News and analysis to 4th April 2003
EDS –
Innovative incentive scheme
EDS’s HR department has reflected on the incentive scheme
offered to former CEO Dick Brown, which in summary is ‘If you manage to do a
bad job, $37m will be waiting for you in reception’. Brown’s successor Michael
Jordan will not be rewarded on the same basis.
Microsoft feeling unsecure?
Despite Microsoft’s overt attempts to patch up its security
record, a recent survey of 35 $1bn plus firms by Forrester Research shows that
77% of their IT security experts cited security as their major concern when
deploying Windows applications. Microsoft’s reputation has not been helped by
the nervousness system administrators have in respect of deploying MS security
patches. Also the fact that MS releases its products with the security ‘back
doors’ defaulted to open rather than closed has not helped.
Sprint finished?
Sprint is feeling the wrath of two of its affiliates
(Horizon PCS and US Unwired) that attribute their heavy losses to the US
cellular operator. Another affiliate has filed a lawsuit claiming that Sprint’s
breaching of agreements has pushed it into bankruptcy. Sprint also faces
delisting from Nasdaq on account of its share price falling below $1.
Marconi – A short seller’s dream?
The formerly cash rich telco equipment maker is planning to
relist on the London Stock Exchange on May 19th. At that point
Marconi’s banks and bondholders will own 99.5% of the shares. Current trends in
Marconi’s sales appear to be south facing. Thus there is a reasonable chance
that the shares will follow in May.
IT spending to recover next year
Or at least not this year according to Gartner Group. CEO
Michael Fleisher believes that pent up demand for technology coupled with the
growing cost of maintaining current systems will trigger a return to spending.
He caveats this with the fact that the war in Iraq has the potential to cause
massive economic disruption.
Outsourcing out, multi-sourcing in
Gartner Group believes that 50% of outsourcing contracts
will be deemed failures because they fail to deliver the expected value. It
suggests that in the shorter term there will be a move towards multi-sourcing,
which involves a managing vendor that acts as an interface to a number of
suppliers. Until we get universal agreement on what constitutes value in
respect of IT spend, both outsourcers and the IT industry in general will have
ongoing difficulties making a business case.
USA – (Wireless) LANd of the free
The number of US wireless LAN users looks set to grow seven
fold over the next five years, according to Gartner. Specifically WLAN (or
802.11b to its friends) technology will dominate. There will be a strong focus
on vertical markets, so expect to see WLAN suppliers focused on education,
healthcare, warehousing and manufacturing.
HP – Class act
Hewlett Packard has been awarded a $300m contract to build
and operate a ‘virtual classroom’ for 400,000 students in Northern Ireland. HP
claims that this is the world’s biggest e-learning project.
Iraq is no excuse
According to a survey conducted by Merrill Lynch, 90% of
CIOs believe that a quick end to the war in Iraq would not give rise to an
increase in IT spending. They claim the root cause of the spending slowdown
relates to structural problems in the economy.
Microsoft eyes up EDS
Lock up your IT department! The latest rumour to hit the
market via FT.com is that Microsoft has the ‘hots’ for EDS, or more
specifically EDS’s clients. Such a move would support Microsoft’s apparent
migration away from products into ‘big ticket’ services.
