Software Licensing & Master Service Agreements : Chicago Software Licensing Lawyer & Attorney : Sam Conforti Law Firm : Master Service Agreements, Negotiations, Outsourcing : Cook County, Illinois

I highly recommend Larry Barrett’s August 20^th article in CIO Update entitled Intel’s McAfee Buy Latest Sign of Sea Change in IT. In the second half of his article Barrett discusses how Intel’s acquisition of McAfee opens the door for Intel to become a key player in the mobile device and network security markets. I will discuss some of his key points later in this posting.  However, what I found most interesting is his discussion in the first half of his article where he describes quite adroitly and with relative ease his perception of the “Sea Change” in the IT industry. Barrett lays out the salient points in rapid fire succession based on his perception that the arrival of wireless networks, smartphones, and the “consumers’ unquenchable thirst for mobile devices” has sparked an acquisition frenzy amongst the big IT players who have plenty of cash on reserve. For example, Google has gone from the prime search engine vendor to mobile devices, operating systems, Cloud Computing, and SaaS. He mentions Cisco Systems, IBM, and HP purchasing unified communications, network security, and business intelligence companies, all of these companies apparently outside of the acquirer’s original area of expertise.

And now Intel’s Security on a Chip:

This acquisition takes Intel in a totally different direction from its core business. Gartner security analyst, Peter Firstbrook, doesn’t believe you can build security on a chip:

"Security is dependent on the OS and the apps in the stack. You can't anticipate that in the chip."

However others are not so skeptical. They see the potential that exists for Intel to enter a whole array of markets from network security, to smartphones, to PC tablets, to the myriad of hardware and software these markets create. Intel CEO, Paul Otellini, stated that the purchase of McAfee and bringing security to the chip was

“not just the opportunity to co-sell but also the opportunity to deeply integrate into the architecture of our products."

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In May of this year Microsoft sued Salesforce for infringement of nine Microsoft patents. Last week Salesforce counter-sued Microsoft claiming Microsoft has infringed on five of its patents. Salesforce has asked for treble damages (i.e. three ‘3’ times the amount of harm caused), an injunction of Microsoft’s use of the patents in question, and attorneys’ fees and court costs. Hanging in the balance is the future of cloud computing for enterprises and consumers alike. For more on this matter see Stuart J. Johnston’s article in eCRM Guide.com entitled Salesforce Suit Clouds Microsoft’s Patent Attack.

The Microsoft products affected by the Salesforce claim of patent infringement are as follows:

·         SharePoint Server and related products

·         Windows Server AppFabric

·         Windows 7 error reporting system

·         Windows Server 2008 R2

·         Microsoft’s .NET development platform

·         Windows Live delegated authentication system

The outcome of this law suit could have a tremendous consequence on Microsoft’s cloud computing initiatives.

So what are the chances that young upstart Salesforce can defeat the mighty Goliath Microsoft in any legal action? Well I would not count my chickens before they are hatched. Salesforce has hired David Boies as legal counsel for this litigation. For those of you not familiar with Mr. Boies or any of his notable cases you can find a brief synopsis of his career here. Just to whet your appetite here is a list of some of his more notable cases:

Notable cases

• At Cravath, Boies assisted top litigator Thomas D. Barr in defending IBM in the 13-year antitrust cases brought by the Justice Department and many private competitors.
• Also at Cravath, he represented the Justice Department in the United States v. Microsoft case. Boies won at trial and the verdict was upheld on appeal. The appellate court overturned the relief ordered (breakup of the company) back to the trial court for further proceedings. Thereafter, the George W. Bush administration settled the case. Bill Gates said Boies was "out to destroy Microsoft."
• Boies represented New York Yankees owner George Steinbrenner in a suit against Major League Baseball. This involved an action against all the teams. The Atlanta Braves were owned by Time Warner, a longtime Cravath client, who objected to his representation of the Yankees.
• He defended CBS in the action brought by General William Westmoreland. The general abandoned his case during the trial.
• Following the 2000 U.S. presidential election, he represented Vice President Al Gore in Bush v. Gore.
• Boies defended Napster when the company was sued by the RIAA for facilitating copyright infringement.
• In November 2003, he represented Andrew Fastow, deposed Chief Financial Officer of Enron.
• Boies has been retained by the SCO Group in their pursuit of alleged infringement of their rights to the Unix intellectual properties.
• He negotiated on behalf of American Express two of the highest civil antitrust settlements ever for an individual company: $2.25 billion from Visa, and $1.8 billion from MasterCard.

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Rob Ederle in his article in Datamation.com entitled 2010: The Year and Decade of the Cloud has an interesting theory on the circuitous nature of the computing populace and the nature of the industries that feed into this arena.  Enderle surmises that we have come, or will be coming, full circle in our approach to computing in this second decade of the 21^st century. He notes that we started this journey with huge centralized computing and dumb terminals, and now with the surge in growth of Smartphones and Smartbooks, we may be headed back to that original configuration, but this time in “The Cloud”. Enderle’s advice for companies to survive is to change their approach of how they view the market. Larger vendors ensconced in the large systems approach may have a leg-up on their competitors who were more user-focused; however, these larger vendors must accommodate these user’s demands or risk alienating them. Similarly, the more user-centric vendors must adopt the large centralized systems approach or be left behind. Enderle foresees the most likely way these vendors, large systems vendors and more user-centric vendors, will survive and evolve is through partnerships. He predicts Google as a likely survivor if this decade of cloud computing pans out the way he envisions it.

Ederle gives us a quick definition of what he calls Services-Based Computing, otherwise known as “The Cloud”. He takes a retro look back and states that is what IBM started. I’m not sure if I buy a direct correlation to what was the IBM leasing/services model and what the new cloud computing will become, but I at least understand where he is going with this perspective.

Ederle’s article makes an interesting observation and distinguishes between “Public” cloud computing and “Private” cloud computing. It is easy to guess, and Ederle’s article is quite clear, that the Public brand of cloud computing would be lower cost while the Private brand will be more concerned with security, but at a higher cost.  As a neophyte when it comes to cloud computing (well I guess most of us are neophytes at this point in time), I am not sure I can make the distinction between Private cloud computing and a Managed Hosting arrangement, or is this a distinction without a difference? Further in his article there is a discussion how the enterprise vendor (i.e. the large centralized systems vendor) must meld its strategic efficiencies with the more user-centric vendors who have the knack for responding to the needs of the line managers who have become the new decision makers when it comes to technology spending.

Ederle’s solution, or at least his prediction, is that companies will need to form partnerships with each partner having the right mix of Public and Private components. He concludes his article by stating that the companies that exit the new decade of cloud computing will not resemble anything like they were when they entered this new decade.

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This sort of activity is common in mergers and acquisitions. I wish I could say that I had experienced this only once, but the sad truth is I have been on the inside and watched this happen several times. And it always is the same. Something big happens, (e.g. a merger, an acquisition, a new “C”-Level Executive) and people leave. In my last corporate counsel position a new CEO was hired just two months after I had come onboard. The General Counsel who had hired me, an intelligent attorney with a superb management style, abruptly announced his untimely retirement just three months later. His replacement lasted a short 12 months. Within a year and a half the new CEO’s friend and confidant had assumed the General Counsel position and the department I had been a part of was completely eliminated.

So is it any surprise that Sun is experiencing a bit of a brain-drain after the acquisition by Oracle? Andy Patrizio reports for InternetNews in his article Defections Batter Sun Microsystems that some key Java-based developers are reading the writing on the wall and have decided to avoid the tap on the shoulder and request to come to some non-descript conference room. Patrizio reports that so far Java’s creator, James Gosling, has not jumped ship. Josh Farina, analyst with Technology Business Research, states:

"It'd be in their best interests to make offers to get people to stay on board … Oracle is really good at making companies run better, but ultimately it needs the talent to stay because … it's in the line employees who make it happen.”

And the affect is not solely on the software side of the business. To get a preview into this slippage in Sun’s sales see the posts in this Blog Oracle’s Purchase of Sun: A Game Changer and IBM and SAP vs. Oracle and Sun: Let the Speculation Begin. Scott Handy, vice president of marketing, strategy and sales support for IBM Power Systems, reports that customers are calling IBM requesting migration assistance. Sun’s customer base looked at Oracle’s track record and see price increases in the future. Handy states,

“They are all quite concerned. When Oracle bought Siebel and PeopleSoft, they increased the maintenance licenses by 25 percent per year. With BEA, licenses went up 45 percent. So they are looking at OPEX going up just to keep what they had".

IBM is geared up and ready for these migrations. In 2003 IBM acquired a company called Sector 7, a company specializing in migrations. IBM created a program entitled Migration Factory and to date have performed over 1800 migrations. Before the Sun acquisition the ratio was about 40% of the migrations were from Sun but now that percentage is starting to increase. For the first six months of this year IBM has migrated over 170 Sun customers and another 66 Sun storage customers. 

It appears that IBM is doing what it has always done and that is using their hardware to get business in the door and then turn that into sales for long-term services and software.

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In light of the recent mega-acquisition of Sun Microsystems by IT titan Oracle, the rumor mill has begun to turn. As a follow-on to my posting in this Blog last week dated May 11, 2009 entitled Oracle Purchase of Sun: “A Game Changer”, I have found two article’s that my readers may find of interest. Here is a brief synopsis of each:

An IBM marriage to SAP:

CNNMoney.com posted a Fortune Magazine article from their Tech Daily by senior writer Jon Fortt entitled IBM-SAP combo not in the cards – exec. In it CEO Sam Palmisano’s spokesman lays out why such an acquisition is unlikely. I cannot help my flair for the melodramatic and immediately what comes to mind is that old line from some film noir movie “Your lips say no, but your eyes says yes”. Some of the points for such a purchase are:

• IBM’s Websphere, DB2, and Cognos provide the foundation for SAP’s business apps.
• IBM is one of the few (Google and Microsoft notwithstanding) that could afford the $50 billion  SAP market value plus a premium.
• Such a combination could in essence provide all the software an enterprise could need.
• Others (e.g. Oracle / Sun) have embarked on this portfolio strategy.

IBM’s retort to the above is a recognition to tread softly as not to upset their existing partnership relations. I’m afraid I’m reminded of yet another famous line (with apologies to the Shakespearean aficionados – if I may be allowed a bit of poetic license) Methinks he doth protest too much. { The original line "The lady doth protest too much, methinks” is from Hamlet Act III Scene II. Queen Gertrude, not realizing that Hamlet has staged this play within a play to trap her and her husband whom Hamlet suspects of having murdered his father, speaks these famous words to her son, Prince Hamlet.  See answers at yahoo.com --- but I digress}

Oracle could play the old IBM trick: 

To continue on with the “speculation” theme of this posting, Rob Enderle examines  the aforementioned mega-acquisition and comes up with an interesting strategy in his article in InternetNews.com How Oracle-Sun Could Use Google to Become the New IBM. Apparently, back in the 60’s when IBM was king, IBM locked in its customer base by bundling software with the lease / purchase of its hardware. Enderle posits that Oracle stand this strategy on its head and proposes that Oracle bundle its software and services with the Sun Hardware and this time it is the hardware that is the free commodity (or close to it) and not the software as was the case for IBM in the 60’s. Enderle has an analysis on UNIX and Linux and how Java is “a bone fide platform in its own right”, but I will have to leave it to you to grasp the nuance, since I cannot. The missing element to this strategy is the desktop component. Enderle closes the loop in this strategy with an Oracle – Google alliance (if this is possible) and has Oracle emerge as the new IBM. Such an alliance seems improbable, but worth the mention.

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In late April 2009 Oracle announced its $7.4 Billion purchase of Sun Microsystems. As you can imagine, this deal will have a significant impact on the IT industry, but just how much of an impact remains to be seen. Invariably acquisitions of this size and nature will be examined for any possible anti-trust issues such as anti-competitive influences on the market-place. This process by regulators will be done here and abroad and the end-result may be the necessity to sell-off some assets of the newly combined business. If you are looking for an excellent in-depth analysis of this deal I highly recommend Bruce Guptill’s article in SandHill.com The Impact of Oracle – Sun. In it Guptill sees a totally changed IT Industry with Oracle emerging as a “portfolio” company with the following abilities and offerings:

·         Hardware

·         OS

·         Middleware

·         Applications

·         Development tools

·         Databases

·         Production environments for Hosting

·         SaaS

·         On-premise subscription services; and

·         Consulting solutions (vertical and horizontal).

Although Sun is primarily a hardware vendor, Guptill sees this as a play for Sun’s software capability. He quotes Oracle’s CEO, Larry Ellison, “Sun's Java programming language and Solaris operating system were the main attractions for Oracle”; and specifically as regards Java, “the single most important software asset we have ever acquired.”  Guptill believes this asset alone places Oracle at the epicenter of the industry. Sun has also played a key role in open source by opening Java and Solaris to developers and this should give Oracle the ability to influence such software development especially in the following specific vertical markets: financial services, government, academia, and high-performance computing. Lest we forget the hardware business, Sun’s server and storage revenue have been estimated at an annual amount of $7 billion and $9 billion respectively. All of the Sun components, from software to hardware, should provide Oracle the foundation to build its SaaS and Cloud Computing services.

Can Oracle successfully integrate the services and hardware businesses that come with the purchase of Sun? Guptill tells us to be on the lookout for Oracle Management to sell of some of these hardware lines, or alternatively as mentioned above, regulators may force Oracle to divest itself of some of these assets.

Guptill concludes his article with a brief description of the impact such a purchase has on several stakeholders and competitors. For example:

For Sun: This probably means the demise of Sun CEO Jonathan Schwartz who had pushed for the IBM acquisition of Sun rather than Oracle. Sun Chairman, Scott McNealy, although a friend of Larry Ellison, will probably go as well since a ship needs only one captain.

For MySQL: It should fit nicely into the Oracle family as a web server database engine.

For IBM: This was a lost opportunity at more profits and the ability to rein in Oracle competition. Also Sun’s capabilities would have enhanced IBM’s Cloud Computing efforts, but now this advantage goes to Oracle.

For SAP: Guptill sees the advantage going to SAP in the interim while Oracle’s sales teams learn how to integrate Sun products into the Oracle family. I am not so sure I agree. In light of SAP’s recent sales history any advantage may be illusory. See SandHill.com Software News Summary article SAP Struggles. The title tells it all.

For Hardware Vendors: For those that have partnered with Oracle in the past the loss could be significant.

For Users: Future investments in Sun hardware may be put on hold as the install base waits for reassurances on the direction of the server and storage lines of business.

Never a dull moment.

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Alex Goldman reports for InternetNews.com on two interesting collaborations announced recently by SAP in his article SAP Taps IBM, Intel to Cut Datacenter, SMB Costs. Here’s a brief synopsis:

Ability to create an in-house cloud:

The two giants have been collaborating since 1999 on this particular project. Although the product is not yet generally available, SAP and IBM demonstrated it at the CeBIT trade show. The idea is simply to spread SAP’s utilization across the servers in an enterprise which lessens underutilization of servers while also allowing for spikes in usage. This should be attractive to companies trying to get the most out of their current infrastructure. The technology demonstrated is based on the RESERVOIR cloud computing project. The goal is to make it easier for datacenters to be able to adjust their services to meet demand at different times. 

Xeon-based systems for SMB’s:

Another SAP announced partnership is with Intel. SAP’s Business One customers (i.e. SMB’s) are to be the beneficiaries this time. SAP plans to develop applications for use on Intel's 64-bit Xeon architecture. The end result is a faster deployment for SMB’s using Intel Xeon based systems.

The Green Effect:

The current “Green” craze is not lost in the two announcements above. The parties involved are proud to state that both moves reinforce the output of lower carbon emissions in customers' datacenters.

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It is important to note that Oracle does not have the familiar 12/31 year end, but rather a 5/31 fiscal year end.  Ahead of their conference “Oracle OpenWorld 2008” held in San Francisco this year, Oracle released a wave of glowing financial successes for its first quarter for 2009.

·         Net Income increased 28% to $1.1 Billion

·         Revenues increased 18% to $5.3 Billion

The second quarter is more in question.

·         Non-GAAP revenues could fluctuate anywhere between a 12-15% increase or drop as low as only a 9% increase due to currency fluctuations

·         Non-GAAP EPS should be around 26¢ due to earnings split between higher and lower tax jurisdictions.

The forecast for new software license revenues are also susceptible to the fluctuating currency markets with estimates at 5% - 15% without fluctuations and 2% to 12% if fluctuations are taken into account.  Kenneth Chin, and analyst for Gartner, focused on this broad range and stated:

"Foreign currency had a plus seven percent impact on earnings this quarter, and they see a minus three percent impact for the next quarter, which can be fairly significant.  There's nothing to say that, if the dollar moves more quickly and becomes stronger, that the negative impact wouldn't hit five percent or more."

Fifty percent (50%) of Oracle’s business is license revenue and maintenance fees.  The fastest growing part of their business is middleware.  Larry Ellison, Oracle CEO, is confident that they have or soon will replace IBM in this market space.  For a more complete commentary on the second quarter’s outlook and beyond see Richard Adhikari’s article Oracle Sees Tougher Days Ahead. 

With a broader portfolio of software products to bring to the market the emphasis this week at the San Francisco conference will be on the $8.5 billion purchase of BEA.  The BEA middleware products “are key to Oracle's service oriented architecture (“SOA”) strategy.”

Oracle’s next major release will be 11g, expected by the end of the 2009 fiscal year.  BEA will be an integral part of its latest Web and SOA platforms release. 

Also of note is Oracle’s Green Program and its virtualization initiative.  To read the details on the tremendous increase in savings on these two programs and the Integration of the BEA software products into Oracle’s latest offerings see Oracle's Big Show will be BEA's Coming Out Party.

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Let’s start with full disclosure – I own a BlackBerry Curve. It provides me the freedom I require. I am not tied to the office. I can be out of the office and still receive my emails and determine if the email or document promised to be sent to me has indeed arrived. I can also get a quick note out and/or be responsive to a client’s email and simply state “Not in office. Call U later.” Instead of waiting to the end of this article for the “Moral of the Story”, let me state upfront in my opinion that the secret to high-tech (and especially wireless) should be to make the technology work for you and not the other way around. As of late, there has been a flurry of news surrounding 3G and RIM’s BlackBerry and so I am not quite sure that making the technology work for you instead of you being tied to the technology can remain as my mantra, but I will try. I do not intend for the following to sound like a commercial, but I confess that it might.

RIM announced its latest handheld device, the BlackBerry Bold. We can expect to see this new smartphone this summer. While the corporate customer is RIM’s target market for now, the added features to the BlackBerry Bold may help extend RIM’s reach into the consumer market as well. The new BlackBerry Bold will have “the most vivid display ever on a BlackBerry, a 2-megapixel camera with video recording capability and a media player for watching movies and managing music collections.” To be more descriptive, “the enhanced display” will be “twice the resolution of the Curve. The half-VGA color LCD is ‘fused’ to the undersurface of the device lens, which RIM says, improves definition and clarity.” Further the new BlackBerry Bold is “Sleek, shiny and sharp in design” and comes with “a newly designed full QWERTY keyboard, integrated GPS and 802.11 Wi-Fi. In addition, the unit has a 624MHz mobile processor for faster document downloading and support for triband HSDPA networks.” The more consumer-friendly features of this new device puts Apple’s iPhone squarely in its crosshairs. Read all about these new features in the article as reported by Reuters in the Internetnews.com post A Bold New BlackBerry for Business and also Judy Mottl’s article BlackBerry Goes Bold for Market Gold.

Continuing with this flurry of announcements, as I explained in my post of May 8, 2008, SAP Sapphire 2008, SAP will be integrating its CRM functionality into the BlackBerry with an aim at integrating all the functionality of the SAP software suite in the near future. This announcement was quickly followed by Microsoft announcing that it will make available Windows Live service on the RIM device as well. Users will now have available Windows Live Messenger and Hotmail. If this wasn’t enough, IBM announced that it is making the BlackBerry the only handheld enterprise device to have full mobile access to all Lotus collaboration solutions which includes Lotus Notes and Sametime. Users will now be able to collaborate across documents. “With the Lotus Collaboration Software suite, enterprises also gain access to IBM WebSphere Portal technology. The IBM dashboards software lets businesses build Web sites and single screen dashboard views that deliver information, applications and processes personalized to the individual BlackBerry user.” Judy Mottl reports this and more in her article IBM Lotus Goes Mobile Via The BlackBerry.

And if you aren’t out of breath yet from all these announcements, I’ve got one more. Mottl reports further that the BlackBerry will carry the RSA software in her article BlackBerry Becomes Security Token Device. With this new technology from RSA, the BlackBerry will be able to function much like a key fab security token. “The software generates a one-time passcode that users copy and paste to log in to corporate VPNs, enterprise wireless networks or network applications.” This technology will give greater security for network connectivity. As Mottl points out, such a need for this type of security for our mobile devices was magnified when several White House staffers’ Blackberries went missing during a recent visit from the President of Mexico.

That’s all I have for you now. But ask yourselves, with all this new functionality will we really be making the technology work for us or will we be working more because of the technology. At this point I am not certain.

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Now this is the kind of story that not only makes good business sense it also discusses the application of new technology to something most of us find exciting and can understand, “high-stakes” Baseball contracts. The Major League Baseball Players Association (“MLBPA”) has decided to assist player agents get faster and deeper access to statistics and comparative analysis for their contract negotiations with Owners and General Managers. The MLBPA will be using IBM's Cognos BI software to analyze, compare and project player stats, and chart individual players' progress over the course of this year’s baseball season.

Doyle Pryor, assistant general counsel of the MLBPA, released a statement reported by InternetNews.com in its article Baseball Gets a New Data Cleanup Hitter stating, “Our analysis of player performance is as complex and dynamic as the work of high-powered business analysts in Fortune 500 companies, and we need to use the same robust, flexible interface to achieve reliable results."   Joseph Pusztai, IBM Cognos' director of product marketing added, "Once the agents become comfortable with this, they'll be able to leverage the information for their clients in the best way. The ultimate goal is to come up with statistics that shows a player's success. For example, the common stats will show you home runs, but now they'll be able to see how many were hit in the late innings, when it tends to matter more."

Phil Taylor, senior writer for Sports Illustrated, commented that, "The stats help both the players and owners make their case during contract negotiations. If a player hits .285 for the year, but he can show that he hit .350 from the 7th inning on in tie games, that'll help his case." Such availability to these kinds of stats can be a double edge sword and be used by the Owners and General Managers to show weak hitting in the later innings as well.

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Soon users of Lotus Notes will have the same access to SAP’s business applications as Microsoft Outlook and Exchange users have today. The jointly developed cross-platform application, announced at IBM’s Lotusphere in Orlando, is in answer to customer’s demands. With over 135 million users of Lotus Notes and a majority of its top customers using SAP, what seemed inevitable will finally come to fruition. Both companies will offer this application in the 4^th quarter. 

SAP's CTO, Vishal Sikka, stated in a press release:

Lotus has been an innovator in collaboration for 20 years. This agreement is a great example of how SAP enables our customers to empower their users by providing easy access to SAP business processes and data through productivity tools and user interfaces of their choice.

The new application is entitled “Atlantic”. Larry Barrett reports in his article IBM Teams Up With SAP on ‘Atlantic’:

While Atlantic will first provide support for SAP workflows, reporting and analytics, the two companies plan to include other tools in future releases to extend and adapt these collaboration capabilities and leverage additional offline features found in the Notes and Domino product lines.

In August, IBM began shipping Lotus Notes and Domino 8, the company's latest refresh of its flagship communications suite. Along with a snazzier user interface, Lotus Notes and Domino 8 included custom applications and Web 2.0 features such as mash-ups in the hopes of providing a more interactive user experience.

The integration of SAP’s business suite coupled with the new function-packed Lotus Notes 8, which allows independent software vendors the ability to develop new applications from their Notes dashboard, will further IBM’s quest to overtake Microsoft’s competitive advantage in unified communications and collaboration.

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IBM has revealed that it has approximately 73,000 employees in India. Based on the headcount at the end of 2006 of 355,766 employees and a projected rate of growth equivalent to 2006, IBM now has approximately 20% of its workforce in India. And why not? India offers a skilled workforce without the high cost of labor that usually accompanies such workers in the West. The projected annual revenue from the Indian market for 2007 at $1 billion is yet another reason for IBM to ramp up its workforce in the sub-continent. The BRIC countries (Brazil, Russia, India, and China) are expected to have high growth rates in the coming years and IBM Chairman, Sam Palmisano, wants to direct more of IBM’s investments into these emerging economies. Jesse J. Green Jr., IBM’s Vice President of Financial Management, is optimistic and stated, “we see continuing good stability in the BRIC countries in general and good opportunity for growth in those countries as well.”  (See Associated Press article)

I think that it is commendable that IBM execs are aware of the labor savings and the potential for increased revenues from emerging markets. Many of us have direct investments in IBM or indirect investments through 401K’s and other investment funds. As a public company IBM is acting according to its mandate to increase investor value. However as a good corporate citizen there are other considerations as well, such as social, political, ethical, and religious. How much outsourcing of skilled labor is too much outsourcing? My only cautionary note is not to overdue and abuse the situation. Employee growth in these emerging markets should be, and I am sure that it is, managed growth to meet the needs of the growing market but not at the expense of these other considerations. We all remember the dot.com boom and then the bubble that burst. We are all aware of the real estate boom of recent years and the subsequent subprime mortgage bubble that has panicked much of Wall Street and Western Europe as well as investors from the Middle East and the Pacific Rim. India is a nuclear power and borders Pakistan another nuclear power and its antagonist. Does IBM really want to put all of its eggs in one basket?

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