Monthly Archives: April 2012

IT Outsourcing: What You Don’t Know, Might Be Costing You

For many companies, the management of IT outsourcing is becoming increasingly complicated, problematic – and expensive. While there’s no question that outsourcing can help fill gaps in IT department services, there’s also a growing consensus that confusion regarding negotiated terms and conditions, lack of transparency, and faulty integration of cost and utilisation reporting can cause the vendor relationship to spiral out of control.

Despite best efforts to get their arms around technology consulting, project labor and support services, many CIOs now can’t help but look at their provider’s monthly bill and wonder:

  • Are we being as efficient as possible with this contract?
  • Do we know if this contract is still cost-effective?
  • Can we be sure we are being billed at the correct rate?
  • How many resources have been consumed?
  • Have the services we’re paying for actually been performed?

Of course, all of these are legitimate questions, and more and more companies are finding that it pays to track down the answers. In fact, I have found that more than 30 percent of mycustomer base is losing valuable resources because of ineffective IT outsourcing contract management.

Granted, traditional contract pricing typically includes a fixed fee for a contracted volume of services, with variation on fees for volumes above or below those target thresholds. (Additional resources required are known as “ARC’s.” Credits for reductions in services provided or resources consumed are called “RRC’s.”)

This ARC/RRC methodology was designed to account for service/resource fluctuations, but when customers lack visibility into the processes that determine ARC’s and RRC’s, they lose opportunities to identify how best to utilise the services the vendor provides.

What’s more, as IT outsourcing contracts continue to grow increasingly complex, this level of uncertainty is becoming much more than a mere annoyance. It’s costly, and a lack of definition and understanding can lead to even bigger headaches down the road.

What are vendors doing to remedy these problems? Not much, apparently. And that means many customers are left feeling as though their IT outsourcers are leaving them in the dark.

For example, I have seen several cases where the original cost model based on the outsourcer invoice data did not include details on the operational environment. As a result, one of our customers who had outsourced a considerable amount of services was unable to conduct a detailed analysis on how the environment was being used and where to look for cost saving and optimisation opportunities.

In addition, some vendors are notorious for sending customer’s billing data in two separate reports: one from finance, which accounts for base contract service levels and ARC/RRC adjustments; the other from project managers, outlining server utilisation and other operational metrics.

This siloed reporting structure leaves customers hamstrung and creates ambiguity that inevitably ends up favoring the vendor. Why? Because without meaningful integration of the data from these two reports, they don’t have a simple way to connect the dots and make meaningful business decisions.

Is there anything your company can do to reverse this trend? What steps can you take to more effectively manage your IT outsourcing contracts? For starters, look for ways to marry technology outsourcing cost data with information about utilisation. This type of integrated analysis can help you:

  • Optimise hardware utilisation: Precise information about the server environment, including utilisation metrics and detail on how servers are provisioned, provides a better understanding of the resources consumed and the cost to consume them. Armed with these insights, you’ll improve your view of what resources should be optimised – and which ones can be deferred
  • Understand the TCO of your IT service portfolio: Determine total cost, cost drivers and business consumption of your IT service provider. Retained costs and other internal costs that fall outside the vendor contract should also be part of this analysis.
  • Shift IT spend to “Change the Business” initiatives: Identify trends that can lead to further innovation, cost savings, process efficiencies, and competitive advantage.
  • Renegotiate existing contracts: Contracts often contain clauses that allow you to renegotiate if your requirements have changed and specific services aren’t being utilised.
  • Uncover immediate cost savings: Analysis of integrated metrics can identify “quick wins”, such as moving provisioned services to a lower tier of service (gold to bronze, e.g.)

Remember: When your business depends on IT outsourcing, it’s imperative that you understand how to derive optimal value from your vendor contract. Once you start combining IT operational and financial data, you’ll gain actionable insights that will help improve your decision-making and lead to efficient, cost-effective management of both the IT services and resources your vendor provides.

In short, it’s time to put an end to all the uncertainties in your outsourcing contracts. Take a collaborative approach to start finding the answers you need, because I guarantee that once you do, you’ll discover that when it comes to managing IT outsourcing vendors, knowledge is power.

source:

http://www.businesscomputingworld.co.uk/it-outsourcing-what-you-dont-know-might-be-costing-you/

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Windows 8 Release Candidate Coming in Early June

The Microsoft Windows 8 release preview will arrive in plenty of time for manufacturers to have Windows 8 devices "out in the fall well ahead of the holiday buying season," said analyst Al Hilwa. "Shipping early means an even bigger variety of devices by the holidays" that will be running Microsoft Windows 8.

Microsoft will launch a Windows  8 release preview of its next generation operating system in early June. The announcement was made on Tuesday by Stephen Sinofsky — the president of Microsoft’s Windows division — at the Windows Developer Days conference in Japan.

Microsoft’s release schedule for Windows 7 began with the launch of the W7 developer’s preview on October 28, 2008. Then in 2009, Microsoft rolled out the W7 public beta, release candidate (RC), and release to manufacturing (RTM) versions on Jan. 7, April 30 and Oct. 22, respectively.

This time around, Microsoft has changed the designations for its incremental W8 OS releases to developer (Sept. 13, 2011), consumer (Feb. 29, 2012) and preview (early June).

"Barring any major issues, an early June roll out of a release candidate caliber version of W8 is in fact earlier" than many industry observers had expected, said Al Hilwa, director of applications software  development at IDC.

The W8 release preview will arrive in plenty of time for manufacturers to have W8 devices "out in the fall well ahead of the holiday buying season," Hilwa said. "Shipping early means an even bigger variety of devices by the holidays."

A New Mobile Platform

When we asked Hilwa what the impact would be of each subsequent W8 release on third-party app developers and service operators, he said he does expect independent software vendors to begin to take more notice of each new W8 release — and with some ISVs already showing visible interest in W8 because they view it as a new mobile  platform.

"Traditional PC  ISVs will likely start to take notice with the June release," Hilwa said. "Business ISVs will likely be the last to come and will likely add modules for their apps around business-to-consumer functionality."

With its new cross-over capability to run on media tablets and other computing devices equipped with ARM-based processors, however, Windows 8 may present Microsoft with more challenges to have a final release-to-manufacturing version ready for an October rollout to tablet  makers as well as PC manufacturers. The good news for Microsoft, however, is that the new OS will radically expand the sheer number of platforms on which W8 can run.

"All indications are that we will see tablets and convertible devices at various points of the weight and price spectrum with Windows 8 itself," Hilwa said. "The theory is that Windows RT devices will be lighter, cheaper and have better battery life, but I am guessing they are going to get a run for their money from Intel -based machines."

Adapting to a New PC Paradigm

So far, however, Hilwa is impressed with the extensive set of consumer friendly features and capabilities that Microsoft has packed into its consumer preview release of W8, which he has been using for the past couple of weeks.

"From a quality perspective the consumer preview version of Windows 8 is amazing," Hilwa said. "I have to pinch myself sometimes when I see the device sleep and wake-up in a couple of seconds."

Hilwa’s principal concern from the consumer perspective is whether people will welcome all the new changes or be overwhelmed with having to change their past computing behavior to fit Microsoft’s new paradigm. The response of consumers to all the changes may depend on how long they have been using Windows — with younger PC users potentially finding it easier to adapt to the new computing environment.

"There are some things I am still trying to figure out in Windows 8 and I have been using a PC for 20 years," Hilwa said. "Maybe that is why."

source:

http://www.sci-tech-today.com/story.xhtml?story_id=12000EO2A2BC&page=1

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BPOs are coming out of the coder shadow

Is the business process outsourcing (BPO) servicessegment finally emerging from the shadow of information technology (IT) services?

It sure seems to be trying. In fact, last quarter, most BPO subsidiaries and firms grew at a faster clip than their IT counterparts.

Tien-tsin Huang and Puneet Jain, analysts with JP Morgan, said BPO major WNS’ robust revenue growth of 2% sequentially and 7% year-on-year last quarter underlines buoyancy for this year.

“WNS is seeing benefits from restructuring… and healthy demand environment for BPO services. The company is also seeing a nice build-up of large contracts in its pipeline. WNS needs to win a couple each year to drive next year’s revenue growth,” they said in a note last week.

Back home, even HCL saw its margins salvaged by a turnaround in the BPO numbers.

“While… results (of HCL) are ahead of expectations with positive surprise on margins, a large part of the beat was driven by turnaround in the BPO segment,” Religare analysts Manoj Singla, Rumit Dugar and Udit Garg said in a note on Wednesday.

Ankita Somani of Angel Broking said the demand environment for BPOs was improving as clients looked at globalisation of delivery capabilities, which was driving transformation and enterprise-wide cost efficiency.

“HCL is continuously investing in building platforms for non voice-based businesses in this segment. Demand is seen in areas of cloud, mobility, social media and multi-tower end-to-end process data,” she wrote in her report.

Even Sid Pai, managing director and partner, TPI, the third-party outsourcing advisory, said one reason BPO revenues were climbing was it was no longer a back-office support kind of work but more higher-end such as business-oriented core functions that customers were seeking.

According to Samiron Ghoshal, partner and national leader, IT advisory & global talent, Ernst & Young, there were two main factors driving the recent BPO growth.

“First, peer BPO deals (contact centre) are not happening so much anymore, and there are more KPO-linked deals. Secondly, a lot of deals which took place in the last 5-10 years are coming up for renewal in the next 12-18 months. The new renewals are also seeing some change in strategy, where processes are being divided between players, instead of giving out bundled contracts for all BPO services to a single player as was the case earlier,” said Ghoshal.

This, he said, worked in favour of companies like HCL, who have more value to add than pure voice BPOs.

“However, this sudden rise in BPO gains can be looked at as a sporadic change and not a complete lifting of the BPO segment since it impacts Opex (operational expenditure) spends and not Capex (capital expenditure) spends,” said Ghoshal.

Ritesh Idnani, chief operating officer of Infosys BPO, said in a recent interview to DNA that he expected the BPO market in India to grow faster than the IT market this fiscal.

Keshav Murugesh, CEO, WNS, said what had turned the tide in favour of BPO was the segment’s focus on non-linear services as well as more consulting and technology-based offerings. He said most firms were slowly moving away from traditional BPO offerings.

“For long, too much attention has been focused only on the IT functions of a BPO process whereas there is a great difference between an IT and BPO buyer on the strategic side. In the current recessionary climate, they are now outsourcing more of their non-core functions to BPOs like WNS, which can provide them with new ideas to improve their top-line and bottom-line,” he said.

IDC has predicted a compounded annual growth rate of 19% for the offshore BPO market in the next five years, the bulk of which is expected to come from India. Recently released TPI index shows that while outsourcing contracts were down 37% sequentially and 20% annually, BPO contracts were up 30% and 27%, respectively for the same periods.

TPI’s Pai, however, does not see BPO revenues overtaking IT services revenues in the near future mainly because of the way its contracts are structured.

“I don’t see it (BPO segment) becoming larger than IT services because of the way it is bought. I believe IT companies would continue to go after IT services contracts,” he said.

Source:

http://www.dnaindia.com/money/report_bpos-are-coming-out-of-the-coder-shadow_1679374

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InfoPro Ranks Among Top 12 Training Outsourcing Companies

Adding another feather to its cap, InfoPro Learning, Inc., an award-winning learning solutions provider, secures a position among the top twelve companies in the 2012 Training Outsourcing Companies Watch List, announced by Trainingindustry.com. The list recognizes highly competent companies offering outsourced learning services across the globe.

InfoPro demonstrated excellence in most of the selection criteria of the Watch List such as innovative service offerings, ability to provide services on a global basis, unique and proven approach to Business Process Outsourcing (BPO) solutions and quality of the client list. Each company who participated had to undergo extensive research, including thorough analysis of its capabilities, experience, and expertise.

“The Training Outsourcing Companies Watch List provides corporate training service buyers with a quality list of companies to consider when sourcing your next training outsourcing project. Consider these companies as some of the companies to watch as the training outsourcing market continues to evolve,” said Doug Harward, Chief Executive Officer of Training Industry, Inc.

Speaking on the achievement, Arun Prakash, Executive Vice President, InfoPro, said, “We are delighted and honored to be recognized by Trainingindustry.com once again. This is a great achievement for the entire InfoPro family. This recognition is a manifestation of hard work and dedication of each and every employee of InfoPro. We are sure that this will go a long way in reinforcing the faith our clients have in us, and establishing our credibility to new prospects in new markets.”

To view the 2012 Training Outsourcing Companies Watch List visit Trainingindustry.com.

InfoPro is recognized as a thought leader in the learning space. By leveraging the vast pool of creative and innovative professionals, InfoPro has helped its clients in enhancing their businesses in verticals like IT, Telecom, Healthcare, Publishing and Education, Aviation, Oil and Gas, Shipping and Logistics, BSFI etc. It provides complete learning solutions starting from advisory services including learning and training strategies, architecture consulting, providing solutions to deployment and always being concerned about customer satisfaction by going the extra mile.

Source:

http://www.theoutsourceblog.com/2012/04/infopro-ranks-among-top-12-training-outsourcing-companies/

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Software Development: 10 hard truths developers must learn to accept

On most days, programming is a rewarding experience, with no problem too challenging to solve. Perseverance, intuition, the right tool — they all come together seamlessly to produce elegant, beautiful code.

But then a botched deployment, yet another feature request, or a poorly documented update with crippling dependencies comes crashing headlong into the dream.

Sure, we might wish our every effort had enduring impact, that the services our apps rely on would be rock-solid, that we would get the respect we deserve, if only from those who should know better. But the cold, harsh realities of programming get in the way.

That doesn’t mean the effort isn’t worth it. But it does mean we have some hard truths to face. Here are 10 aspects of programming developers must learn to live with.

Developer hard truth No. 1: It’s all just if-then-else statements
Language designers argue about closures, typing, and amazing abstractions, but in the end, it’s just clever packaging wrapped around good, old if-then-else statements.

That’s pretty much all the hardware offers. Yes, there are op codes for moving data in and out of memory and op codes for arithmetic, but the rest is branch or not branch based on some comparison.

Folks who dabble in artificial intelligence put a more mysterious cloak around these if-then-else statements, but at the end of the day, the clever statistical recommendation engine is going to choose the largest or smallest value from some matrix of numbers. It will perform calculations, then skim through the list, saying, "If this greater, else if this greater, else if this greater," until it derives its decision.

Developer hard truth No. 2: Most of the Web is just data stored in tables
For the past 20 years, the word "Internet" has tingled with the promise of fabulous wealth, better friendships, cheaper products, faster communication, and everything but a cure for cancer. Yet at its core, most of the Internet is a bunch of data stored in tables.

Match.com? A table of potential dates with columns filled with hair color, religion, and favorite dessert. eBay? It’s a table of deals with a column set to record the highest bid. Blogs? One table with one row for every cranky complaint. You name it; it’s a table.

We like to believe that the Internet is a mystic wizard with divine wisdom, but it’s closer to Bob Cratchit, the clerk from Charles Dickens’ "A Christmas Carol," recording data in big accounting books filled with columns. It’s an automated file clerk, not the invention of an electronic Gandalf or Dumbledore.

Read More:

http://www.infoworld.com/d/application-development/10-hard-truths-developers-must-learn-accept-189620?source=fssr

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Software Outsourcing: 7 Programming Myths: Busted

7 Programming Myths: Busted!

Even among people as logical and rational as software developers, you should never underestimate the power of myth. Some programmers will believe what they choose to believe against all better judgment.

The classic example is the popular fallacy that you can speed up a software project by adding more developers. Frederick P. Brooks debunked this theory in 1975, in his now-seminal book of essays, "The Mythical Man-Month."

Brooks’ central premise was that adding more developers to a late software project won’t make it go faster. On the contrary, they’ll delay it further. If this is true, he argued, much of the other conventional wisdom about software project management was actually wrong.

Some of Brooks’ examples seem obsolete today, but his premise is still sound. He makes his point cogently and convincingly. Unfortunately, too few developers seem to have taken it to heart. More than 35 years later, mythical thinking still abounds among programmers. We keep making the same mistakes.

The real shame is that, in many cases, our elders pointed out our errors years ago, if only we would pay attention. Here are just a few examples of modern-day programming myths, many of which are actually new takes on age-old fallacies.

Programming myth No. 1: Offshoring produces software faster and cheaper

These days, no one in their right mind thinks of launching a major software project without an offshoring strategy. All of the big software vendors do it. Silicon Valley venture capitalists insist on it. It’s a no-brainer — or so the service providers would have you believe.

It sounds logical. By off-loading coding work to developing economies, software firms can hire more programmers for less. That means they can finish their projects in less time and with smaller budgets.

But hold on! This is a classic example of the Mythical Man-Month fallacy. We know that throwing more bodies at a software project won’t help it ship sooner or cost less — quite the opposite. Going overseas only makes matters worse.

According to Brooks, "Adding people to a software project increases the total effort necessary in three ways: the work and disruption of repartitioning itself, training new people, and added intercommunication."

Let’s assume that the effort required for repartitioning and training is the same for outsourced projects as for homegrown ones (a dangerous assumption). The communication effort required for outsourcing is much higher. Language, culture, and time-zone differences add overhead. Worse, offshore development teams are often prone to high turnover rates, so communication rarely improves over time.

Little wonder there’s no shortage of offshoring horror stories. Outsourcers who promise more than they deliver are a recurring theme. When deadlines slip and clients are forced to finish the work in-house, any putative cost savings disappear.

Offshoring isn’t magic. In fact, it’s hard to get right. If an outsourcer promises to solve all of your problems for nothing, maintain a healthy skepticism. That free lunch could end up costing more than you bargained for.

Programming myth No. 2: Good coders work long hours

We all know the stereotype. In popular culture, programmers stay up late into the night, coding. Pizza boxes and energy-drink cans litter their desks. They work weekends; indeed, they seldom go home.

There’s some truth to this caricature. In a recent analysis of National Health Interview Survey data, programming tied for the fifth most sleep-deprived profession. Long hours are particularly endemic in the video game industry, where developers must endure "crunch time" as deadlines approach.

But it doesn’t have to be that way. There’s plenty of evidence to suggest that long hours don’t increase productivity. In fact, crunch time may hurt more than it helps.

There’s nothing wrong with putting in extra effort. Fred Brooks praises "running faster than necessary, moving sooner than necessary, trying harder than necessary." But he also warns against confusing effort with progress.

More often than not, Brooks says, software projects run late due to chronic schedule slippage, not catastrophes. Maybe the initial estimates were unrealistic. Maybe the project milestones were fuzzy and poorly defined. Or maybe they changed midstream when the client added requirements or requested new features.

Either way, the result is the same. As the little delays add up, programmers are forced into crisis mode, but their extra efforts are spent chasing goals that can no longer be reached. As the project schedule slips further, so does morale.

Some programmers might be content to work until they drop, but most have families, friends, and personal lives, like everyone else. They’d be happy to leave the office when everyone else does. So instead of praising coders for working long hours, concentrate on figuring out why they have to — and how it can stop. They’ll appreciate it far more than free pizza, guaranteed.

Read More:

http://www.pcworld.com/businesscenter/article/254286/7_

programming_myths_busted.html

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Android, Java, and the tech behind Oracle v. Google (FAQ)

The eyeless, mouthless Java mascot named Duke cartwheels across a T-shirt from a JavaOne conference.

Sun Microsystems’ years-long effort to profit from Java has come to this: the chief executives of two of tech’s most powerful companies, Oracle and Google, being grilled in court.

Scrapping over copyrights, patents, and licensing deals is an ignominious outcome for a technology that a decade and a half ago spooked Microsoft and seemed poised to inject dynamism into a largely static Web. Back when it debuted, Java was a brand that carried impressive power.

Though Java has been technologically influential, its brand clout with the average person has diminished as other software such as Apple’s iOS and cloud computing rose to prominence. So now probably is a good time to dig into some of the details on which Oracle’s case hinges.

What is Java?

Java — invented at Sun in the early 1990s and absorbed into Oracle with Oracle’s Sun acquisition in 2010 — is several things.

First, it’s a programming language — a carefully defined way of issuing instructions to get a computer to do something useful.

Second, Java comes with software called a virtual machine that runs programs written in Java. The Java virtual machine (JVM) looks to Java programs like a real computer, but it’s really a layer that hands off instructions to the lower-level operating system actually running on some computing hardware. By building JVMs tailored for a variety of computers, the same Java program can at least theoretically run on both a Mac and a Windows computer. Thus Java’s initial tagline: "write once, run anywhere."

Third, Java includes pre-written code called class libraries that does all manner of work — everything from cryptography to communicating using Bluetooth. A Java programmer wanting to tap into this prefab power does so through a carefully defined mechanism called an application programming interfaces, or API. A sizable collection of companies define these APIs for Java.

Collectively, these three components are collectively called a Java runtime environment, or JRE, and it’s what you need on your computer to run Java software. To be able to slap a Java logo on a particular device, it has to pass tests to ensure it runs Java programs correctly.

 

Happier times: Sun and Google were Java allies in 2005, when Sun's then-president Jonathan Schwartz, left, and CEO Scott McNealy, center, joined Google CEO Eric Schmidt to tout a partnership that ultimately fizzled.

 

Well, that sounds simple enough
Guess again. Java quickly gets more complicated than that.

There are different varieties for different uses. The initial Java Standard Edition was geared for personal computers. It was joined by the Enterprise Edition, which defined APIs for server tasks such as managing databases, and the Micro Edition, which defined APIs for mobile tasks such as sending text messages on a phone.

And it got even more complicated: the Micro Edition had different varieties: the Connected Limited Device Configuration, the Personal Profile Specification, the Mobile Information Device Profile, the Mobile Information Device Profile 2.0, and more.

The upshot was that programmers couldn’t necessarily predict what APIs a particular device would support. Would a phone allow accelerated 2D graphics through Java? How about 3D graphics? That’s important to know if you’re writing a game. The lack of consistency led to the mocking tagline of "write once, test everywhere."

A last gasp came in the form of JavaFX, which aimed to sweep away the muddle with a prepackaged software foundation from Oracle. But as it was arriving, another force attracted mobile programmer attention instead: Apple’s iOS.

Oracle argues that Android has fragmented Java, undermining its write-once, run-anywhere promise.

Read More:

http://news.cnet.com/8301-1001_3-57417144-92/android-java-and-the-tech-behind-oracle-v-google-faq/

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C Is The Most Popular Programming Language In April

Have you heard of the TIOBE Programming Community Index? It’s a table that lists the ratings of programming languages and tracks their status throughout the developer ecosystem. It’s a good indicator of where a language stands in terms of its general use. April has a few surprises though.

It was found that Java is a downward trend from it’s top spot in the developer world. It would appear that C is now the most popular programming language in the world at a rating of 17.555 percent. It’s not all that bad for Java though since it’s rating for April is at 17.026 percent. TIOBE Software says that Java will never diminish too badly due to the Android development scene.

How does TIOBE find these results? Here’s how the Web site puts it:

The TIOBE Programming Community index is an indicator of the popularity of programming languages. The index is updated once a month. The ratings are based on the number of skilled engineers world-wide, courses and third party vendors. The popular search engines Google, Bing, Yahoo!, Wikipedia, Amazon, YouTube and Baidu are used to calculate the ratings. Observe that the TIOBE index is not about the best programming language or the language in which most lines of code have been written.

What’s interesting is that C-based languages make up the majority of the top five list with C++ coming in at number three with a rating of 8.896 percent, Objective-C at number four with 8.236 percent and C# at number 5 with 7.348 percent. Objective-C has seen the largest climb with its position at number eight this time last year.

While Java may be doing down, JavaScript is working it’s way up rather slowly. It was at number 10 this time last year, but now it’s at number nine.

TIOBE hopes that their list will help developers make the proper choice when it comes to building new applications. Choosing a more popular language will ensure maximum compatibility, but there are applications being made now that should make language conversion easier for those who want to program applications in multiple languages.

Here’s the top 20 languages for the month of April according to the TIOBE Index:

C Most Popular Programming Language In April

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Top 5 Ruby on Rails Hosting 2012

Photo: PRWeb / SL

The leading web hosting rating site TCWH announces the Top 5 Ruby on Rails hosting providers for 2012 based on the Ruby on Rails hosting compatibility, web hosting features, reliability, tech support and price.

San Francisco, CA (PRWEB) April 24, 2012

The web hosting rating site Top-Cheap-Web-Hosting.com announces top 5 Ruby on Rails hosting providers for 2012 ranked by their editors and the 119 real customers based on the Ruby on Rails hosting compatibility, web hosting features, reliability, tech support and price. The Top 5 Ruby on Rails hosting providers are BlueHost, GreenGeeks, Arvixe, HostGator and MyHosting orderly.

There are thousands of web hosts and the vast majority of them are using Linux and Apache, but only a few of them support to host websites developed by Ruby on Rails technology. These top 5 web hosts set up mod_rails module for Rails running in Apache web server, and all of them support Rails 3.x based on Ruby 1.9.x.

Read More:

http://www.seattlepi.com/business/press-releases/article/Top-5-Ruby-on-Rails-Hosting-2012-3505909.php

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Oracle-Google case shows patent system flaws

The big news out of the Oracle versus Google showdown on Monday was that one of Oracle’s patents was brought back from the dead, put back into play after the U. S. Patent and Trademark Office reversed its earlier rejection.

But let’s be clear: One zombie patent isn’t the remarkable thing in this case. The remarkable thing is that, when the dust settles, five of the seven patents Oracle claimed that Google violated will likely be overturned because Google forced the patent office to take a second look.

Oracle filed the lawsuit in 2010, alleging Google infringed on patents and copyrights related to its Java programming language in developing the popular Android smart-phone software.

If only two of Oracle’s patents hold up on review, that means the patent office got it right less than 30 percent of the time, an average we have every reason to believe is representative of the entire sector’s patents. In fact, software patent holders lose nearly 90 percent of the time in litigation, Stanford law Professor Mark Lemley found in a research paper published last year.

Invalid claims

Yet these overwhelmingly invalid patent claims have had dramatic impacts on the industry. They’ve allowed an entire sector of patent trolls to emerge with the sole aim of strong-arming companies into forking over licensing fees. They’ve forced tech giants to drop billions on legal fees or defensive patent portfolios, money that might have gone into research and development.

"It’s approaching crisis levels," said James Bessen, a lecturer at Boston University School of Law and co-author of "Patent Failure." "In most industries, the patent system has become a disincentive to innovation."

Still, companies are left with little choice but to play the game and act as if all patents are legitimate. It’s so expensive and time consuming to challenge them in court or through the patent office that most companies simply acquiesce to licensing fee demands. Or they buy up patents of their own in hopes of discouraging claims through a sort of mutually assured legal destruction. You sue me, I’ll sue you.

Google is acquiring Motorola Mobility for $12.5 billion, a purchase largely geared to gain access to the company’s trove of mobile and wireless patents. Microsoft spent more than $1 billion to buy nearly 1,000 patents from AOL. And Facebook announced plans Monday to purchase about 650 of Microsoft’s newly acquired patents for $550 million. That’s likely to provide ammunition in its legal battle with Yahoo, which filed a patent suit in March; Facebook responded with a countersuit several weeks later. It’s one of dozens of patent cases now embroiling the online and mobile industries, as Apple, HTC, Kodak, Samsung, Motorola, LG and many others duke it out.

So how did we get here?

For starters, we have an overworked and underfunded patent office staff, said Gregory Aharonian, who performs research on behalf of companies challenging patent awards, in an earlier interview. Staff members routinely approve redundant, unoriginal or vaguely worded patents. They simply don’t have the resources and motivation that a company like Google can bring to bear in digging up "prior art," or examples of the technology that precede and thus invalidate the patents.

There’s a complicating factor when it comes to software patents. Since software – unlike, say, chemical compounds – can be described by different firms in completely different language, the only foolproof way for a company to ensure that it’s not bumping up against existing patents is to hire attorneys to examine every one.

Since there are hundreds of thousands of software patents, with 40,000 new ones approved every year, one firm could easily spend hundreds of thousands of dollars to perform patent research on just one piece of software, said researchers Timothy Lee and Christina Mulligan in a summary of their recent paper on the tech blog Ars Technica.

"It’s so difficult, in fact, that the vast majority of software developers don’t even try" to perform that patent research, they wrote.

Read More:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/04/24/BUCM1O88OR.DTL&type=tech

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