Tag Archives: Business

BT shares plummet 15 per cent as profits take a dive

BT shares have taken a harsh hit this morning as the company announces ongoing issues with their Global Services unit.  Shares in BT fell 15 per cent to 104.7p, causing BT’s market value to suffer a loss of £1.5 billion.

Between October and December of last year, BT’s Global Services unit was slapped with a £340 million charge due to financial reviews.  Profits for the unit were said to be significantly lower than the equivalent period the year before.  The third quarter to the last day of 2008 was expected to provide profits of around £17 million, however the same period of time a year earlier provided profits around £215 million.

The news follows an announcement by the company in November to cut the costs of its pension schemes and make 10,000 job cuts, 6 per cent of their overall workforce.  The announcement of job cuts will affect thousands in Britain, pushing the record breaking unemployment records even further towards the 2 million mark.  The Global Services arm of the company was said to be a means of growth for BT, however it is now proving to be a heavy weight pulling down the overall performance of the company significantly.

Ian Livingstone, the group chief executive, remains positive about the future of the company, stating, “BT remains committed to the success of Global Services, and I believe these changes will create a stronger business that can deliver positive cash flow and excellent customer service.  The performance of the rest of the group is ahead of expectations for the third quarter, but unfortunately this will be more than offset by the issues in Global Services.”

“The first job of the new management team in Global Services and the new group finance director has been to review the financial position of Global Services and its major contracts,” continued Livingston.

However, BT is not blaming the issue on the current economic downturn, but rather more simply on operational failures.  BT also claimed that they predict that the charges mentioned will be non-cash and the company’s final dividend would be promising.  BT is also predicting that the revenues for the Global Service arm of the company will rise by 15 per cent in the third quarter of this financial year.

“These ongoing reviews reflect changed circumstances and a more cautious view of the delivery of cost efficiencies and contract performance, particularly in the light of the current economic climate. We have also initiated a review of Global Service’s operations which will help us drive our cost savings initiatives.”

The other units belonging to BT that are expected to exceed expectations are the retail section, wholesale section and the Openreach unit.  These three units of the company are set to soar in the third quarter of this financial year.  BT’s share prices have more than halved within the last year when shares were priced at 245p.

Virtualization Explained Part 2: Business Virtualization

The value of virtualization has been found by businesses because of the opportunity it gave legacy applications to continue working without tying up a physical computer. This in turn led to the next big virtualization virtue: server consolidation.

If you can avoid having to maintain old hardware for an outdated platform by running a system within a virtual PC there is no reason you can’t avoid maintaining new hardware by continuing to virtualize your systems. By using virtualization you are able to combine multiple workloads all on the one physical computer. Although this equates to less machines, the overall work performed, and the number of environments represented, does not decrease in any way.

Imagine a medium to large scale business that houses a data centre with racks and racks of servers. Each one of these is performing a task of some kind. One could be a mail server, one a print server and several would be dedicated to a range of applications including small rarely-used apps that are only required by one person, a situation that most companies can find themselves in.

If you imagine that each on of these computers is taking up space in the building. They are using a lot of power, and require constant cooling, all of which costs lots of money. Now image the systems administrator when the business come along and announces they’ve bought another special-purpose piece of software that needs its own web server not tied up for any other purpose.

The systems admin has two options. He can order new hardware, taking up space and adding upkeep cost, or if he’s clever he will recognize he can use the capacity within the existing servers. This is where consolidation comes into its own, as you could run two (or more) entirely independent and even conflicting virtualized computers on the one set of hardware, which will prove much more energy efficient than two individual computers would be.

Some businesses have found that they can cut the number of servers in their organization by consolidating them as virtual servers. This can help deliver he cost savings, and help a company who wants to turn that little bit greener.

In addition to this, virtualization cuts the dependency between an operating system and the underlying computer hardware. Typically, when setting up a server there is a lot of work involved configuring the computer itself. The computers setup is largely tied in to that machine. If you wanted to upgrade to a more powerful computer you generally cannot simply backup the computer and the restore onto the new system. Generally, you must go through the format, installation and setup process from the start.

This is not the case with virtualization. As the file system is merely a file on a disk, and the virtual computer is protected from the real hardware, by working through an abstraction layer which is provided by the software implementing your virtual environments.

You can now replace your hardware with a more powerful computer that need not bare any resemblance to your previous system. The virtualized systems won’t mind. Just copy their disk files over and you’re up and running once more, and unless something has went completely wrong they’ll pick off from where they left off.

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Is your filing cabinet is bursting at the seams?Google’s here to help

If you happen to run a massive business that needs to store millions of documents, then the version 5 of Google Search Appliance is the answer. Five times faster than its predecessor and three times the capacity, this bright yellow server remarkably remains the same size as before, and offers a bunch of new features for end users.

Obviously the main challenge for the designers was to jump up from the previous models storage capacity of 3 million documents to ten million without changing the dimensions of the device.

“A typical enterprise search deployment would require dozens of servers if you have a scale of 10 million documents – with multiple back-end databases, Web servers, content servers, and all that stuff,” Google Enterprise Project Manager Nitin Mangtani said.

“We have done some really core architectural changes to simplify the entire search … so the administrators and IT departments just need to manage one server to scale the 10 million documents,” he explained.

To achieve this, both the hardware and software were given a serious overhaul. Google?s engineers tweaked the crawling system to improve speed and installed an improved central processing unit and more memory. Google has essentially built a “brand new hardware and software platform,” Mangtani said

Although the speed and memory were improved, Google?s main focus was to improve the Search Appliance?s ? powered as before by Dell – features that make it easier to use.

One of the major changes is improved search for different types of content, including enterprise systems such as Microsoft Sharepoint, IBM File net, and OpenText LiveLink. Another improved feature is the ability to ad different user groups to define individual search parameters for specific sub-sets.

Other new features include the option for e-mail alerts of specific topics or documents, advanced search analytics, and improved encryption. The Search Appliance also supports Kerberos, as well as UK spelling, as well as international support for Portuguese, Turkish and Vietnamese.

“The idea of the hardware is really simplicity,” Mangtani commented. “You plug and play and you’re up and running.”

Google already says that they have 20,000 Search Application clients includeing Adobe, and NASA.

“[With] any organization or business entity which has a lot of digital content … the main problem for them is they have done some massive investments in content depositories and tools all for the digital content. But all that investment is not fruitful until you can find the right document you are looking for,” Mangtani pointed out.

Charles King, principal analyst at Pund-It, commented on the need for Google?s Search Application: “The effective search is obviously critical in the world of the Internet. There’s really astounding growth in the sheer amount of information and documents that companies are storing and attempting to manage successfully,” he said.

“The more than tripling of capacity on the new appliance … isn’t simply a matter of bigger, better or best. It’s really, I think, a response to a very serious issue that more and more companies are facing – and that’s how to efficiently work with and effectively leverage the information that they continue to collect and store,” he noted.

Google?s Search Appliance doesn?t come cheap though. The entry-level model comes in at a bank breaking US$30,000. But if you have a need for a lot more capacity, Google can custom build you one that will handle up to 30 million documents ? but if you have to ask the price?you cant afford it.