Telkom dominates in quiet week

The international ICT world was quiet and uneventful last week with no significant news. However, the local scene was dominated by Telkom SA`s results and price adjustments.

* Good annual results from Telkom SA, with revenue up a little over 10% but attributable profit up 36%.
* Satisfactory interim numbers from Zaptronix, with a change of year-end making comparisons difficult.
* An interim loss from Spescom, with revenue also down.
* A share repurchase announcement from Telkom SA.
* Nashua Mobile bought Internet service provider BlackDot IT Solutions.
* The resignation of Hugo Knoetze, COO of arivia.kom.

* Namibia awarded a second cellular licence to Powercom, a joint venture between Norwegian Telenor and NamPower, a Namibian power utility.
* The appointment of Ham-Mukasa Mulira as the first minister of Uganda`s new ICT ministry.
* Workgroup and Pinnacle Micro were named as the sole Sub-Saharan distributors for Trust products.

According to IDC, worldwide converged mobile device shipments totalled 18.9 million units in Q1 2006, an increase of 7.5% from the previous year.

Paul Booth, MD, Global Research Partners

* Palm has replaced Anteon International in the S&P MidCap 400 Index.
* Nortel has called off its joint venture with Huawei Technologies.
* A government panel in Japan recommended the break-up of NTT in order to boost competition.
* South Korea`s SK Telecom invested about $1.1 billion (10%) in China Unicom, China`s second largest mobile group.
* Cisco acquired Audium and Metreos as part of the former`s strengthening of its service-oriented network architecture.
* EMC acquired nLayers, a software company that develops appliances that discover and map the interdependencies of software in back-end infrastructure.
* HP acquired Silverwire Holding AG, a provider of commercial digital photography solutions and software.
* The appointments of Tommy Allen as CEO of eLinear, John Chambers as chairman of Cisco Systems (from 15 November), Sergio Edelstein as president and CEO of GSI Group, John Finke as president and CEO of HickoryTech, Philip Hardy as president of eLinear, John Heindel as chairman of PECO II, Thomas Kelly as chairman, president and CEO of MontaVista Software, Clifton Sink as president and CEO of SteelCloud, and Michael Strianese as interim CEO of L-3 Communications.
* The resignations of Michael Lewis as CEO of eLinear, John Morgridge as chairman of Cisco Systems (from 15 November), James Oyler as president and CEO of Evans & Sutherland, and Charles Winston as president and CEO of GSI Group.
* The retirements of Tom Dunne as founder and CEO of SteelCloud and James Green as chairman of PECO II.
* The death of Frank Lanza, chairman and CEO of L-3 Communications.
* Analyst upgrades for BMC Software. Broadcom, CNET Networks, Cognos, Corning, DiamondCluster International, Exar, Golden Telecom, International Rectifier, Maxim Integrated Products, National Semiconductor, Paychex, Plantronics, RSA Security, salesforce.com, SanDisk, SBA Communications, SiRF Technology, STMicroelectronics, Telefonica, Ulticom and Valor Communications.
* Analyst downgrades for Brightpoint, CA, Comtech Group, Crown Castle International, Cyberonics, Intuit, Keane, Take-Two Interactive Software, Vitesse semiconductor and Wireless Facilities.
* Positive results announcements from Advanced Medical Optics, Bouygues, Brady, Novellus Systems, Texas Instruments and TPO.
* Negative result warnings from AU Optronics, Cray and iSoft.
* Stock repurchase announcements from Cisco and ICOS Vision Systems.
* Private funding obtained for Capital H Group, an HR outsourcing provider; Gabriel Technologies, a provider of security products; Hatteras Networks, a metro Ethernet switching equipment and services vendor; and Numerex, a wireless machine-to-machine communications provider.
* Stock offering announcements by Cogent Communications and Hynix.
* A share split announcement from Cray (reverse 1:4).
* A planned IPO on Nasdaq from Acme Packet, a provider of session border controllers.
* A planned IPO on London`s AIM by OCZ, the California-based computer components maker.
* Hello Telecom, a provider of B2B Internet-based telecommunications services, admitted to trading on London`s OFEX.
* Kasten Chase Applied Research, an encryption specialist, has ceased business.

* The buyer for France Telecom`s directories business.
* A possible MBO at Misys.

* The worldwide external controller-based disk storage market grew 8.6% in Q106 compared to last year, with revenue totalling $3.8 billion, says Gartner. EMC remained at number one with IBM taking over at number two, a position it took from HP.
* According to IDC, worldwide converged mobile device shipments totalled 18.9 million units in Q1 2006, an increase of 7.5% from the previous year.
* The integration middleware market grew 7.1% last year to $8.5 billion, with the top five vendors, IBM, BEA, Oracle, Microsoft and Tibco, accounting for 69% of sales, says Gartner.

* JSE All share index: Down 7.4%
* Nasdaq: Down 3.8%
* Top SA share movements: Altron (-14,5%), Datatec (-13.3%), Dynamic Cables (-20.8%), Eureka (+10.7%), GijimaAst (-12.7%), Infowave (-14.3%), ISA (-11.3%), Labat Africa (-21.4%), Spescom (-14.7%) and Vesta (+16.7%).
* Top international share movements: BackWeb Technologies (+47.2%), Brightpoint (-29.6%), CMGI (-20.4%), Entrada Networks (-50%), Epicus Communications (-46.7%), Finisar (-32.7%), Level 8 Systems (+40%), NeoMagic (-28.1%), SEMX (+50%) and SONICblue (-66.7%)

A new research report by IDC that was commissioned by HP indicates IT consolidation will grow at a strong rate in the coming years, with the market expected to grow to 6.5% from 2004 to 2009, ie from $18.1 billion to $24.7 billion, outpacing the expected growth of the overall IT market.

According to the report:

* Infrastructure software for consolidation is expected to grow 13.1%, more than twice the rate of the underlying IT consolidation market. In part, this growth reflects an increasing acceptance of the need for, and benefits to be gained through, virtualisation and centralised management.

* Consolidation will play a significant role in driving server and storage sales. Server consolidation`s share of the overall server revenue is predicted to grow to 12.6% in 2009 (up from 9.5% in 2004). Similarly, the storage consolidation market is expected to grow to 17.3% (up from 13.9% in 2004).
* Consolidation growth will occur in heterogeneous environments: Linux 14.4%, Windows 9.8%, and Unix 1.2%, with Linux representing an emerging growth opportunity for consolidation, particularly for servers and software (22.3% and 22%, respectively).

The need for IT consolidation and its underlying technologies has gained widespread acceptance in recent years. A separate IDC consolidation survey of 400 senior IT executives revealed that 60% view consolidation as an important step towards dynamic IT, while 80% are actively consolidating.

According to Matthew Eastwood, a VP of IDC, the issue isn`t whether companies will consolidate, but the approach. The research indicates the sooner companies embrace IT consolidation as a core business strategy, the sooner they will be able to achieve the kind of flexible and dynamic infrastructure that helps solve business problems such as increasing revenue and satisfying customers.

According to the report, several technology and IT management trends will continue to drive growth in IT consolidation, including:

* Improving technologies such as blade servers, multi-core processors, virtualisation and partitioning.
* The ongoing need to update and improve disaster recovery and security solutions.
* System and software standardisation initiatives.
* Chief information officers` desire to free budgetary and personnel resources from maintenance and management in order to reduce costs and drive innovation.
* IT consolidation`s capacity to help CIOs face the challenges of driving down costs while increasing system responsiveness and providing better services.

The report suggests that the IT consolidation opportunity rests primarily with large companies, but is expected to spike in the small to medium business market in coming years. Growth is expected to accelerate as technologies that enable consolidation become more affordable and the recognition of superior return on investment with IT consolidation grows.

North America will lead IT consolidation growth at 7.7% yearly due to the prevalence of distributed computing, with growth elsewhere being somewhat slower.