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Raw Iron ideas placed application software front and center while demoting the server hardware itself and the operating system to a subordinate role. The customer who needs some database software need hardly know what’s going on under the covers.

But having Sun’s hardware assets in-house gives Oracle more flexibility to adapt to cloud computing on its own, in particular through Sun’s recently relaunched Network.com cloud computing infrastructure.

Financial complications
Sun Chairman and co-founder Scott McNealy and even more so CEO Jonathan Schwartz likely are breathing a sigh of relief. Sun’s stock plunged after IBM’s attempted acquisition of Sun fell apart, but with an Oracle acquisition offer also on the table, it’s now clear why Sun could play chicken with IBM, then issue a statement about the board’s faith in Schwartz after IBM walked. On Monday, Sun’s stock surged 36 percent to $9.07 in mid-morning trading.

Standalone server sales? At Oracle?
Oracle can sell software-hardware package deals and build a Sun-based cloud service, but how well will it serve customers who want to run their own machines with their own software? It’s likely those companies will look elsewhere unless Oracle can show it truly wants to be a full-fledged hardware company.

Sun’s stock plunged after IBM’s attempted acquisition fell apart, but with an Oracle offer also on the table, it’s now clear why Sun could play chicken with IBM, then issue a statement about the board’s faith in CEO Jonathan Schwartz after IBM walked.

Oracle Chief Executive Larry Ellison is a true believer, though, making the sales pitch in the company’s official statement:

What’s smart about the approach is that it lets Oracle profit from Sun’s diverse technology–which includes not just servers but also open-source software such as Java and the MySQL database that Oracle already tried to buy years ago–without disrupting its own business too much.

The once and future server market
Another issue, though, is that server appliances are to an extent an artifact from an earlier era, when companies bought and managed discrete systems. That remains a big business, but it’s at odds with two important trends gaining steam in the industry.

It’s not clear how much Oracle’s financial projections rely on the strength of that standalone server business. Historically, selling software has much nicer profit margins. It’s also not clear how much of a hit Oracle is expecting to its current software business after a Sun acquisition turns present allies into rivals.

Through one important piece of corporate computing jargon–”integration”–Oracle has found a justification for its $7.4 billion acquisition of Sun Microsystems. Now it will have to convince historically skeptical customers, too, that the idea makes sense.

Customers appreciate integrated technology to an extent, but Raw Iron and server appliances quietly submerged beneath the waves. Also worrisome for Oracle is the failure of one of its integration ideas, Unbreakable Linux. Customers by and large ignored this Oracle attempt to offer its own version of Linux, a clone of market-leading Red Hat’s product.

Oracle seemed eager to justify the price, arguing it will improve Oracle’s earnings per share significantly and that it will help the company more than earlier massive acquisitions.

Second is cloud computing, where applications run on central servers on the Internet rather than in a company’s own confines. Cloud computing takes many forms, but from Oracle’s perspective, an excellent example is Salesforce.com, whose sizable cloud-computing service competes directly with Oracle’s Siebel business for customer relationship management chores such as tracking who bought what and when their warranty is up for renewal.

“Oracle will be the only company that can engineer an integrated system–applications to disk–where all the pieces fit and work together so customers do not have to do it themselves,” Ellison said. “Our customers benefit as their systems integration costs go down while system performance, reliability, and security go up.”

Oracle signed a Raw Iron partnership with Dell and worked on it with Sun, IBM, and then-independent Compaq. With Sun’s technology in house, one major challenge of those deals–who’s in the driver’s seat–evaporates with Sun a part of Oracle. There’s no longer any question about which partner owns the customer relationship, which services the technical support contracts, and how the sales revenue is divvied up.

The all-cash acquisition agreement–announced Monday, costing Oracle $5.6 billion with Sun’s cash factored in, and expected to close this summer–puts the innovative but financially bumbling Sun out of its misery after IBM’s move to buy it fell apart earlier in April. The way to fit Sun’s technology into Oracle’s business model goes back to a project called Raw Iron that’s more than a decade old.

Oracle also must deal with the fact that server makers Hewlett-Packard, Dell, and IBM could become less eager to promote Oracle’s software. Because massive database servers are so complicated, Oracle has relied on tight sales, support, and marketing partnerships, and those companies could lose enthusiasm if their server sales force starts seeing Oracle’s offering competitive bids.

First is virtualization, chiefly through EMC’s VMware software. This lets a single server run multiple operating systems, with the software collection moving flexibly from one physical machine to another as work load demands shifted. By breaking the hard link between hardware and software, virtualization undermines the integration sales pitch and inserts a third party’s technology between the server and its higher-level software.

Will server appliances work this time?
Here’s the rub, though. Raw Iron, along with the related concept of server appliances that arrived a few years later, was a marketplace dud.

At least Oracle’s acquisition faces less of an antitrust hurdle than IBM’s. Big Blue and Microsoft offer viable database competitors to Oracle’s and Sun’s, and Oracle buying Sun mean there would still be major server makers rather than the three left standing had an IBM acquisition gone ahead.

It should be noted that Oracle did surprisingly well integrating BEA Systems, PeopleSoft, and Siebel–despite having its own directly competing products in each case–but also that those were software companies. Sun is much more, and the future of its hardware business is cloudy.

And selling products at this high level of integration gives Oracle a way to ingest Sun’s considerable open-source assets–among them Java, MySQL, Solaris, GlassFish, NetBeans–without too much indigestion. It might even give Oracle some incentive to be more active with the open-source community it’s mostly kept at arms’ length.

He does have a point. Sun has always focused on the database market, and it has compelling technology assets for that market that it hasn’t been able to sell effectively: its current Niagara and the delayed higher-end Rock multicore processors, its Solaris operating system, and its Thumper storage servers with tremendous built-in data capacity.

So Sun shareholders and government officials likely will be convinced of the merits of the deal. The ultimate success, however, will depend on how Sun and Oracle’s customers see it.

“We expect this acquisition to be accretive to Oracle’s earnings by at least 15 cents on a non-GAAP basis in the first full year after closing,” Oracle President Safra Catz said in a statement. “We estimate that the acquired business will contribute over $1.5 billion to Oracle’s non-GAAP (generally accepted accounting principles) operating profit in the first year, increasing to over $2 billion in the second year. This would make the Sun acquisition more profitable in per-share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft, and Siebel combined.”

Tiffany appeals loss in counterfeit suit against eBay

Download today’s podcast

Today’s stories:

Defcon ends with researchers muzzled, viruses written

Verizon averts workers strike

Apple, AT&T mum on iPhone 3G issues

Jobs confirms iPhone app blacklist feature

Listen now:

Heat from car exhaust could improve mileage

‘Extreme’ gamers padding video game industry’s bottom line

Flash, HTML, Ajax: Which will win the Web app war?

Back from covering the Defcon hacker fest, CNET News’ Declan McCullagh explains the aftermath of a decision by a federal judge granting the Massachusetts transit authority’s request for an injunction, preventing three MIT students from giving a presentation about hacking smart cards used in the Boston subway system…Olympics viewership is stronger than it’s been in the last decade. But the company still hasn’t figured out a strategy to best take advantage of the Internet. Webware’s Rafe Needleman has a few suggestions…With hostilities escalating between Russia and Georgia, the battle has now predictably crossed over into cyberspace.

Google is funding work to ensure the Windows version of Adobe Systems’ Photoshop and other
Creative Suite software can run on Linux computers.

For the project, Google is funding programmers at CodeWeavers, a company whose open-source Wine software lets Windows software run on Linux. Wine is a compatibility layer that intercepts a program’s Windows commands and converts them to instructions for the Linux kernel and its graphics subsystem.

And with current technology trends, maybe Adobe never will see the need for Linux ports. With virtualization software from companies such as Parallels and VMware and improving support from chipmakers Advanced Micro Devices and Intel, it’s getting easier to run multiple operating systems on the same computer.

“We hired CodeWeavers to make Photoshop CS and CS2 work better under Wine,” Dan Kegel, of Google’s software engineering team and the Wine 1.0 release manager, said on Google’s open-source blog. “Photoshop is one of those applications that desktop Linux users are constantly clamoring for, and we’re happy to say they work pretty well now…We look forward to further improvements in this area.”

A survey by desktop Linux advocate Novell found Photoshop is the top non-Linux application that Linux users would like to have. Although Adobe has dipped its toes into the desktop Linux waters, so far it hasn’t made any major moves.

Google already uses Wine for the Linux version of its Picasa software for editing, tagging, and uploading photos. Photoshop is a larger and more complicated package, however, not to mention updated to version CS3 for nearly a year, so it’s likely the CodeWeavers programmers will have a lot of work on their hands.

(Via Matthew Aslett of The 451 Group.)

“The NAB is trying to suffocate the first viable alternative to broadcast radio and is reaching out of their industry to kill another.” –Tim Westergren, Pandora founder

UPDATE Friday, 3:25 p.m PT: To include Pandora’s letter to fans

Westergren said that there is nothing in the Webcasting bill that would block traditional broadcasters from reaching their own rate agreement.

Westergren said the NAB’s efforts to kill the bill is nothing more than an attempt to stifle the burgeoning Web radio sector, which many in terrestrial radio see as a competitor.

Time is running out on a bill that could pave the way for Pandora and other Webcasters to pay reduced royalty rates, as traditional radio broadcasters are now trying to kill the legislation.

As Congress readies to adjourn, representatives of the National Association of Broadcasters are lobbying lawmakers to stop legislation that would allow anyone streaming music over the Web, such as National Public Radio and Pandora, to continue negotiating with SoundExchange, the body that collects statutory rates for the music industry.

Friday afternoon, Westergren issued a letter to fans asking that they call their congressman to voice their support. He signed off: “Thanks for helping Pandora survive.”

Responding to Westergren’s comments an NAB spokesman issued this statement: “NAB has concerns related to Congress attempting to fast-track a bill introduced less than 24 hours ago that could have serious implications for broadcasters, Webcasters, and consumers of music. NAB spent more than a year trying to work out an equitable agreement on webcasting rates, only to be stonewalled by SoundExchange and the record labels. We will continue to work with policymakers on a solution that is fair to all parties.”

Without the legislation, the talks could come to a halt and the deal could fall through, Westergren said. The bill is scheduled to be voted on the House floor Friday. Congress is expected to adjourn no later than noon on Monday.

The bill, introduced late on Thursday, would allow negotiations between Web radio stations and the music industry to continue and reach a settlement while Congress is adjourned. The two sides need the government’s OK before reaching a settlement because they’re after a statutory license. Such a license gives Web radio stations the right to stream any copyright songs they want, but also requires them to pay a negotiated rate.

SoundExchange and the Digital Media Association (DiMA), which represents Web radio stations, have been at odds over the fees required to stream music, but the two sides are “optimistic that a deal can be reached,” said Tim Westergren, founder of music service Pandora. He has long said the music service won’t survive unless royalties rates come down.

“This bill doesn’t effect the NAB at all,” Westergren said. “This bill is designed to give us the time to resolve what it looks we’re close to getting resolved. The NAB is trying to suffocate the first viable alternative to broadcast radio and is reaching out of their industry to kill another.”

For those who don’t have this luxury, I feel for you. But try to avoid the sponsorship, all the same.

Analysts, to a person, will scream “No!” they’re not biased by the money. But it’s human nature to be influenced by a paycheck. Very few people/analysts have the clout of Walt Mossberg to be able to nakedly diss a product or company.

But do you ever wonder about the research’s integrity? Do you care enough to go to the next page of that document or website and see just who was so interested in this topic or trend that they shelled out big bucks to enable this research project to take place?

Some of us have the luxury of being able to get paid in accordance with our ideals. I have exactly zero problem advocating the adoption of open source, because I see it benefit customers on a daily basis, and because it jibes with my personal, moral philosophy.

CIO.com raises an important issue about the integrity of research being done by industry analysts. Namely, if a sponsor pays for the research, do they get favorable treatment in that research?

commentary

The answer is, “No.” Most people don’t check. They see the headline, look at the pretty charts, and forget about the fine print.

But I’m an industry participant that makes my money selling services around open-source software. I don’t have to pretend to be neutral.

I’m not suggesting that the research is corrupted. I’m just suggesting that it’s hard to remove the taint of sponsored research. Just take a look at Gartner’s “Hype Cycle” on open source, which is woefully inaccurate, probably in part because Gartner gets its information from the vendors who sponsor its research, not the customers who are buying into open source in droves.

So, the next time you read a report, blog entry, or article, consider who pays the writer (including when reading this blog).

For example, logs can track where
sensitive data is stored in the cloud, and when data has been copied
or transported. If a VM with sensitive data is moved to another
server, logs document the switch. Zhen says logging every event or
interaction in the cloud enables enterprises to track, trace, and
measure each heartbeat, while also making cloud providers more
accountable.

In a May 2008 report, Merrill Lynch predicted that by 2012, the annual
global market for cloud computing will surge to $95 billion. In order to get to what seems an impossibly big number we need to look at what will prevent adoption.

According to Jian Zhen, senior director
of open platforms at LogLogic, cloud computing is currently like the “Wild West” for enterprises. He says cloud providers may not have all the information they need about threats and aren’t
likely to enforce widespread security until a major
breach occurs.

Zhen emphasized that improving cloud security isn’t too far off. For
example, companies and managed service providers already use log
management products to capture logs for a variety of
business operations and forensics purposes. Why not turn on log
management in the cloud?

One obvious answer comes to mind: security.

Somewhere down the line you need to be able to aggregate the usage and parse the data for all it to make sense. If you consider that Amazon.com is doing millions of transactions a day, there will be some serious effort required.

When it comes to cloud computing, Zhen said, enterprises need
transparency: the ability to view log reports showing who has accessed
what data in the cloud, and when.

Although it’s competing with services like Savings.com and SilkFair, iStorez doesn’t focus as much on the social element of savings like the others do. Instead, iStorez offers a series of weekly newsletters from major online retailers and coupons that allow visitors to save a little extra cash before they make a purchase.

iStorez, a company that collects specials and coupons from online stores and bundles them together to help visitors find savings across the Web, announced Monday that it obtained $2.3 million in first-round funding from Norwest Venture Partners

iStorez is owned by the Kriyari network, which “powers Web 2.0-style online malls for media, lifestyle, content, and social-network publisher sites.” In essence, Kriyari, with the help of iStorez, aims at creating interactive “malls” filled with online stores and brands. As each visitor clicks on a product, it dynamically adapts to create a “mall” that’s tailored to the user’s interests.

iStorez, which has been in operation since January, will take that vision and the new funding to offer a more robust offering, the company claims.

But putting it all down to the Air metaphorically having a big red X painted on it is ultimately just sour grapes — it got compromised, and that’s a frowny face in the Apple column.

David Maynor says:

Finally — and this is the issue that would the easiest for Apple to solve — the members of the hacker community just don’t know anyone at Apple. They know people at Microsoft because the company shmoozes the hell out of them.

There are several reasons these security “professionals” are spending their waking and non-waking hours targeting Macs.

And, really, this is exactly the kind of game that Apple has gotten wrong for 30 years. Shmoozing is not exactly the company’s forté (just ask any Apple developer how the lunches are at WWDC).

[The Fujitsu running Vista and the Sony Vaio running Ubuntu] are still standing, but that may be because there’s more hacker glory in taking down the MacBook Air.

The company could defuse a large part of this without changing a line of code because it’s less about the relative merits of the various platforms — which are valid concerns — than it is about emotion (see: salad, fruit).

There’s certainly no denying that, as ZDNet’s Larry Dignan says (no “Mac zealot” he), the MacBook Air was certainly the more coveted target:

See, the easiest thing in the world to do is to get someone who will take these people golfing and tell them “Dude, we are totally going to do that. Next release. I swear.”

The Macalope certainly wants to see Apple come up with a comprehensive strategy for implementing sound security in its software, he’s just saying that there’s more than one aspect to this issue. One requires coding, the other requires grease.

First, they’re lashing out at what they think is a “smug attitude” by Apple on security. Frankly, Apple’s corporate position on security is so lame that the only thing these people are basing this on is the “Get a
Mac” ads. Yes, really. These people have the emotional maturity of a cup of fruit salad. That’s all territory we’ve covered already.

“Now watch this drive.”

I hope this puts to rest the myth that OSX is more secure but I am sure the zealots will have a million reasons why this is a fixed or rigged contest.

Well, the Macalope for one has already acceded to his contention that Vista is more secure based on the technical merits, if not the practical ones. So the brown and furry one’s not really sure what he’s on about. But he’s sure David will find a Slashdot comment somewhere that will validate his Artie MacStrawmanism.

Third, Apple simply has not implemented a comprehensive security policy (see: Leopard firewall, Back To My Mac defaults). It may very well be that it’s easier to exploit certain vectors on the Mac. The Macalope’s not qualified to make that call.

Plus, you hack it, you keep it. So, sure, everyone’s trying to hack the Air. (The Vista laptop was later hacked, but only after the rules were relaxed.)

Second, thanks to the resurgence of Apple, most of them have only just discovered the Mac. It’s virgin territory for them and, like when Columbus “discovered” the New World, their first inclinations is to immediately start shooting the natives and giving them all kinds of horrid diseases.

If it wanted to, Apple could probably make serious inroads to this community and at least reduce its PR problem by hiring someone they know. Now, many of these people are not exactly the corporate citizen type. They often dress and smell funny and, if you’ve been paying attention, have the emotional maturity of a cup of fruit salad. So maybe Apple would want to poach someone from Microsoft or look to those who write about security — your Rich Mogulls, your Ryan Naraines — and tap someone like that. Sure, journalists still dress funny, but they fare slightly better on the olfactory and fruit salad scales.

Unless you’re too busy doing the rickrolling that’s so popular with the kids these days, you probably saw that a MacBook Air got hacked at CanSecWest last week.

So the Macalope will reiterate his call — again! — to Apple to get more serious on security.

In a repeat of last year’s “PWN 2 Own” contest, organizers this time offered three different laptops running three different operating systems.

Today, for kicks, I tried to draw a map of all the places I write content, all the places it is displayed, and all the intermediate services that re-post my content in places other than where I originally write it. It’s a spaghetti of interlinked services, and it’s becoming unmanageable. I think it’s just dumb luck that I haven’t created an infinite loop of republishing so far. Adding one more service could push things over the edge.

Although my profession is creating content and publishing it, my problem is hardly unique. I post a few times a day on Webware and Twitter, and I contribute to some other blogs and podcasts, and once in awhile I update Delicious and Flickr. But compared with some people in non-publishing jobs my output is modest. There are people active on multiple personal content services like Facebook, Digg, Vox, Blogger, and Youtube that produce more content than I do, and they’re also using republishing services to make sure that all their friends, on all their networks, see all their content.

So this is my challenge to the Web 2.0 community: Solve the personal content and community problem. Take the multi-publishing chops of Ping.fm, the aggregation features of Friendfeed, the republishing capability of Twitterfeed (with more functions, please), and the discussion aggregation of Disqus, and put it all together into one simple, easy-to-maintain product that acts as a hub for publishing, reading, and community in all these services. And while you’re at it, make sure you don’t steal traffic or community from the services you’re front-ending; they all have personalities we want to keep alive.

I am, so far, managing to keep most of these connections in my head, but I fear that if I sleep for more than nine hours I could forget how my network is put together. I could look at my sketch. But we really shouldn’t need network maps to keep track of what we’re doing where, should we?

It shouldn't be this complicated (click for full-size).

The challenge is keeping track of all the connections between services. It’s a tangle, as I said: I have Friendfeed republishing my Twitter posts. Ping.fm, which I often use to post to Twitter (and thus, to Friendfeed), could just as easily publish to Friendfeed directly. I just happened to set up the Friendfeed-Twitter link before I started using Ping.fm. I have Ping.fm updating several other nanoblog feeds, like Jaiku, Pownce, and Plurk. Meanwhile, my Webware article feed (just my stories) is read into Friendfeed and directly by Jaiku. I do not feed Webware into Twitter directly; I use a republisher called Twitterfeed. I am also using Twitterfeed to republish my ProPRTips blog into Twitter, which is strategic, since I get more readers for that blog’s content on Twitter than the blog gets itself.

It gets worse. Each of the sites my content ends up on (partial list: Webware, News.com, ProPRTips, Swagalicio.us, Twitter, Friendfeed, Jaiku, Identi.ca, Pownce, Kwippy, Flickr, Delicious, Digg) has its own communities. And I never know where a conversation will take hold. Since I’m most active on Webware, Twitter, and Friendfeed, I check those services more frequently. Sometimes something I write will spark a conversation on one, sometimes another. There’s no telling. (By the way, Plurk gets a decent share of community action; every time I go there I think I should check in more frequently.) Disqus can do a lot of discussion bridging between blogs, but one thing it doesn’t do is bridge communities between the microblog sites.

Twhirl, a desktop client for Twitter and Friendfeed that I dearly love, updates only one site at a time, so I can use it to send Twitter posts to either my main Twitter account or other specialized accounts I occasionally write to. Friendfeed reads in only what I write in my main Twitter account, though. And since Twhirl does not update other services I use, like Jaiku and Plurk, when I use Twhirl I need to be mindful that some of my followers on these other networks aren’t going to see the posts.

Or should I drop it all and just write e-mail newsletters instead?

(Credit:
Rafe Needleman / CNET)

Discount online retailer Overstock.com announced on Thursday that it will be selling its products outside the United States for the first time.

The Salt Lake City, Utah-based company has inked a deal with E4X, which runs a service called FiftyOne Global Ecommerce. The partnership has enabled Overstock to start billing and shipping to a total of 34 new countries–Canada, as well as 33 European nations. FiftyOne lets a participating retailer ship to a U.S. address and receive U.S. currency, while the buyer pays in his or her home currency.

“We’re actually right smack dab in the middle of integrating,” Jake Bailey, Overstock’s director of international sales, said in an interview with CNET News.com on Thursday. No final date has been given for the launch of international sales, but Bailey said it will be before the end of 2008.

Not all of Overstock’s products will be able to be shipped overseas. Some bulky products, like massive HDTVs and large pieces of furniture, will continue to be available only in the States. But, Bailey said, “for the most part, it’s going to be the bulk of our product offering.”