Strange days indeed

The strange goings-on in Italy with Olivetti and its bid for Telecom Italia SpA made international waves in the IT world last week. Olivetti seems to be able to find $58 billion for the take-over bid of Telecom Italia, but is unable to provide guarantees to the banks for a $74 billion loan for Olivetti Computers Worldwide, and is asking for bankruptcy protection. On the other hand, Telecom Italia is trying to thwart this take-over by merging its fixed-line and mobile-phone businesses.

• he very successful JSE debut of Decillion, the financial risk services management company that has a large software portfolio;
• the appointment of Rob Shuter, previously head of investment banking at SCMB, as director of corporate development and strategy at Computer Configurations Holdings;
• very good half-year numbers from Datacraft Asia, the Dimension Data subsidiary; and
• Rectron's announcement that it will be setting up a distribution business in Australia.

[Local]

Local Cautionary Notices (see attachment)

• the announcement by PeopleSoft that it is seeking an executive to replace the founder, David Duffield, as president; and
• the news that Northern Telecom will change its name to Nortel Networks.

[International].

Other international news included rumours that Cable & Wireless is considering making an offer to take control of International Digital Comms (IDC), the Japanese telecomms operator, of which it already owns 17.6%. This possible deal could upset NTT, which would also like to acquire a significant stake in IDC.

In addition, Eastman Kodak is looking to sell its software division two years after it was acquired from Wang Labs for $260 million. It's currently losing about $12 million a quarter!

Telecom Italia is trying to thwart this take-over by merging its fixed-line and mobile-phone businesses.

Ingram Micro is closing its California operations centre, realigning its sales force and cutting 1 400 jobs. Alcatel intends to shed 12 000 jobs; while Sony plans to slash the number of factories it has worldwide, reduce its workforce by 10% and raise its stake in three of its Japanese subsidiaries to 100%.

Additionally, following many mergers in the "portals" arena, a strategic partnership between Infoseek and ZDNet has been put in place. If Microsoft is serious about being a major player in this area of the market, it will need to put its skates on!

We saw excellent figures from CMG and Sopra SA. Losses came from Ariel, Bitstream, Certicom, Dolphin Telecom, GEO Interactive Media Group, National Semiconductor (better than expected), Osicom Technologies, Prodigy Comms, QAD, Sentry Technology and V-ONE.

Good numbers were recorded by Anderson Consulting (based on full-year figures), Oracle (but possible cause for concern), and Telstra. Satisfactory results were reported by Atlantic Tele-Network (back in the black), Bell & Howell and Geac Computer.

Mediocre returns came from CMGI (but back in the black), Peerless Systems and Unitrode; while very poor results came from Staffware.

Other financial news included profit warnings from Alcatel, AMD (loss projected), Andrew, Brightpoint, Digi International, Ingram Micro, Seagate and SAP. There was also the announcement that the first Indian firm to list in New York will be software house Infosys Technologies.

Locally

Crux (+24.1%)
MB Technologies (+40.3%)
Micrologix (-29%)
M-Web (+17.2%)
PentaCom (+25%)
USKO (+18%)
Whetstone (-51.4%)

Internationally

GST Telecomms (+24.1%)
LanOptics (+49.9%)
LTX (+24.1%)
Merant (+21.1%)
Network Solutions (+27.2%)
Oracle (-23.7%)
Telxon (+34.8%)

With the DOJ/Microsoft trial in recess until April, it looked as if it was going to be Intel`s turn to face the music last week. In a surprise announcement, a proposed anti-trust settlement by Intel was tabled and is being considered by the commission. If agreed, it will spare the public exposure of Intel, which obviously doesn't want the spotlight that Microsoft "enjoyed".

Additionally, expect an announcement this week from Microsoft, splitting the company into four major groups. These are likely to be the consumer division, previously the Interactive Media group which includes Microsoft Network; a division aimed at software developers; the enterprise division and the applications group.