With Perot, Dell can get a chunk of IT's hottest market -- health care

There are a lot of reasons why Dell Inc. agreed to buy Perot Systems Corp. for $3.9 billion, but Congress' vote earlier this year to appropriate billions of dollars to spread the use of electronic medical records may be a key one. Even before today's announcment that Dell plans to buy Perot, the PC maker and IT services firm had agreements in place develop platforms dedicated to electronic health care applications. Perot, which says that about half of its $2.8 billion in annual revenue is derived from health care projects, is in a good position to gain a significant chunk of the $36 billion the federal government is poised to spend on IT related health care projects. During a conference call with reporters today, Michael Dell, CEO and chairman of Dell, called the move "the right acquisition" for his company, and that the two Texas-based firms share several similar characteristics. "Our products, services and structures are overwhelmingly complementary," Dell said.

EDS was spun off in 1996 as an independent firm and remained that way until it was acquired last year by Hewlett-Packard Co. for $13,9 billion . Ross Perot founded Perot Systems in 1988. Harry Greenspun, chief medical officer for Perot Systems' health care group, told investors garthered at an industry conference this month that there's tremendous opportunity for companies like Perot in the health care market. "Most hospitals, most physicians' offices are very immature in their adoption in their technology," he said, according to an archived recording on Perot's web site. Ross Perot, the chairman emeritus of Perot, added, "We saw this as a cultural match, and we saw what we could do together, and I think that made it a lot easier to jump on Michael's vision to build Dell," Perot founded Electronic Data Systems (EDS) in 1962 and sold it to General Motors Corp. in 1984 for $2.5 billion. Dell hopes to complete the deal by year's end, just after the federal fiscal year starts on Oct. 1, which is when federal spending on electronic records is set to begin in earnest. Dell and Perot are already jointly offering what Greenspan called a "dumb box" without ports of disk drives. The demand for help in implementing new health care IT projects should come quickly - Under the law, health care providers have to start upgrading e-health systems by 2015 or face federal penalties.

The Software-as-a-Service system delivers electronic records to virtual desktops that charge customers on a subscription basis. "This is a different way of delivering this service," said Greenspun. Bendor-Samuel said improved revenue from health care projects should be a strong side effect of the merger, but contended that Dell's primary interest is gaining access to a broader base of enterprise customers. "It's great to be a dominant player in the fastest growing segment of the economy, but I view that as a nice thing to have," he said. The purchase of Perot Systems will also give Dell some credibility among large users as a service provider, said Peter Bendor-Samuel, CEO of Everest Group, an Dallas-based outsourcing consultancy. "It both significantly improves their delivery capability and tremendously improves their credibility," he said. Dane Anderson, an analyst at Gartner Inc., believes that the deal shows only that Dell is finally embarking on a services strategy. It has not offered the broader consulting and integration services provided by IT services firms like Perot Systems, he added.. "Really, where the opportunity is in the nearest term is to bring more capabilities to the table for that Dell installed based of clients, he said. Dell's support operation has traditionally focused on providing services to meet the needs of existing users.

Anderson said that he doesn't expect Dell to quickly gain new services contracts due to the acquisition of Perot. Enterprise aren't likely to exit existing contracts with other services providers.

Verizon dances on grave of AT&T lawsuit

Verizon wasted no time gleefully mocking AT&T after the rival carrier dropped its lawsuit challenging the legitimacy of Verizon's "There's a Map for That" ads. The 25 funniest vintage tech ads In the day since AT&T announced it was dropping the suit, Verizon spokesman Jeffrey Nelson has updated his Twitter account 15 times to reference the failed suit. Priceless!

Typically, Nelson would retweet a comment from another tweeter making fun of AT&T. Prominent examples include "There's An Apology For That: AT&T Dismisses Its Pointless Lawsuit Against Verizon," "Now AT&T can focus on improving their 3G network," and "AT&T to Verizon: We give up, you win the ad war." Additionally, Nelson linked to an speech delivered by Verizon Chief Marketing Officer John Stratton detailing the company's plan to continue ridiculing AT&T throughout the holiday season. The ads then display maps that show the total geographical reach of 3G coverage for each carrier, with Verizon's map showing a far larger area of the country covered by its 3G service. Furthermore, Stratton said that Verizon has scrapped its original holiday ad campaign in favor of producing more ads attacking AT&T. "We tried to do some research to find out where our competitors' 3G coverage actually was, but we couldn't find it, they didn't provide it," he said. "So we went with an industry source, a third-party source who maps roaming for the industry and asked them to map our 3G coverage and map our competitors' 3G coverage… Now, we had already completed our fourth-quarter holiday work at considerable expense, but we have that stuff now sitting on a shelf." Verizon's "There's a Map for That" ads typically show AT&T users struggling to use applications on their mobile devices while Verizon customers happily watch live streaming videos. In its lawsuit, AT&T did not dispute that the maps used by Verizon in its ads were accurate. However, in Verizon's ads the company clearly marks the maps as "AT&T 3G Coverage" and "Verizon Wireless 3G Coverage."

Rather, it accused Verizon of misleading consumers by implying that AT&T has no wireless coverage in large parts of the country, when in reality parts not covered by AT&T's 3G HSPA network are still covered by its 2G EDGE network.

Intel/AMD deal could help solve virtualization compatibility problems

The $1.25 billion Intel/AMD settlement announced Thursday could improve competition in the server hardware market and solve some lingering problems related to server virtualization, analysts say. 50 greatest arguments in networking: AMD vs. But a new five-year cross-license agreement between the companies raises the possibility that Intel and AMD will share information on their instruction sets and enable live migration across servers with different processors, he says. Intel Today, a virtualization technology known as live migration lets customers move workloads from one physical server to another, but only if both servers contain processors from the same chip maker, according to Forrester analyst James Staten. "If you look at the virtualization instruction sets that have been implemented by AMD and Intel, they are incompatible with each other," Staten says. "If you build a virtualization pool and do live migration from one system to another, it has to be all Intel, or it has to be all AMD." The Intel/AMD settlement, which ends various antitrust and patent cross-license disputes, doesn't explicitly talk about virtualization, Staten notes. Gartner analyst Martin Reynolds agrees the Intel/AMD settlement could be good news for virtualization customers. "If they were to integrate virtualization more deeply into the processors as a single standard that companies use, it's possible virtualization could become less expensive," Reynolds says.

In the wake of the settlement, there are several other potential areas for new levels of compatibility between Intel and AMD processors, Staten says, including memory and power management, and security. The virtualization incompatibility has mainly harmed AMD, because the issue forces customers to standardize on one type of server and Intel has a dominant market share, according to Staten. Broad collaborations between the rivals should not be expected, though. "These are two fighters who just took a lot of bruises over the last two years," Staten says. "They're not about to run to the center of the ring and shake hands." In lawsuits filed against Intel, AMD claimed that Intel illegally forces customers into exclusive deals with cash payments, discriminatory pricing, marketing subsidies and other practices. I think that's beneficial for all." AMD benefits from the settlement more than Intel does, because it eliminates many concerns customers have about purchasing AMD-based servers, according to Staten. The settlement prohibits Intel from "offering inducements to customers in exchange for their agreement to buy all of their microprocessor needs from Intel," and other anticompetitive practices such as inducing customers to limit or delay sales of AMD products. "Intel agreed to a set of rules of the road for how they will conduct business going forward," says AMD spokesman Drew Prairie. "It should help create a fair and open competitive environment where products compete on their merits, and where innovation is rewarded by the marketplace. Even if customers like AMD technology, they might have chosen Intel-based servers instead because of concerns about AMD's viability.

The time and money allocated to fighting Intel in court may also have distracted AMD from product development. "Having those hindrances gone will definitely help AMD because their CPUs are quire competitive at this point," Staten says. Moreover, if AMD's allegations were correct, that means Intel's business practices were preventing OEM vendors from embracing AMD processors to the extent they would have liked. The settlement also makes AMD more attractive to outside investors, Reynolds says. While both companies are embracing multi-core processors, Intel is taking a homogenous approach in which every core is the same and AMD is using different types of cores in the same CPU for different workloads, according to Staten. AMD is taking a different approach than Intel to the server market. AMD is also trying to go down the multi-core path faster than Intel, with attempts to get 16- and 24-core processors on the market before its rival.

Generally, AMD is about a year behind Intel's technology, but turns a profit by making products that are cheaper and cost less to build, Reynolds said. "Generally the server vendors use the product that most meets their needs," he says. "They know their customers are smart and will buy the product that delivers the best value." Follow Jon Brodkin on Twitter. Reynolds said he doesn't expect the settlement to cause any major shifts in how OEM vendors approach Intel and AMD, however.

High-tech hardware spending returns, no help for IT jobs

IT decision makers will be investing in hardware in the coming six months, according to recent research, but high-tech executives say staffing will remain flat as companies not only slow the pace of jobs cuts but also hold off on new hires. The latest release of the CDW IT monitor reveals that more than two-thirds of some 1,043 IT decision makers in corporate and government sectors plan to make IT hardware purchases in the next six months. Podcast: Have IT budgets hit bottom yet? More than 80% of large businesses and 84% of federal government high-tech executives polled expect to invest in hardware, with a majority pointing to operational efficiency gains as motivation. "Hardware refresh cycles have been pushed to limits we've rarely seen, and anticipated investment in this area is encouraging as companies prepare for a larger economic recovery," said Mark Gambill, CDW vice president, in a statement.

Nearly 50% of both corporate and federal IT decision makers expect budgets to stay the same, with just more than 30% expecting slight budget increases. The survey, conducted over two weeks in September, also showed that more than 50% of federal government IT workers anticipate increased budgets in the next six months. Twenty-seven percent of those polled expect to also invest in software across a significant part of their organization, while 45% anticipate software purchases for a smaller portion of their companies. Eighty percent of IT decision makers do not anticipate adding staff and plan to keep their personnel counts at current levels. While spending is set to increase in various sectors in big and small ways, depending on the organization, questions regarding IT staff seemed to garner the same response across the board. Twelve percent do plan to hire additional IT workers in the next six months, and 8% continue to consider cutting staff, the research found. "The confidence we began to see emerge in April with decreases in planned job cuts has now evolved into planned capital investments in IT infrastructure to increase efficiency and productivity," Gambill stated. "The down side is that the percentage of organizations planning investments in IT staffing has held steady and in some cases declined." Do you Tweet?

Follow Denise Dubie on Twitter

Security service protects PCs from attack

Start-up InZero Systems Tuesday makes its debut with a security service that promises to protect PCs from possible malware, intrusions and other types of attacks. The device protects the PC from Internet threats without relying on the more traditional antivirus scanning model. The InZero Secure PC service features what the company calls a "little black box" that, when plugged into a PC and attached to Ethernet cable, offers a "hardware sandbox" with its own CPU, read-only memory and stateful inspection firewall and encryption engine. There's also a version of the hardware that would fit inside a PC. The InZero Secure PC device, which externally measures about 3" x 4" x 1", also acts as a gateway that can prevent malicious code from being sent out as well through what he calls a filtering and conversion-engine mechanism. 11 security companies to watch "This completely isolated area is dealing with anything from the outside," says co-founder Louis Hughes, chair and CEO of the start-up, which was founded in 2005 with undisclosed investment from financial partners and now has 60 employees.

The InZero Secure PC service also includes an encryption capability for protecting applications that might be stored on the user's own PC, says another co-founder, Alexander Pyntikov, president and COO. "We believe hardware is the key to this," he notes, since using just software wouldn't provide the level of protection the company is striving to achieve. InZero Secure PC is intended for use by either business or consumer, and as a service, it is managed through a data center in the Washington, D.C., area. The hardware-based service also includes a way to use a VPN to encrypt traffic. Wesley Clark, chair of the InZero Systems advisory board, is expected to make an appearance as well touting the InZero Secure PC service and product. In a press conference in Washington, D.C., Tuesday, Phil Zimmermann, creator of PGP, is expected to speak on the topic of evaluating the encryption in the product, and Gen. InZero Systems says it has about 37 businesses trying out the security service, which is being offered free for one month, with pricing around $70 per month, and lower based on volume discounts.

Google Voice Frees Your Voicemail, and Your Number

Until yesterday, signing up for a Google Voice account required you to pick a new phone number - not a pleasant option for those who have kept the same digits for years. When you sign up for Google Voice - which is still not widely available to the public (you need to get an invite or request one) - you can either choose Google one-stop phone number or keep your own for a more pared-down experience. Now Google has enabled users to keep their existing phone numbers and get (most of) the features Google Voice offers, including Google's excellent voicemail service. Keeping your old digits gives you: Online, searchable voicemail Free automated voicemail transcription Custom voicemail greetings for different callers Email and SMS notifications Low-priced international calling Going for the full-throttle Google experience gives you all of the above plus: One number that reaches you on all your phones SMS via email Call screening Listen In Call recording Conference calling Call blocking If you already have a Google Voice number, you can add the voicemail option to any mobile phone associated with the account.

Happily, Google circumvented this problem earlier this month. Some of the awesome benefits are explained in Google's YouTube explanation: Since voicemails are transcribed and placed online, even made publicly available for sharing purposes, there has been some danger of said voicemails appearing in search results. These new features are both freeing and limiting: you can keep your number but sacrifice some of the goodies that make Google Voice a powerful contender in the telephony business. Follow Brennon on Twitter: @neonmadman Full number portability is likely coming in the future, after, of course, Google deals with AT&T, Apple, and the FCC. But some have high hopes that eventually the opposition will grow to accept and embrace Google Voice.

Microsoft plans six patches next week, ties November record

Microsoft today said it will deliver six security updates Tuesday, less than half the number it issued last month, to fix flaws in Windows and Office. The six slated for next week, however, tie the record for the most issued in November, traditionally a light month for Microsoft updates. The updates will patch a total of 15 separate vulnerabilities , Microsoft said in a follow-up entry to its security response center's blog. "Six is the lucky number this month," said Andrew Storms, director of security operations at nCircle Network Security. "Really, anything less than 13 is a lucky number." Last month, Microsoft released 13 updates that patched 34 vulnerabilities, both records since the company started shipping monthly updates more than six years ago.

In November 2006, the company also delivered a half-dozen security updates. Four of the six affect one or more editions of Windows or Windows Server; the other two will patch Office, specifically Word and Excel. In 2007 and 2008, however, it shipped just two each year in November, while it released only one in 2005. Of the half-dozen updates, Microsoft tagged three as "critical," the highest severity rating in its four-step scoring system, while the remaining trio were labeled "important," the next-lowest ranking. Because there are no outstanding Microsoft-generated security advisories, Storms was at a loss about what next week's updates might fix. "But Bulletin 1 looks interesting," he said, noting that the critical update would patch only Vista and Server 2008. "Historically, you would expect a Vista patch to also affect XP, and maybe even Windows 7," Storms explained. Last month, Microsoft released the first patches for Windows 7's final code. "There aren't any Windows 7 patches at all," Storms said. "So, so far so good." Windows 7 will be worth watching, however. "It will be more interesting down the road to see if Microsoft disclosed bugs they found in Windows 7, and fixed during development, but are just now going back and fixing in the older OSes." Another update to watch carefully next week is the one Microsoft named "Bulletin 3" in its advance notification , the monthly forewarning that includes only the barest of details. None of Tuesday's updates will affect Windows 7, Microsoft's just-released operating system, or the also-new Windows Server 2008 R2, the companion server software.

That update, also rated critical, affects everything version from the aged Windows 2000 to Vista and Server 2008. "I think No. 3 is the big one to watch next week," said Storms. The first update will impact Word 2002 and Word 2003 on Windows, and Word 2004 and Word 2008 on the Mac. Another researcher agreed. "Our sources unanimously suggest that Bulletin 3 will be the issue that needs to be addressed first this month," echoed Sheldon Malm, senior director of security strategy at Rapid7, in an e-mail. "[Users] should take inventory of where Windows versions are within their environments so they can plan testing and roll-out of the patch for Bulletin 3 as quickly as possible." The two Office updates, both important, will address issues in Word and Excel. The Excel update, on the other hand, will patch one or more problems in Excel 2002, Excel 2003 and Excel 2007 on the PC, Excel 2004 and Excel 2008 on the Mac. "The Office updates are interesting, but from what Microsoft gave us today, I think they'll be the kind of file format parsing bugs we've all come to know and love," Storms said today. Earlier this week, Microsoft acknowledged that the bulk of all attacks targeting Office in the first half of 2009 were leveraging a single vulnerability, which Microsoft patched in June 2006. This is the second month in a row that Microsoft has disclosed not only the number of updates it will ship next week, but also the number of flaws those patches will fix. Vulnerabilities in Office file formats have been a treasure trove for hackers, who have successfully exploited them for years.

And that's a good thing, said Storms. "That's great," he said. "It aids the planning process, because six bulletins could be six vulnerabilities or 20." Microsoft will release the six updates at approximately 1 p.m. ET on Nov. 11.