2001 promises to be an eventful year  

Welcome to the first issue of 2001! Stay tuned and hold your seats, as this year promises to move at an extremely fast rate.

Microsoft is back in the news again [...] with the first showing of their Xbox video-game console at the Consumer Electronics Show in Las Vegas.

Paul Booth, MD, Global Research Partners

The flood of profit warnings including those from Compaq, Kodak and Microsoft, the continuing revelations at L & H, the take-over of Eircell by Vodafone, and the acquisition of Great Plains Software by Microsoft dominated the international world of information technology & telecommunications during the last four weeks; while at home the Fintech/USKO deal and a spate of poor local full-year and interim results stole much of the local headlines.

• we saw a revised set of full-year numbers from Core Holdings, showing a significant drop in net income;

• a good set of interim numbers from Crux Technologies (income and margins well up);

• a full year loss from E-Data (although revenue up);

• a satisfactory half-year set of numbers from Y2KTec (back in the black);

• a disappointing set of interims from Netactive (a loss but for investment income and revenue also down);

• a half-year loss from Accord Technologies (revenue also well down), Hicor (but revenue well up);

• the proposed buy-out of Smacsoft by UK-based AFA Systems Plc., which is likely to lead to the de-listing of Smacsoft shares;

• the partial re-structuring of the Altron empire with the sell-off to USKO, to be renamed Bytes Technology Group, of the IT interests of Fintech;

• the strategic investment by Loita Capital Partners into Explorer, thus allowing the lifting of its JSE suspension and thus giving it the means to continue trading;

• the news that Prism has applied for permission to undertake a reverse listing onto the LSE; and the announcement by MMW, that following the confirmation of the disposal to Siltek of the 50% stake in its joint venture with Siltek, it will be de-list from the JSE as from the beginning of 2001.

[VIDEO]Additionally, Conlog is to make its debut in the telecommunications sector of the JSE after changing its name to Dynamic Telecomms, and Pinnacle Technology Holdings issued a profit warning.

[Local]

Other local news included:

• the announcement that Tinderbox, part of JSE-listed Prism Holdings, is to open a London UK office in January 2001;

• that the State, at long last, has announced that its IT company, Arivia.kom, formed from Ariel Technologies, Datavia and the IT division of Eskom, would be launched early this year;

• and that Explorer would change its name following the Loita investment, to (probably) Loita Explorer.

Additionally, Telkom announced it had awarded US-based Hughes Network Systems together with its local partner, Plessey, a four-year contract to supply satellite-based comms systems.

• we saw the name change of PSDI to MRO Software;

• the announcement by AT&T that it intends to sell-off its 25% stake in Time Warner Entertainment;

• that New Zealand Telecom is interested in buying part of Cable & Wireless`s mobile business, Optus;

• that Breathe.com, a UK-based ISP is in financial difficulties and has called in PricewaterhouseCoopers to administer the company;

• that Telia, the Swedish telecoms operator has the humiliation of becoming the first leading national not to be awarded a 3G licence in its own country;

• that France telecom has sold its 1.8% stake in Deutsche Telekom to Germany`s official development agency;

• that the debacle at Lernout & Haupsie continues, with more and more creeping out of the woodwork, although they have now succeeded in gaining bankruptcy protection under Belgian law;

• and that KPMG Consulting has pulled out of its ASP joint venture with Qwest Comms.

Additionally, watch out for a partnership between Tiscali, the Italian ISP and its French counterpart, LibertySurf; the re-naming next week of Informix Business Solutions and the plan for listing separately the two Informix companies; the outcome of the talks between Bull re its sale of its smart-card division to Schumberger, a French-American technology services company; and the possible sale by NEC of most of its manufacturing facilities.

[International]

Other international news included:

• the

  appointments

  of Robert Beauchamp as President and CEO of BMC Software, Craig Brennan as CEO of Brio Technology, Bruce Chizen as CEO of Adobe, Thomas Dorosewicz as CEO of SVI, Michael Grainger as President and COO of Ingram Micro, Stephen Hurly as President and CEO of Fastnet, Thomas Koll as CEO of Infowave, Eran Lasser & Ziv Mandl as C0-CEOs of Gilat Comms, Ashok Pandey as the sole CEO of Intelligroup, George Samenuk as CEO of Network Associates and Tom Thomas as President and CEO of Haht Commerce;

• resignations

  of Gary Daichend, No 2 at Cisco, John Lanaway, CFO of Geac Computer, William Larson, Chairman and CEO of Network Associates and Bill Wiberg, President of Lucent Technology`s cellular and PCS business;

• and

  job loss announcements

  from Acer, ADC Telecom, Applied Microsystems, Ask Jeeves, AT&T Broadband, Bigstep.com, Covad Comms, Cybersource, Digital Broadband, ECI Telecom, Engage, Fantastic, Lernout & Haupsie, Lightning Rod Software, Lucent Technologies, Organic.com, PSINet, Quintus, Red Herring Comms, Rubus Plc., Tumbleweed Comms and Viador.

On the results front, we saw excellent figures from Comtech Comms, Electro Scientific Industries, FSI International (back in the black), Information Dynamics Group Plc., Innovation Group Plc., iSoft Plc., Jabil Circuit, Manugistics (back in the black), Merix, Net AG, Nu Horizon Electronics, Palm, Solectron and Verity.

Losses however came from 3Com, 3dfx, AmeriQuest, Anacomp, Associated Network Solutions Plc., Cabletron, CMGI, Covista Comms, Engage, FastComm Comms, Freeserve, H-NET.NET, ID Data Plc., iMagicTV, Input/Output, Interactive Telesis, Kalamazoo Computer Group Plc., Liberate Technologies, MindArrow Systems, Multi-Link Telecomms, NaviSite, Net2Phone, Rapid Technology Group Plc., Red Hat, Saba, Sierra Systems, Starnet, Sunhawk.com, Tadpole Technology Plc., Tibco, Vega Group Plc and Visual Data.

Good numbers were recorded by Centennial Comms, Conolog (back in the black), GFI Informatique SA, IDT, Isra Vision Systems AG, Oracle, Richardson Electronics, Tektronix, Workflow Management and Xeta Technologies; and satisfactory ones by Cognos, Eagle Wireless, National Data, Standard Microsystems and Take-Two Interactive.

Mediocre returns came from Adobe, Computerland UK Plc (but back in the black), Great Plains Software (revenue well up but income down), Gtech Holdings, Infinite Graphics, Integral Systems, Micron Electronics, Progress Software, Research In Motion, TELS, Versus Technology (but back in the black), Volt Information Sciences and Wallace Computer Services; whilst very poor results came from Aehr Test Systems (but back in the black), Autologic Information International (but back in the black - just), Fayrewood Plc and HEI.

Other financial news included:

• profit warnings

  from Acer, Adaptive Broadband, AMD, Anadigics, Antec, APC, Artesyn, AT&T, BackWeb, Brooktrout, C-Bridge Internet Solutions, C-Cor.net, C-Cube Microsystems, ClickSoftware, Commtouch, Compaq, Copper Mountain, Covad Comms, Creative Technology, Cybersource, Cysive, Dallas Semiconductor, Data I/O, Delano Technology, Dialog Semiconductor, Diebold, DoubleClick, Eastman Kodak, ECI Telecom, Efficient Networks, Engage, Eprise, Evolving Systems, eXcelon, Fairchild Semiconductor, F5 Networks, Fantastic, FiberCom, General Semiconductor, Icon Medialab, IDS Group Plc., Information Resources, Inktomi, Insilicon, Intershop AG, Iomega, IS Solutions Plc., JDA Software, JNI, Knowledge Support Systems Group Plc., Lucent Technologies, Magic Software, Microchip Technology, Microsoft, Network Associates, New Era of Networks, Next Level Comms, NICE Systems, Nx Networks, O2Micro, Office Depot, PCTEL, Pitney Bowes, QSP Group Plc., RadiSys, Razorfish, RealNetworks, RMH TeleServices, Sapient, SBC, SemTech, Silicon Image, Siliconix, Terayon, Tumbleweed Comms, Turnstone Systems, United Microelectronics, Viador, VISX, Vitria Technology and Westell Technologies;

• share split

  announcements from Merisel, Sanmina and Siemens;

• and good

  IPOs

  from Gemplus International (smartcards), Jazztel (telecomms cabling), Resources Connection (professional services - break-off from Deloitte`s) and RiverSoft (Internet Software).

Additionally, Walker Interactive Systems faces de-listing from NASDAQ; Agere (ex-Lucent) has filed for an IPO, and Mannesmann Arcor, the German fixed-line unit of Vodafone has postponed its IPO, as has Enterworks (software) and Iconixx (e-business services); BTI Telecom (voice and data services), E-Profile (technology for Internet-based financial services companies), Novient (Internet infrastructure software) and Roxio (Adaptec`s software unit) have withdrawn their planned IPOs; Quad Systems has filed for Chapter 11 bankruptcy protection; LetsBuyIt has filed for the Dutch equivalent of Chapter 11 bankruptcy protection, while its directors have resigned en masse, and DSL provider Digital Broadband Comms has closed its doors.

Locally

Acuity (-65.5%)
Cyberhost (+50%)
E-Data (-45%)
I-Tech (-40%)
Infowave (+150%)
NetActive (+36.4%)
Pinnacle (-30%)
Softline (+34.4%)
Streamworks (-26.7%)
Y2KTec (-66.7%)

Internationally

Adaptive Broadband (-63.8%)
Allegiance Telecom (+62.6%)
BackWeb (-71%)
CacheFlow (-81.6%)
CMGI (-62.3%)
Inktomi (-71.1%)
Intershop (-78.8%)
Network Associates (-66.1%)
Network Plus (+72.4%)
Terayon Comms Systems (-75.4%)

Just a couple of the many statistics from 2000: the year saw the number of Web-related mergers and acquisitions more than double from 1999, with buyers spending $87 billion on 910 deals; and at least 210 Internet companies shutting their doors.

Finally, Microsoft is back in the news again, but for totally different reasons. This time its with the first showing (mock-up) of their Xbox video-game console at the Consumer Electronics Show in Las Vegas, and again in conjunction with various law-suits totalling $5 billion that a group of former employees has filed with respect of alleged job discrimination.