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Column

Bad week for SAP SA

Kickback allegations surrounding SAP SA and the politically connected Gupta family made headlines on a global level last week.

Despite a host of acquisitions in the international ICT market last week, the allegations involving SAP SA stole the headlines on a global level.

Key local news

* A positive trading update from MTN Group.
* Ansys acquired Profitek Industrial Communications for R50 million. The transaction is intended to enhance Ansys' safety and productivity business division, in its pursuit to become a digital technology solutions provider, which leverages its own intellectual property to provide world-class products for global distribution.
* Siemens bought (Altron's) Powertech's Crabtree Electrical Accessories.
* Cape Town-based BI firm Datanomix has signed a black economic empowerment (BEE) transaction with AIH Northwind Holdings, a majority black-owned B-BBEE investment firm.
* SAP has put four senior managers in SA on administrative leave and begun a probe into reports that have dragged the company into an influence-peddling scandal involving friends of president Jacob Zuma. It is alleged SAP paid kickbacks in the form of sales commissions to a firm linked to the politically connected Gupta family, helping SAP clinch a deal worth R1 billion with rail and logistics company Transnet and other state-owned firms. The German company has hired an independent international law firm based in the US to conduct an external investigation, and will also run its own, internal probe using SAP's compliance organisation.
* A new JSE cautionary by Huge Group.
* A renewed JSE cautionary by MICROmega Holdings.
* The death of Richard Hurst, a respected ICT industry analyst and management consultant.

Key African news

* Etisalat Nigeria has changed its name to 9Mobile.
* The Vodacom Tanzania IPO has been opened up to foreigners.
* The appointments of Claas Kuehnemann as interim MD of SAP Africa; and Khaled Zeidan as MD of Middle East and Africa for Coriant, a supplier of packet optical, IP, and SDN solutions to tier one global service providers and Web-scale Internet operators.

Key international news

* Accenture acquired Clearhead Group, a US-based digital marketing company.
* Alphabet (Google) bought India's Halli Labs, a start-up focused on building deep learning and machine learning systems to address what it describes as "old problems".
* Altice bought a 94.7% stake in Portuguese TV and radio firm Media Capital for €440 million.
* America Movil purchased 60MHz of wireless spectrum (airwave) in the 2.5GHz band from Grupo MVS.
* Ansys acquired Computational Engineering International, the developer of a suite of products that helps engineers and scientists analyse, visualise and communicate simulation data.
* Certent bought IBM Cognos Disclosure Management (CDM), IBM CDM on Cloud, IBM Cognos Financial Statement Reporting and IBM Clarity 7 products.
* Cincinnati Bell purchased Hawaiian Telcom Holdco for $650 million.
* Cincinnati Bell also bought OnX Enterprise Solutions for $201 million.
* Cisco acquired Observable Networks, a forensic security cloud service provider.
* Canadian cable company Cogeco Communications' Atlantic Broadband unit bought MetroCast's assets for $1.4 billion, expanding its presence in the US.
* Cotiviti Holdings purchased RowdMap, a payer-provider, value-based analytics company.
* Private equity firm EagleTree Capital acquired Corsair Components, a US manufacturer of computer peripherals and hardware geared towards the professional gaming market, for more than $500 million.
* EET Europarts bought UK-based POS distributor DED.
* Logitech International purchased Astro, a video-game headset maker, for $85 million.
* Symantec acquired Israel-based Skycure, a move designed to boost its mobile security capabilities.
* Teledyne bought Scientific Systems, a manufacturer of precision components and specialised subassemblies used primarily in analytical and diagnostic instrumentation.
* Teradata purchased StackIQ, a start-up that has developed one of the industry's fastest bare metal software provisioning platforms that has managed the deployment of cloud and analytics software at millions of servers in data centres around the globe.
* Tencent Holdings made a $66.8 million investment in TCL's smart TV unit.
* Lantronix, a global provider of secure data access and management solutions for the industrial Internet of things, has filed a patent infringement lawsuit against Jinan USR IOT technology.
* AT&T plans to separate its telecoms operations from its media assets after clinching a takeover of Time Warner, and keep chairman and CEO Randall Stephenson at the head of the company, with two top lieutenants. Veteran AT&T executive John Stankey will be in charge of the Time Warner business.
* A French court ruled Google was not liable to pay €1.1 billion in back taxes as demanded by the French authorities.
* Seiko Epson will replace Toshiba in the Nikkei 225 index.

A French court ruled Google was not liable to pay EUR1.1 billion in back taxes.

* Uber and Yandex, the ‘Google of Russia', have agreed to combine their Russian ride-sharing businesses, with Yandex the leading partner in a deal that extends to five nearby markets. Uber has agreed to invest $225 million, while Yandex will contribute $100 million into a new joint company in which Yandex will own 59.3% and employees will have a 4.1% stake.
* Vertu, a luxury smartphone maker, has gone into liquidation.
* Good half-year numbers from Largan Precision.
* Satisfactory quarterly results from Infosys.
* Mediocre quarterly results from Asustek.
* Mediocre year-end numbers from Micro Focus and TSMC.
* Mixed quarterly figures from Barracuda Networks, with revenue up but profit down; Groupa Televisa, with revenue down but profit up; and TCS, with revenue up but profit down.
* The appointment of David Henshall as CEO of Citrix Systems.
* The resignation of Kirill Tatarinov, CEO of Citrix Systems.
* A planned IPO from Internet television company Roku later this year, as it aims for a valuation of more than $1 billion.

Research results and predictions

South Africa:
* IT spending in SA is forecast to total R266 billion in 2017, a 2.4% increase from 2016, according to Gartner. Software is predicted to be the best-performing segment, with a 13.2% increase year-on-year. Spending on devices (PCs, tablets, ultramobiles and mobile phones) in SA is forecast to decline by 4.6% in 2017.

Worldwide:
* Worldwide PC shipments totalled 61.1 million units in Q217, a 4.3% decline from Q216, according to Gartner. It is the 11th straight quarter of declining shipments and the lowest quarter volume since 2007. However, HP regained the top spot from Lenovo, with other major players retaining their positions.
* Worldwide semiconductor revenue is forecast to total $401.4 billion in 2017, an increase of 16.8% from 2016, according to Gartner. This will be the first time semiconductor revenue has surpassed the $400 billion mark.
* Worldwide purchases of robotics, including drones and robotics-related hardware, software and services, will total $97.2 billion in 2017, an increase of 17.9% over 2016, according to IDC. IDC expects robotics spending to accelerate over the five-year forecast period, reaching $230.7 billion in 2021, with a CAGR of 22.8%.
* Worldwide shipments of traditional PCs (desktop, notebook, workstation) totalled 60.5 million units in 2Q17, posting a year-on-year decline of 3.3%, according to IDC.
* Worldwide sales of new semiconductor manufacturing equipment are projected to increase 19.8% to total $49.4 billion in 2017, marking the first time the semiconductor equipment market has exceeded the market high of $47.7 billion set in 2000, according to SEMI.

Stock market changes

* JSE All share index: Up 3.3%
* FTSE100: Up 0.4%
* DAX: Up 2.2%
* NYSE (Dow): Up 1%
* S&P 500: Up 1.4%
* Nasdaq: Up 2.6% (highest weekend close)
* Nikkei225: Up 1%
* Hang Seng: Up 4.1% (highest weekend close this year)
* Shanghai: Up 0.1%

Look out for

International:
* Flipkart making a revised offer for buying beleaguered e-commerce site Snapdeal, after its initial $850 million proposal was rejected by the latter's board.
* The outcome of the battle for Vocus after private equity group Affinity entered the race with a $2.2 billion offer for the embattled telco group. The entry of Hong Kong-based Affinity Equity Partners comes less than a week after Kohlberg Kravis Roberts was granted access to Vocus's books.
* Cyber security firm Symantec selling its Web site certification business, in a deal that could fetch more than $1 billion and extricate it from a feud with Alphabet's Google.
* NEC buying British software firm Civica for £900 million. The latter is one of the UK's biggest public sector software providers.

South Africa:
* Further news regarding the data centres planned for SA by Amazon and Microsoft.
* Further news regarding the SAP SA saga.

Final word

MIT Technology Review recently published its list of the ‘50 Smartest Companies' that combine innovative technology with an effective business model.
Included are:
* 1: Nvidia
* 3: Amazon
* 5: Alphabet
* 8: Tencent Holdings
* 13: Intel
* 16: Apple
* 23: Facebook
* 27: Microsoft
* 33: Foxconn
* 36: Flipkart
* 39: IBM
* 41: Alibaba
* 42: HTC
* 44: Jumia (Africa Internet Group)
* 47: Salesforce.com
* 48: Snap
* 50: Baidu


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