News and Analysis to 16^th December 2004

Oracle nails PeopleSoft

After months of stalking, Oracle appears to have bagged PeopleSoft. Oracle had to raise its best and (almost) final offer from $24 per share to $26.50, giving a valuation of $10.3bn. PeopleSoft’s customers can rest assured. Oracle has not changed its plans to phase out the PeopleSoft suite, but has introduced the concept of a merged product suite that should take some of the sting out of the inevitable.

Microsoft’s ready to search your desktop

Microsoft has just released software (in beta) that enables users to search their hard drives using web-like search technology. Embracing Outlook mail in searches will make this attractive to users. Unfortunately this tool could make it easier for hackers to find what they want. So Microsoft needs to ensure that the security is watertight before it is released into the wild. I would be an instant convert if it could help find my stapler.

Sun – CPU muscle for hire

Sun is looking to position itself as a wholesale provider of computer processing power.  This will force Sun into a commodity market and move it one step further away from the boardrooms of its clients. Unfortunately for Sun most customers want to buy a service rather than processing units. Purchasing EDS would go a long way to correcting this tail-spin down the value-chain.

Global smooth operators

The UK Department of Trade and Industry conducted a survey of the most sophisticated users of IT on the planet. Sweden topped the rankings, followed by the UK and Ireland. The US slid from third place to seventh. A key measure of sophistication was the extent to which firms extracted value from their IT investments, rather than whether coke or dry martini was the user tipple of choice.

EDS abandons defence

This is not a reference to its expertise in matters military, but to the fact that the troubled outsourcer has scrapped its ‘poison pill’ defence against a hostile takeover. EDS’s board rejected the idea earlier this year, but shareholder pressure has helped them reach an alternative perspective. This move is the equivalent of putting a ‘for sale’ sign on the front gate.

PC players face China syndrome

IBM, the company that redefined the term PC, is to sell its personal computing division to China’s Lenovo for $1.75bn, in a mixture of cash, debt and equity. Despite creating the market, IBM has failed to really exploit it, so this move will free it up to focus on the more lucrative enterprise marketplace. By number of shipments, HP and Dell have got nothing to worry about. However China is one of the few remaining countries where PC shipment growth has yet to plateau. This could put a big dent at the top of the global rankings in a few years time.

HP – Breaking up is hard to do

Despite pressure from analysts, CEO Carly Fiorina maintains that HP will not dismantle the company, though they have contemplated it. There is a natural split between HP’s consumer (PC and printers) and enterprise business. Carly referenced IBM, which she sees as a role model, as an example of how some companies do not simply exist to wring out profits. She may not have been aware of the Lenovo deal at the time.

Nokia - senior executives going places

A stream of Nokia’s executives have departed in recent weeks. Firstly Matti Alahuhta, the chief strategy officer and then Sara Baldauf, head of network infrastructure along with senior executive Dr Jukka Bergqvist. The outbound traffic appears to be of Scandinavian origin, whilst inbound traffic in the form of CFO Rick Simonson and Mary McDowell, head of Nokia Enterprise Solutions are both US citizens. Possibly the recent slide in market share has made the mobile phone giant less confident in its domestic leadership.

IT workers less confident

According to recruiters Hudson, confidence among IT workers has dropped dramatically in November. Apparently this is typical for the time of year, as companies postpone hiring decisions and employees begin to feel the burden of the festive season on their wallets.