Datatec delays Westcon IPO

The EU clearance for Oracle`s bid for PeopleSoft and the flood of Japanese results from technology-oriented companies dominated the international world of IT and telecommunications last week.

At home, the delay of Datatec`s Westcon IPO and the application for the liquidation of EC-Hold stole much of the local headline space.

* We saw full-year losses by EC-Hold (revenue also down) and MGX (revenue also down);

* Good interim numbers from Datatec (revenue up and back in the black); and

* A positive trading update from MTN.

Other local news included:

* Pinnacle Technology`s additional investment in Explix Technologies;

* Datatec postponed Weston`s IPO in the US;

* EC-Hold applied for a liquidation order;

* Mthunzi Mdwaba, executive chairman of Torque-IT, was named as the CSSA IT Personality of the Year 2004;

* Ken Jarvis, CIO of SARS, was honoured with a special lifetime award for his achievements, particularly in the SARS transformation; and

* Philip Tromp was named as the CIO of the decade.

New local distributorships included that of Allied Telesyn by Axiz, Inter-Tel by Tellumat and Micronet by Esquire Technologies.

* Datascension, a data storage company, announced that it would spin-off Datascension International, an organisation that runs call centres in English and Spanish;

* The European Commission cleared Oracle`s bid for PeopleSoft;

* EDS is to offer about 9 200 employees voluntary early retirement; and

* The win by Danish telecoms operator TDC in the battle for Song Networks.

An international strategic partnership was announced between DataMirror and Panorama Software.

Additionally, look out for the proposed merger of French-based Sagem SA and Snecma SA.

Other international news included:

* The appointments of Thomas Hyde as CEO of Teletouch, Daniel Maynard as CEO of Connecture, Scott McGregor as president and CEO of Broadcom, Ian Penman as CEO of Volante Group an William Ruhl as president and chairman of D&E Comms;

* The retirement of Alan Lanny as CEO of Broadcom (as from 3/1/05); and

* A job loss announcement from LSI Logic.

We saw excellent* figures from Activision (back in the black), Armour (back in the black), Ask Jeeves, AudioCodes (back in the black), Catapult Comms, Chartered Semiconductor (back in the black), Cognizant Technology Solutions, CSG Systems International (back in the black), CyberOptics (back in the black), Euronet Worldwide, F5 Networks, GSI Lumonics, Hifn (back in the black), Hynix Semiconductor, iCAD (back in the black), ICOS Vision Systems, InfoSpace, InTechnology, LCA-Vision, M-Systems, Novatel Wireless (back in the black), Photon Dynamics (back in the black), RightNow (back in the black), SafeNet, Sapient, Sierra Wireless (back in the black), Varian Semiconductor, Virage Logic (back in the black), Volterra (back in the black) and VSE.

Very good* numbers were posted by Advanced Fiber Comms, Anixter International, Ascential Software (back in the black), ASM International, Atheros Comms (back in the black), Bell Microproducts, Chi Mei Optoelectronics, Diodes, Garmin, HCL Technologies, ILOG, inTEST (back in the black), L-3 Comms, LG Electronics, MEMC Electronic Materials, MicroStrategy (back in the black), MIND CTI, Moldflow, MPS Group, Nam Tai Electronics, Netgear (back in the black), NovAtel, Quest Software, Radware, ScanSource, SeeBeyond (back in the black), Silicon Labs, Skyworks Solutions, Stratasys, Symmetricom (back in the black), SYS Technologies, TechTeam Global (back in the black), Tekelec, Teledyne Technologies, TTM Technologies, TTP Comms, UbiquiTel (back in the black), United Microelectronics, Visual Networks (back in the black), WebSense, Westside Story (back in the black), and Winland Electronics.

Good figures* were recorded by Akamai (back in the black), AMX, Anaren Microwave, Anteon, APC, Avaya, Avid Technology, Bisys, Bottomline Technologies (back in the black), Butler International, Cabot Microelectronics, Canon, Cesky Telecom, Ciber, Cobra Electronics, Cox Comms (back in the black), DiamondCluster International, EFJ (back in the black), FEI, Flextronics (back in the black), FMC Technologies, FreeStar Technology, Global Imaging, Global Signal, GTSI, Harte-Hanks, InFocus (back in the black), iPass, Kyocera, Matsushita Electric, Merge eFilm, Microcell Telecomms, Micros Systems, NEC Electronics, ON Semiconductor (back in the black), P-Com, Par Technology, Phoenix Technologies (back in the black), Presstek, Ptek Holdings, RadiSys, Rogers Comms (back in the black), Rogers Wireless, Sanmina-SCI, Segue Software (back in the black), Sharp, SI International, SINA, SMIC (back in the black), Sohu.com, Symbol Technologies, Taiwan Semiconductor, Tecnomatix (back in the black), Telenor, Tellabs (back in the black), Toshiba (back in the black), Trimble, Universal Electronics, Veritas Software, Western Digital and Zebra Technologies.

Satisfactory* figures were posted by ADP, Alcatel (back in the black), Analysts International (back in the black), Applix (back in the black), Avnet (back in the black), Baldwin Technology, Banta, Cadmus Comms, Century Business Services (back in the black), Ceva (back in the black), Checkpoint Systems, Chunghwa Telecom, Consolidated Graphics, DoubleClick, Dynamic Research, Equant, Forrester Research, France Telecom, Fujitsu (back in the black), Hitachi, ICT Group (back in the black), Imagistics, Insituform Technologies, Instinet Group, Komag, MapInfo, McAfee, Mitsubishi Electric, National Instruments, NCR, NEC, NetManage (back in the black), Openwave Systems (back in the black), OSI Systems, Pegasus Solutions, Pitney Bowes, Relm Wireless, S1 (back in the black), Snap-on, Sony, Superior Consulting (back in the black), Syntel, TDK, Tele Centro Oeste Celular Participacoes SA, TeliaSonera, Telus, Thomson Corp., TransAct Technologies, Transaction System Architects, Verizon Comms and Viacom.

Mediocre* returns came from Altris, Arch Wireless, AsiaInfo, AU Optronics, BellSouth, Black Box, Brightpoint, Castelle, Celular CRT Participacoes SA, CenturyTel, Click Commerce, ClickSoftware Technologies, Comcast, Creative Technology, CT Comms, CTE, Datastream Systems, DoCoMo, Dot Hill Systems, Epiq Systems, Hickory Technologies (back in the black), i2 Technologies, iMergent, Ingram Micro, Integrated Circuit Systems, InterVideo, ITG, LeapFrog Enterprises, ManTech International, Monolithic System Technology (back in the black), Nashua, Navteq, Neoware, Opnet Technologies, Optelecom, Overland Storage, PEC Solutions, Pegasystems, Performance Technologies, Pioneer, Radyne, SK Telecom, SSA Global, Staktek Holdings (but back in the black), SurfControl, Technitrol, Tele Sudeste Celular Participacoes SA, Tessco Technologies, Trident Microsystems and Tyler Technologies.

Very poor results* were announced by Adept Technology (but back in the black), Andrew, Gartner, Giga-tronics, Intergraph, LookSmart, Magma Design Automation, UTStarcom and Viisage (but back in the black).

Losses* were posted by 724 Solutions, 8x8, ACE*COMM, Actuate, Adaptec, Agere Systems, Alaska Comms, Alliance Fiber Optic Products, Alterian, Amkor, Anadigics, APAC Customer Services, Apropos Technology, Ariba, Arris, Atmel, AXS-One, Blue Martini Software, Brillian, Callidus Software, Centillium Comms, Centra Software, Corio, CoSine Comms, Covansys, Critical Path, Crown Castle International, CyberGuard, DDi, deltathree, eMerge Interactive, Enterasys Networks, Equinix, ESS Technology, Exabyte, Gateway, Gemplus, Genesis Microchip, GlowPoint, GSI Commerce, Hypercom, Hytek Microsystems, I-many, Identix, IndigoVision, Indus International, InfoVista, Input/Output, Insight Comms, Insignia Solutions, Intelsat, Intentia International AB, Intrusion, ISCO International, ISSI, Jacada, JDS Uniphase, Kemet, Knology, Level 3 Comms, Lightbridge, LogicVision, LSI Logic, Manchester Technologies, MatrixOne, Metalink, Metro One Telecomms, Micro Component Technology, Microtune, Mindspeed Technologies, Mobility Electronics, Mobius Management Systems, Nanophase, Nera ASA, NetIQ, NetLogic Microsystems, NUR Macroprinters, Nyfix, Occam Networks, On2 technologies, Onyx Software, Open Text, Oplink Comms, Plexus, Power-One, Prosoft Training, Proxim, PSi Technologies, Qualstar, QuickLogic, QRS, Radcom, RadView, Raindance Comms, RF Micro Devices, Safeguard Scientifics, SBA Comms, Sigma AB, Silicom, Sitel, SonicWALL, Spectrum Signal Processing, SR Telecom, STATS ChipPAC, Stratex Networks, Sunrise Telecom, Tarantella, Tele Leste Celular Participacoes SA, TenFold, Terayon Comms, THQ, Three-Five Systems, Triton PCS, Tut Systems, US Lec, Veeco Instruments, Verilink, Vitesse Semiconductor, Vitria, VocalTec, WatchGuard, Wave Systems, Wavecom, US Dataworks, Ziff Davis and Zoran.

Other financial news included analyst upgrades for Altera, Ariba, Corning, Fairchild Semiconductor, GTSI, International Rectifier, Micrel, National Semiconductor, NCR and Nvidia; analyst downgrades for Adobe, Akamai, Amkor, Chordiant Software, Equifax, ESS Technology, Flextronics, GSI Lumonics, Maxwell Technology Group, On Semiconductor, Qualcomm, Research in Motion, Sapient, Skyworks, SonicWALL, Symantec, Tellabs, Transmeta, WatchGuard Technologies and Zoran; a private placement of shares by eMagin; and private funding obtained for Esmertec AG, KXEN, Network Inference, Networks in Motion, Pelikan Technologies, ServiceFactory AB and Vette.

There were share buy-back announcements from Check Point Software, Integrated Circuit Systems, InterDigital, Lexmark, Pegasystems, TeliaSonera and Viacom; a shareholders rights plan from Manugistics; positive results/profit warnings from Adobe, Balda, Digital Recorders, DoCoMo, Nvidia, Silicon Labs, Toshiba and ViaNetWorks; negative results/profit warnings (often veiled) from Atmel, AU Optronics, Flextronics, InterDigital, Taiwan Semiconductor, Tom Online and Tripath Technology; a good IPO from DreamWorks Animation; and a planned IPO from Phoenix IT Group in London during November. Additionally, eB2B Commerce has filed for Chapter 11.

Locally

Altron (+11.1%)
AST (+14.5%)
Beget (-33.3)
Elexir (+50%)
Labat Africa (+44.4%)
Square One (-20%)
Stella Vista (-33.3%)
UCS (+9.5%)
Vesta (+42.9%)
Zaptronix (+33.3%)

Internationally

Ariba (+50.8%)
Butler Group (+46.4%)
Chordiant Software (-21.2%)
Earthport (+24.2%)
Encore Wire (-24%)
Glow Comms (+381.8%)
Network Computing Devices (+27.3%)
Redback Networks (+44.1%)
Retail Decisions (+25.8%)
Riverstone Networks (+27.5%)
SRS Labs (+20.2%)
Taiwan Semiconductor (-21.2%)
Tekelec (+21.8%)

In terms of indices, the Nasdaq was up 3.1% and the JSE up 0.07% for the week.

Assuming the take-over process is successful despite dragging on for the best part of two years, the key questions are now around Oracle`s plans for the PeopleSoft and JD Edwards product sets.

Paul Booth, MD, Global Research Partners

One of the major obstacles that Oracle needed to overcome in its quest to acquire PeopleSoft has now been overcome, ie the EU clearance decision. Regardless of PeopleSoft`s recent quarterly results that were better than expected, they are still unlikely to de-rail the potential acquisition process. The next step seems to be that Oracle now needs to finalise its revised 'bid` price.

Assuming the take-over process is successful despite dragging on for the best part of two years, the key questions are now around Oracle`s plans for the PeopleSoft and JD Edwards product sets. There seems to be two choices: their possible extinction or, maybe, a re-engineering exercise on certain parts and then a subsequent integration into their own product application suite. The Oracle application suite is particularly weak when it comes to manufacturing.

Regardless, SAP is likely to make merry during this uncertain period, especially as there is no obvious number three player in the enterprise applications market, only a set of pretenders, and this is particularly true in SA.

Unfortunately the losers, again, are likely to be the end-users of JD Edwards and PeopleSoft, who may need to spend significant resources on formulating and implementing their future development plans in the light of the revised product strategy, a move that may still only result in them 'standing still`.

* NB

Guidelines for the categorisation of results are as follows and are always in comparison with the equivalent period for the previous year; pro forma numbers are ignored (the terminology may vary slightly from country to country).

* Excellent: Both revenue and net income growth in excess of 50%.

* Very good: Both revenue and net income growth in excess of 25%.

* Good: Both revenue and net income growth in excess of 10%.

* Satisfactory: Revenue is within 10% of previous year and net income is up.

* Mediocre: Either revenue and/or net income is down.

* Very poor: Net income is less than 1% of revenue.

* Loss: A loss has been recorded.