News and Analysis to 27th June 2003
News in summary
Hardware
q
Microsoft provides testing tools to board manufacturers
q
Wireless LAN equipment becoming a commodity
Software
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Oracle claims to be committed to PeopleSoft acquisition
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SCO softens on Unix copyright
q
PeopleSoft is looking for help
Services
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EDS looking to raise finance
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CGEY looking to raise finance
Security
q
US companies under security pressure
Telecoms
q
Orange unites with other European players to take on
Vodafone
News in Detail
Microsoft focusing on the Board
Microsoft is keen to have a plan B if its PC power base
crumbles. To that end it is endeavouring to migrate its products to
non-standard computing devices such as fridges and cars. To ease this
transition, Microsoft is supplying testing tools to computer board
manufacturers. Microsoft will soon learn that, unlike their current customer
base, users of cars etc. are less laid back when they don’t work. Vendors will
also take issue if they have to recall thousands of their products.
Wireless commodity
According to Gartner, WLAN equipment is evolving into a
commodity. Whilst global shipments were up 120% year on year, the associated
spend was up just 29%. Gartner suggest that there are too many vendors. Cisco
appears to be a casualty of this with revenues dropping 7%. As with everything
else in IT, the money will be in the associated solutions and services. How
quickly will the vendors wake up to this?
Orasoft looking likely
What looked like mischief now appears to be serious.
Oracle’s overtures towards rival PeopleSoft appear to be genuine. Rumours of
Oracle planning to discontinue the PeopleSoft product range and providing its
acquired customer base with free migration to Oracle’s products has served only
to antagonise the PeopleSoft management. Despite this, Oracle’s CEO Larry
‘Limelight’ Ellison hinted recently that he is prepared to up his £6.3bn offer
if necessary.
Linux community escapes SCOtt free
The SCO Group, which owns the intellectual property rights
(IP) for the Unix operating system has been flexing its legal muscles of late,
claiming that there are a number of Unix and Linux vendors that have infringed
its IP. Most recently it has dropped its claim against the Linux community
stating that this could potentially destroy the Linux marketplace. However IBM
is not so lucky with a $3bn lawsuit dangling above its head.
PeopleSoft’s new strategy - Bidding
prayers
PeopleSoft’s management have openly declared their distaste
for an Oracle takeover. They appear to have painted themselves into a corner, which
could prove at the very least to be very embarrassing if Oracle is successful.
Thus PeopleSoft are hoping for an ABO (Anybody but Oracle) to ride in and save
the day. Potential white knights include Microsoft, IBM, Siebel and Sap. What
with HP’s Compaq assimilation going so well, the acquisition of PeopleSoft
could turn its solutions aspirations into reality.
EDS in self-surgery mode
Having planned to axe 2,700 jobs, EDS, IT outsourcer and
collector of problematic contracts, now plans to restructure itself financially
in anticipation of a further debt rating downgrade. To offset this it is
planning to raise $1.1bn through private share issuance. The money might best
be spent on legal advice to unravel it from those $3bn worth of problem
contracts.
CGEY branching into roulette
CGEY plans to raise $0.5bn to expand into, of all things, IT
outsourcing, which requires significant upfront investment. Ask EDS. In fact
EDS might be very happy to give CGEY a ‘leg-up’ into the outsourcing arena by
handing over some ‘large’ high-profile contracts.
US Government to help Californians be more secure
A US Bill to force companies to alert Californian customers,
should their personal details be hacked will come into effect in California
next week. It is likely that the law will extend to the whole of the US. This
innovative way to improve corporate online security will cause a surge in
demand for related services. Companies eager to avoid bad PR will be pushing
online security to the top of the business agenda.
Wireless line drawn across Europe
Wireless telephone operator Orange has seized the initiative
to take on Vodafone by forming strategic alliances with Telefonica Moviles,
T-Mobile and Telecom Italia Mobile. Each one is an established force in its own
market, but they are restricted in their international aspirations because they
do not have Vodafone’s breadth. Orange, one time producer of visionary (read
fictional) TV adverts is under pressure to provide its debt-burdened parent
France Telecom with a healthy cash stream.
