Meta recommends adaptability

The HP/BT Group partnership dominated the international world of IT and telecommunications last week.

At home, the Telkom/Telecordia news stole most of the local ICT headline space in a week that was quiet worldwide.

* We saw very good half-year numbers from UCS (revenue and profits both well up);

* A full-year loss from Bytes Technology Group (revenue also down);

* Mediocre full-year numbers from Altech (revenue static but attributable earnings significantly down) and InfoWave (revenue up but profit down);

* Satisfactory Q3 figures from FrontRange Solutions (US subsidiary of FrontRange); and

* The lifting of the suspension of MGX`s shares.

Other local news included:

* A share re-purchase announcement from Venfin;

* The appointment of Patrick Maddox as MD of Artec Computer Systems;

* A proposed de-listing of MGX`s shares;

* The Pretoria High Court dismissed Telecordia`s leave to appeal re its dispute with Telkom SA and the High Court judgement made last year, clearing the way for the matter to be heard by a panel of three retired Judges of the Supreme Court of Appeal in SA;

* The formation of Comztek Africa, a joint venture between Comztek and DS Technology Distribution; and

* Pamodzi`s proposed investment in Altech Data.

New local distributorships included that of Brix Networks by Westcon Group, Create!form by CenterField, PNY Quadro High End Workstation cards by Axiz and Samsung hard drives by Annex Distribution.

* Rambus launched an anti-trust lawsuit against Hynix Semiconductor, Infineon Technologies, Micron and Siemens.

* International strategic partnerships were announced between BT Group and HP.

Other international news included:

* The appointments of David Arculus as chairman of MMO2, Michael Lawrie as CEO of Siebel Systems, Keith Mountainas as president and COO of Spatial, Bertrand Sciard as CEO of Intentia, John Tarello as chairman of Analogic and Panagis Vourloumis as chairman and CEO of OTE;

* The resignations of Bjorn Algkvist as CEO of Intentia and Robert Hoog as CEO of IXOS Software AG;

* The retirements of Tom Siebel as CEO of Siebel Systems (stays on as non-executive chairman) and Gordon Wood as chairman of Analogic; and

* Job loss announcements from SCO and Sprint.

We saw excellent* figures from Alvarion (back in the black), CSR (back in the black), Essex (back in the black), Innovative Solutions, iPayment, MetroPCS, NetEase.com, Novatel Wireless (back in the black), Pixar (back in the black), Sonic Solutions, THQ (back in the black), Ultradata Systems (back in the black) and WindsorTech (back in the black).

Very good* numbers were reported by Ansys, California Micro Devices (back in the black), DTS, Emcore (back in the black), iMergent (back in the black), Macrovision, Netgear, Nu Horizons (back in the black), Perot Systems (back in the black), PT Indonesian Satellite, SRA International, TransAct Technologies (back in the black), Univision and Western Wireless (back in the black).

Good figures* were recorded by Activision (back in the black), Audible, Axsys Technologies, Creo (back in the black), Fundtech (back in the black), Golden Telecom, Netgraphe (back in the black), Netsmart Technologies, Nice Systems, Nvidia, O2Micro, Orbotech, PLDT, Radware, Ross Systems, Siliconix, Singapore telecom, TDC and Vishay Intertechnology.

Satisfactory* results were reported by Applied Digital Solutions, Bell Canada Enterprises, CGI, Communications Systems, Delphax Technologies (back in the black), eSpeed, Ezenia, Hector Comms, Imagistics, InterActiveCorp (back in the black), Paxson Comms, PT Telekomunikasi Indonesia, QRS, Telecom Italia (back in the black), Telecom Italia Mobile, Telefonica Moviles and Venture.

Mediocre* returns came from Allin, Aether systems (but back in the black), Arch Wireless, BearingPoint, CGI, CTE, DG Systems, EasyLink, Embratel Participacoes SA, KT Corp, Nexus Telelocation Systems (but back in the black), PC Mall, RCM Technologies, Supertex, Systemax, TeleTech, Titan, Trio-Tech International and Tucows.

Very poor results* were reported by Intelligroup (but back in the black), Superior Essex (but back in the black) and Sykes Enterprises.

Losses* came from ACE*COMM, Airspan Networks, Alamosa Holdings, Asyst Technologies, Atari, Avanex, Aware, Bookham Technology, Catalyst International, Celeritek, Clarus, Commerce One, CommScope, CompuDyne, Crown Castle International, Digital Angel, EchoStar Comms, ECI Telecomms, eGain, enherent, ETC, FairPoint Comms, Fonix, Glenayre Technologies, GRIC, Hanaro Telecom, I-many, iGate, Infowave, InteliData Technologies, Intentia, InterWAVE, ITC^DeltaCom, Larscom, LG Telecom, McLeodUSA, Meta Group, Microcell Telecomms, Microtune, Microvision, Monolithic Systems Technology, Notify Technologies, Onvia, Open Text, PanAmSat, ParkerVision, Pinnacle Entertainment, Quantum, Qwest Comms, radiant Systems, RadView, RDM, Redbus Interhouse, RiT Technologies, Roxio, SBA Comms, SCM Microsystems, Sierra Systems, Switchboard, Teleca AB, Thus, TMNG, Tricom, Tvia, US Unwired, VerticalNet, Viisage, VitalStream Holdings, Xybernaut, Zarlink Semiconductor, Zix and Zomax.

Other financial news included analyst upgrades for Cray, Cypress Semiconductor, Juniper Networks, MatrixOne, Micron, National Instruments and Vishay Intertechnology.

There were analyst downgrades for Adobe, Descartes Systemes, GRIC and Unova; a private placement of shares by Copper Mountain Networks; share offerings from Global Payments and Path 1 Network Technologies; private funding obtained for Asia Broadband; and share buy-back announcements from Cree and Western Digital; a positive results/profit warning from InterDigital.

Negative results/profit warnings (often veiled) came from Bookham Technology, CNT, Computer Associates, Intellisync, NTT DoCoMo and Sony; and IPO filings from IC designer Austriamicrosystems AG in Switzerland, chip distributor Memec in the US and Israeli IT specialist Ness Technologies on Nasdaq. Additionally, Aspect Comms has postponed its public share offering and Acclaim Entertainment is to re-state its 2001 earnings.

Locally

Elexir (-50%)
Faritec (+18.5%)
Global Technology (-50%)
Pinnacle (-12.5%)
Prism (-17.9%)
Stella Vista (-25%)
Synergy (+30%)
Trematon (+11.7%)
UCS (-10.4%)
Zaptronix (-33.3%)

Internationally

Asyst Technologies (+32.1%)
Bookham Technology (-34.1%)
ClickSoftware Technologies (+33.2%)
Descartes Systemes (-45.4%)
Entrada Networks (+41.2%)
Exabyte (+26.8%)
Firstwave Technologies (-34.2%)
GRIC Comms (-40.9%)
Macrovision (+33.2%)
Read-Rite (+100%)

In terms of indices, the Nasdaq was 0.1% down and the JSE 0.2% up for the week.

An adaptive organisation is defined as one that focuses on dramatically improving the economics of business change to enhance the organisation`s performance.

Paul Booth, MD, Global Research Partners

The Meta Group held its annual METAmorphosis 2004 conference last week in Gauteng, with the theme "The Adaptive Organisation: Building value by remodelling for IT flexibility". An adaptive organisation is defined as one that focuses on dramatically improving the economics of business change to enhance the organisation`s performance, according to Robert Whitmore, senior VP and GM, Meta Group EMEA.

According to the recent CEO survey undertaken by IBM, added Whitmore, the top requirements that would enable the organisation to implement business strategy were agility, flexibility and speed, while the top inhibitors were human capital management, too many standardised processes and internal people mobility. Becoming adaptive is so important to an organisation but must be perceived internally as an evolutionary and not a revolutionary process.

The keynote talk that immediately followed the above introduction focused on the adaptive organisation (AO) manifesto, with the AO being 're'-defined as one that is organisationally ready to capture the advantage of 'windows of opportunity` present in its native and complementary markets. It was also stressed that being 'adaptive` requires that the values of the organisation don`t change.

In summary, the AO manifesto was as follows:

* Determine willingness to become adaptive, and start where the will matches the business driver.

* Focus on principles, planning, governance and architecture to ensure success.

* Adjust IT processes as needed to support adaptability.

* Incorporate modelling into business, application, infrastructure and operational efforts.

* Implement infrastructure services to ensure flexibility of all of the above.

* Look at outsourced variable capacity as a small part of the overall adaptive organisation effort.

The adaptive organisation is the latest phase of an evolutionary process fusing IT and business.

* 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.