With Steve Jobs Absent, Now We Know Apple's #2

Story from the Wall Street Journal

Tim Cook, who has run Apple Inc. for five months while Steve Jobs has been on medical leave, has emerged as a star in his own right -- and one that the company needs to make sure stays put.

"At this point, losing Tim Cook would be a bigger deal to investors than if Steve Jobs stepped aside," says Gene Munster, an analyst for Piper Jaffray. "Just that thought makes my stomach tighten up."

Mr. Cook has been the target of overtures from other technology giants in the past: Motorola Inc. tried to hire Mr. Cook last year while Dell Inc. wooed the executive two years ago, according to people familiar with the situation. Apple, Motorola and Dell declined to comment.

The Cupertino, Calif., company's board is "acutely aware that Tim is a very attractive property," says a person familiar with Apple's thinking. As a result, the chief operating officer and 11-year Apple veteran may be invited onto Apple's board. He currently serves on the board of Nike Inc.

Recruiters say Mr. Cook's leadership of Apple over the past five months has solidified his reputation as an attractive candidate for large companies looking for someone to run all or a big piece of their businesses.

Mr. Cook's leadership is notable for how life has continued as normal at Apple without Mr. Jobs. On Monday, Apple reported that it sold more than one million units of its new iPhone 3G S model in its first three days on the market, exceeding analysts' expectations. Apple's press release Monday announcing the milestone included a quote from Mr. Jobs, not Mr. Cook.

Mr. Jobs went on medical leave in mid-January without disclosing the details of his ailment, though he has occasionally been to Apple's headquarters. The 54-year-old had a liver transplant in Tennessee about two months ago.

Mr. Jobs is due back this month, but he could work part-time initially. Mr. Cook, 48, may have a more encompassing role beyond his responsibilities as operating chief.

"Now it's clear that Tim Cook can run any technology-based company," says Stephen Mader, a co-head of the CEO practice at recruiters Korn/Ferry International. "He's a more attractive CEO candidate both inside Apple and outside."

Under Mr. Cook's leadership, Apple's stock has risen about 60% since mid-January, compared with an 18% increase in the Nasdaq Composite Index. Shares closed at $137.37, down $2.11, on Monday. In April, Apple also reported a 15% increase in quarterly profit as consumers continued to buy its iPods and iPhones.

Several people who do business with Apple say their dealings with the company have remained unchanged in recent months and that products continue to be developed and released on schedule. One tech-industry recruiter said Mr. Cook has been taking on more CEO responsibilities, such as negotiations with AT&T Inc., the exclusive U.S. carrier for Apple's popular iPhone.

Mr. Cook's title hasn't changed while Mr. Jobs has been out -- he wasn't named interim CEO. Still, the company has now turned twice to Mr. Cook to oversee Apple. Mr. Cook was handed the reins for two months in 2004 when Mr. Jobs was recuperating from surgery to remove a cancerous tumor from his pancreas.

Mr. Cook joined Apple in 1998 from Compaq Computer Corp. to fix Apple's then-troubled supply-chain system. At the time, Apple was dealing with bloated inventory and an annual loss of more than $1 billion. Mr. Cook was instrumental in closing down factories and outsourcing manufacturing to contractors.

"He turned a company that was on the brink of bankruptcy into one that is generating a huge amount of free cash," says Charlie Wolf, an analyst at Needham & Co.

People who know Mr. Cook say his persona sharply contrasts with that of Mr. Jobs. While Mr. Jobs is known for his fiery temper and his showmanship at public events, Mr. Cook is polite, low-key and prefers to stay behind the scenes.

"One of [Mr. Cook's] great strengths is that he's very even tempered and that makes him a great manager," says Avie Tevanian, a former Apple executive.

Despite the tens of millions of dollars that Mr. Cook has received in Apple stock, the Alabama native keeps a humble lifestyle and still rents a house in Palo Alto, Calif. He is a cycling, running and hiking enthusiast and counts Yosemite National Park as one of his favorite destinations.

According to regulatory filings, Mr. Cook received total compensation of $7.4 million last year, including a base salary of $700,000. The company raised his base salary to $800,000 for the current year.

Some people close to Apple worry Mr. Cook lacks Mr. Jobs's overall vision and decisiveness. But Apple watchers believe he is growing into a leader, pointing to an impromptu speech in an earnings conference call in January that painted a particularly vivid picture of the direction that Apple was taking.

In it, Mr. Cook said, "We believe in the simple, not the complex. We believe we need to own and control the primary technologies behind the products that we make...We believe in saying no to thousands of projects so that we can focus on the few that are meaningful to us. Regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well."

Intel To Takeover Wind River Systems Inc. After Anti-Trust Period Expires

Story from Mercury News

Intel Corp. said Wednesday it has cleared a hurdle in its proposed $884 million takeover of software maker Wind River Systems Inc. as a federal waiting period expired.

The world's largest computer chip maker said the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act expired at 11:59 p.m. EDT on June 22.

Intel said earlier this month it will buy Wind River in an all-cash deal that will help it expand beyond the PC market. It said the purchase will benefit its processor and software offerings for embedded systems and mobile devices, which run the gamut from smart phones to networking equipment.

Wind River's software started as a way to help Francis Ford Coppola edit movies, and has since been used in NASA's Mars rovers, fighter-jet control panels, TV set-top boxes and mobile devices.

Intel initiated a cash tender offer on June 11 to buy all of Wind River's outstanding shares, including rights to buy shares of Series A Junior Participating Preferred Stock at a price of $11.50 per share.

The tender offer will expire at midnight EDT on July 9 unless it is extended under the merger agreement and Securities and Exchange Commission rules. Expiration of the waiting period satisfies one of the conditions of the tender offer.

Intel shares climbed 43 cents, or 2.7 percent, to $16.24 in late morning trading. Shares of Wind River Systems rose 3 cents to $11.46.

Stop Buying What You Don't Need: Rent It

Story from the Detroit News

The economy is turning many of us into renters, and I'm not talking about apartments.

A number of Web sites have sprung up that encourage people to look around their houses for things they can do away with for a temporary amount of time -- for a fee.

Conversely, people can rent items they only need once or twice, rather than buy them and have them sit around the house.

It's a strategy many people seem to be embracing. They're hitting public libraries and video stores a lot more these days. They're driving around in Zip cars.

"The old paradigm of 'buy and use it once and store it forever' is shifting to an economy based on usage and accessibility," said Jeff Boudier, co-founder of Zilok.com.

Zilok.com came about like this: In the fall of 2007, a couple of friends in France were trying to hang something up on a wall and didn't have a drill. They thought about buying one but somehow calculated that a drill is used only an average of 12 minutes in a lifetime. It made no sense to buy one, they argued.

"We were thinking about all of the drills lying around the building or the block and we had no access to it. We thought there are so many ways you can sell your things online, but no way to borrow things," Boudier said.

The peer-to-peer renting Web site first launched in France and Belgium. Once it took off, the founders expanded to the United Kingdom and the United States. Boudier, who is the U.S. general manager, said there are now 100,000 items for rent just in America. Not only are there drills up for grabs but infant car seats, camping gear, and digital cameras.

"We are offering new ways for people to save and make money," he said.

To prevent fraud, users have to register. The owners of the items set the price and the renter has to pay a deposit. Both parties sign rental agreements.

Rent-instead.com works in a similar fashion and offers a variety of electronics, books, clothing, and other items. Other Web sites are more specialized. At Chegg.com, for instance, students can rent textbooks. At Babyplays.com, parents can rent toys.

More Than 1 Million New-Model iPhones Sold So Far

Story from the Detroit News

Apple Inc. sold more than a million units of its latest iPhone model in the first three days, making it the most successful model yet.

The iPhone 3G S went on sale Friday in the U.S. and seven other countries.

When Apple Inc. launched the previous model last year, it also sold one million units in the first three days, but that model launched simultaneously in 22 countries.

Piper Jaffray analyst Gene Munster had expected the Cupertino, Calif., company to sell half a million 3G S in the first three days.

"Customers are voting, and the iPhone is winning," said Steve Jobs, Apple's CEO. It was the first time he was quoted in a company statement since he went on leave for unspecified medical reasons in January. The company has said that Jobs, who has battled pancreatic cancer, is returning to work at the end of the month.

The Wall Street Journal reported Saturday that Jobs had a liver transplant two months ago in Tennessee and that he will likely work part-time, at least initially. Apple has not commented on the report.

The launch of the iPhone 3G last year turned messy, as Apple and phone company servers failed to cope with the load of new customers trying to activate their phones. That problem recurred Friday with the launch of the 3G S, but to a smaller extent. Some customers who tried to activate the phone at home got messages that the process could take 48 hours to complete.

Some customers got e-mails on Sunday promising a $30 credit at Apple's iTunes store as compensation for the hassle.

Apple did not break down where the million units were sold. Dallas-based AT&T Inc. is the iPhone's exclusive carrier in the United States and has said it sold hundreds of thousands of phones via pre-order.

In its two-year life, the iPhone has revolutionized phone design and given AT&T a leg up on its rivals in recruiting customers willing to pay high monthly fees.

Competitors have started to catch up to some of the iPhone's signature features. In particular, the newly released Palm Inc.'s Pre, available exclusively for now through Sprint Nextel Corp., has generated a lot of buzz and favorable reviews.

But the iPhone is still the king of smart phones.

You Can't Stop The Signal

Story from Strategy Page

June 15, 2009: Bowing to growing pressure from the troops, the U.S. Army has unblocked access to Facebook, Flickr, Delicious, Vimeo and Twitter at 81 bases in the United States. It was only two years ago, that the Department of Defense blocked access to YouTube, MySpace, Metacafe, IFilm, StupidVideos, FileCabi, BlackPlanet, Hi5, Pandora, MTV, 1.fm, live365, and Photobucket. Since then, other sites, like Twitter, were added to the blocked list. This means that anyone using a computer connected to Department of Defense network (NIPRNET), was no longer able to reach the banned sites.

The reason for the ban was quite practical. All those video and audio clips were jamming up the network, and making it difficult to get official business done. This is a problem university networks began to encounter in the 1990s, and solved by a combination of expanding capacity, and restricting how much students could use the network for downloading large files. The Department of Defense is in a slightly different situation, because many of its users overseas depend on satellites for their Internet connection. Land based fiber-optic lines can provide a lot more capacity, but in combat zones satellite is often all that's available.

But that made the Internet available as well, and the troops loved it. Aside from the obvious popularity of email and use of messaging systems, the Internet also provided access to social networking systems (MySpace, with 125 million users, and Facebook with 220 million). These gradually became a popular way for American troops overseas to keep in touch with the folks back home, and with each other. The ease-of-use that has made these sites so popular with civilians, was equally attractive to troops who don't have much time to spend on the Internet. Most troops have access to the internet in Iraq and the internet in Afghanistan, but often via the equivalent of a dial-up connection. So MySpace and Facebook are convenient enough for troops to quickly post messages, pictures and short videos.

The brass were not happy with all this social networking, but were reluctant to attempt a crackdown. The suspect troops can be hard to identify, if they want to be, and have proved to be very responsible when it comes to OPSEC (Operational Security, not giving out info that can help the enemy). The brass have also learned that taking away Internet access would cause a serious morale problem.

Facebook is eclipsing MySpace as the social networking site everyone, including the troops, wants to be on. Twitter has become popular with commanders and technical team leaders, for keeping in touch with their subordinates. Flickr is where everyone keeps their photos. So, for the moment, the military will scrounge up the bandwidth to make some social networking sites available.

The Role Of IT Staff In Rebuilding Iraq

Story from Computer Weekly

IT contractor Peter Moore has been held hostage in Iraq for over two years.

His plight has highlighted the dangers facing ordinary workers and civilians living and working in the country. Even aid agencies have deemed the situation too perilous, and most moved their staff out years ago.

There are 31 million Iraqis in the country, as well as thousands of contractors and military staff, including technology workers working on projects that will play a crucial role in the rebuilding of the country.

The war decimated much of the country's infrastructure, including the telecommunications network and any hope of a reliable internet in Iraq.

Some restructuring work is underway, but Gartner analyst Vittorio Dorazio predicts it will be at least five years before Iraq sees any real changes.

Many would consider technology as relatively low down the list of priorities in a country that does not have enough doctors or schools. But IT will be a crucial part of improving basic living standards.

Building records and systems

IT company EMC is working in Iraq through its business partners. Mohammed Amin, regional manager for EMC Middle East, said IT is central to providing public services and standards of living.

"IT has to work in parallel with building roads and schools, and improving transport and healthcare," he said. "These developments need records and systems. You need healthcare databases, and systems are needed to determine who is eligible for new passports and citizenship, for example."

The main areas of activity are telecoms, government and the banking sector, which is now starting to re-awaken. Most telecoms investment is going into mobile communications, because landline networks are more cumbersome and expensive. The government, with help from oil revenues, is investing large amounts in basic infrastructure equipment and in archiving government information.

"There are so many documents from the past 30 years which are very important - they detail how to run the country, how to handle the security situation, how to control Iraq's borders. They need a huge archiving system," Amin said.

Full of potential

Despite the hurdles that Iraq will no doubt have to get past, there is plenty of activity and potential, according to Dorazio.

"The Iraqi IT industry is definitely growing, despite the crisis. There are small companies, but you don't see large companies. It is in a very early stage. The fighting is even now ongoing and it is very hard to provide a service when the overall infrastructure is disrupted," he said.

EMC's Amin agrees the security situation is still a problem. EMC has considered opening an office in the safer northern part of Iraq, but has had to put its plans on hold after a resurgence of violence in the past couple of months.

Progress on security is still being made. Large IT companies and consultancies, such as PricewaterhouseCoopers, do business in Iraq and transfer knowledge to the country.

The armed forces have also played a big role in training up the Iraqi security forces in all kinds of skills, ready for the UK's departure in July this year.

Lt Col Jon Cole, commander of joint forces for communications and information systems in Iraq, said, "We have assisted with training the Iraqi forces so we are not leaving them in the lurch. There is also a small British army presence that is staying in the country, at the invitation of the Iraqi government, to help with training."

The army, navy and airforce have worked in partnership with local contractors throughout their six years in the country, although the military operations have been self-contained and will have had little impact on civilians. In mid-March the information systems engineers started winding down the military IT operations in Iraq, and they expect to be finished in mid-July.

Throughout the war, IT and communications have been a central part of military operations. "It is absolutely crucial," Cole says. "More and more equipment that comes into service is technologically far superior than in previous generations. Command and control officers use large screens and advanced systems to keep track of where soldiers and vehicles are. If the IT is not working, a patrol will not go out - it is as simple as that."

Once the military has moved out, the UK government will help reconstruction efforts through the Provincial Reconstruction Team, based in Basra. There is a long way to go, but hopes are high that Iraq could one day become a technological hub in the Middle East.

"First, we need stability," says Dorazio. "But Iraq could really leapfrog other countries in terms of technology. Back offices will not be constrained by legacy systems, and people starting businesses can get the newest technology. There is a massive amount of potential."

Ice Ice Baby

Ice Energy to cool data centers
Story from C-net

Ice Energy said on Monday it has partnered with data center cooling company Data Aire to make a hybrid air conditioner that uses ice for efficient cooling.

The idea behind Ice Energy's Ice Bear air conditioner is to make ice in a storage tank during off-peak times to take advantage of lower rates. The machine uses the stored ice to make cool air during times of higher energy demand--and higher rates.

Ice Energy and Data Aire said they have tested a way to link the Ice Bear to Data Aire's cooling systems. The companies said that the combination is more efficient at cooling data centers than stand-alone systems and will cut peak electricity usage.

Ice Energy originally expected to make these refrigerator-size units for consumers, but has since focused on selling to commercial customers. California utilities PG&E, Southern California Edison, and Anaheim Public Utilities offer incentives for installation of the Ice Bear.

Is Hosted VoIP Ready For Enterprise Customers?

Story from TMC Net

Hosted VoIP solutions fall broadly into two categories:

a) Basic (SIP) trunking with minimal features

b) Full-featured hosted PBX phone systems or hosted Centrex.

According to AMI Partners, these services have grown quite significantly over the past few years with the number of seats deployed increasing from 394,000 seats in 2006 to 3,000,000 seats by 2010. However, virtually all of these seats are deployed in small or medium sized businesses. To a large extent, enterprise customers have not adopted hosted VoIP services. Why is this, and is the time right for them to do so now?

There are a number of reasons why larger enterprise customers have not adopted hosted VoIP to the same extent as the SMBs. First, there is an inherent inertia inside a large business driven by the mindset that only PSTN trunks can provide the kind of quality and reliability demanded by the users (and most importantly the CEO). The fear of the unknown and resistance to change is palpable; no one is going to get fired for installing a new AT&T PRI trunk, but they might get fired if they install a new (unknown and scary) hosted VoIP service! Secondly there are some genuine concerns about the real availability of the services, the end to end QOS and even the viability of some of the new service providers.

So, has the time come for enterprise to move to hosted business VoIP services?

Clearly, times have changed from just a year ago. We are in the depths of a deep, worldwide recession and almost all businesses, especially large enterprises, are feeling significant pain. No longer can they accept the status quo; they must look for ways to cut costs and become more efficient. For hosted VoIP providers, this is an opportunity that had not previously been afforded. But just cutting costs is not going to win an enterprise contract as the genuine concerns outlined above must be addressed. Let’s look at these in more detail:

a) Scalability. Is the system scalable for large enterprise? How can this be shown? Are simulated results good enough or is an enterprise deployment needed before you can win one (chicken and the egg problem)?
b) Availability and reliability. Does an enterprise really need five 9’s? Is four 9’s sufficient based upon the reduced costs and the ability to route calls elsewhere in the instance of an IP network failure issue, for example?

c) Manageability. Is the system manageable for many thousands of extensions? For example, the interface to manage 100 extensions may not be adequate for managing 10,000 extensions.
d) Quality. Most enterprises are probably not going to rely on a single IP connection for both voice and data (though with the availability of MPLS circuits and guarantees of QOS from the access provider and the VoIP service provider, there is certainly no reason not to finally merge the two), so the VoIP service provider needs to guarantee some level of QOS based upon a Layer 2 or private peered arrangement with the access provider (assuming they are not one and the same). Voice quality can actually be improved over the PSTN with the deployment of wide-band codecs or “HD voice” as it is sometimes referred to.

e) Security. Are security-conscious enterprises going to allow un-encrypted voice over a public Internet phone system? Probably not, so a plan for encrypted authentication and encrypted voice will likely be needed in any enterprise proposal.
f) Viability. Is a $100B (or maybe $10B nowadays) enterprise going to trust its mission critical phone services to an unprofitable, cash poor service provider? Any smaller service provider will have to make a case that it is just as viable (or even more so) as the customer’s previous vendors. With the recent bankruptcy of Nortel, perhaps this case isn’t so hard to make?

In conclusion, the time is ripe for service providers with products and services that can meet the criteria described above to market to enterprise customers. In all likelihood, SIP trunking will make the first inroads, as this is the least disruptive to the enterprise and any installation can be quickly reversed if problems are encountered. But enterprise is also ready for penetration by hosted PBX and hosted IP Centrex, especially if they have not already invested in an enterprise IP-PBX or are looking for integration with multiple smaller branch offices. The cloud of recession could indeed have a silver lining for our industry. IT

As Cell Phone Market Reaches Saturation, AT&T And Verizon Look To Netbooks

Story from Business Week

For the country's two dominant wireless phone carriers, AT&T (T) and Verizon Wireless, the arithmetic is clear. Cell-phone penetration in the U.S. is approaching 90% of the population, and the recession is damping enthusiasm for pricey new phones and services. So to avoid a slowdown in sales growth, both cellular giants are getting into a new game: personal computers.

AT&T jumped in earlier this year selling the stripped-down laptops called netbooks at its stores in Philadelphia and Atlanta. These devices are already a big hit for computer makers, priced in the $300-$500 range at retail. Now the carriers want to sell them—much the way AT&T sells Apple's (AAPL) iPhone—by discounting the device but making up revenue with two-year contracts for expensive data plans. Long-term, the carriers aim to expand into a whole range of computers, Net-ready cameras, game consoles, and other such products. The goal: to find fresh revenue streams and stoke demand for their new, fourth-generation (4G) data networks, expected to start rolling out next year.

The netbook idea appears to have legs. On May 17, Verizon Wireless began selling Hewlett-Packard (HPQ) netbooks discounted to $199 with a two-year data contract starting at $40 a month. "We are ramping up very nicely," says Verizon Wireless CEO Lowell McAdam. Two days later, AT&T announced that by midsummer it would broaden its own netbook experiment to all its stores nationwide, offering Dell (DELL), Acer, or Lenovo (LNVGY) products. If Sprint (S) and T-Mobile USA (DT) follow suit, netbook sales could top 2.1 million units in the U.S. this year, with carriers accounting for 22.5%, market researcher IDC estimates. "We think we are really at the next big growth area of wireless," AT&T Mobility CEO Ralph de la Vega recently told BusinessWeek.

Pricing is still a work in progress. In Atlanta, AT&T subscribers who sign up for a two-year service contract can snag an Acer netbook for as little as $50, but they must shell out $40 or $60 a month for either 200 megabytes or 5 gigabytes of wireless capacity, used for everything from messaging friends to posting photos on Facebook.

Similarly, Verizon customers who pay $60 a month for a data plan can get an HP netbook for $199. "You are not going to find too many laptops at that price point," says Verizon Wireless director of marketing Michael Willsey.

Probably not, but buyers may notice that when the service fees are tallied up, the cost could be as much as $1,440 over two years, plus the price of the netbook. And that may be on top of $30 a month or more the customer is already paying for another data plan linked to his cell phone. Tech-savvy shoppers may balk at this, given a logical alternative—on some service plans they can "tether" the computer to their smartphone with a cord and use the high-speed cellular connection. AT&T charges $15 a month for this on top of a subscriber's data plan.
"Limited Viability"

Some analysts say the chances of driving iPhone-like revenues are slim unless the carriers pull in millions of new users with cheaper data plans. That's what's happening in Europe, where service plans cost less and come in a variety of forms, including prepaid monthly and daily plans. As is, the U.S. approach—counting on well-heeled customers with little sensitivity to price—has "limited viability," says CCS Insight analyst John Jackson.

Technical glitches could also spoil the fun, but carriers say they're ready. PC makers will field hardware problems for customers while the service providers handle diagnostics and network issues. "We're very much in coordination with their customer care people," says Glenn Lurie, AT&T Mobility's president of emerging devices, who managed the Apple relationship. "This is nothing new for us."