the cloud. The problem?

"We don't see IT doing it all that well in the [conventional] outsourcing world," says David Rutchik, with the outsourcing consultancy Pace Harmon. Rutchik says outsourcing vendor management is talked about a lot, but it tends to be much more reactive than proactive.

Firing an outsourcing provider is the ultimate reaction--witness the 29% of IT shops that have done it in the past year. But try firing a SaaS provider after you've integrated the platform into your operations. Cloud can be a bit like a tick--a vendor can latch on easily to your organization and then is a pain to get rid of.

Cloud monitoring and management are critical but in some cases shouldn't be done by IT, Rutchik says. Sound like heresy? The reality is that SaaS providers often have a relationship with business units first--our SaaS research earlier this year found that IT organizations are driving the decision to use SaaS only a third of the time. Rutchik is seeing IT being brought it on the front end of SaaS deployments--to provide the proper governance framework, validate performance, and create interfaces. The IT organization will make sure SaaS fits the company's architecture, from bandwidth to desktops. But once the app's in a steady state, the business unit may be the right one take over its management, he says, since they're most affected by performance.

How To Manage The Cloud

To make sure IT manages the cloud properly, we recommend looking at the top concerns IT has about outsourcing in general, and then tailoring remedies for what's unique about cloud services. The rise of SaaS and cloud computing often is assumed to relieve work on overburdened IT groups, and it can, as our generally positive results show. But cloud computing extends vendor relationships further than ever for some companies, and customers must stretch their management practices to cover it.

What follows from our survey results are the top problems that plague outsourcing in general, followed by steps IT managers should take to protect cloud computing and SaaS projects from them.

Unforeseen costs: Organizations must factor in items beyond the core service, including bandwidth requirements, security upgrades, and monitoring costs.

Communication problems: Typically, cloud projects don't have a point project team or dedicated support reps from the vendor. You need to push for regular contacts before and after the project.

Lack of understanding of our industry: This can be a problem, especially for SaaS initiatives, since the economics of the cloud lean toward one-system-for-all, not industry-specific systems. It's critical to have a complete business requirements plan that can be matched to system functionality.

Time required to manage: Management of the cloud extends well beyond a functional team and should include security, network operations, and application groups, as well as business unit reps taking new responsibility, as Rutchik suggests.

Quality control and compliance: Extend your quality control beyond basic checks to actively monitor vendors. Problem is, only 17% actively monitor all their cloud/SaaS apps.

IT teams also should be involved in scrutinizing cloud deals before they're signed. They're different from conventional outsourcing agreements--a hybrid of outsourcing, software, and leasing--but they're still a major contractual commitment, says Richard Austin, a former general counsel for EDS Canada who now has his own Toronto practice, Austin Technology Law. "Don't let the decision be made at a midlevel within the organization," Austin advises. "Treat it as seriously as any other form of outsourcing."

More than half of our survey respondents say their companies have no system for managing outsourcing requests for proposals. Furthermore, 43% lack a contract management system once the contract's awarded, and 29% lack an online project management system. Can you say "Excel hell"?

Even companies with rigorous monitoring and measurement standards for outsourcers often don't use those measurements internally, says Mark Rosen, a specialist in Lean Six Sigma strategies who has worked on internal quality programs at Fidelity Investments, external quality programs for outsourcer Nadastra, and is now heading a quality initiative with a major U.S. retailer. "External vendors are often willing to provide the details and metrics to win the business. Management then falls short by not forcing the practice to the internal teams, often avoiding obvious performance issues with their own staff."

Companies need to be bluntly honest about the time and cost it takes to manage outsourcing, and then make that investment. Many aren't. It's critical not only for expanded use of the cloud, but also as outsourcing takes on ever-more strategic roles.

Well Beyond The Basics

An "outsource the basics" approach is still followed by 30% of our survey respondents' companies--typically, tasks such as testing, app support, help desk, and discrete development.

However, we're surprised to see how many companies have moved outsourcing up the stack. Seven percent of organizations look to outsource the entire IT function, including executive and senior management roles. Twenty-three percent keep executive and management functions but outsource everything else, including engineering and development roles; 21% keep engineering in-house but outsource development. Added up, 59% of companies outsource one or more of the strategic components of their IT operations.

With any outsourcing, but especially with higher-skill functions such as architecture and engineering, IT leaders have to ask this question: Can they keep their competitive advantage with that knowledge outside the business? It puts added pressure on managers to push providers for the innovation a company needs and its customers expect.

Consider data center operations. Many companies consider it non-core, and nearly half of our survey respondents outsource its operation or support to some extent. Yet some of the biggest strategic decisions in technology today center on the data center--virtualization, next-generation operating systems, and the mix of internal and external cloud computing. How aggressively is your outsourcing vendor pursuing these changes for you? Another area is the fast-moving nature of the Web. Only 10% of companies completely outsource their Web site, but nearly half use some outsourced resources. Companies can't expect outsourcers to have a deep enough understanding of your business in order to know what customers expect from your site in terms of search, content sharing, content ranking, live chat, and integration with Facebook and other social networking sites. Yet those things are vital to a vibrant Web site. Get that wrong, and you'll find your company tweeting in the dark.

The Outsourcing Threat

While most companies accept outsourcing as part of modern IT, it's important to acknowledge that 26% of our survey respondents say staffers see outsourcing as a threat to their jobs. The only surprise is it's not higher, given the fragile U.S. economy and high unemployment.

Companies of all sizes cut back across departments, including IT. In some cases, IT leaders have used this downturn to drive strategic change, like moving apps to a cloud model, that seemed too disruptive before. Even as the economy improves, some CIOs will continue to drive this change, resisting hiring as long as possible, pushing the limits of flexible staffing models and exploring cloud-based approaches.

"It's a gray moment for IT," says Terrence Gaughan, a partner with DevSelect, an outsourcing and IT staffing firm. "IT is getting charged with solving a problem and even given money to do it." However, CIOs will be reluctant to hire in a recovery that feels shaky. Says Gaughan: "It's going to be difficult to be the 'first' to rehire, especially for IT."

Large companies have discreetly formalized this approach, setting a fixed percentage of IT staffing as outsourced. One survey respondent's employer has targeted a 40% outsourcing model. Grumble at the model if you must, but there's a humane element to it: It's a lot easier to cut back a staffing contract than lay off one of your own.

To execute it, however, most teams must improve their management of all outsourcing. The early productivity and cost-saving gains we're seeing with cloud and SaaS initiatives may vaporize if companies don't invest in integrated monitoring and management systems. Break/fix outsourcing, app dev, and simple Web conferencing are still large parts of the outsourcing picture, but our survey shows the biggest growth is in outsourcing of more complex engineering tasks and broader cloud systems that must be tightly integrated into your ecosystem.

Outsourcing has always had the potential to produce competitive advantage--anything most companies struggle with, and some do well, separates winners and losers. Our data shows that even in the category where IT outsourcing is most successful, only 37% of companies hit that magical quadrant of "lower cost, higher quality," while in the worst category it's 17%. Expanding outsourcing to higher skill levels and into more sophisticated cloud computing initiatives will only raise the potential to gain advantage, and ramp up the stakes for effective outsourcing management.

One respondent summed it up well: "We regularly look to outsourcing at different points to move us forward, assuming certain responsibilities if it makes sense in terms of our overall business. We think of it as an evolutionary process." Remember, though, what drives evolution: Only the fittest survive.

Michael Healey is president of Yeoman Technology Group.

By Michael Healey
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An early peek at the upgraded Google Apps and an exclusive series of interviews with Google engineers reveals how the productivity apps have been formulated to take on a bigger role in the office -- and a bite out of Microsoft's Office suite.

There's More

Video: David Berlind explores new Docs features

More analysis: Of Microsoft's cloud offerings, and other cloud productivity vendors

Research: A report including this analysis and more, along with the complete data set of 14 charts based on our survey of 571 business technology pros.

In a play for a bigger chunk of business users in the enterprise and SOHO markets, Google has refreshed its online word processing (Google Documents) and spreadsheet (Google Spreadsheets) applications. In the process, it has put office titan Microsoft on notice: realtime collaboration and online-only software are here to stay.

For years it's been hard to know how serious Google was about business software. Now its strategy is clear: It's going for Microsoft's jugular.

In a walkthrough of the revised Google Documents app with product manager Jeff Harris, TechWeb Chief Content Officer David Berlind got an inside look at changes to the Microsoft Word challenger.

To test the realtime collaboration capabilities of Google Docs, InformationWeek editors and reporters worked collectively on editing documents. Verdict: "From a collaboration point of view, it's sort of like breathing pure oxygen. But it takes some getting used to..."

Realtime collaboration for Spreadsheets users was already a done deal, so Google's rewrite of the app focused on and tinkering under the hood to add more muscle to features and performance. A visit with Google engineers revealed some of the process that went into the changes. See video here.

So, who will reign in this battle for the collaborative backbone of business computing? No one knows, of course, but a collateral winners are already emerging. CIOs and other IT decision makers, like the Los Angeles City Council, are finding reasons to switch.

By Cora Nucci
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Share trading has gained great impetus in recent times. People are seeing how the market is fast recuperating in front of their eyes. The market has drastically gone down during the recession and as per economists and analysts, such a downtrend will not surface itself for the next several years. So, it is a continuous upward trend with negligible fall that the NSE market and BSE market will witness at present and in the future. There are countless investors who are engaged in stock market trading in India. And more investors are joining the race; the portfolio of investors include all sections of the people from employed to unemployed, from students to retired professionals, and the like. It is because of the lucrative stock market trading opportunities that people are driven towards it.

Whether you are investing in the NSE market or BSE market, what is of substance is your know-how about the stock market. In today’s times, you need not personally meet the share broker to open an account or take trading tips. Online share trading has simplified the trading process. No matter where you are in any part of the world, if you have a trading account, you can buy and sell shares as per your convenience online. You will no doubt be guided by your share broker but that is not enough. You cannot rely on him/her only; it is ultimately you who will give the green signal in case of purchasing and selling. Your share broker will not be responsible for your loss or profits. Of course he/she will take a monthly or yearly fee or as decided for handling your transactions.

Stocks may retain their value or loss the same very quickly depending on market conditions. Market experts, in their books and articles, have delved on the fact that companies that have maintained consistent growth record over the years are less prone to risks than those companies that show mixed results. Going by their advice if you choose stocks of companies that projects good growth in the future based on its past records, you can no doubt experience a win-win situation.

Novice investors will find the zigzag graph of the NSE market index or BSE market index very confusing. It will take them some time to learn and then get equipped with the nuances of trading. It is again with time that one learns as knowledge has no boundaries. The more you learn, your knowledge horizons will broaden further and you will still feel that there are lots more to learn. Patience and not panicking even in times of losses will make you an expert trader.

By: Nirmal Soni

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The buy is consistent with the strategy of adding complimentary assets to its Oracle Health Sciences division.

Oracle said Friday it will buy Phase Forward, a provider of applications for life sciences companies and healthcare providers, in a cash deal worth around $685 million.

In a statement, Oracle said the acquisition is consistent with its strategy to add complimentary assets to its Oracle Health Sciences division. The company also predicts that Phase Forward's SaaS- based integrated clinical research suite which manages clinical development Phase 1 clinical trials through regulatory submission to post-approval monitoring, will help Oracle's life science customers more effectively capture, access, and share data securely.

"It's a little bit of a surprise, but as one begins to look at it, this is a pretty good opportunity for Oracle," said Alan Louie, Research Director at IDC Health Insights.

According to Louie, the life sciences industry has been moving toward a more comprehensive interconnected e-clinical solution. Customers want technology that connects the different e-clinical segments such as data capture, clinical trial management systems and safety management processes.

"Oracle has market-leading clinical data management systems, they have market-leading clinical trial management systems with Siebel clinical, but their front-end electronic data capture solution, Oracle RDC, is not what one would define as best-of-breed," Louie said.

Oracle's purchase of Phase Forward provides the database giant with access to InForm, an electronic data capture solution which is among the best in the industry," Louie said.

Other advantages for Oracle, according to Louie, include acquiring Phase Forward's interactive voice response technology, its clinical trial design tools, and its FDA electronic submission platform.

Mark Bowker, analyst at Enterprise Strategy Group, said the purchase puts Oracle in a better position to capture healthcare and life sciences IT dollars.

"Sixty seven percent of health care organizations will increase IT spending in 2010, driven by compliance and security requirements. Billing and business intelligence are top application priorities," Bowker said. "Phase Forward has the potential to help Oracle further demonstrate its value where decisions are being made -- at the clinician level and not from a technology perspective like many may be fooled into thinking," Bowker adds.

"The life sciences and healthcare industries are converging as they seek to control costs while accelerating patient-centered innovation," Neil de Crescenzo, Senior Vice President and General Manager, Oracle Health Sciences said in a statement "Phase Forward brings outstanding products and employees with significant expertise to Oracle that will help enable the delivery of personalized medicine and value-based healthcare."

In a letter posted on Oracle's website, Crescenzo also said Phase Forward's management and employees will join Oracle as a part of the Oracle Health Sciences global business unit, ensuring the continuity of products and services delivery for Phase Forward customers. The transaction is expected to close in the mid-2010.

By Nicole Lewis
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Despite its relatively small share of the PC market, Apple's overall market penetration makes it a major player in many parts of the country.

Apple sold 1,130,000 computers in the U.S. in the first quarter of 2010, according to IDC, a figure that represents 6.4% of the market.

But the popularity of Apple's iPod, iPhone, and now iPad lines means that the company can count 21.6% of adults nationwide among its customers, according to a new report from Experian Simmons. And that's to say nothing of those under age 18 who use Apple devices.

In many urban areas of the U.S., Apple's presence is stronger still.

The top geographic market for Apple is where it makes its home, in California's San Francisco Bay Area, including Oakland and San Jose. Almost one-third of all adult residents of the Bay Area own at least one of Apple's three core products: Mac, iPhone, or iPod.

Of Apple's top 10 regional markets, according to Experian Simmons, four are in California.

Beyond the Bay Area, where Apple product ownership is 49% above the national average, the three other Apple strongholds in California are San Diego (#3), Monterey-Salinas (#8), and the Santa Barbara-Santa Marina-San Luis Obispo region (#9).

In the San Diego area, 31.8% of the area's 2.2 million adults are "admitted Mac users," Experian Simmons notes, as if that were something to conceal.

In the Monterey-Salinas area, home to about half a million adults, about 151,000 or 28.1% own a Mac, iPhone or iPod. And there's only one Apple retail store in the vicinity.

The Santa Barbara area, meanwhile, is home to 141,000 Apple customers, or about 27.9% of area adults.

Other top Apple strongholds include Boston, MA (#2), New York, NY (#4), Washington, D.C. (#5), Chicago, IL (#7), and Las Vegas, NV (#10).

By Thomas Claburn
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Hiring engineers; planning to develop and test new ideas and turn them into products quickly.

MasterCard executives today said the card company is going to spend "tens of millions per year" on people and resources for a new research and development arm called MasterCard Labs. To start with, the Labs will be based in existing MasterCard facilities in Singapore, Dublin, Purchase (N.Y.), and St. Louis (where much of MasterCard's technology operations are based).

"The fact that we support 210 countries around world with an integrated global processing platform means we've got assets all over the world," notes Rob Reeg, MasterCard's president of global technology and operations, who spoke to Bank Systems & Technology in an exclusive interview today. "It's a unique footprint. The linking of the lab is key for us because it gives us a playground where we can let things happen in a standalone environment, test them out quickly and bring them to market quickly."

The Labs will be staffed by a global virtual team, Reeg says, although he would not divulge numbers of current or future employees who will be dedicated to the effort. MasterCard has already begun hiring for the team and is looking mostly for engineering talent, according to Josh Peirez, MasterCard's global head of innovation, who spoke in the same interview. The positions will all be posted on MasterCard's website, he says. "We're looking for creative development engineers and programmers, people who know how to turn an idea into something that works, people who can manage outside vendors and integrate different technologies — because often the innovation is in how you bring certain technologies together — and people who can quickly understand how to build these things in a way that could be commercialized, so when we build products and bring them to market, we can rapidly scale them."

The Labs are indeed a new initiative and not marketing spin, Peirez insists. "What we run today are a series of networks," he says. "This is different, this is an R&D center looking at technology from a consumer, merchant and bank perspective." The innovations will be not in the existing networks but in the front-end user experience, he says.

Recent innovations from Peirez's group have included MoneySend (a program that lets cardholders transfer money from one MasterCard or Maestro card to another via ATMs, and can be expanded to include the Internet, bank branches and mobile phones); inControl (a program that offers authorization, transaction routing and alert controls; and Marketplace (which provides a personalized shopping experience for cardholders).

"Today we have no dearth of ideas," Peirez notes. "If anything, we have more ideas than we could possibly action."

Reeg adds that one goal of the new Labs is to quickly find the ideas that aren't going to work. "We want to do a fail fast," he says.

The three areas of focus for the R&D lab this year will be mobile, ecommerce, and person to person payments, Peirez says. The lab staff will work to enhance existing products and develop new ones.

MasterCard also announced today the appointment of Garry Lyons as group executive, research and development, who will oversee MasterCard Labs.

By Penny Crosman
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Despite strong first quarter results, the company's stock slipped on worries about costs.

Google on Thursday reported Q1 2010 revenues of $6.77 billion, above expectations but not enough to shock.

Wall Street consensus was $6.60 per share, according to Thomson Reuters. Google delivered $6.76 per share.

Google CFO Patrick Pichette said in a statement that the company performed well and that it intends to continue investing in innovation for its core and emerging businesses and in its effort to support the open Web.

Nonetheless, Google's shares were down almost 5% in after-hours trading shortly after the company disclosed its financial results, perhaps reflecting lingering uncertainty about the company's prospects in China and/or concern about the company's growing headcount and expenses.

Google hired almost 800 people since December, bringing its total number of full-time employees to 20,621.

In a conference call for investors, Pichette said the company planned to keep hiring to fuel its growth, specifically in support of engineering and sales. "We are continuing to invest heavily in people, products, and acquisitions," he said. "We've already stepped up hiring and we expect to continue hiring through the year."

Though Pichette stressed that Google's hiring standards remain high, he made it sound as if the talent Google seeks isn't easy to find. "Every time I can find another great engineer to add to the Chrome OS platform, I'm going to hire them," he said.

Google CEO Eric Schmidt did not participate in the call. Pichette said not to read anything into this change.

The company's search, display, mobile, enterprise businesses are all strong, said Pichette.

Google's Nexus One, Pichette said, "is a profitable business for us."

The company declined to provide specific sales figures but VP of engineering Jeff Huber said that Google was seeing 60,000 activations of Android phones daily.

Asked whether Google expected to continue to be the default search provider on Apple's mobile devices, Huber said that Google historically has had a strong relationship with Apple and that he hoped it will continue.

With regard to China, Pichette defended the company's decision to move its search operations from mainland China to Hong Kong.

"This was a tough situation and we really believe we made the right decision," he said, adding that the company still has engineers and marketing personnel in mainland China.

By Thomas Claburn
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Sandy Bridge chips, set to go into production in late 2010, are based on a next-generation microarchitecture.

Intel says it plans to start production of processors based on its next-generation microarchitecture, codenamed Sandy Bridge, late this year.

The chipmaker released a few details of its upcoming 32-nanometer replacement for Nehalem at the Intel Developer Forum in Beijing, which ends Wednesday. In addition to discussing Sandy Bridge, Intel unveiled a forthcoming system-on-chip, codenamed Tunnel Creek, featuring an Intel Atom processor core.

Sandy Bridge will be the first Intel microarchitecture to include the company's Advanced Vector Extension to the x86 instruction set architecture. Intel proposed AVX in March 2008 for inclusion in x86 processors from Intel and Advanced Micro Devices.

AVX is expected to improve processors' performance in handling floating point intensive calculations in general applications that process images, video, and audio, and in engineering applications that provide 3-D modeling and analysis, scientific simulation, and financial analytics.

Sandy Bridge will replace Intel's current 45-nanometer microarchitecture, codenamed Nehalem. Production of chips based on Sandy Bridge is scheduled to begin in late 2010, David "Dadi" Perlmutter, executive VP and co-general manager of Intel Architecture Group, said during his IDF keynote.

Also at IDF, Intel introduced Tunnel Creek, a SoC for embedded applications, such as smartphones and in-vehicle infotainment systems. Doug Davis, corporate VP and general manager of Intel's embedded and communications group, said during his keynote that Tunnel Creek would combine the Atom core, memory controller hub, graphics engine, and video engine onto one chip.

The new SoC would be the first from Intel to use PCI Express as the interconnect for motherboard-mounted peripherals. Use of the standard will make it easier for Intel partners to connect their own custom-built silicon to the SoC, Davis said. Intel did not provide a release date for Tunnel Creek.

Perlmutter, however, said Intel was on schedule to release in the first half of this year Moorestown. The platform comprises a SoC, code-named Lincroft, which integrates a 45-nanometer Atom, a graphics processor, video, and memory controller; and an I/O hub, code-named Langwell.

The platform will be accompanied by Intel's Moblin operating system, which handles voice calls, and will compete with ARM-based products from Nvidia, Qualcomm, and Texas Instruments.

Intel has been working for several years on developing low-power platforms that will expand its product line from traditional PCs and servers to the faster-growing market for smartphones and other handheld devices, most of which use ARM-based processors today.

As part of that push in handheld computing devices, Intel has partnered with Nokia in developing a mobile operating system called MeeGo, which would run on Intel silicon. The OS combines two Linux-based OSes: Intel's Moblin and Nokia's Maemo. Working with the open source community, the two vendors envision MeeGo devices eventually competing with smartphone platforms from Apple, Google, and Research in Motion.

By Antone Gonsalves
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Not only is fake anti-virus software increasingly common, but it delivers half of the malicious ads detected.

Fake anti-virus software is on the rise and currently accounts for about 15% of all malware detected, according to a forthcoming report from Google.

Fake anti-virus software purports to be software than can find and remove malware. But in fact it's malware, the very thing it's supposed to eliminate.

Fake AV software typically pretends to scan the victim's computer and to find some form of malware, at which point it seeks payment from the victim to remove the non-existent malware.

Whether or not there's a payment, the fake AV software may install more malware.

Computer users often come into contact with fake AV software through spam Web sites and online ads, which explains why Google is interested in the topic.

Beyond its general concern with maintaining user trust and security, Google wants to make sure that online ads don't become such a pervasive means of malware delivery that users reject legitimate marketing as a risk.

In a blog post on Wednesday, Google security engineer Niels Provos said, "[T]he Fake AV threat is rising in prevalence, both absolutely, and relative to other forms of Web-based malware."

Google's forthcoming report, slated for presentation later this month at the Workshop on Large-Scale Exploits and Emergent Threats (LEET) in San Jose, Calif., says the company found 11,000 domains involved in distributing fake AV software over the past 13 months.

The report, "The Nocebo Effect on the Web: An Analysis of Fake AV distribution," says that fake AV attacks represent 60% of the malware found on Web sites that include trending keywords -- popular search terms that generate visitor traffic.

It also says that fake AV software is responsible for 50% of all malware delivered via online ads, five times more than a year ago.

In a related note, Google's Postini Q1 spam report indicates that despite several high profile botnet takedowns, spam volume as a percentage of total e-mail volume remains steady.

"This suggests that there's no shortage of botnets out there for spammers to use," said Gopal Shah, from Google's Postini team, in a blog post. "If one botnet goes offline, spammers simply buy, rent, or deploy another, making it difficult for the anti-spam community to make significant inroads in the fight against spam with individual botnet takedowns."

By Thomas Claburn
Read the Original Article at InformationWeek

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