Archive for March, 2009

IBM Runs Into Stormy Weather with Cloud Computing (NewsFactor)

Monday, March 30th, 2009 | Finance News

Big Blue has lost some friends in the clouds. This weekend, IBM was in the eye of a storm dealing with companies such as Google,, and Microsoft. The Internet search giant, the online retailer and the software behemoth all withdrew support for IBM's effort to launch a cloud-computing initiative.

Members of the Cloud Computing Interoperability Forum (CCIF) also pulled their support.

The core issue behind the loss of support was IBM's manifesto. Some companies weren't happy about being invited late in the process, while others believe there are some political efforts under way.

Not an Open Process

The CCIF's organizer, Reuven Cohen, said because the group represents members from various industries, it could not endorse just one document.

"I don't think anyone had any issues with the document, that was hard to argue with and I'm an advocate for an open ecosystem for cloud computing," Cohen said. "The issue is a lot of people in the community -- small and big companies and individuals -- believe cloud is an approachable technology."

The CCIF could not endorse the manifesto because some of its members didn't agree that it was an open and fair process. "They feared that it was overly political and may have agendas," Cohen said.

"While Google isn't party to the manifesto, we are a strong advocate of cloud computing, given the substantial benefits for consumers and businesses," said Google's Jon Murchinson. "We value industry dialog that results in more and better delivery of software and services via the Internet, and appreciate IBM's leadership and commitment in this area. We continue to be open to interoperability with all vendors and any data."

Poking Holes in IBM

"Microsoft is behaving the way it behaves and IBM is behaving the way it always behaves," said Kelly Sims, a spokesperson for IBM. "It is not surprising that folks are looking for ways to poke holes in what IBM is doing."

Sims said everyone was approached relatively at the same time and that the effort came together in just weeks.

Thirty-five companies and organizations have signed on to the manifesto, which went live Monday morning. Companies including EMC, Sun Microsystems, and AT&T are on board, as are the Open Cloud Consortium and The Open Group.

"Seventeen new ones have contacted us this morning and clearly they are not scaring off everyone," Sims said of Microsoft, Amazon and Google. "It is pretty impressive when you take away the Microsoft versus the world battle."

Next to Come

IBM said the manifesto was drafted and went live in order to get a conversation started, but the most important steps will come in the next few months.

"It is important to embrace this for what it is, and that is an early step (in the process)," Sims said. "This is going to be a significant effort."


Peugeot ousts Streiff as sector troubles deepen (Reuters)

Monday, March 30th, 2009 | Finance News

PARIS (Reuters) –
Christian Streiff has made a career of waging and often losing corporate battles, but the outspoken executive's exit from carmaker Peugeot may say more about a culture clash in French boardrooms than his own record.

Sunday's sacking of the PSA Peugoet Citroen chief executive marked the third time that the 54-year-old engineer and novelist has played for high stakes and lost, after a 100-day stint as head of Airbus and a bumpy ride as no.2 at glassmaker St-Gobain.

Family-controlled PSA Peugeot Citroen (PEUP.PA), hit by an unprecedented industry-wide crisis as car sales slump, fired Streiff on the same day the head of struggling U.S. automaker General Motors (GM.N) was forced out.

The "exceptional difficulties" faced by the auto industry warranted the change of leadership," Chairman Thierry Peugeot said in a brief statement on Sunday.

Streiff will be replaced by 56-year-old former steel boss Philippe Varin, who worked for more than 20 years for aluminum conglomerate Pechiney, which was bought by Alcan Inc in 2003.

Varin, who is married with four children, later joined the troubled Anglo-Dutch Corus steel company in 2003, leading it back to profitability before successfully managing its merger with Tata Steel (TISC.BO) in 2007.

Streiff hit back, calling his ousting "incomprehensible," and noting that the market had appreciated his achievements.

Industry observers believe Streiff's candor, and his radical thinking -- which made waves at Airbus and St-Gobain -- may have been too much for a company hamstrung by a 30.27 percent family shareholding, and more recently by a 3 billion euro loan from the French state.

"I've heard that he was keen to make some sort of strategic move, and be quite aggressive, and the family weren't that keen," said a London-based analyst.

With several major management changes taking place at the PSA group in recent months, observers wondered whether senior executives -- including Citroen boss Gilles Michel -- were leaving in anticipation of a merger. Paradoxically, with the arrival of Varin, analysts say M&A deals may be more likely.

The French company last month posted a 343 million euro ($453.7 million) net loss for the full year 2008, and said it would stay in the red until 2010.

Analysts said Streiff had faced an uphill battle.

"I think he took on a pretty tough job, in the sense that the scope for him to change things was pretty limited, given where they were in the product cycle and given the forces at play in terms of family and government," said Nomura International's Michael Tyndall.

Credit Suisse analyst Stuart Pearson agreed: "I think it's longer-term structural and strategic issues that people have more questions over. It's a subscale mass maker, overly dependent on Western Europe, probably with too many products in too many segments." He noted that Peugeot is the best performing stock this year in its sector.

Peugeot has gained 17.5 percent so far this year, while the DJ Stoxx auto sector index is down 14 percent in the year to date. Renault has fallen 16.5 percent, and European market leader Volkswagen (VOWG.DE) is down 4.9 percent.


No stranger to corporate infighting, Streiff served as number two at French construction materials group St Gobain (SGOB.PA) until 2005, and was tipped to take over the top spot before being pushed out after failing to please his boss.

Streiff, an amateur pilot, was brought in to turn around Airbus in 2006 at a turbulent moment in the planemaker's history as it battled massive delays to its flagship A380 "superjumbo" program. He was forced out after 100 days in a dispute with parent EADS over control of painful restructuring moves.

Demonstrating the tendency to speak his mind that sometimes cost him vital support, Streiff enraged German shareholders of parent company EADS (EAD.PA) by calling the Hamburg plant widely blamed for A380 delays the "weakest link."

His analysis of the problems which caused hold-ups with the A380, however, and his plan to solve them -- the 2 billion euro "Power8" cost-cutting plan -- were later broadly adopted.

Married to a school teacher, with three children, Streiff published a novel, Kriegspiel (War Game) in 1999 about a young German textile entrepreneur and his French associate who take on the German establishment.

Analysts have voiced concerns over Streiff's effectiveness as CEO since he was hospitalized in May last year. Streiff returned to work in July and said he had recovered fully from what is believed to have been a stroke.

Streiff was born on September 21, 1954, at Sarrebourg, close to Germany, and educated at the French Mines School, an elite academy for engineers.

($1=.7560 Euro)

(Additional reporting by Tim Hepher, Blaise Robinson and Estelle Shirbon; Editing by Marcel Michelson and Simon Jessop)


Market share of U.S. second-home sales fell in 2008: NAR (Reuters)

Monday, March 30th, 2009 | Finance News

NEW YORK (Reuters) –
Sales of vacation and investment homes in the United States slipped to 30 percent of all transactions of existing and new homes in 2008, the National Association of Realtors said on Monday.

However, more than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties, with large percentages indicating that portfolio diversification was a factor in their purchase decision, the NAR said in a report.

The market share of homes purchased for investment was 21 percent last year, unchanged from 2007, while another 9 percent were vacation homes, compared with a 12 percent market share in 2007, the NAR said.

The total share of second homes declined from 33 percent of all transactions in 2007, while in 2005, the peak year for home speculation, 40 percent of sales were second homes, the NAR said.

(Reporting by Julie Haviv, Editing by Chizu Nomiyama)