News and Analysis to 10th March 2005
Larry Ellison – Shopoholic?
Oracle CEO Laurence J Ellison, is an impulsive shopper. If
he thinks someone else is getting a bargain, he wants it. Only recently
PeopleSoft’s takeover of J D Edwards prompted the Oracle CEO to acquire them
both. German rival Sap has been eyeing retail sector application provider Retek
for some time and was in the process of queuing up at the checkout to make the
purchase. However Mr Ellison has attempted to yank the goods out of the hands of
Sap CEO Henning Kagermann with
a counter offer. Retek management need just sit back and watch their share
price go asymptotic.
SCO Group accuses itself of financial irregularities
Unix vendor and Linux legal nuisance SCO Group announced
that it needs to restate its financial results for the first three quarters of
2004, after discovering accounting errors related to staff compensation.
Possibly this is just an elaborate manoeuvre to get itself into the position of
being able to accuse MCI and Computer Associates of stealing the intellectual
property associated with its accounting techniques.
European IT services whirlpool
With the contractual ink still drying on Atos Origin’s
acquisition of most of Schlumberger’s IT services business (once known as Sema
Group), the word on the street is that the enhanced Atos Origin will merge with
Siemens Business Services to create a European powerhouse. Who’s next?
Be big and flexible or die
According to the Economist Intelligence Unit (EIU)
businesses need to get big, but remain responsive to market forces. The fierce
competition, which comes courtesy of operating in a global economy, will make
life tougher over next 5 years. On a positive note, according to the MIT Sloan
School, IT will become critical as a tool for out innovating the competition.
Those that don’t subscribe to this theory should continue to have their IT
director report into the CFO.
ID Theft – It’s personal
A quarter of UK adults have experienced ID theft, according
to consumer watchdog Which?. This can be attributed to the ease by which
fraudsters can obtain credit card details, passwords and other identifiers,
using online techniques such as spyware and phishing, and traditional offline
techniques such as confidence trickery and dustbin diving. More details on this
can be obtained by sending your passport to….
Back to the customer
Don Peppers, CRM guru and author of the ‘One to One Future’
is pushing for a new metric for assessing company performance, namely
Return-on-Customer (ROC). Basically companies need to squeeze their clients’
wallets harder rather than chasing new ones. This will be music to the ears of
the CRM technology vendors who have generally been having a tough time of late.
EDS to get defensive
It would appear that the UK government is impressed with the
way EDS manages its IT projects. Post Child Support Agency, Department of Work
and Pensions and Inland Revenue, the outsourcing giant has been awarded a
£2.3bn contract to provide IT services to the Ministry of Defence. This could
well be a poisoned chalice, as the terms are draconian, and the
deliverables/success factors unclear. EDS leads a consortium that includes
Fujitsu, LogicaCMG, EADS, HP, IBM and General Dynamics. Contractually if EDS
slips up, the MOD reserves the right to appoint another consortium member as
prime. It will take great skill to manage the client and the consortium
members, plus an above average sense of fair play from the consortium partners
to avoid this being an expensive and brand decaying exercise.
Make that move
Ex HP CEO Carly Fiorina is rumoured to be joining President
Bush at the Whitehouse. Whilst Ms Fiorina appears to be on a shortlist to
become President of the World Bank, President Bush may have other plans for
her. Given her experience in attempting to merge (read ‘bang heads together’)
HP and Compaq into one cohesive business, possibly President Bush sees these
skills being used to address some of his foreign policy conundrums.
Intel – Too big in Japan?
Japan’s Fair Trade Commission has issued a warning to chip
making giant Intel, alleging that it has violated its antitrust laws by
incentivising a number of Japanese PC makers to avoid/minimise use of chips
from rivals AMD and Transmeta. A similar probe is taking place in the European
Union.
Nice work if you can get IT
IBM’s chairman and CEO Samuel J Palmisano received $8.8m in
remuneration in 2004. His 12% increase is in line with the 11% increase in
IBM’s net income. Mr Palmisano, who obviously knows a thing or two about how
the IT market operates, has played a key role in IBM’s reinvention, building on
the work of predecessor Louis Gerstner.
