Rosetta Stone’s IPO (RST) is better than Bridgepoint Education’s IPO (BPI)

March 22, 2020

IPO Analysis, Grading, Scoring from IPOdesktop.com
Rosetta Stone IPO: http://bit.ly/18evtp
Bridgepoint Ed IPO: http://bit.ly/4DhEsY
both scheduled for April 13wk

SIMILARITIES: RST & BPI
(1) Both are educational stocks
. Rosetta Stone provides language learning software
. Bridgepoint Ed provides post-secondary online education

(2) Both report revenues for 2008 in the $200mm range & both were profitable in 2008

(3) Both have good internal growth track records

(4) The trailing 12 mos P/E ratios are in the same range at price range mid-points: 23.4x for Rosetta; 29.7x for Bridgepoint

DIFFERENCES
(1) Rosetta is a market segment leader with a differentiated product

(2) 95% of Rosetta’s sales are in the US, and growth plans are set for international expansion

(3) Rosetta’s gross margin is higher, 87% versus 71% for Bridgepoint

(4) Price-to-book value is more favorable for Rosetta: 2.7 versus 20.8 for Bridgepoint

(5) Online comparables to Bridgepoint suggest it is fairly priced (trailing 12 months) relative to Capella Education (CPLA) at 28x and Strayer Education (STRA) at 29x. The range is wide, however, with Apollo (APOL) at 15x ($10bb market cap) and Grand Canyon (LOPE) at 93x ($677mm market cap).

Notice that post-secondary online ed stocks sold off 15-17% since March 31, so there are some headwinds in the sector.

Rosetta Stone IPO: http://bit.ly/18evtp
Bridgepoint Ed IPO: http://bit.ly/4DhEsY
Disclosure: No positions


IPO Pulse: When Numbers Make the News

March 10, 2020

On Wall Street, numbers rule. Investment bankers were very busy last week. And they have the numbers to prove it.

So let’s take a look at last week’s IPO traffic:

  • 10 companies announced new terms for their pending IPOs. (This is a sign a deal is starting to move from the inactive IPO pipeline to the active IPO calendar.)
  • 4 companies withdrew their plans to go public.
  • 4 companies filed plans to go public.
  • 2 IPOs were postponed.
  • 7 IPOs were priced.

That’s busy by any standard. On top of that, bankers placed another 15 IPOs on this week’s new-issues calendar. From all outward appearances, the IPO Express looks to be barreling down the tracks. But here is where it starts to get a little funky.

Last week’s IPO Graduating Class was a break-even bunch. It started to reflect an overall weakness in the underlying stock market. For the record, the Nasdaq Composite Index closed on Friday, Feb. 4, 2005, at 2,086.66, — DOWN 4.08 percent for the year.

Four of last week’s seven deals had their offering prices cut to get out the door. This resulted in a negative impact on their overall aftermarket performances. There is how the week ended:

  • Three IPOs closed ABOVE their initial offering prices.
  • Three IPOs closed BELOW their initial offering prices.
  • One IPO was unchanged from its initial offering price.
  • The average gain was 2.8 percent.

The sloppy aftermarket performance of last week’s IPOs prompted some people to raise an eyebrow.

Consider this: The Nasdaq Composite Index ran from its August 12, 2004, low for the year of 1,752.49, up to 2,178.34, its 2004 high, on Dec. 30, 2004. That’s a gain of 24.3 percent.

During that four-month run, bankers priced 99 of the year’s 238 deals. That averaged 25 IPOs a month, compared with an average of 17 IPOs for the previous eight months. The conclusion: IPOs swim with the tide, not against it. When the stock market rallies, here come the IPOs! When the stock market pulls back, where are the IPOs?

Since the Nasdaq Composite Index hit its recent high (on Dec. 30, 2004, at 2,178.34), it has slipped into what can be politely called “a period of consolidation.” To be labeled a bear market, the Nasdaq Composite would have to experience a sell-off of 20 percent. That would put the Nasdaq at 1,742.67. It got nowhere near there.

Here’s the reality. The Nasdaq hit its recent low of 2,008.70 on Jan. 24. That was down 7.79 percent from its recent high. It closed Friday, Feb. 4, at 2,086.66. That was still down on the year, but up 3.88 percent from its 2005 low.

This week’s new-issue calendar lists 15 IPOs. Another four IPOs are lined up for the week of Feb. 21, 2005. But don’t start reading negative thoughts into the apparent drop-off in the number of deals. The week of Feb. 21 is shortened by the Presidents Day holiday on Monday.

For the Last 100 (from Sept. 29, 2004)

Number of IPOs priced: 99 (*)

Number Up: 77

Number Down: 21

Number Unch: 1

Percentage Change From Issue Price: 21.60%

Percentage Change for The Nasdaq Composite from Sept. 29, 2004: 10.18%

(*) Three IPOs were priced on Sept. 29, 2004)


Analysts Corner

February 25, 2020

Semiconductor Manufacturing International Corporation

Stock symbol: NYSE:SMI

Average daily volume (recent IPO):

Stock price 3/17/04: $15.90

Common shares (3/17): 364,000,000*

52-week price range: recent IPO

Equity market capitalization: $6 billion

*ADS (American Depository Shares)

 

China-based semiconductor company providing integrated wafer manufacturing services

Address: 18 Zhang Jiang Road, Pudong New Area, Shanghai, F4, 201203, China
Telephone: 86-21-5080-2000
Web site: not available
State or other jurisdiction of incorporation or organization: China
Auditors: Deloitte & Touche Tohmatsu
Investor contact: Jenny Wang, CFO

 

Business (see glossary at the end). Fabricates semiconductors based on customers’ own or third parties’
integrated circuit designs
. Developed leading edge integrated wafer manufacturing services, including
copper interconnects capabilities, within three years after founding in April 2000
. One of the leading semiconductor foundries in the worldIndustry trendsCompound annual growth rate
> The worldwide sales compound annual growth rate of the semiconductor foundry industry
. Is projected to be 21.8% from 1998 to 2008
. Compared to 9.5% for the semiconductor industry as a whole for the same period
according to IC Insights, a leading semiconductor industry publicationSemiconductor foundries are key partners to…> Fabless semiconductor companies, which have expanded geographic reach and worldwide sales
> Integrated device manufacturers, which have outsourced manufacturing requirements for complex
semiconductor devices to become more cost competitiveWell positionedSMI believes it is well positioned to benefit from
. Fabless semiconductor company growth and
. Integrated device manufacturer outsourcing

China emerges

> The China domestic market for electronic information products in China
. Grew from US$20.2 billion in 1999 to US$77.1 billion in 2002
. According to China’s Ministry of Information Industry
> SMI believes its position as a leading foundry in China
. Allows it to meet Chinese semiconductor sourcing demand
. And to meet electronic products for export demand

Industry recognition

. SMI’s Fab 1 facility in Shanghai was selected as one of the two “Top Fabs of 2003” by
Semiconductor International, a leading industry publication.
. Ranked second in a readers’ poll of top global foundries of 2003 conducted by Silicon Strategies,
another leading semiconductor industry publication.

Current capacity

. SMI believes it is the only semiconductor foundry to have reached capacity in excess of 40,000
8-inch wafers per month
. Had an aggregate capacity as of December 31, 2003 of 49,000 8-inch wafers per month for wafer
fabrication and 9,000 wafers per month for copper interconnects
. Operates an 8-inch wafer fabrication facilities in the Zhangjiang High-Tech Park in Shanghai,
China and, as a result of a recent (Motorola) acquisition, an 8-inch wafer fab in Tianjin, China.

Capacity expansion

. Currently constructing 12-inch wafer fabrication facilities in Beijing
. SMI believes it will be the first 12-inch fabrication facility in China.

Manufacturing & service focus

Manufacturing
> Semiconductor fabrication services using 0.35 micron to 0.13 micron process technology for
. Logic technologies
(including standard logic, mixed-signal, radio frequency and high voltage circuits)
. Memory technologies
(including dynamic random access memory, static random access memory, flash, electronically
erasable programmable read-only memory and mask read-only memory)
. Specialty technologies
(including liquid crystal on silicon, complementary metal oxide silicon image sensor and
system-on-chip)

Services
> In addition to wafer fabrication, SMI service offerings include libraries and circuit design blocks,
design support, mask-making and wafer probing.
> Also works with partners to provide assembly and testing services.

Customers and concentration

Customers
. Integrated device manufacturers (IDMs): Fujitsu Limited, Infineon Technologies AG, Samsung
Electronics., STMicroelectronics and Texas Instruments
. Fabless semiconductor companies: Broadcom, Elite Semiconductor Memory Technology, Marvell
Semiconductor
(Note: customer list “is not intended to identify top customers, but rather to provide a representative
sampling of SMI’s customer base”)

Customer concentration
. For the year ended December 31, 2003, SMI’s five largest customers accounted for 57^ of sales
. Sales are dependent upon a small number of customers

No backlog, high fixed costs, cyclical business

No backlog
. Customers purchase orders are not placed very far in advance of shipping dates
. Because expenses have high fixed cost components — costs can’t be adjusted quickly to
compensate for shortfalls in sales
. The semiconductor manufacturing business is notoriously cyclical
Designed-in products result in long sales cycle
. Sales cycle can last a year or more
. Sales cycles to IDM (integrated device manufacturers) customers can take longer

Competition

Dedicated foundry service providers
. SMI’s competitors and potential competitors include TSMC, UMC and Chartered Semiconductor.
(TSMC = Taiwan Semiconductor Manufacturing Company, UMC = United Microelectronics Corp)
. TSMC, UMC and Chartered Semiconductor had market shares of 53%, 24% and 7%, respectively,
in the semiconductor foundry industry in 2003, according to IC Insights
. Both TSMC and UMC have announced plans to build and acquire fabs in mainland China in order
to compete for the growing domestic market in China.
Semiconductor companies — Integrated Device Manufacturers (IDMs)
. IDMs that have established their own foundry capabilities.
. Include Fujitsu Limited, Hynix, IBM, Samsung Electronics Co., Ltd. and Toshiba.
. IDMs are primarily dedicated to fabricating integrated circuits for the end products of their
respective affiliates

Basis of competition

. Rather than competing solely on price, SMI intends to compete on process technology,
performance, quality and service
. In more advanced technologies, the competition tends to be greater

Patent lawsuit

SMI is currently the subject of a lawsuit in the United States brought by TSMC in December 2003
. Relating to alleged infringement of five U.S. patents and
. Misappropriation of alleged technical and operational trade secrets relating to methods for
conducting semiconductor fab operations and manufacturing integrated circuits.

Exchange rate risk

> SMI financial statements are prepared in U.S. dollars
. SMI sales are denominated in U.S. dollars
. Operating expenses & capital expenditures are denominated in U.S. dollars, Japanese Yen, Euros
and Renminbi Yuan (conversion rate set by the People’s Bank of China)
> If the dollar falls against the other denominations, then costs increase in US$ terms
> If China were to devalue its currency relative to the US dollar
. Then sales expressed in US$ would decline and SMI products would become more expensive
(in terms of US$)
. The Chinese government remains under international pressure to allow the Renminbi rate to float

Very capital intensive, requires additional financing

SMI expects capital expenditures in 2004 and 2005 to total US$1,950 million and US$1,373 million
. For expansion of operations in Shanghai and Tianjin and
. To complete the construction, equipping and ramp-up of Fab 4, Fab 5 and Fab 6C in Beijing.
. Operating cash flows are insufficient to meet capital expenditure requirements.

Use of IPO proceeds

> $1 billion to SMI
. US$403.0 million of the net proceeds for constructing and ramping up Beijing fabs
. US$600 million of the net proceeds for upgrading the technology and increasing the capacity at
Shanghai and Tianjin fabs.
> $679 mm to selling 55 shareholders, including Motorola* (will own 7.8% post IPO, down from
11.4% pre IPO), Singapore government (less than 1% pre IPO), General Motors (less than 1%
pre IPO) and 52 others
*SMI acquired a fabrication plan from Motorola in January 2004

 

 

Shareholder Profile

(Post March 11, 2004  IPO)

 

Shanghai Industrial Holdings Limited

10%

Motorola, Inc. and Motorola (China) Electronics Limited

7.8%

Global Growth Fund and International Equity Income Fund

5.8%

Beijing Beida Jade Bird Software System Company

4.8%

All directors and executive officers as a group (17 persons)

45%

 

Note: This table depicts beneficial ownership as determined in accordance with the rules of the SEC; some of the shares may be double counted.

 

 

Balance Sheet on December 31, 2003

(in $000s)

 

Cash & equivalents

445

Notes payable

250

Other current assets

236

Current liabilities

325

Total current assets

680

Long term liabilities

480

Property & equipment, net

1,523

Total liabilities

4,25

Other assets, net

87

Shareholders’ equity

1,485

Total assets

2,290

Total liabilities & equity

2,290

 

After the March 11 IPO the company received $1 billion, $400 million for ramping up the Beijing fabs; $600 for upgrading the technology and increasing the capacity at the Shanghai and Tianjin fabs

 

Operating Results
and valuation ratios

 

December 31 fiscal  

2001

 

2002

 

2003

Mkt

Gross Revenues (mm)

0.0

50

366

Cap (mm)

Gross Margin %

n/a

-54.9%

2.3%

$6,006

R&D

9.3

38

32

@$16.5

Net Income

-2.7

-103

-66

Net Income %

n/a

-204%

-18%

Last 4 quarters  

March

 

June

 

Sept

 

Dec

Revenues (mm)

38

75

107

145

Gross Margin %

-65.2%

-17.9%

9.7%

21.2%

Net Income

-38.3

-27.9

-11.1

 

4.6

Net Income %

-100%

-37%

-10.4%

3.2%

Business Mix %
Memory Wafers

72%

53%

34%

25%

Logic Wafers

24%

43%

60%

 

72%

Notice the increased Logic Wafer trend
VALUATION RATIOS  

Mrkt

 

Price /

 

Price /

 

Price /

 

Price /

 

Cap (mm)

 

Sales

 

Earnings

 

BookValue

 

TangibleBV

SemiconductorMfgSMI

6006

10.4

326

2.1

2.2

 

(sales and earnings ratios based on annualizing the most recent quarter’s results

Compare and contrast:
The last companies from this industry sector (Standard Industrial Classification Code: 3674)
to go public are listed below, and the underlying industry index:
AMIS Holdgs (AMIS)  

Mrkt

 

Price /

 

Price /

 

Price /

 

Price /

Price

 

Cap (mm)

 

Sales

 

Earnings

 

BookValue

 

TangibleBV

3-5-04

1430

2.9

105

7.5

8.7

17.50

AMIS Holdings (Nasdaq: AMIS), a Pocatello, Idaho-based
manufacturer of integrated mixed signal semiconductor products,
priced its IPO at $20 a share on Sept. 23, 2004. The stock closed
on Friday March 5, 2004 at $17.50 a share — down 12.55 percent
from its initial offering price.
The Stock: Estimated Consensus EPS:
52-week Price Range: Dec./2004E: $0.69
High: $21.85 Low: $16.42 Recent: $17.50 Dec./2005E: $0.92
Number of brokers following the company: 7 Dec./2006E: $0.87
Average rating: “Buy”
Average price target: $25 a share
Atheros Comm ATHR  

Mrkt

 

Price /

 

Price /

 

Price /

 

Price /

Price

 

Cap (mm)

 

Sales

 

Earnings

 

BookValue

 

TangibleBV

3-5-04

851

5.7

-942

6.2

6.2

18.73

Atheros Communications (Nasdaq: ATHR), a Sunnyvale,
California-based developer of semiconductor system solutions
for wireless communications products, priced its IPO at $14 a
share on Feb. 11, 2004. The stock closed on Friday March 5, 2004,
at $18.73 a share — up 33.8 percent from its initial offering price.
The Stock: ATHR is in its 40-day quiet period
52-week Price Range:
High: $19.48 Low: $17 Recent: $18.73
Number of brokers following the company: None
StaktekHldgs(STAK)*  

Mrkt

 

Price /

 

Price /

 

Price /

 

Price /

Price

 

Cap (mm)

 

Sales

 

Earnings

 

BookValue

 

TangibleBV

3-5-04

690

11

22

5.8

11.6

13.69

* STAK: exclude $14.7 in amortization of compensation and acquisition expense for the Dec quarter,
and uses a 33% tax rate (the average os 2001 and 2002)
Staktex Holdings (Nasdaq: STAK), an Austin, Texas-based
provider of memory stacking solutions, priced its IPO at $13
a share on Feb. 5, 2004. The stock closed on Friday March 5, 2004,
at $13.69 a share — up 5.3 percent from its initial offering price.
The Stock: STAK is in its 40-day quiet period
52-week Price Range:
High: $15.61 Low: $12.37 Recent: $13.69
Number of brokers following the company: None
Ratio comparison summary — based on annualizing last reported quarter’s results
NAME/symbol  

Mrkt

 

Price /

 

Price /

 

Price /

 

Price /

Price

 

Cap (mm)

 

Sales

 

Earnings

 

BookValue

 

TangibleBV

3-5-04

AMIS Holdgs (AMIS)

1430

2.9

105

7.5

8.7

17.50

Atheros Comm ATHR

851

5.7

-942

6.2

6.2

18.73

StaktekHoldgs(STAK)*

690

11

22

5.8

11.6

13.69

Semicndctr MfgSMI  

6006

 

10.4

 

326

 

2.1

 

2.2

 

24%

* STAK: exclude $14.7 in amortization of compensation and acquisition expense for the Dec quarter,
and uses a 33% tax rate (the average os 2001 and 2002)
Notice that SMI is slightly profitable and sells at the lowest price-to-book ratio
Ratio comparison summary — based on annualizing last reported quarter’s results
verus the major publicly held semiconductor foundries
NAME/symbol  

Mrkt

 

Price /

 

Price /

 

Price /

 

Price /

 

Cap (mm)

 

Sales

 

Earnings

 

BookValue

 

TangibleBV

CharteredSemi (CHRT)

2470

3.4

-88

1.4

1.4

Taiwan Semi (TSM)

43530

8.4

81

4.6

6.0

United Micro (UMC)

17730

6

36

1.8

2.6

Semicndctr MfgSMI  

6006

 

10.4

 

326

 

2.1

 

2.2

DJ Semiconductors Index: 52-Week Percentage Change:
52-week high: 1,608.08 (1/12/04) Semiconductors Index: up 82.4 percent
52-week low: 754.57 (3/11/03) Nasdaq Composite: up 57.2 percent
Dec. 31, 2002: 758.77
Dec. 31, 2003: 1,471.32
Recent: 1,430.25 (3/5/04)

 

Management


Richard Ru Gin Chang
founded the company in April 2000 and is currently the Chairman of our Board, President and Chief Executive Officer. Dr. Chang is also a director of SMIC Shanghai, SMIC Beijing and SMIC Tianjin. Dr. Chang has over 25 years of semiconductor experience in foundry operations, wafer fabrication and research and development. From 1998 to 1999, Dr. Chang was President of Worldwide Semiconductor Manufacturing Corp., or WSMC, after joining the company in 1997. Prior to joining WSMC, Dr. Chang worked for 20 years at Texas Instruments Incorporated, where he helped build and manage the technology development and operations of ten semiconductor fabs and integrated circuit operations in the United States, Japan, Singapore, Italy and Taiwan. Dr. Chang received a PhD in Electrical Engineering from Southern Methodist University and a master’s degree in Engineering Science from the State University of New York. In December 2003, Dr. Chang was selected by the China Center of Information Development as one of the ten “China IT Economic People of 2003” for his role in influencing and contributing to the development of China’s information technology industry.

Jenny Wang joined as Chief Financial Officer and Chief Accounting Officer in January 2004. Ms. Wang has over 25 years of experience in the investment and finance field, more than 10 of which were spent in the information technology industry. Before joining our company, Ms. Wang worked at Motorola, where she was Corporate Vice President and Vice President and Director of Corporate Finance of Motorola China. Prior to that, she held the position of Chief Representative of Motorola China with responsibilities that included strategic planning, corporate governance, communication and public affairs for Motorola China. She is a member of the American Institute of Certified Public Accountants (AICPA) and the Texas Society of Certified Public Accountants (TSCPA). Ms. Wang obtained an M.S. in Accountancy from the University of Houston.

Marco Mora joined in 2000 as Vice President of Operations and since November 2003 has been Chief Operating Officer. Mr. Mora has more than 18 years of experience in the semiconductor industry. Prior to joining, Mr. Mora held management positions with STMicroelectronics N.V., Texas Instruments Italia S.p.A, Micron Technology Italia S.p.A and WSMC. Mr. Mora received a master’s degree in Physics from the University of Milan.

Toshiaki Ikoma joined as Chief Technology Officer in January 2004. Dr. Ikoma has extensive semiconductor experience in both academia and industry. Dr. Ikoma was the President of Texas Instruments Japan, Inc. for five years and, prior to that position, served as a professor of Electronics at the Institute of Industrial Science at the University of Tokyo from 1968 to 1994. Prior to joining, he was a professor of Technology Management at the Graduate School of International Corporate Strategy of Hitotsubashi University, Tokyo, beginning in 2002. Dr. Ikoma received a PhD in Electronics from the University of Tokyo.

Akio Kawabata joined in 2002 and is currently our Vice President of Marketing. Mr. Kawabata has over 32 years of experience in the semiconductor industry. Prior to joining, Mr. Kawabata held various management positions with Toshiba Corporation, including General Manager of Toshiba’s International Division, President of Toshiba Electronics Europe GmbH and Managing Director of Toshiba Asia Pacific. Mr. Kawabata received a master’s degree in Electrical Engineering from Stanford University.

Jason Ting Chih Hsien joined in January 2002 and became our Vice President for Human Resources and General Affairs in January 2004. He previously served as our Senior Director of sales and marketing. Prior to joining, Dr. Ting served as a Director of Walsin Lihwa Corporation in Taiwan. Dr. Ting received a PhD in Material Science from the University of Illinois.

Glossary

Integrated circuit
An electronic circuit where all the elements of the circuit are integrated together on a single
semiconductor substrate.

Logic device
A device that contains digital integrated circuits that perform a function rather than store information.

Memory
A device that can store information for later retrieval

Semiconductor
An element with an electrical resistivity within the range of an insulator and a conductor. A
semiconductor can conduct or block the flow of electric current depending on the direction and
magnitude of applied electrical biases.

System-on-chip
A chip that incorporates functions usually performed by several different devices and therefore
generally offers better performance and lower cost.

Wafer
A thin, round, flat piece of silicon that is the base of most integrated circuits

 


Preparing For Windows Vista

February 10, 2020

Windows Vista is the next major operating system release from Microsoft. This highly anticipated release not only has many new and exciting features but Microsoft have also improved the graphical user interface and given it a new visual style.

Windows Vista, which is due to be released to the business sector in November this year, sports hundreds of new features, many of which are designed for use within the business environment.

Why should I care?

Windows Vista brings many benefits to small, medium and large organizations. New features such as “Desktop Search” and the “Windows Explorer” improvements make finding and using information easier and quicker than ever before. It is stated that over 30% of an employee’s day is spent trying to find information – these new tools will help to reduce that figure and increase productivity within your company.

As we move into an ever increasing “mobile age” it is becoming more important for employees to be mobile enabled. The “Sync Centre” feature of Windows Vista is at the heart of Microsoft’s desktop / mobile technologies. This application eases the pain of mobile device synchronization and ensures the whole process is completed securely enabling users to have a consistent view whether they are in or out of the office.

Windows Vista also has many new security features that will aid in defending against the vast number of security threats that are present today on the Internet. With improved “Windows Firewall” and “Windows Defender” technologies, defending against spyware and unauthorized access is transparent. “User Account Control”, which protects against admin users inadvertently changing settings, ensures that any malware or virus that get onto your system cannot change any settings without you first agreeing to it. There are many other security features including granular auditing/logging, improved security update tools and full disk drive encryption – all of which combine to create the most secure Windows ever.

What should I do to ensure a smooth transition?

1. Windows Vista requires almost 4 times the processing power as Windows XP so it is important to know that your hardware is up to the task. In order to ascertain this produce an asset report on all of your desktop machines. This should detail processor type and speed, the physical size of memory and hard disk(s), the type of graphics card installed and the amount of graphics memory it has.

2. Microsoft are going to release 6 different versions of the operating system so it is therefore important to decide which version meets your business needs.

3. Understand what machines will be compatible with Windows Vista and what machines will need to be upgraded or replaced.

4. Produce a report detailing all software applications that are used throughout the business. This report should detail the product name and version.

5. Understand any compatibility issues between your installed software and Windows Vista.

6. Ensure that your users know how to use the features in Windows Vista that will improve both productivity and ensure security/reliability.

The next steps

With the launch of Windows Vista only a few months away, it is important that you take action now. If you follow the steps outlined above, you will ensure that your transition to Vista is smooth and ensure that your business remains productive, reliable and secure.


Microsoft Gets Principles

February 5, 2020

Many parts of the antitrust settlement Microsoft agreed to with the US Department of Justice will expire soon, but the company said that will not stop them from adhering to 12 tenets of good corporate behavior.

Microsoft’s general counsel Brad Smith has been a news fixture for some time, as Microsoft battles accusations of anti-competitive behavior in the European Union. The company has had to deal with the same issues in the United States, which led to the 2002 settlement with the Justice Department.

Avoiding appearances of anti-competitive actions led the company to disclose its 12 tenets, which expand on three principles of consumer and PC manufacturer choice, third-party developer opportunities, and interoperability. Smith announced these at a talk at the National Press Club in Washington, DC.

Under the first principle, Choice for Computer Manufacturers and Customers, the key tenet regards business terms. Microsoft said it “will not retaliate against any computer manufacturer that supports non-Microsoft software.”

Microsoft discusses this more as a matter of standardized volume pricing for Windows licensing. Other could see it a different way: OEM PC makers like Dell or HP could conceivably market their hardware with non-Microsoft operating systems, without fear of retaliation.

Although Apple has said it would not make Mac OS X available on non-Apple hardware, what if Microsoft’s position here encourages an OEM, perhaps with Intel’s prodding, to approach Apple CEO Steve Jobs about rethinking the non-Apple hardware position?

That probably won’t happen. Apple makes a lot of money on hardware margins. But Novell should at least chat with HP or Dell about the possibility of SuSE Linux distribution on OEM machines.

Microsoft’s second principle of Opportunities for Developers includes the tenet of no exclusivity, as it applies to third-party developers. It will be a continuation of Microsoft’s settlement with Justice, where the company agreed not to enter into contracts that would require promoting Windows or Windows middleware on an exclusive basis.

In its Interoperability for Users principle, Microsoft will make its communication protocols available through reasonable licensing terms. This has been an issue in Europe, where the European Commission has asked for the imposition of a $357 million fine against Microsoft for not providing this information as they had demanded in an antitrust ruling in 2004.


Windows To Make Apple Rich

January 25, 2020

Thanks to the Boot Camp software released by Apple, Windows users can switch to the Mac and bring their OS along for the ride with OS X.

The Apple Boot Camp software has been available in public beta, pending its incorporation into the next version of Mac OS X. Boot Camp allows users to install Windows XP and run it natively on Intel-based Macs.

That sound you heard was the ka-ching of cash registers ringing in Cupertino. Windows to thank for helping out Apple? Apparently so, according to a report from Forbes.

“Judging from consumer interest, it is reasonable to believe that Boot Camp will play a significant role in Apple gaining market share over the next twelve months,” the firm said in a statement to clients, the article noted.

This is where it gets a little strange.

Analysts from Piper Jaffray have cited their survey on PC purchasers. Of 42 shoppers who plan to purchase a PC soon, 8.3 percent plan to buy a Mac instead of a PC due to the availability of the Boot Camp software.

That works out to three people, out of 42. If that percentage were to hold true for the entire market, it would more than double Apple’s market share in the US, currently around 3.6 percent.

The desire to keep Windows XP available on a new platform revolves around applications. Although there are many common applications on Windows that the Mac can match, in the home market there is one category that they cannot touch – the gaming market.

Hardcore gamers aren’t likely to part with carefully tweaked machines running Windows XP on top of overclocked AMD chips and the latest video cards installed. A less serious gaming fan could make that change and not miss a Windows-only platform too much.

Windows users would get a best of both worlds experience. They would have access to a Mac platform that is well-suited to creating and distributing digital media, like video, that has become so popular through sites like YouTube and Google Video.

For applications requiring a Windows-or-nothing platform, users can switch over to XP via Boot Camp, and likely run what they need. A great example of this would be the software-as-a-service (SaaS) available from Salesforce through its AppExchange program.

Software that may not run under a browser in Mac could do so in IE on the XP side. If SaaS does take off as Salesforce CEO Marc Benioff has evangelized, maybe it will be Mac hardware that provides some impetus for more users to embrace it.


Turner Snaps At Microsoft Rivals

January 20, 2020

With its Worldwide Partner Conference coming to a close in Boston, Microsoft COO Kevin Turner declared war on companies and technologies aspiring to Microsoft’s place in the enterprise.

"I'm in it to win it, and No Limit is my home."
-- American rapper and poet Snoop Dogg

Microsoft is in it to win it when it comes to the enterprise space. Just because a lot of journalists think Google and Linux will take a wrecking ball to Microsoft’s foundation of Windows and Office doesn’t mean Microsoft feels the same way.

COO Kevin Turner told the crowd during his closing keynote speech that “we’re not going to let Google win in the enterprise space. That’s our house, our market space,” a CRN report noted.

Turner continued in this vein, to the approval of the Microsoft faithful in attendance:

“Then we’ve got Novell, Linux, Red Hat and other competitors. We’re going after IBM and Google,” Turner said. “We’re going to win because we have a better solution, better total cost of ownership. We’re going to get at the competition.”

“We know you have choices,” Turner told partners. “But this is a company that if we don’t get it right the first time, we’ll keep coming, and coming and coming and not stop until we get it right.”

That does sum up how Microsoft has entered and ended up dominating a lot of markets. For example, Microsoft moved from a zero market share in the web browser market to a figure of about 83 percent usage of Internet Explorer in 2006. One-time browser leader Netscape is a shell of what it used to be.

All the ex-Wal-Mart CIO Turner was missing from his speech was a Howard Dean-style call to action from the executive. Though it is tempting to rule out Microsoft when so many alternatives exist for its products, the company does enjoy the business of numerous large and powerful corporations for its core revenue generating products.


Microsoft ODF Plans Nothing New

January 5, 2020

Microsoft’s announcement that it would back the Open XML Translator project, and bridge the gap between Office 2007 and OpenDocument Format as an open source initiative, had been hinted at in October 2005.

It was Ray Ozzie, Microsoft’s new chief software architect as well as the inventor of Lotus Notes, who let slip the suggestion that an ODF plugin for Microsoft Office would be developed.

That’s the contention of Andy Updegrove, who follows standards issues on his ConsortiumInfo blog. He noted in an email that as recently as May 19th of this year, Microsoft continued to withhold information on the project.

That was the date Microsoft replied to a state of Massachusetts request for information on plugins. With ODF gaining popularity, and public attention, in Europe, it appears Microsoft chose to follow that with its announcement.

This may also have been an attempt to generate some good press for the company before the European Commission decides whether or not Microsoft should be fined for failing to comply with antitrust rulings.

Updegrove cited Microsoft’s action as a “concession” to interoperability desired by users at the government level:

“Microsoft’s latest concession clearly makes it easier for governments and other users to feel safe in making the switch from Office to ODF-supporting software, since Microsoft itself will be collaborating to make document exchanges smooth and effortless.

Critics of the Massachusetts (and Danish, French and Belgian) initiative will now know that not only will Massachusetts government workers and the keepers of public records be able to easily exchange documents, but those with disabilities may simply continue to use Office as their peers convert to ODF software, later changing over themselves when accessibility tools for ODF software become available.”


Microsoft’s capitulation on building an ODF plugin became news last week. The company announced the creation of the project, and made a download of a Word 2007 prototype available.

Despite the concession, Microsoft did not let the fight end without tossing a late jab at ODF:

(Microsoft’s) Open XML and ODF were designed to meet very different customer requirements….

ODF focuses on more limited requirements, is architected very differently and is now under review in OASIS subcommittees to fill key gaps such as spreadsheet formulas, macro support and support for accessibility options. As a result, certain compromises and customer disclosures will be a necessary part of translating between the two formats.

 


Fixing Windows Registry Errors

December 28, 2019

The most important reason your should fix Windows Registry errors as they occur is that this one single preventative measure can greatly increase the life-expectancy of your Windows system by stabilizing the growth of its Registry.

Prevention is Key!

It is a fact of Windows that trying to fix Registry problems after they occur is much more difficult than preventing their occurrence in the first place. So when it comes to the Windows Registry, the motto should always be “prevention is key!” This is because it is often the most common and abundant types of errors that wind up killing Registries, especially those caused by a system’s registered applications, users, and even Windows itself.

As new applications are installed and old applications are removed, and as registered applications continue accessing and changing Registry data, they often leave small bits of themselves behind as orphaned registry entries.

By themselves, these errors will probably not reveal themselves in any degradation of speed or normal Windows functions, especially if your system is new. But if these errors are allowed to accumulate for a very long time, they can greatly increase a Registry’s size and wreak havoc on the overall structure and stability of its database. And for a fast-growing Registry, even small error accumulations can quickly send your Registry’s database structure out of control.

If you don’t fix these Windows Registry errors often, your system can very easily fall victim to sudden crashes, system stalls, or a severe decrease in operating speed. It is particularly at risk if you frequently install or uninstall applications and hardware, since these actions increase the Registry’s rate of growth further by adding more registered components, orphaned Registry entries, and undeleted drivers to your system.

Registry Repair Utilities

Once you have made the decision to fix Windows Registry errors on your system, you will need to know something about how to go about it. Although some versions of Windows provide built-in background system utilities designed to maintain Registry structure and stability, these utilities only address the most basic Registry problems in the most primitive ways, making them insufficient when a Registry becomes very large and complicated. However, there are many third-party Windows Registry repair utilities available on the Internet that are inexpensive and easy to use.

For general maintenance and prevention purposes, Combination Repair/Cleaning utilities are perfect. They are effective in finding and removing errors caused by invalid references, viruses, and spyware/tracking programs, and usually have other features, like Registry defragmenting and backup/restore utilities and scanning schedules, that make it very easy to maintain your computer’s health and optimize its performance.


Microsoft, Feds Extend Antitrust Oversight

December 20, 2019

The technology company agreed to extend its licensing and documentation of desktop communications protocols by two years, stemming from the antitrust settlement agreement Microsoft and Justice have in place.

Due to concerns by the federal government that Microsoft has lapsed considerably in complying with terms of its 2002 antitrust settlement, oversight by the government will be extended to November 2009. Microsoft agreed voluntarily to that extension.

California Attorney General Bill Lockyer said the agreement will help the settlement achieve “important objectives of marketplace and consumer protection.” Eighteen states including California, and the US Department of Justice, were parties to the agreement.

Microsoft’s work on developing the communications protocols needed by third-party application providers to interoperate with Microsoft’s software had been found to be “of limited use” to competitors.

To fully comply with the settlement, Microsoft needs to completely rewrite the protocols they have created to date.

General Counsel Brad Smith for Microsoft said “even after the expiration of these provisions of the consent decree, it will continue on a voluntary basis to document and license the communications protocols in the Windows desktop operating system that are used to interoperate with Windows server OS products.”

Smith also said the company would continue to make Windows source code available to licensees under the settlement program’s provisions.

Microsoft will also establish an interoperability lab where licensees can test the protocols and obtain assistance from Microsoft engineers on-site.

Internet Explorer formed part of the issue drawing scrutiny from Justice and the states involved. With IE 7 available in a public beta version, users of that beta can use a search box built in to the browser for the first time.

The inclusion of a search box had search engine leader Google crying foul.

“We don’t think it’s right for Microsoft to just set the default to MSN. We believe users should choose,” Google’s Marissa Mayer said in an April report. It has since been found that the default changes to Google or Yahoo in IE 7 if that PC’s user has downloaded software from either company.

Our test found IE 7 beta 2 defaulting to Google in the search box upon installation, rather than MSN Search. We had downloaded the Google Toolbar for Firefox in a previous test.

Antitrust reviewers had no issues with Microsoft’s search box, a component they had been examining closely. Court documents reported IE 7 has “a relatively straightforward method for the user to select a different search engine from the initial default.”