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12/9/2001
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IT Confidential

Last week's 10-year, $1.4 billion outsourcing deal between IBM Global Services and Cendant, the travel-service conglomerate, has more behind it than meets the eye, a Cendant IT insider says. About nine months ago, Cendant brass brought in a consulting team to evaluate data-center operations; after six weeks, the consultants concluded that IT operations were sound and didn't need to be outsourced. Next, Cendant brought in IBM, which made a more-convincing pitch. During all this, Cendant was acquiring strategic properties, such as the Galileo travel-reservation system, while quietly trimming its IT resources. "There have been some heavy-duty layoffs" across the company during the last several months, says the Cendant exec. For example, he says, Cendant's Avis division lost half its systems-development team, and the company's RCI unit lost half its IT staff. All Cendant IT operations will be centralized in Denver, around the Galileo data center; IBM will run the Denver operations and take on about 500 of Cendant's IT staff. Cendant's other data centers will be moved to Colorado, including one in Garden City, N.Y., that has 600-plus servers, five mainframes, and 35 terabytes of storage. "It's a big wake-up call for all of us," the exec says. "And it's only going to get worse over the next few weeks."

Oracle CEO Larry Ellison last week pooh-poohed the suggestion that the hard-driving database vendor has been bleeding management talent during the last several months. "We have a stronger management team than we've ever had," he said during a press conference at last week's Oracle OpenWorld show in San Francisco, in response to a question about the recent departure of Jay Nussbaum, executive VP and one of Oracle's top sales managers. Nussbaum left two weeks ago for the No. 2 slot at KPMG, one of Oracle's system- integration partners, Ellison said. He joins other top Oracle executives, including president Ray Lane and executive VP Gary Bloom, who've left the company in the last 18 months.

Speaking of palace intrigue, Microsoft CEO Steve Ballmer recently demoted group VP Bob Muglia, a 13-year company veteran who headed MSN and .Net My Services, to senior VP in Jim Allchin's Windows group. Senior VP David Cole, who reported to Muglia, assumes much of his old boss' job.

Meanwhile, a month after the Justice Department and nine states reached a settlement agreement to the years-long Microsoft legal saga, nine other states and the District of Columbia said last week that the pact restrictions on Microsoft's conduct-including a ban on exclusive contracts and disclosure of APIs-don't go far enough. The dissenting states proposed new remedies: that Microsoft offer PC makers a version of Windows sans Internet Explorer and other applications, place its browser code in the public domain, and ship Java code with Windows.

California Gov. Gray Davis last week issued an executive order directing the state's Health And Human Services Department to stop selling birth and death records to private companies, pending a 45-day review. "The confidential information the state collects about Californians should be kept private," Gov. Davis said in a statement. "There is too great a risk that unscrupulous people will use this information for identity theft, to falsify records, or to invade our privacy in other ways." The action came after state Sen. Jackie Speier objected to Health Services providing a copy of the state's birth index of 24.6 million names to Rootsweb.com, one of the nation's largest online genealogy Web sites. The state's data allowed Rootsweb users to find information on native Californians such as birth date, county of birth, and mother's maiden name-data that can be used in identity theft. Rootsweb voluntarily pulled the California data from its Web site; it did the same with a database with similar information from Texas.

Take my identity-please! If your identity gets stolen, can you get another one? If so, can you trade your identity in?-I'll take Tiger Woods', if the waiting list isn't too long. While I'm waiting, send me an industry tip to [email protected] or phone 516-562-5326. If you want to talk about the layoffs, leave-taking, or loss of identity, meet me at InformationWeek.com's Listening Post: informationweek.com/forum/johnsoat.


To discuss this column with other readers, please visit John Soat's forum on the Listening Post.

To find out more about John Soat, please visit his page on the Listening Post.

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