Datatec takes the lead

The $37 billion merger between Bermuda-based upstart telephone carrier, Global Crossing, and the smallest of the "Baby Bells", US West, and the on-going Telecom Italia Spa saga was the dominant international IT business news last week.

Global Crossing, already in the throes of swallowing telecommunications company Frontier, will now have to reincorporate as a US company as part of the merging process. This deal now leaves only BellSouth as the sole original "Baby Bell" without a merger partner.

When it seemed that Telecom Italia Spa and Deutsche Telekom were on-track for their proposed merger - despite litigation against the latter from France Telecom - Olivetti SpA is back in the battlefield, having secured a controlling 51.02% stake in the Italian Telecomms company after a late rally on Friday, the closing date for Olivetti`s share tender. This week should see further developments.

At home there was a flood of local results. Excellent year-end numbers were reported by Datatec, Idion (maiden results), Softline and TopInfo Technologies (maiden numbers). There were also poor interim numbers from Infiniti, a profit warning from WenTech (shares hit an all-time low of 7c at the close on Friday), the news that TopInfo Technologies intends to transfer to the main board, and that Peregrine`s subsidiary, Taita Technology, intends to reposition itself as an IT investment bank.

The superb Datatec results catapult the company into the big $1 billion-plus IT companies bracket for the first time and it is the first IT company in SA to achieve this milestone. I`m sure it will not be long before it is listed overseas, since this is where the vast majority of its income comes from. The three operating divisions are disparate in size but are now profitable. The e-solutions business was in a loss situation, but is following a scenario/pattern very similar to this type of business elsewhere overseas.

[Local]

Cautionary Notices (see attachment)

Local Listing calendar (see attachment)

Other local news included:

• The decision by Stantronics not to exercise its option to purchase Buzzard Electrical, which has now applied for its own liquidation.
• This week sees the new IT listings of Streamworks Group and Acuity Group Holdings.

• the announcement of an alliance between Hitachi`s Semiconductor unit and Lucent Technologies to co-specify, develop and market Internet-protocol telephony technologies and reference platforms;
• the announcement by Compaq that it is to close one of its plants and in the process cut 900 jobs;
• the rumour that PeopleSoft will name Craig Conway as its president today; and
• the name changes of Tyler Corporation to Tyler Technologies, and of Network Computer, the spin-off company of Oracle and Netscape, to Liberate Technologies.

[International]

We saw excellent figures from BEA Systems, Formula Systems, Network Appliance and Tyler.

Losses came from 3Dfx Interactive, ACE*COMM (only just in the red), Adelphia Comms, Advanced Radio Telecom, Aegis Comms Group, Altris Software, Autonomy Corp, Beta Systems Software AG, Brokat Infosystems AG, Choicetel Comms, Clearnet Comms, Comms Instruments, Convergent Comms, CoreCom, Credence Systems, CVF Technologies, DecisionOne, Digital Power, Docucon, e-Globe, Endemann!!Internet AG, Entex, eSoft, Etec Systems, Fonix, GateField, Hyperion Telecomms, I-Link, IAT Multimedia, ImaginOn, Inference, Intelect Comms, Internet Comms Group, Lycos, MC Informatics, Memotec Comms, Metrowerks, MSGI, Muse Technologies (but revenues more than tripled), NetVision NV, Nikon (full-year), NTL, one point Comms, OptiSystems Solutions, ORBIT/FR, PC Quote, Portal Software, PPT Vision, Recognition Systems Group, Restoration Hardware, SBE, Software Publishing, SSA, STB Systems, Storage Computer, SubMicron Systems, Techdyne, Tekgraf, United Pan-Europe Comms, USA Technologies, Varian Semiconductor, Wall Data, Wave Systems, Westell and Zenith Electronics.

Good numbers were recorded by ADC Comms, Artwork Systems Group NV, British Telecom, Ciena, Dataram, Dell, Lernout & Haupsie (back in the black), National Computer Systems, Prokom Software SA (full-year), Serena Software, Telefonica Internacional, UIH and Unify.

Satisfactory results were reported by Applied Materials, Avalon Cable, Digital Transmission Systems (back in the black), Hewlett-Packard (better than expected), Lenfest Comms, Mannesmann, Network Systems International, PC DOCS Group, Siemens AG (half-year) Softbank Group (full-year figures), Swisscom, Ultimate Electronics, Viasystems and Wind River.

Mediocre returns came from Analogue Devices, Aztec Technology Partners (but back in the black), Dynamic Details, Matsushita (full-year), MTI Technology, NeoMagic, Peerless Systems, Puma Technology, VSI Holdings and WesTower. Very poor results came from AmeriLink, Teltronics and VTEL.

Other financial news included profit warnings from Data General, and share splits from Altera, Lycos, Sanchez Computer Associates and Vishay Intertechnology.

Locally

Billcad (-16.9%)
CIH (-18.9%)
Dectronic (-19.2%)
Idion (+20.4%)
LogTek (-19.6%)
Metropolis (-18.2%)
MMW (-20.3%)
USKO (-20.9%)
WenTech (-36.4%)

Internationally

ADC Telecomms (+23.7%)
Aspen Technology (+30.9%)
Baan (+24.4%)
Cabletron (+32.3%)
Cambridge Technology Partners (+28.8%)
Compucom (+25.9%)
Computer Horizons (+31.2%)
Computron (+25%)
Manugistics (+36.5%)
Mecon (+23.3%)
Network Associates (+20.5%)
Symix (+35.8%)

Tech Data (+27.6%)

Triquint Semiconductor (+21.3%)
Vantive (+61.3%)

Red Herring recently published its 100 Top Companies of the Electronic Economy, which will be carried in its June issue. Best overall in the public domain was Lucent Technologies, with Broadcom rated as having the best long-term potential. In the private domain, the top award and the award for the best long term potential went to Symbian, a company that makes operating systems for cellphones and digital assistants. There are many interesting and comparatively unknown names on the lists, and it is essential reading for those looking for new partnerships or distributorships.