The Bloor Perspective: Microsoft's Java plans, real PDA costs and Andersen fall out

In a peculiar turn of events last week, Microsoft told the world Java support will be part of its Windows XP roadmap. At the same time it gave a cut-off date - the point at which, it seems, the on/off, love/hate, Java/Microsoft relationship will be officially terminated. Is it just hedging its bets?

There are reports that Microsoft has included the Java Virtual Machine in its upcoming Windows XP Service Pack 1. Having said this, just to keep you on your toes, Microsoft then said that support for Java, and inclusion of the JVM, would cease on 1 January 2004.

This move has been triggered by another bout of threatened legal action. Last year, when Microsoft left Sun's Java Virtual Machine out of its operating system it was threatened with legal action from Sun for non-inclusion. Sun claimed that by leaving out the JVM, Microsoft was limiting Sun's ability to do business, or words to that effect.

In its defence, Microsoft cited a previous court ruling - that Sun had won - restricting Microsoft's implementation of Java.

Now Sun is trying to take Microsoft to court again, claiming not including a Java engine in Windows XP was effectively restricting its trade, or words to that effect. So Microsoft, it would appear, has said, okay, in order to clear that hurdle and remove it from the current legal debate it'll stick the JVM into XP.

That's all good and well but probably not the entire story. Microsoft has had a problem with Java for a good few years now. Java has huge support. Microsoft gets a lot of bad publicity for not giving it the attention it deserves, the attention other vendors give it. Add those points into this mix and you're probably getting closer to the real reason for Microsoft including the JVM.

But why is Microsoft revoking the JVM support in 2004. It's probably bluffing. Microsoft is taking a bullish stance on this issue right now to put the frighteners on Sun and its many affiliates. It's also telling the world, and its fine upstanding investment community, that Microsoft is confident about its .Net strategy, of which Java is a competitor, and that it will fight to defend its turf.

Amidst all of this pomp and plunder there is one very real fact Microsoft knows it can't quite ignore. Java is increasingly important to all areas of the tech sector and the JVM, therefore, will stay come 2004.

*PDA TCO lessons*

These days PDAs cost between £200 and £500, their price is going down and their functionality is going up. There are a variety of platforms and specifications available, so it's a case of you pays your money and makes your choice. But recent research suggests the cost of operating mobile devices is as much as £2,000 per year and for anyone wishing to add a wireless connection the price goes up to a yearly £3,000.

Sixty per cent of all that goes on hardware, software and network services, 30 per cent on technical services and operational support, while the last 10 per cent goes on training-related activities.

Of course, there are many opportunities to get this money back. Increased productivity through easy access to corporate systems, improved customer service delivered by field based staff and the continuous connectivity to email and other systems.

We have seen for sometime the argument for return on investment and it's clearly true in this case. If companies base their purchasing decisions on business need rather than employee demand for the latest gadgets to keep up with the Joneses, then the investment is wisely spent

Aside from highlighting the gadget frenzy that often affects IT-based staff, the research highlights the fact that often the long-term costs of items is rarely considered or understood.

No matter how many column inches are given over to return on investment or total cost of ownership there are very few organisations out there that measure themselves as thoroughly as they should.

*Andersen fall out*

As the dust settles around the remnants of Andersen the implications of the 'guilty' verdict are finally beginning to emerge. Increased fees, comprehensive overhauls and rehashed strategies seem to be the call of the day. But in actual fact this could run far deeper than we ever imagined.

So far, just to recap, after 10 days of discussion and debate and five weeks of hearing evidence, the jury decided Andersen had acted illegally.

Sentence, however, has not yet been passed. It is expected the courts will revoke Andersen's licence to audit publicly listed firms, which will have a devastating effect on the company. Auditing publicly listed firms is Andersen's bread and butter.

Even so, as soon as the guilty verdict was passed Andersen announced that, by 1 August 2002 it would cease its practice of auditing publicly listed companies itself. Not so much shooting itself in the foot as damage limitation - it does after all look better to slit your own corporate throat than have someone else do it for you.

In the first instance the move that we can expect to see gathering pace this week will be the disappearance of Andersen's clients. A large proportion of them have already jumped ship but it is estimated that another 1,500, desperate to avoid the tar leaking from Andersen's brush, will be rushing headlong towards the raft of competitors - Deloitte and Touche, Ernst & Young, KPMG, PwC and many, many others.

These audit firms, however, are not anticipating an especially easy time for themselves. Certainly they may pick up plenty of new clients without too much effort. But, despite having worked tirelessly over the past six months to ensure their accounting and audit operations are distinctly separate, they know that more of these potentially damaging horrors are going to emerge. Expect to see far more involvement from the one time elusive 'partners' at these firms, whom we imagine will be keeping a very tight rein on all audit practices for the foreseeable future.

That's not a bad thing of course. But there will be bad news that each and every one of us will have to contend with. First, there's all of this talk about increased fees. It is being suggested by all and sundry the increased regulatory pressure on the audit firms will give them the perfect excuse to push fees through the roof. It seems unlikely, on first examination, that increased fees will tempt anyone. But if a firm can demonstrate it is whiter than white, big corporations will pay top dollar for that service.

**Bloor Research is a leading independent analyst organisation in Europe. You can find out more at http://www.bloor-research.com or by emailing mail@bloor-research.com .