ERP woes continue to escalate

Rumour has it that AT&T may sell its Internet-access lines to AtHome, including its WorldNet consumer dial-up service.

The continuing woes within the ERP industry dominated the international IT world last week. At home, the news of departures from the Connection Group seems to have been a high visibility story, the effects of which still need to be assessed.

• the listing of Skills Accel on the venture capital market of the JSE;
• the appointment of Allan Cawood as group MD of Dimension Data Networking;
• the announcement that ITI Technology would be transferring to the electronics and electrical sector of the JSE from mid-February;
• the announcement that Ixchange is intending to list in the USA within two years;
• the news that the Connection Group has lost four of its directors, including two founder members;
• the announcement that Dimension Data`s Asian subsidiary, Datacraft Asia, has reported excellent interim results (revenue up 26.3% and income up 40.2%); and
• the closure of the local office of Olicom, which has handed over all responsibility to its distributor, Tarsus.

[Local]

Local Cautionary Notices (see attachment)

• the announcement of a strategic alliance between the Sema Group and BroadVision, as the former's first foray into electronic commerce;
• the IPO of MarketWatch.com, which soared some 474% on its first day of trading; and
• the announcement of further lay-offs by Western Digital.

[International]

Other international news included the statement by troubled Manugistics, after weeks of speculation about potential suitors and acquisitions, that it will now go it alone and restructure the company. This move includes a 30% workforce reduction and the resignation of some senior VPs, as well as the appointment of a new CEO.

Baan also made a lengthy pre-results statement indicating a significant loss for the year, together with other restructuring information, the costs of which are being written off in the latest set of results expected very soon.

Additionally, rumour has it that AT&T may sell its Internet-access lines to AtHome, including its WorldNet consumer dial-up service, in an attempt to improve its competitive position against America Online.

We saw excellent figures from Ardent Software (well back in the black and revenues up 49%), BMC Software, Citrix Systems (better numbers than expected), Compuware, Documentum, i2 Technologies, Iona Technologies, Javelin Systems, Legato Systems, Lucent Technologies (above expectations), Maxtor (much better than expectations), Microsoft (income up over 75%), Microstrategy, Qlogic, RF Micro Devices, Xircom and Xylan.

Losses, however, came from Asanti Technologies, Ascend Communications (Stratus write-off charge causing losses), Aspec Technology, Asyst Technologies, Aura Systems, Brio Technology, Cirrus Logic, Disk, DoubleClick, Entrust Technologies, Exabyte, Excite, KLA-Tencor, Larscom, Memory, Microware Systems, Oak Technology, Powerwave Technologies, Prism Solutions, Quantum (but better than expected), Silicon Graphics, Spyglass, Sybase, Tadpole Technology, Varian Associates, VeriSign and Western Digital.

Good numbers were recorded by Accrue Software, Atmel (better than expected), Boole & Babbage (soon to be part of BMC Software), CACI International, CAP Gemini, Check Point Software Technologies, Corel (back in the black and revenue well up), Data General (revenue flat), Electronic Arts, Equifax, Fore Systems, Gartner Group, Gateway, GeoTel Comms, Hyperion Solutions, Kofax Image Products, MapInfo, NCR, PanAmSat, Parametric Technology, PSDI, Qualcomm (better than expected), Rockwell International, Sanmina (below expectations), Software AG Texas Instruments (better than expected), Sun Microsystems (better than expected), Texas Micro, Visio and Xilinx.

Satisfactory numbers were recorded by Acxiom, Altera, Ameritech, Citation Computer Systems, Computer Associates (better than expected), Diebold, Electronic Tele-Communications, IBM (better than expectations), Infinium Software, Mitel, Radius, SBC Comms, SCT, Synopsys (back in the black) and TRW.

Mediocre returns came from ACT Networks, Andrew, CBT Systems, C-Cube, Ceridian, Comshare, Forte Software (but back in black), Hummingbird Comms, Lattice Semiconductor (but better than expected), Logic Devices, Novellus, Phoenix Technologies, Quickturn Design Systems Read-Rite (but back in the black), Rogue Wave Software, Storage Technology, Teradyne and Viasoft.

Very poor results came from ASM Lithography NV, Iomega, KLA-Tencor, Teradyne and VLSI technology.

Other financial news included profit warnings from Baan (loss includes major restructuring charge), Discreet Logic, GTech (termination charge for Citicorp deal), Iomega, LAN Research, Manugistics, Merisel and Versant (loss predicted).

Stock movements

Locally

Compu-Clearing (+19.6%)

Datacentrix (+68.4%)

E-Data (-23.2%)

EOH (+23.5%)

Maxtec (+23.4%)

Metropolis (+19.6%)

Micrologix (-25%)

PentaCom (+36.4%)

Internationally

Computer Horizons (-27.2%)

Excite (+30.2%)

JBA (+37%)

Larscom (+46.3%)

Lycos (+25.3%)

Manugistics (-35.8%)

Psion (+32.6%)

SBS Technology (+28.7%)

Systems & Computer Technology (-27.7%)

Western Digital (-23%)

Final word

It seems that some more embarrassing information regarding Microsoft`s accounting practices came out at the trial last week. I also suspect that the just announced 75% increase in quarterly income didn`t help Microsoft's case either!