Tag: law

Oracle’s whistleblower suit opens a can of worms

5707c0e99b6aa.imageThe “whistleblower” who claimed she was told to fudge cloud Oracle’s cloud accounts has done something that Larry Ellison’s PR team should have expected  – it has put a focus on the database maker’s cloud accounting policies.

The lawsuit, filed on Wednesday in US District Court in San Francisco by former Oracle senior finance manager Svetlana Blackburn, also revives longstanding questions about proper accounting when software and computer services are bought on a subscription basis rather than as a single package.

Blackburn said she was required by Oracle management to “fit square data into round holes” to make Oracle’s cloud services’ results look better. She alleges that her bosses instructed her to add millions of dollars of accruals for expected business “with no concrete or foreseeable billing to support the numbers.”

Oracle is reassuring everyone that its numbers are correct, but the fact Blackburn claims she was fired by Oracle for complaining means that the allegations are not going away. Oracle is compounding the problem by threatening to sue Blackburn and claiming she was fired for poor performance.

Blackburn does not use the word “fraud” in her lawsuit, but it might be confusing for a lay person to spot the difference. It is clear Oracle’s sales force has been offered big incentives to book cloud deals. Cloud software is growing fast while traditional software sales slow, companies have an incentive to play up their ability to operate in the cloud.

By not handling Blackburn correctly and even escalating the situation, Oracle’s image is suffering and its shares fell almost  four percent the day after the lawsuit was made public.

It is highlighting a problem that software companies have in booking software sales as cloud or traditional.

The most nebulous part of cloud accounting concerns situations where the customer buys a product that can be used partly in the cloud, and partly on its own hardware.

US accounting rules state that in cases when use is mixed, companies should allocate the revenue between traditional, or licensed software; and cloud, or hosted software.

US Securities and Exchange Commission has investigated IBM over how it reports its cloud-computing revenue although this went no-where. Salesforce was also investigated which ultimately led to the company restating its 2002 and 2003 results, contributed to a delay in Salesforce’s 2004 initial public offering.

But it can get messier. In 2006, software maker Computer Associates had to restate past financial results after an internal audit found issues concerning stock options and how the company booked some subscription revenue. Its former chief executive, Sanjay Kumar, pleaded guilty to securities fraud in 2006 and was sentenced to 12 years in jail.

This was clearly something that Oracle does not want, but for some reason its legal team and PR Team did not think about this particular fall out. We predict that things are going to get a lot worse for Oracle, even if it ultimately wins.

China puts anti-western tech law on hold

1900-intl-forces-including-us-marines-enter-beijing-to-put-down-boxer-rebellion-which-was-aimed-at-ridding-china-of-foreigners-A law, China claimed was all about counter-terrorism but stopped US technology companies selling so much behind the bamboo curtain, has been put on hold.

A senior US official welcomed the move which he said was a good sign for Western businesses that saw the rule as a major impediment to working in the world’s second largest economy.

President Barack Obama said in an interview with Reuters on March 2 that he had raised concerns about the law directly with Chinese President Xi Jinping.

White House Cybersecurity Coordinator Michael Daniel said the Chinese have decided to suspend the third reading of that particular law, which has put the law on hiatus.

“We did see that as something that was bad not just for U.S. business but for the global economy as a whole, and it was something we felt was very important to communicate very clearly to them,” Daniel said.

The law would require technology firms to hand over encryption keys, the passcodes that help protect data, and install security “backdoors” in their systems to give Chinese authorities surveillance access.

The move has given companies “some breathing room, but not complete relief” because the bill could be picked up again at any point.

The thought is that the Chinese are not ready to kick out all foreign companies, and because they weren’t ready to take that step, they backed off.

The initial draft, published by the NPC late last year, requires companies to also keep servers and user data within China, supply law enforcement authorities with communications records and censor terrorism-related Internet content.

Although the law would apply to both domestic and foreign companies, officials in Washington and Western business lobbies complained that the combination of that law, the banking rules and anti-trust investigations amounted to unfair regulatory pressure targeting foreign companies.


Bohr lays law on Moore

moores-920x460-mooreIntel is working out a way of using Moore’s law beyond the 10  nanometre (nm) node.

Mark Bohr, senior fellow for logic technology development at Intel, told hacks he will take part in a panel discussion on the move beyond 10nm and the many challenges it poses soon.

Per the existing roadmap, the company expects to move to 10nm in 2016 and to 7nm in 2018.

“I still believe we can do 7nm without EUV [Extreme Ultraviolet Lithography] and deliver improved cost per transistor. I’m not going to say exactly how, because our competitors watch what we do closely,” Bohr said.

Intel has published papers on III-V [three-five] devices and that is one of the new materials that CHipzilla is looking at to move to 7nm.  As always Intel is worried about balancing performance against manufacturability .

However all this flags the fact that EUV, for long considered the best bet to replace current 193-nm lithography and extend Moore’s law beyond 10nm, isn’t ready.  In fact it has been half-backed for nearly a decade.

“Scaling does continue to provide lower cost per transistor, and it is Intel’s view that cost reduction is needed to justify new generations of process technology,” he said.

“Going forward, heterogeneous integration will become increasingly important, but we may not be able to do it all on one chip, so you will see more use of SoC solutions such as 2.5D integration, where two are mounted side by side on a substrate, or full 3D integration, stacking chips on top of each other, each one tuned for a different [manufacturing] process to perform different functions, Bohr said.

UK allowed to copy digital content

copyDecades behind the rest of the world, the UK is finally permitted to make personal copies of digital content they have legally bought.

Consumers are allowed to keep the duplicates on local storage or in the cloud.  However you are not allowed to share the data.

This is the law that many people in the UK thought they already had, indeed most of the world has some fair use law for digital copying.  In the UK though ripping CDs to other formats had previously qualified as copyright infringement, although cases were rarely prosecuted.

The changes were detailed in June, when the Intellectual Property Office (IPO) issued guidance, but had not come into effect until now.

The minister for Intellectual Property, Baroness Neville-Rolfe said the changes are going to bring our intellectual property laws into the 21st century.

“They will mean that the UK IP regime will now be responsive to the modern business environment and more flexible for consumers.”

Also included in the law is permission to create parodies of copyright works. Previously, there has been a risk of being sued for breach of copyright if clips of films, TV shows or songs were used without consent.

Many EU nations place a levy on sales of recordable media, such as blank DVDs, memory cards and hard disks,  and some also add a charge to MP3 players and video recorders, with the proceeds passed on to the media industry.

All that is dying out along with physical formats.


Dell attempts to clear the air on data laws

dellsig Dell SecureWorks has teamed up with European law firm Field Fisher Waterhouse (FFW) in a bid to dispel common myths about data protection laws.

A whitepaper looks at current laws and exactly how they impact security implementation in the EMEA region, as well as providing some pointers on using external Managed Security Service Providers (MSSP) for security.

Top myths, according to the report, are as follows: using a third party to process personal data isn’t permitted, transferring data outside the European Economic Area can’t happen, organisations can’t use cloud services for processing or storing personal data, and foreign security and law enforcement authorities automatically have access to personal data.

Data protection law, the report points out, applies almost exclusively to data controllers, meaning the office which decides why and how that data is processed. On the other hand there are data processors, for example, a person who processes that data on behalf of a controller, whether that’s an agent, contractor or service provider, without deciding why and how that data is processed.

Processors, Dell says, are not usually subject to European data protection law.

The ever expanding volume and types of cyber attack make it more difficult for companies to protect themselves. At the same time, laws governing how data is handled are becoming more strict. So it makes sense for organisations to use external security like MSSPs to make sure there is data compliance at the country level, the regional level, and global laws. Dell’s report argues how and why legislation supports these moves.

Stewart Room, partner at Field Fisher Waterhouse, said that compliance with security and data protection laws is vital – but some businesses are unsure of how to tackle the problem.

“It is no wonder businesses lack clarity as the requirements vary for different countries, within the EEA and globally,” Room said. “We have developed this whitepaper with Dell SecureWorks to provide guidance and reassurance for organisations and we have found that the laws in EMEA support the use of external providers such as good quality MSSPs which provide better data security because of their enhanced level of expertise, awareness and threat intelligence”.

The report is available on the Dell Secureworks website, here.