Investment firm UBS Warburg Thursday downgraded Cisco stock, citing slowing orders and softness in U.S. and European enterprise markets.

The firm cut its revenue estimates for Cisco's fiscal fourth quarter, which ends in July, from 6 percent to 4 percent on a sequential basis and to 6 percent "organic" growth -- excluding acquisitions -- year over year.

"Our industry checks show orders are slowing, which gives us concern about the July quarter," states UBS analyst Nikos Theodosopoulos in his bulletin on the downgrade. "Recent checks indicate that in addition to prior softness in U.S. Enterprise, European Enterprise is slowing a bit, and Emerging Markets, while still strong, are growing in the 25 to 30 percent range, not the 30 to 40 percent target."

UBS also is lowering its fiscal 2008 and 2009 revenue growth estimates for Cisco. Estimates for 2008 are now 12.4 percent from 12.8 percent. For the following year, expectations have been lowered to 7.9 percent from 9.2 percent. Earnings-per-share estimates have been lowered by 1 cent for 2008 and 3 cents for 2009.

Cisco stated bullishly in recent quarters that it expects annual revenue growth in the 12 percent to 17 percent range, but CEO John Chambers warned that the third and fourth quarters of fiscal 2008 could be " extremely challenging." UBS now feels Cisco will need to make acquisitions to grow at that 12 percent to 17 percent clip.

"Historical analysis of $40 billion tech companies shows it's virtually impossible to grow 12 percent to 17 percent without requiring acquisitions and compromising operating margins," Theodosopoulos states. "We believe Cisco's aggressive target will require acquisitions. We think the stock will have a hard time rallying if demand is slowing and acquisitions are likely."

Reuters - The U.N. war crimes tribunal cleared Kosovo's former prime minister on Thursday of persecuting Serbs in a 1998-99 separatist war, a move expected to fan tensions simmering over Kosovo's secession.

A Gartner study finds that IT spending has so far been largely unaffected, despite the ongoing signs of weakness in the U.S. and global economies.

On a global basis, the projected IT budget growth rate for 2008 is 3.3 percent, unchanged from a previous Gartner survey.

In the U.S., budgets are still growing, at 2.3 percent, but that represents a drop from 3.1 percent in the last study.

Meanwhile, the growth rate in Europe was 3.86 percent and 5.98 percent in Asia-Pacific, Gartner said.

Overall, "rumors of IT budgets' demise, especially in the first quarter, have been greatly exaggerated," said Mark McDonald, group vice president and head of research for Gartner Executive Programs, during a conference call Thursday.

The survey drew responses from 1,011 CIOs between Feb. 12 and Mar. 12, according to Gartner. McDonald noted that respondents were from end-user corporations, not vendors or technology service providers.

Some 62 percent of respondents said their 2008 IT budgets did not change, while 23 percent reported a drop and 15 percent said their budgets grew. On average, declining budgets did so by an average of 10 percent. However, report budget increases were about 15 percent, according to Gartner.

"We believe enterprises and CIOs are being cautious about IT spending, but not wholesale cutting," McDonald said.

"IT budgets have been modest for the past four or five years, and that modesty is paying off, because they're not as rich for targeting," he added.

Gartner also polled respondents on whether they had a spending contingency plan in place. Only 32 percent said they had one for this year.

"The contingency analysis seems to indicate that while CIOs are prepared to weather tougher economic times, the majority don't think they'll have to," McDonald said.

Top tier anti-virus vendors including McAfee, Trend Micro, and Sophos all failed to secure Windows Vista SP1 in recent independent tests.…

Financial backing for Sprint Nextel's high-speed wireless WiMax Xohm service may still be questionable, but Motorola, still sees a strong WiMax market with or without Sprint in the mix.

"WiMax will happen with or without the backing of Sprint," said Daniel Moloney, president of home and networks mobility for Motorola, the division that oversees WiMax products in an interview on Wednesday. "There's a huge global market for this technology." Motorola makes products that Sprint is deploying in its Xohm trials and rollout, and is already providing WiMax gear for rollouts in other countries.

[ Learn about Everex's new low-cost laptops that use the Sprint Xohm WiMax network. ]

Moloney said he was aware of Sprint's efforts to attract cable companies to invest $1.5 billion or more in the Xohm venture, which could cost $5 billion all told. But Moloney said he was not privy to details of what is happening with those discussions, or why some sort of deal was not reached by Monday, a deadline that Sprint imposed on the cable companies involved.

For its part, Sprint won't comment on plans to attract investors, although a source close to the discussions told Computerworld that Sprint had pushed the Monday deadline. Barry West, president of the Xohm division, on Tuesday said he was still optimistic for Xohm service, but said in an interview with IDG News Service on Wednesday that Xohm will slightly miss a target of providing commercial availability in April. He didn't specify what the new target date will be.

West said the delay was largely due to problems setting up Internet links behind the WiMax portions of the network. Trials are underway in Chicago and Washington.

Moloney agreed with many financial analysts who have said it is logical for cable companies to want to invest in WiMax, since doing so gives the cable providers an extension of wireless services to their customers already getting cable services. He said there is already a trend toward cable companies branching into the telecommunications realm as well, combining wired and wireless networks. He pointed, by way of example, to such moves by Telefonica in Madrid and Singtel in Singapore. "There is interest in blending together technologies," he said.

Motorola is interested in producing technologies for both WiMax and LTE (Long Term Evolution), which is expected to be a big WiMax competitor down the road. LTE (Long Term Evolution) is backed by both AT&T and Verizon Wireless, Moloney said.

Moloney said Sprint would itself have likely backed LTE, but could move faster with WiMax, since the latter service could come to market faster and because Sprint already owned the 2.5GHz spectrum that will carry the WiMax signal. "They could deploy today or wait two to three years for LTE," he said.

While Motorola is backing both WiMax and LTE, Moloney said he wanted investors and others to know that WiMax is going to be a strong network technology especially in developing countries such as Pakistan, where one rollout is underway. "I feel good about where WiMax is headed," Moloney said.

The fate of Sprint's Xohm seemed to be on the minds of many other executives at CTIA, including officials at AT&T. Ralph de la Vega, CEO of AT&T Mobility, was charitable toward Sprint when asked about the fate of Xohm. But he asserted that AT&T will continue to add customers as it develops its networks towards LTE. "WiMax is not a threat," de la Vega told reporters and analysts at a luncheon.

Over the next several years, AT&T official project that its LTE network can achieve 28Mbps speeds -- many times the current rates.

Computerworld is an InfoWorld affiliate.

The European Space Agency’s "Jules Verne" Automated Transfer Vehicle this afternoon successfully docked with the International Space Station at 16:45 CEST (14:45 GMT) following a cautious approach monitored by both ground-based teams and the ISS's crew.…

Dell, the world's second largest PC seller, will move faster into emerging markets and increase its services offerings as part of a plan to reverse poor financial performance, top executives said Thursday.

While Dell holds about 28 percent of the hardware and services business for small and medium-size businesses in North America, that figure falls to 10 percent for the rest of the world, said CEO Michael Dell, during an investor's conference broadcast from Round Rock, Texas.

[ See today's related story: Dell ironing out kinks in supply chain ]

For every $1 spent on hardware, businesses spend $2 on infrastructure services, a market that's worth at least $800 billion, which the company can tap into, Dell said.

Dell is targeting that segment with customizable, a la carte services and features such as remote infrastructure management. So far, the plan is working: For the fourth quarter of last year, the company's deferred services revenue grew 25 percent year-over-year, to $5.3 billion, Dell said.

"We are aggressively expanding the services portfolio of the company," Dell said.

On the consumer PC side, Dell has just a 4 percent market share outside the U.S., with most of those sales in the U.K. But Dell will try to increase that through launching new product lines.

Previously, Dell had just one consumer product line that it sold through its direct sales model, but "we are making a number of changes," including creating new product lines faster, Dell said.

The PC industry in general is suffering from lower profits, but Dell said they'll try to create "excitement and brand lust" in their products to draw new customers.

Dell's turnaround plans come amid a gloomy backdrop for the company, which lost its footing in the face of changing market conditions and a decline in its direct sales model.

"We are not satisfied with the current state of affairs," Dell said.

Incomplete product coverage, overpaid employees and general inefficiency dragged the company down, Dell said. But it has shed 5,500 of its more than 80,000 employees, and is readjusting the salaries and benefit packages of existing workers.

The belt-tightening is expected to eventually save Dell $3 billion annually. Still, CFO and Vice Chairman Donald Carty warned: "There's a lot of work left to do."

Dell reported results for its fourth quarter 2008 in late February. Net income came in at $679 million, 6 percent less than for the same period a year before. Revenue for the quarter was $16 billion. Earnings per share were $0.31, down 3 percent from the same quarter of the previous year.

The International Olympic Committee (IOC) has confirmed that international media will have "access to uncensored internet" during the 8-24 August sportsfest in Beijing and that TV transmission of the games will not be subject to a delay.…

Microsoft continues to give its tacit blessing for consumers to exploit a technical loophole that allows them to upgrade to Vista with Service Pack 1, even if they don't own the necessary prior editions of Windows.

The loophole, which was also present when Vista was first released last year, allows individuals undaunted by Microsoft's licensing and installation rules to save up to $110 by purchasing a DVD upgrade of Vista SP1, rather than the full retail one.

To install an upgrade version of Vista, users are supposed to have Windows 2000 or XP already running on that computer.

Experts say Microsoft is giving its quiet blessing to the loophole in order to boost interest in Vista among the tech-savvy users likely to exploit it.

"The fact that the upgrade edition will still upgrade over itself in Vista SP1 proves that Microsoft executives knowingly support the upgrade trick," said Brian Livingston, editorial director of the Windows Secrets newsletter, which confirmed the trick in an article appearing in its Thursday edition. "I think the feature was deliberately included to make it unnecessary for more advanced and price-sensitive users to ever buy the full version. There is no ethical dilemma with people using a feature that Microsoft has specifically programmed into Vista."

Last year, Microsoft maintained that this loophole violated the terms of its license agreement, though it has not publicly cracked down on users. In a carefully worded statement, it reiterated that position.

"Just because a piece of software installs on a PC, does not mean that it is properly licensed," wrote a spokeswoman in an e-mail. "The licensing states that upgrades require a fully licensed version of Windows to be eligible to use an Upgrade license. We expect our resellers to help their customers be fully licensed for the products that they want to purchase."

The trick is moot for the vast majority of PC users. Some may have already purchased and installed Vista. Others may have access to as many retail copies of XP or 2000 as they need (OEM copies that ship with a new PC cannot be transferred to other computers).

Other individuals and small businesses upgrade to Vista only when they buy a new PC. For large corporations, volume discounts for Windows obviate any cost savings from buying an upgrade version of Vista.

Microsoft has shipped more than 100 million copies of Vista, a figure that excludes corporate volume licenses of Windows). But 80 percent are to PC makers. Only 20 percent are being bought by end users, mostly hobbyists upgrading existing PCs or Intel Mac owners intent on running Vista in virtualization mode.

Vista SP1 became available via retailers such as Amazon.com several weeks ago. The upgrade version of Vista Home Premium SP1 costs about $130, versus $239 for the full edition, though Amazon.com is temporarily offering them for $90 and $205, respectively.

Similarly, Vista Business SP1 lists for $299 and $199 for full and upgrade versions, while Vista Ultimate SP1 lists for about $320 and $220.

The prices for Vista Home Premium SP1 and Vista Ultimate SP1 are already significantly cheaper than the RTM versions of Vista released a year ago. In February, Microsoft cut retail prices for Vista up to 20 percent .

Microsoft also said last month it would offer free technical support to any user experiencing problems with installing SP1.

SP1 includes a large number of bug fixes and performance enhancements.

Microsoft has a long history of de facto toleration of loopholes that allow determined users to get its software for less than full price. For example, many online stores sell student editions of Microsoft software to any customer with a pulse.

Scott Dunn, the writer for Windows Secrets, says "it's debatable whether a clean-install of Vista's upgrade edition -- without any prior purchase of 2000 or XP -- violates any license, but the result is clearly an installed copy of Vista that is indistinguishable from a full edition."

The process is identical to that used with the RTM version of Windows Vista. Users boot up with a Windows Vista SP1 upgrade DVD and begin the full installation process. But rather than entering the product key when prompted, they skip it and continue to do a clean install of Vista that fully wipes the hard drive. Next, they boot into the unactivated version of Vista SP1 on their hard drive. After running the setup again, users select upgrade and enter the upgrade key. This installs Vista SP1 for a second and final time.

Purists say the clean install process, besides allowing the licensing loophole, also enables the OS to run with less risk of problems under the hood.

Computerworld is an InfoWorld affiliate.