Oracle, PeopleSoft, JDE saga intensifies

PeopleSoft`s $1.7 billion acquisition of JD Edwards, the disposal of Baan by Invensys, the hostile bid for PeopleSoft by Oracle and Palm`s take-over of Handspring dominated the international world of IT and telecommunications during the last two weeks.

PeopleSoft`s acquisition of JD Edwards raises some interesting questions about how the company will operate in SA in the months ahead.

Paul Booth, MD, Global Research Partners

At home, the short-listing of two of the consortia for the second national telecoms operator (SNO) and the emergence of another bidder for Softline stole much of the local headline ICT space.

* we saw very good annual results from arivia.kom (revenue and income both well up);

* very poor full-year numbers from Y3K (revenue down but back in the black - just);

* a full-year loss from Eureka (although revenues significantly up); and

* mediocre interim numbers from Paracon (revenue and earnings well down).

Other local news included:

* the short-listing of two consortia, CommuniTel and Two Consortium, for the SNO licence;

* the appointments of Andre Kritzinger as CEO of Siemens Business Services and Charles Osburn as CEO of PreWorX;

* reports that Rubico has closed down its operations and applied for liquidation;

* FrontRange Solutions Inc bought back the remaining 4.8% stake held in it by minority shareholders, making the company a 100%-owned subsidiary of JSE-listed FrontRange Limited;

* the possible management buyout of Peresys, the IT arm of financial services group Peregrine;

* the creation of Benefit Recovery Services, a partnership involving Brian H Burt & Associates, ICL, MFG Capital and Safika Holdings;

* the announcement of Bytes Document Solutions as the new name for BTG`s fully-owned Xerox SA entity;

* a possible alternative bid for Softline from a consortium that includes Dutch-listed Exact Holdings NV and Ivan Ferrer, the original founder of Pastel Software; and

* the tragic deaths of the MDs of Nashua Mobile and Click & Call, and an executive director of Cell C.

* New local distributorships included that of FullArmor`s FAZAM Auditing and FAZAM 200 software solutions by NetIQ, IT4africa for selected technology products from Fujitsu Siemens Computers and Pinnacle Micro for Logitech products. CS Holdings also announced a new strategic business alliance with Learning Resources.

* PeopleSoft`s acquisition of JD Edwards raises some interesting questions about how the company will operate in SA in the months ahead. JD Edwards currently operates through its subsidiary but relies on other parties for many implementations; whereas PeopleSoft abandoned that model 12 months ago and awarded ERP.com the sales and marketing distribution licence that is executed via its activ8 entity, with implementations undertaken by third-parties. Furthermore, ERP.com also has one of the strongest JD Edwards implementation teams in the country.

* PECOAdelphia became PECO TelCove;

* Cable & Wireless withdrew from the US market;

* the spin-off of PalmSource, which is linked to the Handspring acquisition;

* Getronics sold off its 10.3% stake in Norwegian-based Merkantildata ASA;

* the SEC imposed a $22 million fine on six former Xerox executives including two former CEOs;

* Cable & Wireless sold off its 14% stake in PCCW for approximately $400 million;

* Vodafone sold off of its shareholding in Grupo Iusacell and RPG Cellular Services; and

Oracle`s hostile bid for PeopleSoft.

Additionally, look out for privatisation of software company, Made2Manage, which went public in 1997; the possible acquisition of Chubb by United Technologies; and the proposed bid by Oracle to acquire PeopleSoft.

Palm comprises two entities: PalmSource, which develops the palm operating system, and Palm Solutions Group. It is intended to spin-off PalmSource as separate company and then merge Palm Solutions Group with Handspring to create a new, and as yet, unnamed company. This will see the return of Palm`s original founders.

International acquisitions, mergers, joint ventures etc (see attachment).

Other international news included:

* the appointments of Jonathan Becher as president and CEO of Pilot Software Acquisition, Martin Brauns as CEO of Interwoven (was interim CEO); Rodney Cousens as CEO of Acclaim Entertainment, Charles Guy as CEO of EduLink, Ronald Hovsepian as president of Novell and Steven Kiser as president and CEO of SecureInfo;

* the resignations of Toon Bouten, chairman and CEO of Plaut AG, Hilary Cropper as chairman of Xansa, Gregory Fischbach as CEO of Acclaim Entertainment (remains as co-chairman) and Carvel Moore as president of Novell; and

* job loss announcements from 3Com, Advent Software, Cable & Wireless, California Amplifier, SK Telecom and Sprint.

We saw excellent* figures from Comtech Telecomms and OmniVision Technologies; and very good* numbers from Audiovox (back in the black).

Good figures* were recorded by Brocker Technology (back in the black), CMGI (back in the black), Daktronics, Navtech, Ulticom (back in the black) and Verint Systems.

Satisfactory* figures were posted by Adobe, Avatar, Logility, Lowrance Electronics, Oracle, SVI Solutions (back in the black) and Synstar.

Mediocre* returns came from ACS-Tech80, American Software, Dycom Industries, Forgent Networks, Optical Cable, Oxford Instruments and SteelCloud; while very poor results* came from Manchester Technologies.

Losses* were posted by Audiovox, Broadview Media, Cable & Wireless, Carreker, CML Microsystems, Comverse Technology, Conolog, Descartes Systems Group, e-SIM, Finisar, I-documentsystems, IDT, Kewill Systems, Leitch Technology, Linmor, Meta4 NV, MKS, National Semiconductor, Net2Phone, netGuru, Opsware, Peerless Systems, PLATO Learning, Redstone, Remec, Sand Technology, Sorrento Networks, TeleCity, TippingPoint Technologies, Versata, Volt Information Sciences and Vsource.

Other financial news included share buy-back announcements from Keane, Kronos, NovAtel and Vital Images and ZiLOG; results/profit warnings (often veiled) from Alphameric, Arris, Axcelis, Coherent, Cymer, Fairchild Semiconductor, Motorola, National Semiconductor, Nokia, Read-Rite, Riverstone Networks, Texas Instruments, Thomson SA and TriQuint Semiconductor; share split announcements from Activision, Ampex (reverse), eBT International (reverse), Juniper Group (reverse), NetNation (reverse), Persistence Software (reverse), Sapiens (reverse), SoundView Technology (reverse) and Tarantella (reverse); and a good IPO from FormFactor.

Additionally, the SEC is set to probe IBM`s financial figures for 2000 and 2001; US Dataworks is to re-state its figures for 2001, 2002 and 2003; and Daisytek International has filed for Chapter 11.

Locally

AST (+35.7%)

Control (-31%)

Cycad (-33.3%)

DNA (-76.9%)

Elexir (-25%)

I-Solutions (-33.3%)

Infowave (+34.6%)

Maxtec (+25%)

Pinnacle (-48%)

Stella Vista (-50%)

Y3K (-75%)

Internationally

Arel Comms & Software (+55%)

BATM Advanced (+80%)

Dice (+160%)

Fibernet Group (+46.7%)

Geoworks (+142.9%)

NTELOS (-60%)

Read-Rite (-57.3%)

Redbus Interhouse (+50%)

Robocom Systems International (+68.2%)

SRS Labs (46.6%)

In terms of indices, the Nasdaq was up 1.9% and the JSE up 1.7% over the last two weeks.

Finally, the UK`s Financial Times recently issued its latest FT 500 rankings, which make interesting reading. From a technology perspective Microsoft has re-secured the number one spot, a position it last held in 2000.

Other top 'technology` rankings include IBM at 10; Vodafone, the top UK and European entry, at 13; and NTT DoCoMo, the top Japanese player, at 19.

Some of the casualties are WorldCom and Lucent, which have fallen out of the list completely along with 17 other technology companies; EDS, which has fallen to 440 from 160; Nortel Networks, now at 457 (was 313); and Veritas at 499 (was 247).

However, there have been many new technology entrants including Saudi Telecom at 181, Amazon at 342 and Lexmark at 435. All the rankings are based on market capitalisation.

* NB

Guidelines for the categorisation of results are as follows. The figures 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 are in excess of 50%.

* Good: Both revenue and net income growth are 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.