2009

The most incredible deal of this holiday season — and one that customers will be hard pressed to refuse — is Stratus Technologies’ pledge of Zero downtime for customers or $50,000 cash back.
Here’s how it works: organizations that purchase any standard configuration of Stratus Technologies’ most current ftServer 6300 enterprise-class x86 fault tolerant server equipped with Microsoft Windows Server 2008 and the required service contract, are eligible for $50,000 or product credit if the server hardware, Stratus system software or operating system failures cause unplanned downtime in a production environment within the guarantee period. The guarantee period lasts up to six months following server deployment. Stratus executives vow that there are no hidden clauses or trap doors in the guarantee.
Stratus Technologies, headquartered in Maynard, Ma. has built its reputation on delivering rock-solid reliability of 99.999% uptime. That’s the equivalent of less than one minute of per server downtime in a year! This is an admirable achievement by any standard.
The ftServer 6300 line is Powered by 2.93 GHz X5570 Intel Quad-Core Xeon™ processors, the ftServer 6300 is optimized for large data center multi-tasking applications with high transaction rates, such as credit card authorization processing, high speed ATM networks, and as a powerful engine for database applications and virtualization environments. A typical ftServer 6300 configuration can actually cost less than the value of the payout. The offer is open to customers worldwide, and the program ends Feb. 26, 2010.
Specifically, customers can choose from a custom version of the ftServer 6300 or one of two pre-configured bundled configurations. The ftServer 6300 Power Bundles #1 and #2 are robust, high-end configurations that consist of Microsoft Windows Server operating system, disk drives and supporting peripherals, with a significant package discount compared to individually priced system components. Other server models in the ftServer line are not included in this program.
Stratus Technologies’ decision to quite literally put its money where its mouth is is a bold move and one that the overwhelming majority of vendors would never consider. In fact, ITIC can’t recall any high tech hardware vendor in recent memory, offering these same terms. However, Roy Sanford, Stratus chief marketing officer, said the deal underscores confidence in Stratus Technologies is of its ability to deliver the highest levels — 99.999% uptime — or greater. “The Zero Downtime program is a show of confidence that our products consistently perform at the highest levels of availability. Our guarantee is right out there for all to see, customers and competitors alike.”
Corporate enterprises that are risk averse, those that demand the highest levels of uptime or those that are in a betting mood are well advised to check out the Terms and Conditions of Stratus Technologies offer. You’ve literally got nothing to lose. Stratus Technologies: http://www.stratus.com

The decision by IBM’s Systems and Technology Group (STG), to launch a new Systems Software Business Unit (BU) was one of the more significant announcements in what was inarguably a jam-packed Analyst Summit. Helene Armitage, who will serve as General Manager (GM) of System Software noted that it aligns perfectly with IBM’s broader strategy in hardware, services and networking, stating that “Systems software is the integrating force in the data center. Virtualization is the foundation of the data center and management is the backbone [of the data center]. The Systems Software Business Unit is a key STG growth engine and it will enable us to deliver value across all IBM hardware plans.”
The Systems Software Business Unit will provide the integration framework for STG and act as the glue that enables seamless end to end virtualization and platform management and other capabilities. Systems Software covers some 160 products including: management, energy, security, availability, operating systems (OS) and virtualization. According to Armitage, IBM recently conducted a study with over 200 of its corporate clients on virtualization and management and found that clients are strategically investing in their IT infrastructure to drive business value.
IBM’s findings track closely with the results of ITIC’s 2009-2010 Virtualization Deployment Trends Survey conducted in August and the 2010 IT & Technology Trends Survey which polled 500 businesses worldwide in December 2009. The results of both surveys revealed that upgrading server hardware; deploying server virtualization software and deploying new applications in support of business objectives were among the top three IT spending priorities for 2010 for nearly 50% of the survey respondents.
Additionally, the 2009-2010 Virtualization Deployment Trends Survey revealed that almost 30% of businesses will undertake a private or public cloud computing initiative over the next 12 months. This makes virtualization management and fast, efficient, reliable service and support imperative. The results from both ITIC surveys both emphasize that C-level executive managers and IT departments strongly base their purchasing decisions on doing business with vendors who have a track record of superior technology, service and support.
From this standpoint, Armitage said IBM is perfectly poised, via its comprehensive System Software product portfolio, to address the shift from purely physical management to the integration of physical and virtual systems, storage and network resources. IBM, she said is adapting as the business needs of its corporate customers similarly adjust “to optimize energy usage, maximize resource utilization and keep the corporate data assets secure.”
Armitage acknowledged that IBM has not been in the “industry conversation on virtualization,” but said that Big Blue aims to change that in the coming months to be more visible. To accomplish this IBM will focus on a number of key areas including: physical consolidation; virtual system pools; integrated service management and cloud computing.
Armitage noted that the 200 corporate clients that participated in the aforementioned IBM study are using cloud computing as an access model. The goal of STG and the new Systems Software group is to help corporate customers unlock more value in virtualization than they are currently realizing. To accomplish this, the company will deliver products, tools and services that will assist customers in automating and optimizing, Armitage said.
IBM’s just released Systems Director version 6.1 is one of the lynchpins in the company’s strategy and is designed to run as a standalone product. Though the Systems Software BU and IBM’s Tivoli group exist and operate independent of one another, they do share a joint design and architecture team which have agreed upon APIs. “It’s not quite a joint development team,” Armitage said, “but there is a strong collaborative effort between System Software and the Tivoli team,” she said.
IBM Systems Director Software v 6.1 provides businesses with single point of control to manage all aspects of their data center operations, and integrates best-of-breed IBM virtualization capabilities to provide faster, more efficient means of ameliorating the management of physical and virtual platform resources. Systems Director 6.1 incorporates a singular user interface (UI) to perform common tasks and also delivers a consistent and unified view of the IT environment in its entirety, including servers, storage and network assets. Corporations can use Systems Director as a standalone tool or in conjunction with IBM’s Tivoli to reduce data center management tasks and expense.
Armitage said that IBM will ship Systems Director v 6.1 with every server. Initially however, the Systems Software Business Unit’s revenues will not appear as a separate line item but will be incorporated into IBM STG’s overall sales figures.
Analysis
IBM’s decision to launch the new Systems Software BU within STG has both short term tactical and long term strategic impact and implications for IBM and hardware customers. Most immediately, it will enable IBM to more comprehensively and cogently address the business and technology needs of its tens of thousands of enterprise customers who are deploying or plan to deploy, virtualization and cloud computing environments. Given that virtualization and cloud computing are two of the hottest emerging technologies, IBM’s move is an excellent one for the immediate, intermediate and long term.
Additionally, networks are growing in size, scope and complexity even as the economic downturn keeps budgets and resources tight. Organizations are more than ever seeking guidance from their vendors. And those vendors that deliver on promises and provide such guidance will reap the rewards of continuing and expanding opportunities. IBM has a proven track record of delivering leading edge technology and superior technical service and support. The latest ITIC survey data found that 77% of organizations rated IBM service and support “Excellent” or “Very Good.”
In order to fully realize the potential of this unit and deliver the hoped-for value to customers, Armitage and her team will have to work hard to carve an identity for Systems Software . IBM is certainly providing its installed base and potential customer base with added value by shipping Systems Director v 6.1 loaded onto every server. However, the product must be accompanied by a strong marketing plan as well as the appropriate accompanying documentation and training materials to assist cash strapped and resource-constrained IT departments in unlocking and maximizing the potential of this software tool. It is crucial for STG and the Systems Software BU to rise to this challenge and distinguish the new unit within the next six-to-nine months as organizations begin to earmark their 2010 corporate expenditures.

“Make your employers understand that you are in their service as workers, not as women.” Susan B. Anthony in an article excerpted from October 8, 1868 edition of The Revolution, a women suffrage newspaper.

Note to working women: if you want to break out of the “Pink Ghetto” tear a page out of your male co-workers playbooks, start a Good Old Girls group and get serious about networking.
The Pink Ghetto is a largely invisible, often unspoken and unacknowledged place that impedes womens’ upward mobility in the workplace, ranging from achieving equal pay for equal work; to being offered the same opportunities as male co-workers to getting promoted as quickly as men or getting promoted at all.
There are no magic formulas or quick fixes to address ingrained inequities. Networking and mentoring initiatives offer immediate, tactical as well as long term strategic solutions to assist women in breaking down gender-based barriers. There are compelling reasons why women in high technology and in all professions, should make networking an integral part of their daily routines, formalize their efforts and set specific goals.
The ongoing recession of the last two years has made the Pink Ghetto more palpable than ever. The competition for job retention, promotions and to secure new positions is intense. The ongoing economic crisis has spared no one. And with the unemployment rate hitting 10.2% in October – the highest levels in 30 years – everyone is feeling the pressure. Consider these statistics:
• Women now constitute roughly 50% of the workforce, but on average, they make just over three-fourths of the salary of their male counterparts.
• The most recent Bureau of Labor statistics show that salary disparity between men’s’ and women’s wages widened slightly from during 2008. On average, women now earn $.77 for every $1 a man earns, down from $.78 in 2007, for an annual median salary of just over $36,000.
• The National Research Council reported that women leave high technology, computer, science and engineering careers twice as frequently as men and women’s salaries in those professions still lag behind those of males by 12% to 15%.
• The number of women CEOs also declined slightly in the past two years. Currently, women hold the top spots at only one dozen Fortune 500 companies; while 24 Fortune 1000 companies are run by women, according to Fortune Magazine.
According to the latest statistics released by the Bureau of Labor Statistics on November 6, men bore the brunt of the layoffs representing 72% of the 7.3 million jobs lost since the recession began in December 2007. The disproportionately higher job losses incurred by men are attributable to the fact that over 50% of the jobs lost have been in male dominated fields such as automotive, construction and manufacturing.
With so many men losing their jobs, many women now find themselves the family breadwinner, so the pressure is on to make up the salary shortfall and move up the corporate ladder.
The average disparity of 23 cents between a man and a woman’s wages may sound negligible, but over the course of a working lifetime those pennies add up. The wage gap costs the average American full-time woman worker between $700,000 and $2 million over the course of her lifetime, according to economist Evelyn Murphy, president of the Women Are Getting Even (WAGE) Project, a non-profit, grass roots organization formed in 2006 to close the salary gap.
In the high technology, engineering and scientific sectors, the macro-economic levels of male vs. female do not obviously “ show up,” noted Caroline Simard, vice president of research and executive programs for the Anita Borg Institute for Women and Technology in Palo Alto, California. Simard’s research indicates women are more vulnerable specifically because they are less networked and therefore more susceptible to losing a job and are faced with more challenges when seeking new employment opportunities.
“It’s hugely important for women to network; it’s not enough to just work hard. Networking is one of the most powerful predictor’s of advancement and salaries,” Simard said.
Anecdotally, men are very supportive of other men and have typically lobbied on each other’s behalf for swifter promotions, bigger raises and better performance reviews. One woman who spent over 20 years performing admirably at her consulting firm in the Northeast, including traveling the globe and being a top revenue generator, was consistently passed over for a promotion to vice president. Her male counterparts who had a fraction of her experience, came in a lower grade and salary level but quickly passed her in the ranks, achieving the coveted VP title in two or three years. Another woman in this same organization was assigned to report to a younger, less experienced male colleague who was pegged as an up-and-comer and put on the fast track for promotion. When it came time for performance reviews and merit raises, the more experienced woman got a miniscule salary increase and was bypassed for a promotion because her younger boss deemed that her writing lacked the necessary analytic abilities. Ironically, the woman in question had garnered numerous writing awards and was in great demand among the consulting firm’s clients!
While women in high technology will often chat and engage in social activities during the regular office day, they have not heretofore made a concerted effort at networking.
The traditional tried and proven male methods of networking like golf outings or bonding over drinks after work at a local watering hole do not come easily or naturally to women. More often than not, a woman engineer, IT manager, software developer or C-level executive will be a very small minority or perhaps the only female in her immediate group. This can be an isolating and daunting experience. While not specifically excluded from accompanying her male peers to sporting events as a participant or spectator or going with them for drinks after work, many women feel uncomfortable. And many women, who are also wives and mothers, simply don’t have the luxury of going to bars after hours for networking over peanuts and beers.
“Women must network laterally and upwardly – including with supportive men. Women need the connections up to help open the doors to upward mobility,” Simard said, observing that “if you’re the only woman in your group it will be harder to network.”
Women are well advised to get on internal corporate as well as industry committees and task forces and to join their specific industry associations in order to gain external recognition, which they can then use as leverage within their organizations. in order to bring it back to you internally.
“Working harder does not make you more visible it can make you invisible,” Simard observed. “Women need to view networking as being a part of their daily work,” she added.
The Anita Borg Institute runs negotiation programs to teach women specific networking and negotiation tactics. Women who don’t negotiate for better pay and benefits at the outset of their careers are negatively impacted over the long term and will almost certainly get paid less over the course of their careers, Simard said.
Theory and practice are frequently at loggerheads. The growing bodies of research on gender-based workplace disparities are clear that women must become more assertive in order to be heard, especially in male dominated fields. The conundrum facing women is that if they’re too assertive they will be viewed negatively and classified as intimidating or worse.
“Women must learn to navigate that high wire act,” Simard said, noting that even women will view an assertive woman negatively. To correctly assess the tone of your organization, women should seek out a mentor who will help them read and clarify various work related issues and advise them on the best courses of actions for dealing with specific situations and different personality types.
Another way to burst out of the Pink Ghetto is to address the innate gender bias that exists in many organizations’ hiring, recruiting and retention practices. The Anita Borg Institute’s initiatives center on helping companies to realize that they need and want diversity in their corporate culture and communications styles. “The upcoming generation is the most diverse this country has ever seen. Good managers are those that can adequately deal with diversity,” Simard said.
Women in high technology who want to wend their way through the organization and reach the upper echelons in salary and job titles should avail themselves of the growing number of women’s conferences. Online social networking sites like Facebook and LinkedIn are also great sources for networking, reconnecting with former colleagues and supervisors and meeting potential mentors. Don’t hesitate to ask Facebook and LinkedIn connections to write references and recommendations for you. And above all, cultivate these relationships, seek out mentors and be a mentor.

Citrix today released XenDesktop™ 4, which it says is designed to “make virtual desktops a mainstream reality for hundreds of millions of corporate employees .” XenDesktop 4 incorporates a new FlexCast™ delivery technology that takes an agnostic approach, by supporting every major desktop virtualization model in a single, integrated solution. Citrix says this will result in improved ROI, simplified management and extends the benefits of virtualization to every employee in the enterprise. XenDesktop 4 further simplifies desktop computing by integrating all the capabilities of Citrix XenApp. This will allow businesses to deliver on-demand applications to physical or virtual desktops as a seamless part of their overall desktop strategy. To ensure every user gets a high-definition experience at all times, XenDesktop 4 also includes significant enhancements to its industry-leading HDX™ technology.

Another significant component of today’s announcement is that it solidifies and expands the Citrix and Microsoft partnership. The two companies compete in some areas, but in the broader sense they are united by a common goal: to overtake and trounce virtualization server market leader VMware. The Citrix/Microsoft partnership is a true alliance and one that will simplify and enhance the management of virtual desktops through Microsoft System Center. It also adds multiple enhancements that further extend the value of Microsoft Windows and Windows Server platforms. In total, XenDesktop 4 adds more than 70 new features, significantly enhancing its performance, security and readiness for large, enterprise-wide deployments.

Pricing and Availability
Citrix says XenDesktop 4 will be generally available beginning on November 16, 2009. It  will be licensed on a per user basis. This model allows each end user to use an unlimited number of connected or offline devices at no additional cost. XenDesktop 4 will be available in three editions with the following suggested list prices: 

• Standard – $75 per user
• Enterprise – $225 per user
• Platinum –  $350 per user

ITIC ANALYSIS
Pros

Overall, Citrix’ today’s XenDesktop 4 product announcement as well as the company’s strategic focus on cloud computing, desktop virtualization, security, management and interoperability indicate that the company has a sound focus and is well positioned to compete with market leader VMware.

In addition, Citrix’ strong partnership with Microsoft gives the company visibility, access to Microsoft’s broad Windows customer base and deep channel. At the same time, Citrix’ XenServer also directly competes with Microsoft’s Hyper-V, a fact that company executives freely acknowledge. This might be more worrisome for Citrix were it not for the fact that the companies need each other to combat VMware, which has built up a substantial lead in the server virtualization space. In the spirit of “the enemy of my enemy is my friend,” the Citrix/Microsoft partnership will most likely remain that of a close healthy alliance with elements of friendly but spirited “co-opetition.”

Citrix’ other notable strengths are its’ leadership role in promoting Xen.org as an open source community virtualization standard and the breadth and depth of its add-on management and security products. The Xen.org initiative gives Citrix high visibility and credibility with the development community and the industry at large, which will stand it in good stead as it attempts to grow. The add-ons products should enable Citrix customers and partners to build end-to-end solutions that can be based entirely or partially on Citrix technologies.

Cons

Citrix’ as ambitions to be a top tier virtualization vendor means that it must be a top tier vendor in every sense of the word. And that means growing revenue. Light hearted jokes about the state of the economy aside, Templeton and the entire executive and product management team at Citrix understands this and freely acknowledged the fact at the Analyst Summit. Now the company must demonstrate that it can buck the trend by increasing both its sales and installed base. And Citrix must spike sales within the next six-to-nine months as enterprises begin to plan and budget for the next round of upgrades.

ITIC survey data indicates that Citrix is the market leader in the desktop virtualization space and is a close second in the applications virtualization market. Both of these markets are relatively small at present; only five to 10% of businesses worldwide have deployed desktop and application virtualization. So it’s too soon to declare any vendor a winner or clear market leader. Meanwhile, the desktop and application virtualization arenas have three strong contenders in Citrix, Microsoft and VMware. Market adoption in these segments will begin to ramp up strongly in 2010, when according to ITIC’s latest virtualization deployment survey close to 30% of corporations will begin virtualizing their desktops and applications. Clearly, these markets are stepping stones Citrix could use to establish itself in the potentially lucrative yet nascent cloud computing infrastructure market.

In order for Citrix to be a major cloud player, it must first solidify its current customer base and expand outside of its core client bailiwick. Citrix must also offer a cogent, compelling marketing strategy to complement and highlight its new product offerings. This will be challenging in the short term since Citrix does not yet possess the deep pockets of its larger rivals, VMware, Microsoft and Oracle. Citrix’ ace is its chief technology officer, Simon Crosby, who is a highly visible and regarded virtualization expert. Crosby is an indefatigable evangelist who never misses an opportunity to point out competitors’ flaws while promoting the Citrix brand.

Citrix Systems laid out a broad, bold tactical product roadmap and showcased a solid, long term strategic vision at its Analyst Summit held in Denver on September 16-17.
Desktop virtualization, cloud computing, on-demand computing, self-service IT and expanding the company’s strategic vendor alliances and channel partnerships represent the key thrusts over the next six-to-12 months, according to Citrix president and chief executive, Mark Templeton.
All of the aforementioned initiatives will also be the focus of several, separate Citrix’ fall and winter product introductions. The first announcement is slated for later today.
Templeton delivered the keynote to the approximately 70 assembled analysts, stating that as Citrix celebrates its 20th anniversary this year, the company’s goal is “to stand out from the [virtualization] crowd and avoid the status quo.” Templeton, a 14-year Citrix veteran served up some encouraging company statistics noting that while revenue has been essentially flat over the past year – which he considers a positive in the ongoing economic downturn – Citrix’ business is growing in almost every other area (see chart below). “Flat [revenue] is the new growth,” Templeton joked, referring to the company’s 2009 first half revenue of $762 million.

Citrix Expands Product Portfolio

Templeton said that Citrix is moving to aggressively solidify its place as one of the top tier virtualization vendors – along with VMware and Microsoft – by growing the business both organically as well as by acquisitions. ITIC survey data indicates that the top three virtualization vendors: Citrix, Microsoft and VMware account for 90% market share – particularly in the server virtualization arena, where VMware is the clear market leader with over 50% share. In recent months, the more mature server virtualization market has seen a spate of mergers and acquisitions, most notably Oracle’s purchase of Sun Microsystems, Inc. and niche market player Virtual Iron.

Citrix’ own purchase of XenSource in October 2007 and its subsequent partnership with Microsoft to support the Redmond, Washington software firm’s Hyper-V product have given the company a strong foothold in the server arena. Additionally, the Citrix Xen virtualization technology is embedded in a variety of operating system platforms including the open source Debian Etch; Novell’s SUSE Linux Enterprise 10 and 11; Red Hat’s Enterprise 5 and Oracle’s Sun Solaris. Dell also includes the Citrix XenServer OEM Edition as an embedded hypervisor as an option in its Power Edge Servers.

Most recently Citrix has notably bolstered its desktop and application virtualization product portfolio with the addition and enhancement of a number of key offerings including the NetScaler (Application Optimization, Application Delivery Networking, Load Balancing, Web Application Acceleration and Application Firewall).
Citrix is also exerting and extending its influence via the open source Xen.org community project, which Templeton said, now boasts more than 3,700 individual members; 250 contributing companies. Unique code contributions, he added increased 110% from 2008 to 2009. Central to the Xen.org strategy is the Xen Cloud project, which is an open source, open platform for cloud providers. It features broad interoperability among various competing hypervisors; broad industry support and serves as a platform for an overarching open source ecosystem, Templeton said.
Cloud computing is central to Citrix’ long term strategy and the company is building a wide array of desktop management and security add-ons to facilitate corporations’ migration to both private and public cloud infrastructures.
“Consumption based costs is becoming an imperative for users,” Templeton said. “If you’re not a leader in this area, it will kill you,” he added.
Citrix Ramps Up

Templeton noted that Citrix had spent $1.8 billion in acquisitions over the past 18-to-24 months, to bolster the company’s three business divisions: the Online Division; the Desktop Division and the Datacenter and Cloud Division.

In particular, Citrix intends to cement its position in the fast emerging desktop and application virtualization markets by highlighting the increasing trend towards self-service IT. According to Templeton, Citrix’ Software as a Service (SaaS) group is among the “fastest growing part of the company with over 100M online virtualization sessions” to its credit.

Templeton and Wes Wasson, the company’s Senior Vice President and Chief Marketing Officer (CMO) said Citrix’ Xen Desktop is the centerpiece of the company’s short term tactical and long term strategic plans and goals. “Desktop virtualization, Templeton and Wasson said, “can help take big chunks [reduce] the time spent on daily systems management chores” like patching and rolling out updates which consume an enormous amount of IT managers’ time.

“Our agenda is to offer the broadest set of virtualization technologies in the industry – separating desktops and applications from the physical server, to address the growing numbers of mobile, remote and telecommuting workers,” Templeton said. This is crucial he noted, because industry wide, IT spending remains flat in the low single digits. In contrast, “the velocity and amplitude of change” facing customers continues to accelerate.

“For many businesses the current infrastructure design is not suitable for the emerging dynamic business environment. Citrix is responding to market dynamics and market realities where the only constant is change,” Wasson said.

The Citrix executives said they recognize that in the current depressed economic climate, the balance of power has moved from vendors to customers. “No vendor will be successful with a lock-in strategy,” Wasson said. Hence, Citrix will continue to pursue a platform agnostic approach to ensure that its products will work in all operating system environments; the company also provides interoperability and integration with offerings from rival vendors like VMware. The company is also shoring up its partnerships with software vendors like Microsoft and Novell as well as hardware OEMs like Dell and Hewlett-Packard.

This strategy has helped Citrix garner new customer wins among large enterprises accounts. During the summit Citrix showcased corporate accounts such as Emory Healthcare in Atlanta, Ga., which uses Citrix Delivery Center to cut costs by 60% for an anticipated operational savings of $1.5 million in 2009, according to Michael Thomason, Lead IT manager. Tesco, a British based international grocery chain and retailer said it replaced 1,500 traditional servers and consolidated using virtual blade servers and Citrix XenServer technology, according to Chris Brockelsby, the company’s lead IT Director.

The high technology earnings reports from the major vendors over the last several weeks have been decidedly mixed. Some companies notably beat expectations while other bellwether firms’ financials exhibited significant weaknesses.

Apple, IBM and Intel earnings were all in positive territory, beating Wall Street forecasts. On the opposite end of the spectrum, Advanced Micro Devices, Microsoft, Sun Microsystems (recently acquired by Oracle) and Yahoo all posted disappointing – albeit not totally unexpected – declining numbers.

Overall, the latest financial reports provide an interesting perspective on trends in the high technology sector for the remainder of 2009 and into 2010. The consumer sector led by Apple appears robust, while PC sales and the business software sector as evidenced by the contraction and sluggishness in Microsoft’s Windows and Office are weak. That softness will likely persist for the remainder of calendar 2009.

Apple was the biggest winner by far and the brightest star in the high technology firmament.

Apple financials beat all analysts’ expectations. For the 2009 third fiscal quarter ended June 30, Apple posted quarterly revenue of $8.34 billion and net profit of $1.23 billion; that’s a 12% year-over-year earnings increase and the strongest of any June quarter in Apple’s history, the company said. Apple’s strength was evident across the majority of its product segments. iPod sales remained brisk with 10.2 million sold in the just ended quarter, although that is an approximately eight percent decline from 11 million sold during the June 2008 third quarter. Apple and Wall Street analysts attributed the decrease to cannibalization by iPhone sales. However, iPod touch unit sales grew 130% from last year.

Apple sold 2.6 million Macs – a 4% unit increase from the year-ago quarter. Apple’s gross margin was 36.3%, up from 24.8% in the year-ago quarter. Apple also exhibited extremely good diversification, with international sales contributing to 44% of third quarter revenue.

IBM also posted earnings that surpassed Wall Street forecasts and that in turn, lifted Big Blue’s 2009 full-year profit forecast. IBM net earnings increased 12% to $3.1 billion, or $2.32 per share; that easily bested financial analysts’ per-share prediction of $2.02. IBM also got a boost from its ongoing cost cutting measures which helped to lift profits. However, IBM sales declined by 13% to $23.25 billion. In a published statement IBM said it expects to save $3.5 billion in cost cutting measures for 2009; that’s $500 million more this year than it had anticipated.

Intel’s third quarter financials offered a mixed picture. The world’s number one chipmaker had sales of $8.4 billion for the quarter even as it recorded a second-quarter net loss of $398 million, or 7 cents a share, compared to the $1.6 billion and 28 cents a share that Intel earned during the same period in 2008. This was Intel’s first quarterly loss since 1986. The red ink was attributable to charges associated with the $1.45 billion fine levied by the European Commission. In May the EC ruled that Intel abused its market position to cut its chief rival, AMD out of the European market. Intel said it will appeal, but meanwhile, the fines stand.

Intel’s better than expected sales figures buoyed analysts and industry observers because it occurred in spite of sluggish PC sales. One very encouraging note for Intel’s immediate and intermediate term is that its entry level Atom chip, which is used in the burgeoning Netbook minis, is not siphoning off Celeron processor revenues. The Celeron processors are used in the more inexpensive notebooks and there was some fear that the Atom chips would cannibalize a significant amount of Celeron revenue. Meanwhile, revenue from Atom processors and chipsets rose 65 percent from the 2009 first quarter to $362 million.

At the same time, the high tech sector suffered a blow when Microsoft announced the first annual sales loss in the company’s 34-year history. The news was not unexpected, still it cast a pall since Microsoft, the world’s number one software maker is an industry barometer.

For its fiscal fourth quarter ended June 30, Microsoft profits plunged 29 percent to $3.05 billion from the same quarter in 2008. Sales similarly declined by 17 percent during the fourth quarter to $13.10 billion. Microsoft said its poor fourth quarter numbers were attributable to the continuing weakness in the PC and server markets as well as the smaller software licensing fees it collects from the Netbooks.

Most worrisome was the fact that Microsoft experienced quarterly revenue declines in all five of its major business segments. Windows client revenue waned by 29 percent during the fourth quarter; that was $1 billion less than the client software group 2008 fourth quarter sales. And it provided yet another indicator that corporations stayed put on Windows XP, instead of migrating to Vista. quarter, representing a shortfall of more than $1 billion from the year-ago quarter. For the year, Client revenue was down 13 percent. In an earnings call, Microsoft chief financial officer Christopher Liddell attributed this to the overall malaise in the PC hardware market and the “substantial weakness” in the business PC market resulting from budget cuts and delayed hardware refresh cycles. And although Microsoft had indicated it would miss its numbers, the results were weaker than Wall Street estimates of $14.37 billion in sales. For fiscal year 2009 Microsoft had revenue of $58.44 billion, a three percent decline from 2008. One bright spot: Windows unit sales on Netbook minis increased for the first time since the September 2008 quarter.

Yahoo’s financial report was mixed. On a positive note, the struggling online search and advertising firm, beat Wall Street forecasts with its net earnings of $141 million and 10 cents per share. However, most of that was due to substantial cost cutting efforts and handing out over one thousand pink slips. On the downside, Yahoo revenue was $1.57 billion a decrease of 13 percent. And with Yahoo forecasting even greater losses for the current quarter, the industry continue to clamor for Yahoo to ink that long rumored search engine deal with Microsoft. Yahoo chief executive Carol Bartz remained mum on any impending deal.

AMD’s financial woes continued. The company was in the red for the 11th straight quarter; although the company said the rate of loss was slowing. For the second fiscal quarter, AMD posted a net loss of $330 million or 49 cents per share. Revenue for the quarter was $1.18 billion.

In the wake of the bruising financials, AMD’s stock is currently trading at $3.77; its profit margin is off by over 43 percent; operating margin is down nearly 17 percent and its return on equity to shareholders is down by a whopping 415 percent.