SEC Probes Red Hat, Will Restate Results, Jul 14, 2004

Linux distributor Red Hat Inc. said on Tuesday it would restate results for the past three fiscal years to correct the way it recognizes subscription revenue, adding that federal regulators have raised questions about an annual report.

Red Hat, which provides update and support services for Linux software, said the restatement would result in significant changes to operating profit and net income for some periods.

Shares in Red Hat plunged as much as 22 percent, adding to a slump that has erased nearly two-thirds of a year-long rally fueled by investors seeking to invest in the growth of Linux.

In a spirited and thunderous address, the head of Microsoft Corp. admitted that the company has much more work to do to improve software security, even as it rolled out several new products and strategies for combatting software viruses, which are attacking global information systems with greater frequency and sophistication.

“We're not perfect, we're not where we need to be, but we have velocity and purpose,” Steve Ballmer, chief executive officer of Microsoft, told several thousand people at a conference in Toronto.

Speaking for more than an hour, Mr. Ballmer also launched an impassioned attack on open-source software, tried to answer concerns about the long wait for the next Microsoft operating system, and fingered software that helps run small businesses as a multibillion-dollar growth opportunity.

A group of former Red Hat employees have formed a start-up called Specifix that aims to lure customers with customized software needs their former employer couldn't accommodate.

Specifix, headquartered in San Jose, Calif., with most development in Raleigh, N.C., plans to offer versions of Linux that are as compatible as possible with Red Hat Enterprise Linux, the company said. But through the use of Conary, software the company plans to start showing Wednesday.

IBM today announced a new line of Power5 Unix and Linux servers that will give users a mainframelike ability to virtualize their systems at the processor level -- a capability some users, including Whirlpool Corp., are hoping will reduce their software and hardware costs.

When schools buy software, there seems to be only one choice: Microsoft. Why don't more of them use Linux? It can do most of the work, it's more secure and it's free. Michael Pollitt investigates

Linux could soon be in more devices following the release of the first specification and reference implementation from the CE Linux Forum (Celf), a consortium of manufacturers which aims to optimise the operating system for information appliances and other devices.

Celf's specification and implementation, freely available from its web site, is not intended to become a separate fork of Linux, but to provide enhancements to optimise the operating system for embedded designs - for example to improve power-saving and security, and to speed startup and shutdown. Celf said it will work with the open-source community and feed its changes back into mainstream Linux development.

The KDE Project last week announced the availability of the first beta of the 3.3 version of its free graphical desktop environment for Linux and Unix workstations. KDE 3.3 Beta 1, code-named 'Klassroom,' (the alpha of 3.3 was called 'Kindergarten'), was released in preparation for the upcoming KDE Community World Summit 2004 (August 21-29, 2004, in Ludwigsburg, Germany), an event known in the KDE community as the 'aKademy.'

That's the message from major software vendors that have jumped on the information life-cycle management bandwagon. SAP AG will release an ILM product, possibly this summer, based on technology from OuterBay Technologies Inc. And Sybase Inc. in Dublin, Calif., has just begun offering OuterBay's ILM technology, joining PeopleSoft Inc., Oracle Corp., EMC Corp. and other companies anxious to get users to migrate their dusty data from high-priced proprietary servers to cheaper Linux machines. But Michael Howard, CEO of Cupertino, Calif.-based OuterBay, thinks these software giants want to prod you toward "a Linux nirvana," where even your pricey production machines, not just the ones with archived data, are low-cost, commodity Linux boxes.

The PHP Group has announced this week the availability of PHP 5, the next version of the popular Web scripting language.

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