A momentous week

The Microsoft judgement scenario, now being featured in various business publications such as Business Week, Economist and Time, and the Vodafone bids for Mannesmann dominated the international IT world last week.

This acquisition creates the world`s largest independent networking services company, valued at about R18.2 million.

At home, the Dimension Data acquisition of the European networking parts of Comparex grabbed local headlines. This acquisition, the largest in the history of South African IT, creates the world`s largest independent networking services company, valued at about R18.2 million.

• we saw interim losses from M-Web (twice the size of last year`s loss);

• good full-year results from Reunert (revenue down on last year, but income well up) and Spescom;

• satisfactory year-end numbers (maidens) from Dectronic (revenue and income well below prospectus forecast, but ratios better than forecast);

• a full-year loss from Elexir (worse than expected and even revenue well down);

• excellent full-year figures from The DNS Group (a Dimension Data subsidiary), and its partner, Choice Technologies; and

• a profit warning from Bryant Technology. Additionally, today sees the move of Hicor to the IT sector of the JSE.

[Local]

Local acquisitions, mergers, investments etc (see attachment).

Local Cautionary Notices (see attachment).

Local Listing calendar (see attachment).

Other local news included:

• the departures of Leen van der Bijl from PQ Africa, in order to remain chairman of Comztek (QDD), Richard Bryant from Bryant Technology (replacement Hamish Guthrie, previously technical director), Peter Jordi of ATIO (there seems to be significant unrest in ATIO at present) and Rob Shuter from CCH. Additionally, Pamodzi has appointed Peter Vundla as new chairman of Digicore, following its acquisition in Digicore.

• the Vodafone/Mannesmann bids have been rejected and all is now set for the world`s largest ever hostile bid;

• the restructuring at Telecom Italia, involving Telecom Italia Mobile, seems to be abandoned; and

• a mediator, Richard Posner, has now been appointed for the Microsoft anti-trust trial, in an attempt to broker a suitable settlement.

[International]

International acquisitions, mergers, joint ventures etc (see attachment).

Other international news included:

• the resignation from Cambridge Technology Partners of Arthur Toscanini, one of its co-founders, its third senior executive to resign in the last few months; and

• the appointment of Richard Roll as president and COO of Epicor.

We saw excellent figures from Applied Materials (back in the black), Ditech Comms, LTX (back in the black), Network Appliance, OptiSystems Solutions and PC-Tel.

Losses came from 3dfx (although revenue more than tripled), Adelphia Comms, Advanced Communications Systems, Agile Software, AM Comms, Analogy, Ansoft, Aquis Comms Group, ASA International, Bitwise, Barrister Information Systems, Brooks Automation, CVF Technologies, Data Systems and Software, Datawatch, e-Net, eGlobe, Elcotel, Euroweb International, FirstWorld Comms, Hadron, Higham Systems Services Plc., IIJ, Illinois Superconductor, IMA, Insight Comms, International Microcomputer Software, Internet Gold, Liberty Media Group, Lycos, Neoware Systems, Network-1 Security Solutions, Owings Mills, Partner Comms, Pcsupport.com, PRI Automation, Quad Systems, Recticon Enterprises, SBA Comms, Shared Technologies Cellular, Softbank, Star Technologies, Sycamore Networks, Tech Squared, TeleGraf, Toshiba, Transition Analysis Component Technology, UPC, Vertex Comms, Vizacom, Vodafone Airtouch and Zenith Electronics.

Good numbers were recorded by Advanced Electronic Support Products (back in the black-just), Azian (back in the black), BEA Systems (back in the black - just), Computer Research, Comtech Telecomms, Dialog, Elsa AG (back in the black), Etec (back in the black), NTT Comms Network, OA Systems Plaza Co., Peerless Systems, SMART Modular Technologies, ST Systems, The Network Connection and Unify.

Satisfactory numbers were reported by Boundless, France telecom, Merant (back in the black), Newbridge Networks, Sterling Commerce (back in the black), Symix and Telefonica.

Mediocre returns came from HP, Lynx Group, NeoMagic, Sigma designs (back in the black) and Wind River Systems.

Very poor results came from Coyote Network Systems (back in the black), National Data Computer and Software Spectrum.

Other financial news included profit warnings from Calluna, Hitachi and Western Digital (charge re Singapore factory closure) and share split announcements from Ariba, Atmel, BEA Systems, China.com, Commerce One, Exodus, Jupiter Networks, Mercury Computer Systems, Network Appliance and Saga Comms.

There was also very successful debuts by CacheFlow, a Web-caching appliance maker; Quintus, an e-commerce CRM software vendor; Terra Networks SA, the largest publicly-traded Internet company in Europe; and Agilent, the "break-away" entity of Hewlett-Packard.

Additionally, the largest initial public offering in India`s IT industry is under way, with HCL Technologies aiming to raise more than $160 million by offering 14.2 million new shares.

Locally

Acuity (+30.4%)

Advtech (+42.2%)

Advtech-N (+34.4%)

ASAS (-23.1%)

Bryant (-40%)

Cyberhost (+44.4%)

Datacentrix (+22.5%)

EC-Hold (+22.2%)

I-Fusion (+40%)

Infowave (+78.6%)

OSI (-32.4%)

Sethold (-24.1%)

USKO (+38.8%)

Zaptronix (+88.2%)

Internationally

Probably the largest set of upward movements ever

BEA Systems (+46.5%)

Genicom (+61.3%)

Inacom (+45%)

Inprise (+52.1%)

Internet.com (+48.2%)

LanOptics (+50%)

Micro General (+64.5%)

NetObjects (+74.3%)

PCD (+43.8%)

Prodigy Comms (+41.2%)

PSDI (+40.5%)

QAD (+40.6%)

Stamps.com (+67%)

An analysis of the companies on the JSE with an IT interest shows a total of just over 100, of which some 30 were listed this year and nearly 50 in 1998. A further analysis shows that nearly 40% of these companies` shares are trading below 50c a share, and another 10% below R1 per share. I`ve always maintained that there are too many IT companies listed on the JSE. The time must be coming when we will witness a considerable re-alignment of this market sector through acquisitions, de-listings and mergers to create a more sanitised situation. After all, the London Stock Exchange still has less IT companies than the JSE, and that can`t be right!