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02.03.12

Debt in Attachmate

Posted in Finance, Novell at 11:52 am by Dr. Roy Schestowitz

Lost in the market

Lost kid

Summary: The company that bought Novell has a poor outlook, financial issues, and little signs of expansion/renaissance

THE CIRCUMSTANCES under which Novell got sold were mysterious to say the least. Nowadays, Novell products are still traded and marketed under the Novell brand, but the owner is not Novell. To quote a new example:

NetIQ’s partner ecosystem includes more than 600 MSPs and resellers that serve over 12,000 business customers in North America, Europe, the Middle East and Africa (EMEA). The release arrives roughly one year after NetIQ gained identity and security management solutions from Novell, which Attachmate acquired.

We do not hear much from NetIQ. Then again, there is hardly any news from Novell and Attachmate, either. When there is news it is often bad news (like departures), but how about this from the business press? Attachmate wants loans:

Attachmate Corp. (ATTM), a systems infrastructure software provider, is seeking $400 million in loans to fund a dividend to sponsors, according to a person with knowledge of the transaction.

A $300 million incremental first-lien term loan due in April 2017 will pay 5.75 percentage points more than the London interbank bank offered rate, said the person, who declined to be identified because the terms are private. Libor, the rate banks say they can borrow in dollar from each other, will have a 1.5 percent floor.

Attachmate also needed to borrow money to buy Novell. Moody’s, a corrupt analysts firm, downgrades Attachmate to negative outlook:

Moody’s revises Attachmate’s outlook to negative after dividend announcement, affirms B2 rating

Might Attachmate just die in a matter of years, just like Novell? Here is another news report about those loans. We are going to keep track of that in months to come. Later today we’ll write more about Novell.

01.19.12

Gates Wants the Public System to Pay the Bill

Posted in Bill Gates, Finance at 12:19 pm by Dr. Roy Schestowitz

Microsoft cronies

Summary: A quick update on the education front, which is being influenced (by proxy) by Bill Gates for the sake of private profits

THE GATES FOUNDATION, which already embezzles the American public, has been trying to hijack the US education system for several years now, turning it into a profit-making machine for all the wrong people, mostly at the expense of children and teachers.

Techrights has been tracking the matter for about 3 years now and a comment from Danaher M Dempsey Jr stood out as saying:

What the ed reformers are doing, de-professionalizing and demonizing teachers, will have the opposite effect. Who in their right mind would want to teach under the conditions of high stakes testing, standardized curriculum with matching tests, longer days with no additional pay and no additional support? And of course, larger class sizes which seems to be a new thing for Bill Gates and the other geniuses who know what’s best for the rest of us. According to him, class size doesn’t matter and why should it? His idea is ultimately online learning so basically in his eyes teachers, human beings, are expendable, Teachers are “Human Capitol” as the Gates backed NCTQ reports claim.

Another post from the same blog says:

Last year Bill Gates, a big promoter of charter schools, gave Stand for Children $3,476,300 in funding.

And then there’s PIE, another moneyed group, who is also funding SFC and is a big proponent of charter schools.

[...]

So, who is Chad Magendanz and what does he have to do with Stand for Children and charter schools? Apparently a lot. It might have happened innocently enough for Mr. Magendanz who received campaign funding from SFC and endorsements from Kelly Munn and Lisa MacFarland both with the Gates backed League of Education Voters during his campaign in 2008 when he ran for the Issaquah School board and again in 2009 when he ran for re-election. Even before that he was a member of SFC but this boost to school board member seemed to help him rise up through the ranks of SFC and become a spokesperson for the organization during the last legislative session.

[...]

So, where did that name just surface again? As one of the PTA members involved in developing the proposal for charter schools that will be introduced in the Washington State Legislative session this week. The same session where one of the Gates backed organizations, LEV, an organization that is pushing charter schools in our state will be speaking. See So much for fair and balanced with our Washington State PTA. The speaker is George Scarola and he is a lobbyist for LEV.

We are going to provide some more examples of front groups that Gates is funding to ruin the education system for the sake of private profits. The problem is, we lack the time to research the issue more profoundly like we used to. We catch up with older news, still.

12.26.11

Microsoft May Soon Drop to Fourth Position Among Tech Companies

Posted in Finance, Microsoft at 4:29 am by Dr. Roy Schestowitz

Steps

Summary: The relative value of Microsoft is diminished as new technology companies rise at its expense

TECHRIGHTS is beginning to focus on threats other than Novell and Microsoft because Novell is dead and Microsoft is going nowhere fast.

Consider the fact that IBM occasionally passes Microsoft in terms of market cap (IBM and Apple are both more stable than Microsoft in their key markets) and Google too is said to be approaching Microsoft’s market cap. To quote CNET:

Google, the leader of the Internet era of computing through the aughts, now has a US$200 billion market capitalization and is on the verge of passing Microsoft’s market cap of US$215 billion. Microsoft was the leader of the PC era of computing and continues to dominate the desktop, notebook, and server software market for Intel-based x86 computers.

If we lost track of Microsoft (we used to cover it more frequently in 2010), it is because looking in the long run, Microsoft might not be the #1 threat to GNU/Linux and FOSS. We try to look ahead and spot new barriers with sufficient foresight. Apple begins to trouble us more than Microsoft in some ways.

We often stressed that Microsoft was the #1 foe but also reassured readers that Microsoft was going down; these are not conflicting statements at all because Microsoft basically attacks its #1 rival while going down, hopelessly trying to delay the inevitable (like selling at a loss to stop GNU/Linux on sub-notebooks).

12.18.11

Executive Director of The Economic Opportunity Institute Slams Microsoft for Not Paying Tax

Posted in Finance, Microsoft at 11:10 am by Dr. Roy Schestowitz

Design

Summary: Microsoft’s practices of tax dodging have not dodged the attention of people who address the problem

THE problems with Microsoft are numerous. We can only ever effectively address one at a time. Putting aside technical problems, there are also legal problems and Microsoft’s history shows complete disregard for the law. No company — even of comparable size — can really be named for that, mercenaries aside.

The Executive Director of The Economic Opportunity Institute writes an opinion piece which names Microsoft’s attitude toward taxation. To quote, Microsoft “still needs to skimp on taxes. By running its licensing sales through a shop in Reno, Nev., it avoids royalty taxes that could be funding high-quality schools for Washington’s children.

“The Legislature has enabled Microsoft to continue this ruse. Last year the state budget included a provision to ensure that only Microsoft’s licensing revenue from Washington state customers is taxable. For good measure, the Legislature agreed to an amnesty clause that legally prohibits the state from trying to collect back taxes owed by Microsoft before the narrower definition of taxable licenses was passed.

“So how much did public school students and their teachers and professors lose from this ruse? Somewhere between $100 million and $400 million a year for the past 15 years. (We can’t get much more accurate because we can’t see Microsoft’s internal corporate accounting.)

“Add the $104 million Microsoft got in tax deferrals from the state in 2010, and the $2 million it received in tax credits, and you are a long way along the path to figuring out the revenue problem in our state.

“Microsoft’s corporate counsel recently weighed in on the state’s budget woes: “It’s important for the state to avoid further reductions in higher education funding… It’s similarly important to maintain investments in K-12 education across the state…” Which, I guess, is (squishily) endorsing the proposed sales tax increase that would directly hit low- and middle-class families in the pocketbook. But it’s the waste, fraud and abuse in our own tax code that we should be going after — not the students at Everett High School, not the students at Everett Community College, not their teachers and professors, not their parents, and not their daily purchases.”

It is even worse than that because the legislation in place had former Microsoft folks responsible for it. They broke the system.

We have already explained this point along with many others in previous posts on the subject. One of the better sources of information on this subject is a former Microsoft employee who further explains:

1) $1.51 Billion in Tax Savings: Based on Microsoft’s own reporting, I estimate the company has saved $1.51 billion in taxes, interest and penalties since 1998. For the first time, we’ve published our entire analysis in a Google Docs spreadsheet: Financial History of Microsoft’s Nevada Tax Dodge.

This estimate includes the $104 million that Microsoft saved last year after Chair of the Finance Committee Ross Hunter, a former Microsoft Executive, led the Democratically controlled Legislature to drastically shrink the Royalty Tax from a tax on worldwide revenue to one based just on sales to Washington State customers. Hunter’s action will continue to cost the state more than $100 million annually going forward. Hunter even slipped in a section to grant Microsoft amnesty from its past abuses.

2) $4.37 Billion in Tax Savings: The Royalty Tax rate actually was 1.5 percent (more than three times higher) prior to 1998, but was cut in response to software industry lobbying. Scenario B in the Financial History shows that if not for its lobbying to cut the Royalty Tax from 1.5 to .484 percent, Microsoft would owe $4.37 billion in taxes, interest and penalties.

Separately he notes: “When I interviewed Microsoft’s General Council and Vice President Brad Smith in 2004 for Citizen Microsoft, he admitted the tax avoidance effort, while attempting to make light of its scope…”

So even Microsoft admits that it is doing this. But it does not really respond to queries about it. Once in 4 years when there are elections in the US it simply bribes the candidates (as we showed before) which keeps regulation at bay. That is a subject for another day. The “Occupy” protesters have legitimate reasons to be upset. Bill Gates and Microsoft hardly pay any tax. But the problem is even broader because more plutocrats and corporations receive exemptions they do not deserve and they use the media which they own to justify it with sound bites like “job creators”.

12.08.11

Links – SOPA and NDAA round up.

Posted in Antitrust, Finance, Hardware at 5:34 am by Guest Editorial Team

Reader’s Picks

11.29.11

Puppet Attracts Millions in Investment

Posted in Finance, Free/Libre Software at 8:59 am by Dr. Roy Schestowitz

Puppet Labs

Summary: A short Puppet interview delivered upon the news about a multi-million-dollar investment

Puppet is a Free/open source software tool which is used by many companies. I rely on it heavily at work. As we recently covered the release of a Puppet book we decided to also celebrate the news about Puppet Labs getting more funding. We spoke to Luke about the news and here are his answers.

1. Congratulations on the news, Luke. How long was this under negotiation and who was the initiator?

Luke: The investment was negotiated quite quickly. We had multiple outside investors who were interested in initiating a round, but our existing investors were excited enough about Puppet Labs that they proposed a deal we were happy with before we had talked to more than a couple outside investors.

2. At what capacity does Google use Puppet in-house to the best of your knowledge?

Luke: Google has published that they use Puppet on thousands of hosts in their corporate IT, but they don’t publish specific numbers. Their installation is rare in that it primarily uses Puppet to manage workstations and laptops, as opposed to servers.

3. What will the news mean to existing users of Puppet?

Luke: It means we’ve got the resources to continue focusing on improving our product while we grow our sales and marketing teams, to enable us to bring Puppet to a wider group of users.

“Cisco has not yet gone public as a user of Puppet,” explained to us the PR agent of Puppet Labs, “so we cannot explicitly state that Cisco uses Puppet, but I can give you a bit of background on Puppet and Cisco: Cisco is a great fit for Puppet because the demographic is a nearly-perfect overlap consisting of network admins and sysadmins, and Cisco has a lot of management issues that Puppet can help solve. Cisco is moving into virtualization and knows the Puppet infrastructure very well.”

Here is the press release (November 29th, 2011).


Puppet Labs Raises $8.5M in Series C Funding

Cisco, Google Ventures, and VMware Join Kleiner Perkins, True Ventures, and Radar Partners To Build On Market Success and Accelerate Growth

PORTLAND, OR – NOVEMBER 29, 2011 – Puppet Labs, the leading provider of IT automation software for system administrators, today announced the closing of $8.5 million in Series C financing to further accelerate the company’s already strong growth and customer success. New investors Cisco, Google Ventures and VMware join existing investors Kleiner Perkins Caufield & Byers, True Ventures, and Radar Partners. With the $8.5 million investment, Puppet Labs has now raised a total of $15.75 million.

The funding caps off a pivotal year for the company, which now boasts more than 250 customers including Zynga, Twitter, NYSE, Disney, Citrix, Oracle/Sun, Constant Contact, Match.com, Shopzilla, Los Alamos National Laboratory, and Stanford University. In January, Puppet Labs expanded beyond its open source roots and announced Puppet Enterprise, the first commercial version of Puppet™, the powerful yet easy-to-use IT automation solution for system administrators. In March, the company was chosen by AlwaysOn as one of the “OnDemand Top 100” winners.

In September, Puppet Labs announced Puppet Enterprise 2.0 at its annual user conference, PuppetConf. Puppet Enterprise 2.0, the primary driver of business growth, has opened new markets for Puppet Labs in making the provisioning, configuring, and managing of virtualized and cloud infrastructure dramatically easier for system administrators.

In October, The Wall Street Journal noted that the demand for IT professionals with “Puppet skills” had tripled over the previous 12 months. This year has also seen Puppet Labs’ community grow beyond North America and Europe, with user groups and meet-ups sprouting worldwide, including in China, India, and Japan. Puppet Labs has also continued to grow its partner ecosystem such that it now offers integrations with VMware, Amazon Web Services, Cisco, OpenStack, Eucalyptus, RightScale, Zenoss, to name a few.

“The participation of these new investors in this latest round reinforces our lead in providing powerful IT automation tools for system administrators, whether deploying applications on-premise or in the cloud,” said Luke Kanies, CEO of Puppet Labs. “Together, we are well-positioned to enable IT organizations to fully capitalize on the tectonic shifts of virtualization and cloud computing in their delivery of business results.”

About Puppet Labs

Puppet Labs, Inc. was founded in 2005 and shipped the first release of the open source Puppet Project later the same year. The popularity of Puppet Labs’ IT automation solution has since grown to where it is now responsible for managing millions of nodes across thousands of organizations, both on-premise and in the cloud, including Zynga, Citrix, Shopzilla, Match.com, Oracle/Sun, to name a few. Now numbering sixty employees and based in Portland, Oregon, Puppet Labs is backed by Cisco, Google Ventures, Kleiner Perkins Caufield & Byers, Radar Partners, True Ventures, and VMware.

11.27.11

When Former Microsoft Employees Turn Against Microsoft

Posted in Finance, Microsoft at 2:18 pm by Dr. Roy Schestowitz

Jeff

Summary: Thoughts and questions to one who protests against Microsoft’s tax dodge

NOW that there are worldwide protests against corporate dodging of tax it seems like a good opportunity to recall what Microsoft does all around the world to just vacuum some money while giving nothing in return.

Our past articles about this serious issue help accumulate examples that include convictions. Microsoft was not always able to change the law to legalise what is essentially tax evasion. One former employee of Microsoft studied what Microsoft had done politically and then charged his former bosses. In his latest post he corrects what he calls a “wrong” banner and points out that “[i]n 2010, the Legislature changed the state’s Royalty Tax in Microsoft’s favor. The change was led by (wait for it) former Microsoft executive Ross Hunter, Democratic Chair of the Finance committee. The Royalty Tax used to be a .484%* tax on worldwide revenue from software licensing. Microsoft claimed its licensing revenue from its Alter Ego corporate sub-identity in Nevada to avoid the tax. It saved between $1.51 billion and $6.1 billion depending on how you calculate it. However, Hunter changed the tax so the Royalty Tax is now apportioned. The tax now only applies to sales to Washington State customers (not worldwide revenues).”

How is what legal? Well, when a company’s cronies write the law, everything is possible. Here is another new example of Microsoft’s hypocrisy:

TechFlash reports that Microsoft’s General Counsel Brad Smith has called for the Governor to end cuts to higher education and is supportive of an increase to our state’s sales tax. Microsoft loves the sales tax because it’s a regressive tax – meaning that the poor pay a higher percent of their income in taxes than the rich:

“People earning less than $20,000 annually pay 17.3 percent of family income toward sales and excise taxes and property taxes, the report said. People making between $99,000 and $198,000 each year pay 7.6 percent toward their tax bill. Meanwhill, people in the top 1 percent of earners – those making more than $537,000 a year – pay just 2.9 percent, the report said.”

The Institute for Taxation and Economic Policy (ITEP) reports that Washington State already has the most regressive tax structure in the country.

If it weren’t for Microsoft’s Nevada Tax Dodge and its lobbying effort, Washington State wouldn’t have a budget deficit right now. We’ll be updating our reporting on this soon (our earlier summary is here).

This is not the only example of such hypocrisy. Bill Gates and his father need not pay tax because they pretend to run a (for-profit and PR) charity, which exempts them for it while they lobby for more tax burden on the rich, excluding themselves of course. The press misreports this all the time because the PR machine of Bill is hard at work.

Techrights was trying to get an interview with the former Microsoft employee who understands the tax dodge very well. I prepared the following questions, but have not received a response yet. The questions were:

- Could you please start by explaining the tax dodge scenario and the political situation that enables it?

- Is there someone in the political system that facilitates or guards Microsoft’s practices of tax dodging?

- Have you managed to get in direct contact with officials that have a conflict of interest to explain?

- Have any Microsoft executives been contacted by you or the press to explain or to justify what they are doing?

- Are you familiar with Ireland’s status as a tax haven for Microsoft’s European presence? Is that similar to what Microsoft is doing in the United States?

- Did you find Seattle’s media forthcoming when approached to give coverage to this problem?

- What do you perceive as the best course of action to address this issue?

- Is the raising of public awareness sufficient for change? Are petitions or formal complaints fruitful based on your experience?

We would still like to have those questions answered as they would help shed light on what those who dedicated their entire activism to this issue can educate us best and help address the injustice — essentially the robbing of the American public for a few billionaires to get even richer.

11.17.11

Quitting the Pretence – Part of Microsoft is Just a Patent Troll

Posted in Finance, Microsoft, Patents at 12:16 pm by Dr. Roy Schestowitz

Who is Microsoft joking anyway?

Kid clowns

Summary: People who bet their money on Microsoft want to see the company split and the company’s growing business seems to be extorting the competition in dubious ways

HAD Microsoft quit the mobile efforts (which would make total economic sense), then in that particular area it would have qualified as a patent troll, based on the definition.

Microsoft is still a fairly large company (yet small compared to HP or IBM). It operates in many areas and profits only in few, notably Office and Windows (to a decreasing extent). Monopoly tends to do that. Monopoly abuse tends to shield it.

So, Microsoft might be splitting itself into a patent troll (euphemism “licensing”) and other parts, at least if shareholders get their way. There are several articles right now about the shareholders’ meeting. A toned-down article from Microsoft’s ‘news’ site says that “Microsoft Corp shareholders filed out of the software giant’s annual meeting grumbling that they did not get to ask more questions in their once-a-year opportunity to quiz Chairman Bill Gates and CEO Steve Ballmer.

“The gathering broke up with only a smattering of applause from 450 or so in attendance, while a handful of shareholders angrily shouted for more time to ask questions, after a strictly enforced 15 minutes.

“”Why can’t they answer questions for another hour?” said Bill Parker, a shareholder from Cashmere, Washington, a two-hour drive over the Cascade mountains.”

“Microsoft might be splitting itself into a patent troll (euphemism “licensing”) and other parts, at least if shareholders get their way.”When one is reluctant to be grilled, he or she typically has something to hide (or spin).

As one person in USENET put it: “Only because Microsoft have been buying back their shares keeping the price artificially high. No wonder shareholders are revolting.” We wrote about those buybacks before.

Over at OpenBytes, Tim points out that:

Microsoft is in my view, merely flinging mud at the wall in the hope something will stick, the only place where “success” seems to come easily is with their patent aggression (which now may be set to change after we finally get an idea of Microsoft claims). Apple has a logo “Theres an app for that”, maybe the only logo Microsoft will have in the future will be “Theres a patent for that” as it moves further away from trying to compete with its own products and merely uses its patent portfolio to make a buck.

The basic point is, Microsoft is unable to come up with new products. It relies on old cash cows that it broke the law to put in their current state. Right now it tries to make up a new cash cow through racketeering. Maybe if it spins that off as a separate company (like Nokia/MOSAID) it will manage to dodge regulators. The company is clearly flirting with serious antitrust violations.

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