IBM is enhancing its VMControl software for managing data centers to give enterprise users a single point of control across multiple types of IT systems and virtualization technologies. Combined with IBM’s Tivoli software, VMControl allows for combinations of physical and virtual IBM servers to be managed as a single entity, called “system pooling.”

IBM says this approach optimizes virtualization by helping corporate data centers simplify management functions and better share and prioritize use of critical resources such as CPU, memory and storage. Having centralized control over virtualized environments lets companies manage large amounts of information and processing resources and then parcel them out to applications when and where they’re needed.

IBM is reporting a 14 percent growth in year over year net income, posting a third-quarter profit of $3.2 billion, or $2.40 a share, on revenue of $23.6 billion. IBM has been shifting its focus towards software and services from hardware and it appears to be paying off. Chairman, president and CEO, Samuel Palmisano said in a statement that IBM’s “strategic shift to higher-value businesses” contributed to the growth and the company saw “improved revenue trends in business and share gains in software and hardware.”

IBM expects increased full-year 2009 earnings of at least $9.85 per share compared with its previous expectation of at least $9.70 per share. IBM CFO Mark Loughridge said in the earnings call that revenue was boosted by increased sales of software and services. He added that IBM gained share in software areas, specifically mentioning competitor Oracle.

Many people still think of IBM as the company that sells Big Iron—mainframes and its enterprise server descendants. Of course, the engine of the company’s profits long ago shifted to consulting and software. In a financial slide presentation IBM released today to the SEC as an 8K document, however, you really get a sense of how much IBM has continued to shift its business towards software and services over the past eight years.

The result has been a very healthy expansion in its profit margins. As can be seen in the chart above, IBM’s pre-tax income margins have more than doubled from a low of 7.2 percent in 2002 to 16.1 percent in 2008. And the slide presentation suggests that IBM has further to go. It cites data showing that the top quartile of companies in the S&P 500, and 30 percent of tech companies, have pre-tax income margins of above 20 percent. IBM makes $90 billion in revenues per year, so each percentage gain in pre-tax profit margins adds up to nearly $1 billion.

Slouchers on Twitter (you know who you are), take note: IBM is apparently working on technology that would enable you to blog or tweet straight from the remote control of your TV. The company has filed a patent for said technology with the USPTO, reports BaltTech.

The interesting part of the patent filing, which was submitted by IMB engineers last year but only surfaced online a few months ago:

(after the jump)

IBM is buying analytics software and solutions provider SPSS in an all cash transaction at a price of $50/share – a 42 percent premium to Monday’s closing price of $35.09 on Nasdaq – resulting in a total cash consideration in the merger of approximately $1.2 billion. The acquisition is subject to SPSS shareholder approval, regulatory clearances and other closing conditions, and is expected to close later in the second half of 2009.

Big Blue said the acquisition of the publicly-held Chicago company was expected to strengthen its information-agenda initiative, which helps companies take information and turn it into a strategic asset. IBM shares fell 67 cent to $116.96 in pre-market trading, while SPSS shares jumped 41 percent to $49.59.

Update – In other news: IBM also acquired Ounce Labs, a provider of enterprise source code security testing and intends to integrate it into its Rational software business. Financial terms were not disclosed.

Some of the most promising set of mobile apps being built today use a cell phone’s camera and GPS to overlay data onto the real world. In other words, instead of looking at a browser, you look through the camera lens at the real world around you and information is layered on top of the view projected on the small screen. (It’s not just a viewfinder, you know). Last year at TechCrunch 50, the Sekai Camera demo from Japan that does this blew away the audience. More recently, Layar showed us similar augmented reality apps for the Android phone. Now IBM has its own augmented reality mobile app for Wimbledon called Seer Android (see demo in the video above).

Larry Ellison has always wanted to be the Steve Jobs of the enterprise. With this morning’s announcement that Oracle will buy Sun Microsystems for $7.4 billion, he took a big step towards making Oracle more of a soup-to-nuts provider of enterprise technology. With Sun, he will now be able to build and package together everything from chips and servers to operating systems, Java middleware, databases, and enterprise applications.

Like Apple, Oracle wants to take away complexity for its customers and bundle the entire IT stack neatly together so that it works without hassles and is optimized for Oracle’s software. With this deal, Ellison has come full circle from his early-1990s mantra of “best-of-breed” systems, which he abandoned long ago. Rather than look like Apple with its dedication to making the perfect product, Oracle just became IBM. It will use Sun’s existing server market share to push Oracle databases and software, and bundle it all with IT services. Sure, it will continue to support Dell and HP and even rival enterprise software, but the sales pitch will be around the bundled product. If that turns out to be a superior product at a lower price, then both Oracle and customers will win out. But to the extent that it takes away choice from IT buyers, it could be an even tougher sell than convincing them to give up their beloved Blackberries for an iPhone.

Looks like Sun Microsystems is open to renewing acquisition talks with International Business Machines (IBM) if the latter makes a stronger commitment to actually closing the deal, according to Bloomberg sources.

Earlier this month, discussions over a potential takeover broke down when IBM withdrew its earlier $7 billion bid to buy Sun.

Discussions have stalled, still according to the sources, and both companies are now waiting for the other to make a move.

The information provided by the two unnamed sources implies that Sun withdrew exclusive negotations with IBM because there were apparently no guarantees that they would ultimately stick with the takeover if the companies encountered barriers such as an antitrust review. So basically Sun is saying: if you’re going to talk the talk, you’d better be prepared to walk the walk.

Oh noes! IBM withdrew its $7 billion bid to buy Sun Microsystems. The company has no other offers outstanding, which may mean that the well-known and well-loved Unix server supplier will have to go it alone in an uncertain economy. One interesting point, from NYT:

The Sun board did not reject the offer outright, but wanted certain guarantees that the I.B.M. side considered “onerous,” according to that person.

IBM dropped its price to $9.40 and the requirements included changing the management team and the movement/removal of some senior employees. . Sun’s stock dropped to $8.49 last Friday.

With the end of the first quarter of the 2009 almost here, even the strongest companies companies are making last-minute layoffs to shave costs. Today, layoffs were announced across the tech sector, from IBM to Google to Amazon. The biggest layoffs came from IBM, where 5,000 people are losing their jobs in the U.S.. Amazon cut 210 people at three distribution centers in Nevada, Indiana, and Pennsylvania. Google also announced layoffs of 200 people from sales and marketing (so far, engineers have been spared). In all three cases, the job cuts amounted to roughly one percent of each company’s global workforce. The New York Times also announced a 5 percent cut of its newsroom business operations, or 100 people.

It is not as if the payroll reductions will help save the quarter or even have a material impact on it. But the companies can point to the measures during their conference calls with investors and analysts and project the savings going forward.

We’ve added the job cuts to our Layoff Tracker. To see who is hiring, check out our CrunchBoard.

Microsoft’s Steven Martin has ironically blown the whistle on an attempt at an “open” coalition that freezes out certain companies. Ironic in that Microsoft and IBM played this game years ago with the WS-I, an industry standards group that pointedly stonewalled Sun Microsystems’ involvement before caving under media pressure.

In a Google Groups post Introducing the Open Cloud Manifesto, Rueven Cohen describes an effort involving “several of the largest technology companies and organizations” to “draw a line in the sand.”

We are still working on the first version of the manifesto which will be
published Monday, March 30th with a goal of being ratified by the greater
cloud community. Given the nature of this document we have attempted to be
as inclusive as possible inviting most of the major names in technology to
participate in the initial draft. The intention of this first draft is to
act as a line in the sand, a starting point for others to get involved.
That being said this manifesto is not specifically targeting any one company
or industry but instead is intended to engage a dialogue on the
opportunities and benefits of fostering an open cloud ideology for everyone.

As inclusive as possible? Not targeted at any one company? Engage in a dialogue? What a load of crap that is. It’s the same back room cigar-smoke-filled scam of the good old days when Web Services first began its inexorable move to reshape computing.

The consolidation in enterprise technology is upon us. Once mighty Sun Microsystems is now reportedly in talks to be acquired by IBM for a mere $6.5 billion. That is two quarters of revenues for Sun. If you factor in the $2.6 billion in cash and short term investments on Sun’s balance sheet, the true offer is closer to $4 billion. Sun’s shares jumped this morning 65 percent.

Sun’s main Solaris server business has been suffering for years from the onslaught of cheaper open-source Linux servers, which it now offers as well. But Sun still holds big presence in key industries. The play for IBM is to consolidate its server market share in the face of increased competition from HP (which bought IT consulting giant EDS last summer), and now Cisco (which is trying to expand into the server and storage markets). Sun’s commitment to open standards also meshes well with IBM’s philosophy. Remember, it owns MySQL.

IBM is advancing its aggressive cloud computing strategy with a string of announcements this week. The most recent was IBM’s partnership with Amazon Web Services to allow access of its software to solution providers using Amazon’s cloud computing applications. The partnerships offers pay-as-you-go access to development and production versions of IBM Information Management database servers, IBM Lotus content management, and IBM WebSphere portal and middleware products through Amazon’s EC2 cloud computing service. The partnership makes sense because Amazon has been an early leader in the cloud computing sphere, and IBM is making strides towards becoming the master of cloud computing. Microsoft is readying its own cloud-computing software service, Windows Azure, that will allow developers to create services and applications that are supported by Microsoft’s data centers.

IBM will be unveiling a number of new cloud computing technologies at its CIO Leadership Exchange in Shanghai and its Pulse Conference in Las Vegas on Wednesday with networking giant and Cisco-rival Juniper Networks by its side. We reported last summer that Juniper is doing a good job of making inroads on Cisco’s turf, and this partnership with IBM is a sign of Juniper’s continued strength in the cloud computing sphere, an area where Cisco is also hoping to make its mark.

When twitter recently added a “Suggested Friends” feature, I was more than a little disappointed. Unlike Facebook’s “People You May Know” feature, no explanation is provided for why these people were suggested.

In an enterprise setting, the most valuable people are the connectors: “The people who know which people know what”, according to Alan Lepofsky.

The larger the organization, the more likely someone else is working on the same problem. And the less likely you’ll find them.

While touring IBM’s Innovation lab at Lotusphere last week, I was surprised to see IBM is also tackling this problem with their “Social Networks & Discovery” project (SaND for short). And it looked FAR better than anything I’ve seen previously.

(Screenshots after the jump.)

When Apple hired away Mark Papermaster from IBM as its new senior vice president of hardware engineering for devices, IBM struck back with a lawsuit attempting to bar him from switching jobs. Citing his non-compete clause, IBM convinced a judge to order Papermaster to stop working at Apple until the dispute was resolved. IBM even brought Papermaster’s children into it.

Well, now he can finally go make future iPhones and iPods for Apple. The two companies have settled out of court. It kind of makes you wonder why companies even bother with non-compete clauses in employment contracts, especially when they are overly broad. More often than not, they are not worth the paper they are written on.

LinkedIn has partnered with IBM to create a new plugin that integrates its professional social network into Lotus Notes, a popular business desktop client that includes Email, calendar, and IM functionality. The plugin is making its debut to the public at Lotusphere, with plans for its release in the first half of 2009.

For users who spend much of their day ‘living’ in their Email client, the new plugin could be a welcome addition. Its primary purpose is to display information relevant to the people in your Emails, as well as providing a handy way to browse through some of LinkedIn’s most oft-used features (like your news feed and search). However, the plugin does not yet automatically look up the contacts mentioned in your Emails – you’ll still have to click on their names or use the pre-populated search to look them up (automatic lookup is planned for a future release).

Next month is the annual Lotusphere conference. IBM is giving two free tickets to TC readers–leave a comment saying why you’d like to go to Lotusphere, and we’ll pick the winners by Monday morning. (Note: Passes cover conference registration only, not travel/hotel.)

Few pieces of software are as polarizing as Lotus Notes. When my last job forced me to use Notes, I found the interface clunky, the graphics Win 95′esqe, and the workflow architecture non-intuitive. Granted, I was using Version 6.5 (Notes is now on Release 8), but even so I found it frustratingly unproductive. And I’m clearly not alone.

Which leaves me wondering–has IBM’s Lotus Notes lost touch with the user-centric web 2.0 world?

To answer these questions, I interviewed Kevin Cavanaugh, IBM’s VP in charge of the Notes/Domino group. Also joining us was Ed Brill, IBM’s Director of Messaging and Collaboration.

Can’t afford a ticket to China to go visit the Forbidden City? Well, now all you need is your computer. IBM, which is a big believer in virtual worlds, and China’s Palace Museum have created an exact replica of the 178-acre Forbidden City. After working meticulously for three years to recreate every building and thousands of major artifacts, the virtual Forbidden City is now available for download (for Windows, Mac, or Linux). It’s free, although, I warn you the Mac version, at least, is a massive 275MB file.

Once inside, you can choose an avatar, dress him or her up in Qing Dynasty-era robes, take virtual tours, play Go with computer-controlled characters, call up maps, explore buildings and objects that allow you to click for deeper information. The virtual world was built on a gaming platform from Garage Games called Torque. ( I guess OpenSim wasn’t good enough. No word on whether it will be interoperable with Second Life).