Battle continues for control of Computer Associates

The latest Microsoft judgements, the continuing battle for control of Computer Associates, some major acquisitions each worth in excess of $1 billion and the continued flow of profit warnings dominated the international world of information technology and telecommunications during the last two weeks.

[VIDEO]At home Dimension Data`s profit warning and its effect on Nedcor and the Telkom Group`s results and listing scenario stole much of the local headline space.

• .         we saw satisfactory year-end results from CSC South Africa and MIH Holdings;
• .         a mediocre set of year-end numbers from Telkom (revenue up but earnings down);
• .         a full-year loss from Hicor (revenue also down) and Naspers;
• .         interim losses from Dectronic and E-Data Holdings (revenue also well down);
• .         the debut of Temenos (15%-owned by Global Technology) on the Swiss Stock Exchange;
• .         the suspension of the stock split by Igaming;
• .         the formal suspension of the listings of I-Technology and M-Web shares on the JSE;
• .         the proposed unbundling of SecureData`s shareholding in ERP.com and its proposed de-listing from the JSE; and
• .         the application by Accord Technologies for provisional liquidation.

[Local]

Other local news included:

• .         the news that NEC, through its 100%-owned subsidiary NEC Computers International, had taken a majority stake in Packard Bell South Africa to create NEC Computers South Africa;
• .         the announcement that Iscor is to sell its 29% interest in AST;
• .         that Advtech is no longer for sale and is embarking upon litigation to reclaim cash back from the purchase prices of the Communicate Group and the Bryan Hattingh Group;
• .         the formal receipt by Cell C of its licence as the third cellular provider in SA;
• .         the announcement that the listing of Telkom may be delayed because of poor market conditions and that they had issued a counter claim in the on-going saga with Telcordia Technologies;
• .         the news that Vodacom is suing Telkom (one of its shareholders) for unpaid fees;
• .         the public launch of Asiakon SA, a networking infrastructure company;
• .         the appointment by Spescom of Bill Weber as MD of their Altris Software subsidiary; and
• .         the withdrawal from the South African market by Crystal Decisions, formally Seagate Software, with its support, marketing and training being undertaken by various business partners including Asyst International SA, e.com institute and PQ Africa.

• .         we saw the latest round of developments in the DOJ/Microsoft trial with both sides claiming victories;
• .         the further investment in Commerce One by SAP (a life-saver!);
• .         the continued battle for the control of Computer Associates;
• .         the phasing-out of Alpha chips by Compaq;
• .         the ruling in favour of Neon Systems vs New Era of Networks regarding its name, and the instruction to change the name of the latter company within the next six months;
• .         the news that Dell, HP and others have "asked" their employees to take a pay cut or a vacation between now and the end of October, as a cost-cutting exercise;
• .         the announcement by NEC that it intends to list on the NYSE;
• .         the withdrawal from the hardware market by VA Linux; and
• .         the liquidation of Covad Comm`s BlueStar Comms Group unit.

It seems there is going to be a sudden rush for the hands-free technology.

Paul Booth, MD, Global Research Partners

Additionally, look out for the scrapping of Concert, the AT&T/British Telecom joint venture; the acquisition of Secap, Fimalac`s mailing subsidiary; the possibility of Global Crossing being snapped-up by a suitable investor since it currently has all the right characteristics of a "good buy" at current share prices; the potential sale of its UK arm by FutureLink; the possible purchase of content integration systems company Cohera by PeopleSoft; and the sell-off by Deutsche Bank of its Cable TV Group.

[International]

Other international news included:

• .         the appointments of William Avery as CEO of Change Technology Partners, E Van Cullens as CEO of Westell Technologies, Steven Day as CEO of Pinnacle Holdings, Dick Eykel as CEO of Scoot.com, Kenneth Koppel as CEO of PC Connection and Steve Ladwig as President and CEO of Retek;
• .         the resignations of Robert Bonnier, CEO of Scoot.com and John Mayo, CEO designate of Marconi;
• .         the retirement of Alan Goldfield as Chairman and CEO of CellStar; and
• .         job loss announcements from 360networks, Acxiom, Aether Systems, Agere, Altera, Art Technology Group, Avanex, BackWeb Technologies, Baltimore Technologies, Cap Gemini Ernst & Young, CCC Information Services Group, DMC Stratex Networks, EDS, Equant, IBM, Indya.com, Infogrames Entertainment SA, Interphase, Jacada, Marconi, New Horizons Worldwide, Nokia, Pacific Century CyberWorks, Philips Electronics NV, Radcom, RadiSys, Sapient, Scoot.com, Siemens, Sitel, Telelogic AB, VA Linux and WebMethods.

Good numbers were recorded by 3Di, AM Comms, Audiovox (back in the black), Cogeco, Cogeco Cable, Image Entertainment and Legend Holdings.

Satisfactory results came from Cabletron,Corel, Computerland UK and Northgate Information Solutions Plc - all back in the black.

Mediocre returns came from Alliance Atlantis Comms, Anite Group Plc., Merix, Nu Horizons Electronics and Oce NV.

Losses came from 3Com, Alphameric Plc., Aperian, ATI Technologies, Computone, Comtrex Systems, Emmis Comms, ESPS, Geac Computer, Intraware, I-documentsystems Group Plc., ION Networks, Liberate Technologies, LML Payment Systems, Methode Electronics, Micros-to-Mainframes, Palm, Perceptronics, Raining Data, Saba Software, SCB Computer Technology, Systems Union Group, Wegener, Wireless Matrix, Xansa Plc and XKO Group Plc.

Other financial news included profit warnings from 3D Systems, 3M, 724 Solutions, Acxiom, Advanced Switching Comms, Agere, Alliance Fiber Optics Products, AMD, Anixter, Applied Micro Circuits, Applied Microsystems, Arc International, Art Technology Group, ASM Lithography, Avanex, BackWeb Technologies, Bell Microproducts, BMC Software, BroadVision, Bsquare, Cap Gemini Ernst & Young, Commerce One, Compuware, Creative Technology, datastream Systems, DDi, Dialog Semiconductor Plc., E.piphany, EMC, eXcelon, FileNet, Helix, Hifn, i2 Technologies, IKOS Systems, Interactive Intelligence, Internet Security Systems, Jacada, Komag, Liberate Technologies, Lightbridge, LightPath Technologies, Macromedia, Manugistics, MapInfo, Marconi, MIPS Technologies, Multex.com, National Instruments, New Horizons Worldwide, Novatel Wireless, Parametric Technology, PC Connection, Philips Electronics NV, Pivotal, PMC-Sierra, Polycom, Radcom, RadiSys, Rational Software, Redback Networks, Rogue Wave Software, SafeNet, Sausage Software, SeeBeyond Technology, Sherwood International Plc., Symantec, Talarian, Tekelec, Telecomm Systems, Telelogic AB, Telemetrix, Terayon, TetraTech, Tibco, Trend Micro, Turnstone Systems, VocalTec Comms, WebMethods, WorldCom Group and Xilinx.

Share split announcements were made by Beyond.com (reverse).

A satisfactory IPO was made by Monolithic Systems Technology, while Brainlab, a German software company, withdrew its planned IPO.

We saw two bankruptcy filings, in the USA and Canada, from 360networks and Metricom.

Locally

Core (-66.7%)
Dectronic (-33.3%)
Dimension Data (-47.4%)
E-Data (+200%)
Explorer (-33.3%)
JemTech (-33.3%)
OSI (-58.3%)
PTH (-50%)
Sethold (-54.5%)
Synergy (-33.3%)
Vesta (-36.7%)

Internationally

Baltimore Technologies (-56.5%)
I S Solutions (-45.9%)
Knowledge Support Systems (-46%)
Lightning Rod Software (-48.1%)
London Bridge Software (-44.1%)
Marconi (-59.7%)
Merisel (+57.7%)
Orchestream (-48.1%)
Scan-Optics (+55.2%)
Telework Systems (-49.3%)
Virtual Internet (-44.9%)

It`s good to be back home after a hectic but very exciting week at TECHXNY in New York. During that week I was right in the middle of the Microsoft rulings, which are being heavily mis-quoted and often portray the wrong messages, and the ongoing battle for Computer Associates (more about these at another time).

Also, while I was there, there was a New York State ruling on the use of cellphones while driving that had a particularly interesting effect on the technology stocks traded on the various US stock markets.

The authorities announced they intend to ban driving with cellphones except with the use of a hands-free device. Does this sound familiar?

One of the immediate results of this announcement was the significant rise in the share price of several organisations involved with hands-free technology. One of these, and one with a major presence in SA, was Plantronics, the world leader in headset technology, whose share price rose over 20% in the space of 48 hours on the NYSE.

It seems there is going to be a sudden rush for the hands-free technology as the fines to be imposed are very high. The move was triggered by a significant increase in accidents related to the use of cellphones.

It`s good to know that we at home are not always followers!