SiliconBeat

Cisco’s $5 billion purchase of British video-tech company NDS Group is a powerful sign that CEO John Chambers meant what he said last month about stepping up M&A.  It’s also an example of Cisco using its sizable stockpile of overseas cash.

After overhauling the company last year, Chambers told analysts on the company’s  last earnings call that “we curtailed our M&A activity as we worked hard to refocus. Now with our strategy executing well, we expect to be more active with acquisitions in the quarters and years to come.”

Actually, Cisco never really stopped buying smaller companies; it reported six deals last year and five in 2010. But it hadn’t announced a deal valued at ten figures since 2009, when it paid $2.9 billion for Starent Networks and $3.4 billion for Tandberg.

Many people  expect Chambers will be keeping an eye out for other deals in the months to come. Before NDS, Cisco had accumulated $46 billion in cash and short-term investments, which is enough money to burn a hole in anybody’s pocket.

Most of that money comes from overseas revenue, and Cisco has been keeping it parked overseas to avoid the higher U.S. taxes it would have to pay if it brought the money here. (It’s already paid the relevant foreign taxes.) Chambers has been especially vocal among high-tech CEOs who say they’d like to bring their overseas revenue home, to invest or return to shareholders, if the US would only lower its tax rates.

Chambers confirmed to analysts that the money to buy UK-based NDS would come from Cisco’s overseas warchest.

“That was not the primary reason” for the deal, he added. “We would have done it if it were in the US. But the fact that it was international cash made it a lot easier because we have got $46 billion sitting there, not being utilized as effectively as our shareholders want us to.”

Brandon Bailey writes about enterprise IT and other tech subjects. You can reach him at bbailey@mercurynews.com or Twitter.com/BrandonBailey

This one kind of got  lost in the crush of other news, but it’s an interesting development for Hewlett-Packard here in Silicon Valley:

HP, which is in the process of closing its longtime campus in Cupertino, confirmed earlier this month that it will move the local operations of its PC division to the Sunnyvale complex on Maude Avenue that was once home base for Palm, the smartphone maker that HP bought in 2010.

The remaining Palm business, essentially a downsized webOS software group, is leaving Sunnyvale for smaller quarters in Cupertino – not to the old HP campus, but to the former offices of ArcSight, the security software company that HP acquired in a separate deal two years ago.

ArcSight, meanwhile, has moved to the new Moffett Towers office complex in Sunnyvale, where HP is consolidating several commercial software groups, including the recently acquired Fortify and some folks who were based at HP’s old Cupertino campus.

It’s all part of the ebb and flow for a huge tech conglomerate. The dominos started to fall back in 2010 when HP announced it no longer needed the old Cupertino campus. City records show that site housed about 3,000 employees last year, which is a lot less than the 4,600 who worked there in 2002. (HP officials, by policy, won’t confirm how many employees they have at any particular location.)

HP initially had said it would move most of the Cupertino workers to its under-utilized main campus  in Palo Alto. City records indicate HP’s Palo Alto workforce has also declined - from 3,400 in 2001 to about 2000 people last year. But members of the PC group seem pleased about the change of plans.

PC division chief Todd Bradley, who used to be CEO of Palm, described the Maude Avenue complex as offering “fresh, creative and inspirational workplace environments,” in an internal memo obtained by the webOS Nation blog, which first reported the move.

Meanwhile, HP has sold its 100-acre Cupertino campus to Apple, which plans to build a shiny new headquarters there for its own growing workforce.

Brandon Bailey writes about enterprise IT and other tech subjects. Contact him at bbailey@mercurynews.com or 408-920-5022.

Would Oracle CEO Larry Ellison seriously contemplate a hostile takeover of Hewlett-Packard?

Oracle and HP escalated their feud in the courts of law and public opinion this week, after a judge made several rulings in a dispute between the two tech giants over Oracle’s decision to stop making new software for HP’s high-end servers that use Intel’s Itanium chips.

HP fired first on Monday, trumpeting the fact that a Santa Clara County judge had thrown out Oracle’s claim that HP somehow committed “fraud” when it was negotiating a settlement with former HP CEO Mark Hurd, after HP sued Hurd for going to work for Oracle.

Oracle had argued that HP obtained the settlement agreement under false pretenses because HP had not revealed that it planned to hire two of Oracle’s arch-enemies, former SAP chief Leo Apotheker and former Oracle president Ray Lane, as HP’s CEO and board chairman, respectively.

Judge James Kleinberg agreed with HP that this did not constitute fraud. He also denied Oracle’s motion to keep sealed an HP document that contains some examples of Oracle’s hardball efforts to go after HP’s customers by portraying Itanium as a product line that’s nearing its end of life.

Oracle fired back by noting that the judge also agreed with Oracle’s motion to unseal its cross-complaint against HP, which offers up some details of what Oracle contends was an HP effort to hide Intel’s intentions regarding Itanium’s future.

As an example, Oracle maintains that HP negotiated a secret agreement in 2008 to pay Intel a whopping $440 million to keep making Itanium for another three generations of chips, and an additional $250 million under a later agreement, in order to make customers think that HP’s servers had a long-term viable future. HP has not confirmed the numbers but says in court papers that it’s no secret that it agreed to contribute to the chip’s development costs.

And then there’s another point that neither company mentioned in its press releases. In his order, Judge Kleinberg also denied HP’s motion to keep secret some details of the confidential agreement that HP negotiated with Hurd after he went to work for Oracle.

That agreement contained an 18-month “standstill” provision, during which Oracle agreed not to launch a hostile takeover bid for HP, according to the judge. Kleinberg said HP apparently feared that Hurd’s intimate knowledge of HP’s business would give Oracle an unfair advantage should it attempt such a bid.

HP may have sought the standstill agreement out of an abundance of caution; a spokesman declined comment. Oracle spokeswoman Deborah Hellinger said: “We viewed HP’s insistence on a standstill as hilarious, so we gave it to them.”

The case continues in Santa Clara County Superior Court.

Brandon Bailey writes about enterprise IT and other tech subjects. Contact him at bbailey@mercurynews.com or 408-920-5022.

Cisco launched a new media advertising campaign this week, and this one doesn’t feature the quirky, indie actress Ellen Page.

Instead, the networking giant is using stories about some of its customers, in business and industry, and how they’re using Cisco technology to boost their operations.

That’s in keeping with Cisco’s s new focus, after CEO John Chambers took the company through a much-publicized reorganization last year. He pulled the plug on some ill-fated forays into consumer tech, including Cisco’s attempts to sell handheld Flip cameras and a home video-conferencing system that Page had demonstrated in some jokey television spots last year.

After acknowledging that Cisco had spread itself too thin with those efforts, among other things, Chambers is now vowing to stay focused on a shorter list of commercial tech priorities - where his company is competing with the likes of IBM, HP and Oracle.

The new ads don’t specifically mention Cisco’s internal overhaul, but the campaign “is a reflection of what we’re doing from a corporate strategy perspective,” Cisco Chief Marketing Officer Blair Christie told me last week. She added, “We’re a B to B company.”

The ads still use the “human network” catch-phrase that Cisco first began promoting in 2006. The company won’t say how much the campaign will cost, but Christie said the effort will extend to US and overseas markets and will include a sizeable online component - including “homepage takeovers” on several news sites and a LinkedIn blast to 140,000 C-level executives at companies with which Cisco hopes to do business.

The ads will appear in places where business leaders are likely to be tuning in, which means a heavy roster of televised sports events and finance-oriented sites like CNBC or the Wall Street Journal.

HP gadget guru Phil McKinney is among those who believe everyone will eventually own at least two or three computing devices, choosing according to individual needs from among PCs, smartphones and everything in between. Right now, though, it’s that sweet spot in between that companies like Hewlett-Packard are racing to fill, with new products that try to strike the balance between mobility and user experience.

That’s where HP’s recent acquisition of Palm and its webOS software comes in. McKinney, the chief technology officer for HP’s personal systems group, was careful not to reveal plans for specific products during a talk at the MobileBeat 2010 conference Monday. (And he managed to get through a 30-minute presentation without once mentioning Apple or its iPad by name.) But he reiterated that HP plans to use webOS for what most people are calling tablets — HP calls them “slate” devices — as well as for phones and printers.

While giving no sign that HP would dump Microsoft as the operating system provider for most of its PC business, McKinney’s comments were probably no comfort to Microsoft’s mobile software folks. “We see Windows having its segments of the market,” McKinney said. But when it comes to mobile devices, he added, rather than relying on third-party software, HP believes that success lies with providing its own “end-to-end experience.”

McKinney also repeated his recruiting pitch for independent app developers, who are crucial to HP’s plans for building popular adoption of webOS. Echoing comments he made in a video recently posted on Palm’s website, McKinney suggested developers should consider building apps for webOS because HP has the scale and resources to sell “tens or hundreds of millions” of webOS devices, to both businesses and consumers around the world.

Larry Ellison doesn’t do a lot of interviews. But in a recent confab with the Reuters news service, the Oracle CEO offered up some typically unvarnished opinions about prior management at Sun Microsystems, the once-great computer-maker that had fallen on hard times when Oracle bought it for $7.4 billion earlier this year.

Though much of the interview covered familiar ground, it offered some interesting tidbits as Ellison described some of the inner workings of Sun’s operation – including what’s characterized as outdated manufacturing and distribution systems, inefficient sales commissions, wasteful spending and bad management at the very top levels.

“The underlying engineering teams are so good, but the direction they got was so astonishingly bad that even they couldn’t succeed,” Ellison said.

Ellison offered what appeared to be a sharp dig at Jonathan Schwartz, the pony-tailed CEO who ran Sun before the sale to Oracle and who was known for diligently blogging about the company’s strategy and products.

“Really great blogs do not take the place of great microprocessors. Great blogs do not replace great software,” Ellison said. “Lots and lots of blogs does not replace lots and lots of sales.”

Ellison also gave some hints about future acquisitions as he attempts to transform his hugely successful software company into a full-service purveyor of integrated data center systems. Short summary: Oracle may be looking to buy more hardware companies. “We’ll buy in all areas of our business,” Ellison said.

The PC market is coming back strong, according to new research released today by Gartner and IDC. But HP and Dell, the leading US manufacturers, are losing share to their Asian rivals.

Worldwide PC shipments were up 27.4 percent in the first quarter of 2010, compared with a year earlier, according to Gartner. IDC pegged the year-over-year increase at 24.2 percents, still exceeding expectations.

HP remains the world’s leading seller of PCs, with 18.2 percent of the global market by Gartner’s count and 19.7 percent according to IDC. Both firms estimate that HP shipped almost 20 percent more units than a year earlier, while still losing a little under one percentage point of market share.

Acer, by contrast, was in the No. 2 position with 14.2 percent of the world market, up from 11.7 percent a year earlier, according to Gartner. IDC’s report gives Acer 13.6 percent of the market, up from 11.9 percent.

Both research firms are reporting that Dell’s share of the market also slipped a bit, while Lenovo, Toshiba and ASUS showed gains from a year ago.

IDC and Gartner each use slightly different methods of estimating the market, but their numbers usually track pretty closely. One difference this time: Gartner reported Apple gained almost a point of market share in the United States, while IDC reported Apple lost ground slightly.

Perhaps not a surprise, but a sign of transition: James Gosling, the longtime Sun Microsystems software guru credited with developing the Java programming language, has resigned from Oracle just a few months after it acquired Sun.

In a blog post on Friday, Gosling wrote that he resigned on April 2. “As to why I left, it’s difficult to answer: Just about anything I could say that would be accurate and honest would do more harm than good.”

Gosling, 54, is a popular and respected computer scientist and, to many, an icon of the free-spirited early days of Silicon Valley. The bearded, long-haired Gosling favors t-shirts and jeans and always seemed to enjoy himself at Sun’s annual Java One conference, at least during the traditional opening rite in which he and other Sun execs used giant sling shots to loft souvenir t-shirts into the crowd.

Last year, when Sun was in talks to be acquired by IBM, Gosling told tech blogger Jason Stamper that there might be some interesting issues as IBM tried to integrate Sun’s free-wheeling culture with its own. “We’re definitely weirder than they are,” he said then.

As it turned out, the IBM deal fell through and Oracle swooped in. Many wondered if there might be a similar culture clash as Sun old-timers found themselves working for a company that’s definitely oriented to the bottom-line. Gosling didn’t say much more in his post. Instead he wrote:

“The hardest part is no longer being with all the great people I’ve had the privilege to work with over the years. I don’t know what I’m going to do next, other than take some time off before I start job hunting.”

Last week’s criminal conviction of former Brocade Communications CEO Gregory Reyes, on charges relating to options backdating, was not as big a bombshell as the results of his first trial in 2007, when dozens of other Silicon Valley companies were still smarting from examinations of their own stock options practices.

Reyes’ conviction on nine counts of securities fraud and submitting false statements - he was acquitted on a conspiracy count - came after the results of his first trial were overturned last year on appeal. Meanwhile, experts say that heightened scrutiny and new regulations have clamped down on options abuses.

But there have been some ripples of fall-out this week. The Hill, a politics newsletter in Washington D.C., is reporting that national Democratic Party officials are attempting to make hay with Reyes’ conviction by calling attention to $75,000 that he donated over the previous decade to GOP causes.

A Democratic National Committee staffer blasted her Republican counterparts for keeping the donations, claiming that Reyes “defrauded the public using the same irresponsible tactics that sparked the worst economic crisis since the Great Depression,” according to The Hill.

In politics, of course, appearances count. The Hill also reported that the DNC has announced it will give $505 to charity after it was pointed out that Barack Obama’s presidential campaign was given that amount in 2008 by a man recently charged with threatening to kill Republican U.S. Rep. Eric Cantor of Virginia.

What is it with those demonic sheep?

IBM rolled out a new line of Unix server systems under the Power 7 nameplate on Monday. Analysts said IBM appears to be positioning the new machines as a counter to Oracle CEO Larry Ellison’s ambitious plans for selling high-end Sparc servers from newly acquired Sun Microsystems.

Both companies are angling to sell powerful (and expensive) systems that combine hardware and software, engineered and optimized for specific uses such as running complex financial operations. IBM’s press release lays out all their technical specs in detail.

But IBM didn’t stop there. Ellison has been trash-talking IBM for months now, and Big Blue answered back today with a feisty Facebook page (www.facebook.com/ServersForTruth) and a YouTube video that digs at Oracle on several points, including an episode last fall when an industry standards group fined Oracle $10,000 for using the group’s name in ads that didn’t meet its rules.

The video, which IBM says it produced in-house, is a fun spoof of a typically over-heated political campaign spot. Borrowing from former Hewlett-Packard CEO Carly Fiorina and her much-discussed ad attacking rival Senate candidate Tom Campbell,  IBM even threw in a cameo appearance by a sheep with glowing red eyes.