The end of an era

The $1.3 billion acquisition of Navision by Microsoft and the letter of intent put in place by KPMG Consulting re its proposed acquisitions for most of the Andersen Consulting entities dominated the international world of IT and telecommunications last week.

Business desktops and notebooks will migrate to the Compaq platform over the next nine to 12 months under the Compaq brand.

Paul Booth. MD, Global Research Partners

At home, the continuing DataMirror/Idion saga, the formal cessation of Telkom`s monopoly and various telecoms activities arising from this change of status, accounted for much of the local headline space.

* we saw very good annual results from Bytes Technology Group (revenue up and well back in the black);

* satisfactory year-end numbers from Power Technologies (revenue and earnings both up);

* mixed year-end results from Jasco (revenue well down but back in the black);

* satisfactory interim numbers from Reunert (revenue and earnings both up); and

* the suspension of Rectron`s shares prior to the completion of its acquisition by Mustek.

[Local]

Other local news included:

* share re-purchase announcements from Grintek and Mustek;

* the establishment of a SAP application expertise team by Dimension Data;

* the forecast of profitable headline earnings from Idion for the year ending 31 December 2002;

* the final revised bid of R1.80 per share for Idion by DataMirror, again a significant increase from the previous bid;

* the formal end to the Telkom monopoly situation, the action against Telkom initiated by the South African Value-Added Network Services Association (Sava), and the issuing of two licences to Sentech that will allow it to operate a multimedia service, as well as an international gateway that will allow it to act as a carrier-of-carriers;

* the naming of the Smartcall Cointel Group as the top growth company in the unlisted category at the Brait, Gemini and Business Report-sponsored Growth Awards;

* the appointment of Patrick Quarmby as chairman of Datacraft Asia; and

* the resignation of Paul Edwards, contractual CEO of M-Cell, and the appointment of Phuthuma Nhleko as the new CEO.

* we saw the name change of Respond.com to Respond Networks; and

* the announcement from KPMG Consulting that it had signed a letter of intent to acquire the Business Consulting units of member firms of Andersen Worldwide Societe Cooperative, also known as Andersen Worldwide, in a deal that could be worth nearly $300 million. The deal covers member firms in Europe, the US, Asia Pacific and Latin America.

Additionally, look out for the possible break-up of Hynix semiconductor; and the fate of InterTrust Technologies as it seeks a strategic partner or a buyer.

[International]

Other international news included:

* the appointments of John Moores as chairman of Peregrine Systems and Richard Nelson as acting CEO of Peregrine Systems;

* the resignations of Stephen Gardner, chairman and CEO of Peregrine Systems; Dennis Jones, COO of Commerce One; Mike McQuary, president of EarthLink; and Ashley Ward, CEO of Orchestream;

* the retirement of Peter Pervere, president and CFO of Commerce One; and

* job loss announcements from Caldera International, Cosine Comms, IBM, InterTrust Technologies and Sprint.

We saw excellent figures from HPL Technologies, Infocrossing (back in the black), Pixar, TPI (back in the black), Track Data and Tucows (back in the black).

Good numbers were recorded by Activision, Electronic Arts (back in the black), Fast Search & Transfer ASA (back in the black), HPL Technologies, Nanya Technology, Numerex (back in the black), Paravant (back in the black), Polkomtel, Tele Centro Oeste Celular and Ultimate Electronics.

Satisfactory figures were posted by ebix.com, ESCO, FairPoint Comms (back in the black), Global Imaging Systems, Harvey Electronics, ManTech, Nam Tai Electronics, NTT, Pomeroy Computer Resources, Ricoh, SK Telecom, Telecom Italia, Telecom NZ and Vestcom.

Mediocre returns came from Arch Wireless (back in the black), AXS-One (back in the black), Brasil Telecom SA, Cisco (back in the black), Circa, Crayfish (back in the black), Fujitsu Siemens (back in the black), GCI, Global Payment Technologies, Imagistics, Innodata, Morse Group, Netgateway, Pioneer-Standard Electronics, Qlogic, Quanta Services, RCM Technologies, Singapore Telecomms, T-NETIX (back in the black), Sparton, Taiwan Semiconductor, Talk America (back in the black), Technisource, TouchStone Software (back in the black), TransNet, Tyler Technologies (back in the black), WM-data AB and XRT.

Very poor results came from Baldwin Technology, En Pointe Technologies, Magic Software (back in the black) and NTT DoCoMo.

Losses came from ACI Telecentrics, ACT Teleconferencing, Aether Systems, Aladdin Knowledge Systems, Allin, Applied Imaging, BMC Software, Braun Consulting, California Software, Camtek, Celeritek, Choice One Comms, Cintech Solutions, Clarent, Clear Channel Comms, Cognitronics, Compuware, Conductus, Creo, Critical Path, Crown Castle International, Dacom, Delphax Technologies, deltathree, DG Systems, DSL.net, EasyLink Services, Framfab AB, Frontline Comms, Group Telecom, GTC Telecom, Howtek, Hungarian Telephone and Cable, ImproveNet, Infocrossing, Insight Comms, InteliData Technologies, Intelligent Systems, InterCept, Internet America, InterTrust Technologies, ISCO International, IXYS, Jupiter Media Metrix, Maxcom Telecomunicaciones, MEMC Electronic Materials, Mer Telemanagement Solutions, Meta Group, Microcell, MSX International, National TechTeam, Netia Holdings SA, NEXIQ Technologies, Notify Technology, NTELOS, Nu Horizons, NUR Macroprinters, Olivetti, Ono, Orbotech, Orchestream, Perceptron, PFSweb, PSC, Qsound Labs, RCN, Robotic Vision Systems, Rural Cellular, Safeguard Scientifics, SBA Comms, ScreamingMedia, SINA.com, SMTEK International, Softbank, Sourcecorp, Starbase, Superconductive Components, SurfControl, Taitron Components, Tangram Enterprise Solutions, TDK, Technical Comms, Tegal, Temenos Group SA, Terra Lycos, The Management Network Group, Time Warner Telecom, Touch America, Tricom, Trikon Technologies, Tripath Technology, Triton PCS, Tvia, UbiquiTel, Ultimate Software, Ultradata Systems, Univision, US Unwired, V-ONE, Versatel Telecom, Vertel, Webb Interactive Services, Western Wireless, Wireless Facilities, Xybernaut Z-Tel and Zarlink Semiconductor.

Other financial news included share buy-back announcements from Advent Software and CDW Computer Centers; profit warnings from Anadigics, Autodesk, Caldera International, Comarco, Computer Network Technology, Intel, Lawson Software, Logica, Orbotech, Pemstar, Pioneer-Standard Electronics and Serena Software.

There were share split announcements from First Data, Gtech and Harte-Hanks; IPO filings from MTC Technologies and Verint Systems; and a delayed IPO from PrintCafe Software. Additionally, Icon Medialab AB filed for bankruptcy.

Locally

Elexir (+66.7%)
Hicor (+25%)
Idion (+16.1%)
Netactive (+19.2%)
OSI (+33.3%)
Powertech (+16.4%)
Softline (+20%)
Stella Vista (-18.2%)
Synergy (-40%)
Y3K (+300%)

Internationally

Applied Imaging (+29.8%)
Bell Canada International (-37.6%)
DDi (-29.2%)
Jupiter Media Metrix (+154.5%)
NCD (+66.7%)
NTELOS (-49.1%)
Overland Data (+61.4%)
Peregrine Systems (-49.4%)
Sapient (-43.8%)
Western Wireless (-42.2%)

Much of the HP/Compaq product roadmap was revealed last week, with not too many surprises; a summary follows:

* In the Itanium server space, the new company will stay with HP`s previous server roadmap, supplemented by features from the ProLiant IA-64 roadmap. By the time that Intel`s third-generation Madison processor hits the market, the new company will offer Itanium-based servers from the low-end to the high-end of its product line, including Non-Stop Itanium servers and thus, Itanium will be the destination for all future server product lines.

* For the immediate future, the previously published roadmaps for PA-RISC and AlphaServer systems will continue, with the former targeted at new business, and the latter focused on the existing base. Additionally, Compaq`s Non-Stop family becomes the new company`s Non-Stop server. In terms of Unix operating systems, HP-UX takes preference over Compaq`s Tru64, with the latter`s clustering abilities being grafted onto the HP O/S. It seems that Compaq VMS will still be ported to Itanium.

* Compaq`s ProLiant range wins out over HP`s Netserver in the IA 32 space, albeit with the HP prefix. HP`s low-end servers, tc2210 and tc2100 will survive, while the company will also continue to offer HP blade servers optimised for the telecoms market.

* Business desktops and notebooks will migrate to the Compaq platform over the next nine to 12 months under the Compaq brand. Again, short-term, HP`s e-pc line will continue to be offered, as will HP`s Omnibooks. On the consumer side, both the HP Pavilion and Compaq Presario lines will continue to be offered, although this may vary from country to country. HP`s Jornada loses out to Compaq`s iPaq in the handheld space.

* The storage products will be based on the best of both previous company`s offerings, although the StorageWorks brand will be retained as the brand for the new storage and storage solutions portfolio.

* Imaging and printing products will be oriented around the HP products, which now include the Indigo acquisitions.

* The services scenario still seems undefined, although the focus will be on delivering good customer support, managed services and consulting and integration.