4th > September > 1998 Archive
Fujitsu will today announce the closure of its fab in Newton Aycliffe in the north east of England, barely six weeks since a Siemens fab in the area shut. The news will come to a blow to government ministers, already reeling from the impact of other real and potential cuts in inward investment. Fujitsu will blame the closure of the state of the art complex on the poor state of the semiconductor market, and coming hard on the heels of the merger of Hyundai and LG Semicon, further difficulties for this country could lie ahead. Opposition spokespeople blamed the strength of the pound as a reason for the closure. Fujitsu is expected to announce it will repay £100 million the previous Tory government gave it in loans to open up the plant. ®
The spectre of US Internet cable access regulation and censorship looms. The Federal Communications Commission has produced a working paper "Internet over cable: defining the future in terms of the past" by staffer Barbara Esbin that notes that the FCC does not regulate Internet access through cable television, Internet telephony or video conferencing. Basic telecommunication services are heavily regulated whereas cable services providing Internet access escape the FCC regulation of tariffs,interconnection and unbundling requirements. The problem for the FCC is that the new and emerging technologies do not fit neatly into the FTC regulatory structure. No longer are services such as telephony and cable technologically distinct. "This renders application of existing regulatory categories difficult, if not impossible, for many forms of Internet-enabled communications," the report says. "In the future, it will become increasingly difficult to maintain that particular facilities and services are cable' as opposed to telecommunications'. " The FCC already regulates cable television programming, deciding at what time adult programming can start. It is but a short step for it to set uprules for Internet content providers-except that the 1996 Telecommunications Act requires the government to "promote continued development of the Internet . . . unfettered by federal or state regulation". If Internet access services by cable were treated as cable services,franchise fees could be imposed by cities in the US. Whether the boundaries between telephone, cable and Internet access will be subject to regulation will be a matter for Congress, although the FCC is seeking clarification as to whether cable services in the 1966 Act could be interpreted as to include cable-provided Internet services. Esbin suggests that rather than trying to squeeze the Internet and Internet-related services into familiar categories, the FCC might better endeavour to create a new regulatory category.®
Microsoft says that the Department of Justice's efforts threaten to convert the case into a "trial by ambush". The allegation was in the latest motion to be filed late yesterday by Microsoft in the Washington DC federal court. The DoJ's response filed on Monday was careful not to set out in detail the additional issues that have been found during the discovery process. Recognising that it may not prevail in its motion to have the case dismissed, for which there is an oral hearing on 11 September, Microsoft has hit the panic button as it increasingly became aware that it faced a subtle broadening of the case. Microsoft says that it should only have to answer the original charges made in May -- the tying of IE and Windows 98; the provisions in Microsoft contracts concerning the promotion and distribution of IE; and Microsoft's illegal contract provisions that prevent PC manufacturers from removing features or functionality from Windows 98. Microsoft says that the schedule for the trial was set on the basis of these being the charges. Microsoft list six new matters that it says have arisen: dealings with Apple concerning streaming audio and video; dealings with Intel concerning Intel's native signal processing, and Intel's development of applications written in Java; dealings with RealNetworks concerning streaming audio and video; allegations by Sun over pure Java; allegations by Caldera concerning DR-DOS; and anticipated allegations concerning Bristol Technologies claim for access to NT code. Although these additional matters have arisen during the process of discovery, and are legitimate issue to be brought up at the trial on 23 September, Microsoft claims that each matter requires detailed preparation, and that this would take another six months. It seems clear that Microsoft wishes to delay the start and escalate the complexity of the case. It is unlikely that Judge Jackson will agree to an extended period of preparation, having had to change the date one already. Informed observers forecast that Microsoft will win a delay in the court of appeals. It is known that the judges there follow the so-called Chicago school opposed to antitrust and support Microsoft. In the cases so far, they have brushed aside Congress-enacted law -- the Tunney Act, the Publicity in Taking Evidence Act, and the Sherman Antitrust Act - in favour of judge-made law.®
Training and recruitment company Delphi is lopping off its US and French branches in the face of worse than expected interim results for the six months ending 30 June. For the first half of 1998, turnover stood at £162.2 million, an increase of some 22 per cent on £133.4 million for the first six months of last year. Profit, however, fared less well; operating profit fell by 23 per cent to £5.8 million, from last year's figure of £7.6 million In a statement issued today, Delphi chairman and CEO, Tony Reeves, said figures had been hampered by a "poor performance in the US" which he hoped would soon be eliminated. In October 1996, Delphi bought Alpine - a solutions provider, based in the US - but, less than two years later, the decision has been taken to find a buyer for the struggling reseller. Delphi is in talks with three interested parties.® Delphi is also selling off its stake in a French company, Decan, even though this company has out-performed expectations. Delphi owns 30.8 per cent of Decan, representing an investment of £10.7 million, whereas the market value of Delphi's stake in the publicly quoted company stands at £23 million. The sale will provide Delphi with a welcome injection of cash. Reeves said: "We have taken the decision to exit solutions, to divest our investment in Decan and sell Alpine to a strategic partner as soon as practical." This will leave Delphi focused exclusively on staffing and training provision. A representative of Delphi Group said that despite recent difficulties, the company was optimistic. "The management's strengths have always been in the fields of staffing and training," she said. "This is a process of restructuring which will see good growth across the whole of the group." Novell is embarking on a major push to promote the latest gong for its channel partners to hang on their walls. The PartnerNet programme, which is scheduled to complete its roll out at the end of October, offers resellers throughout the EMEA region training, cut-price support and free software.
SU turns to channel for growth opportunities Systems Union is looking to the indirect channel to deliver growth. The accountancy software vendor has expanded its international indirect sales team in the UK, Europe, Middle East and Africa, to prepare for the expansion of the market. Hugh Scantlebury, indirect sales manager at Systems Union, said: "We have set aggressive growth targets for our indirect channel in the next year." Meanwhile, Nina Carey was promoted to international channel manager, Kurt Van Den Eynden now manages the African SunCentres and UK indirect sales will be managed by Emma Lazell who joins the company from Computacenter in France. Ingela Nilsson will be responsible for managing Mediterranean and Middle Eastern SunCentres and supporting the Nordic recruitment drive. Wise strengthens Benelux channel Wise Solutions, the installation software specialist, has named Delado BV as its new master distributor in Belgium, Luxembourg and the Netherlands. Delado will market Wise's flagship product, Wise Installation System, and four new installation suites that Wise plans to launch next month. The software company said that this new channel would better serve its customers in the Benelux region. Memec CEO to make way for new blood Dick Skipworth, one of the founders of Memec, has announced that he is to stand down as CEO, but remain with the distribution group as chairman, at the end of 1998. In a letter to staff, Skipworth said he was making way for a younger and more energetic CEO to run the company in today's highly competitive market. He will be succeeded by David Ashworth, who currently heads up Memec Asia Pacific. DCS interim profits leap DCS Group, the automotive and logistics software VAR, has posted £3.053 million PBT (up 50 per cent ) on sales up 96 per cent to £46.5 million for the six months to 30 June,1998. Sales growth was in part due to the move by subsidiary CSI to move from an agency agreement to a VAR accreditation, meaning that it now records hardware sales in full as revenue, as opposed to recognising commission, as was previously the case. Jonathan Lees has been appointed to DCS Group plc as group finance director. He joins the company from Eidos, where he held the same positions. Andy Forsyth, managing director of CSI ( the DCD-owned IBM reseller) and head of DCS' services division has been promoted to the main board as executive director. Chief operating officer Robert Arrowsmith is leaving the company to o take up a position as Chief Executive in a "new, non-competitive venture". ®
Some of the stories on the site were truncated or in the worst cases missing, due to circumstances beyond the control of the staffers here. Apologies all around. We think we're back to our usual,abnormal service. Tell us if we're wrong. ®
BT is taking advantage of technology developed by Ericsson to offer BT Highway, a new digital communication service targeted at home and small business Internet users. Ericsson's Eristream allows users to have two digital lines over a single copper circuit. This allows one line to be used for data and the other for voice, with a new telephone number being assigned for the second line. Alternatively, both lines could be used with an ISDN adaptor or terminal adaptor to give 128 kilobits/second. BT is Ericsson's first telecom company customer for the technology, which is being provided in association with Marconi Communications. A four-way splitting device turns the copper line into four connection ports -- two analog and two digital. BT has an ambitious plan "to link BT Highway to every household in the UK in five years," according to Afshin Mohebbi, managing director of BT's business division. The service will be available from mid-September. The problem is that less than 10 per cent of UK homes use the Internet at present, and although this is forecast to increase to 40 per cent by 2005, the plan seems unrealistic. BT is conducting trials with Digital Subscriber Line (DSL) Lite services that offer connections at several megabits/second. DSL is expected to be targeted at business users initially. Cynics see the BT Highway move as a pre-emptive strike by BT against cable operators, and a holding move until DSL moves down to the home user. It remains to be seen whether BT will be challenged on fair competition grounds because of cross-subsidisation. BT does not disclose its detailed accounting for individual services, which has resulted in the past in accusations of unfair competition from rivals that do not have the advantage of BT's infrastructure. ®
Symantec has been ordered by a federal judge in San Jose to issue a "notice of recall" of Norton's Uninstaller Deluxe because of allegations that it contains code from CyberMedia's UnInstaller. It is not yet a full victory for CyberMedia because the alleged copyright infringement has to be proved at trial. In February, CyberMedia sued Symantec, claiming that "parts of the program are copied verbatim". It's a complicated story, but MicroHelp developed an early version of UnInstaller that was then bought by CyberMedia. Three MicroHelp employees formed another company, ZebraSoft, which developed Symantec's UnInstaller Deluxe. The smoking guns in the case are interesting. One help file in the Symantec product says that "Advice tabs are green" -- but only CyberMedia's product has advice tabs. In addition, a DLL file has a MicroHelp copyright statement, according to CyberMedia's Lisa Stein. Gordon Eubanks, CEO of Symantec, said that Symantec is indemnified by ZebraSoft. Symantec had removed the disputed code and developed a clean-room version that is now incorporated. CyberMedia is in the process of being taken over by Network Associates for $130 million -- and Network General and McAfee Associates merged earlier this year to form Network Associates. The story would be even more contorted had the litigious McAfee Associates not dropped its defamation suit against Symantec in January. ®
Frustrated at being subservient to Intel's control of processor technology,Compaq, HP and IBM are quietly developing an improved PCI specification(unimaginatively code-named Project 1). At issue is the speed of data transfer between the processor and peripherals. The tablets that Intel brought down from the mountain in 1993 said 66 MHz bus speed, with a transfer rate of a mere 132 MB/second. The new PCIX spec calls for twice the bus speed and transfer rates of 1 GB/second. It is expected that there will be backward compatibility. An announcement is not expected before November, with availability in early 1999 -- in time to exploit the Merced delay. To a large extent, Intel has been left out in the cold by the trio, although it is expected to agree to the PCIX spec. If Intel does not include PCIX in IA-32 chip sets, both IBM and Mylex are expected to offer the chip sets in any event. The market sector of prime importance for the partners is for NT servers. Part of the motivation for the move is said to be a desire by the trio to differentiate their products from commodity vendors that take their motherboards from Intel. It is unlikely that prices will be higher than those of Intel-but the performance should be sufficiently superior togive the desired advantage.®
AS/400 house JBA, is planning to divest itself from its channels division despite turning in results that chairman Alan Vickery claimed were better than expected. Vickery said JBA was considering spinning off the division or selling off part of its stake. "We've thought about lots of options," he said. "Including reducing our ownership to 49 per cent." Turnover for the six months ending 30 June rose to £126.1 million, from £88.1 million for the same period last year. JBA made a pre-tax loss of £4.46 million, compared with last year's pre-tax loss of £1.30 million. An interim dividend of 1.25p per share was agreed, unchanged from last year's interim dividend. In response to the figures, broker Albert E Sharp reduced its profit forecast for JBA's full year, from £14 million to £13 million and marking the shares down as a trading buy. Vickery said the group had performed better than expected and that a number of measures had been put in place to improve long term profitability. "We have made good progress in a number of key areas of our business and as a result are well placed to meet our objectives for the year," he said.®
Novell is embarking on a major push to promote the latest gong for its channel partners to hang on their walls. The PartnerNet programme, which is scheduled to complete its roll out at the end of October, offers resellers throughout the EMEA region training, cut-price support and free software. Novell claims to be targeting in excess of 25,000 resellers with the programme, which comes in two flavours, Business Partners and Business Experts, and is spending the next two months drumming up interest with a series of advertising and direct mail activities. Resellers wanting to sign up to the Internet-based scheme will pay an annual subscription and will then get access to a Web site geared toward generating sales for the channel. Those Novell resellers subscribing to the scheme as Business Experts will have access to Novell's customer base via the Partner Locator on the Web site. Partner Locator is a tool intended to make it easier for user organisations to find Novell resellers that meet their needs; it operates like a search engine, bringing up details of resellers according to skills, geographical location and so on. Murray Treece, Novell UK & Ireland channel sales director, said the PartnerNet programme was an attempt by Novell to bring more cohesion to its channel. "It provides a platform for the channel to deliver value-added service to their customers," he said. "PartnerNet will revolutionise the way Novell communicates with companies developing, integrating and selling solutions on and for the Novell platform."®
Hitachi is expected to announce the closure of another DRAM fabrication plant today, this time in Dallas, Texas. Yesterday, Hitachi shut its Irvin chip plant with the loss of 500 jobs, and announced it would restructure its chip operations in the US, as reported here. That news will come close on the heels of Fujitsu's official announcement that it is to close its fab in the UK, and follows the announcement that LG Semicon and Hyundai are to form a merged chip unit. Yesterday, Hitachi turned in a record loss of 250 billion yen and went into the red for the first time since just after the Second World War. Its president, Tautomu Kanai, said in a statement that he planned to "weed out" all unprofitable activities. More trouble has also hit another major manufacturer, Motorola. Reports said that it was to rejig its semiconductor products unit, which will include job losses and an attempt to cut its admin and overheads by around the 30 per cent mark. ®
Two Japanese giants have joined forces to buy UK disk equipment maker Nordiko. The two companies, precision equipment maker Shimadzu and semiconductor trader Marubun, will spend a total of £22 million on Nordiko to create what they say will be the largest producer of next- generation computer hard disk equipment. Of the two Japanese firms, Shimadzu will come away with the largest portion, 55 per cent, having contributed £13.9 million towards the takeover. Marubun is to provide the remaining £8.16 million gaining a 33 per cent stake. The remaining shares will be held by Nordiko. The UK firm, which makes the thin-film equipment required to produce giant magneto-resistive (GMR) heads for hard disk drives, will continue to operate under its own name, but will become a subsidiary of Shimadzu. Shimadzu said that the acquisition would give it a leading share of the market. The two Japanese companies are sending and executive scout party to Europe to oversee the handover. Marubun would be in charge of sales of the products in Japan. Shimadzu expects the acquisition to boost its annual sales by 13 billion yen by 2001-2002, taking its revenue to a total of 25 billion yen from its current level of 2.3 billion yen. It expects operations to begin next spring.®
A row is brewing between Apple and the Web's leading search engine companies over technology designed to make finding information on the Internet easier that is set to be included in the Mac maker's forthcoming MacOS 8.5 operating system. One of MacOS 8.5's key features is Sherlock, a major upgrade to the system software's Find File facility. In addition to peeking in networked or hard drive-stored files for information relevant to the user's search request, Sherlock also queries the main Internet search engines, such as Alta Vista, Excite and Infoseek. However, while Sherlock, demonstrated recently by interim CEO Steve Jobs at the Seybold publishing conference (see Apple's Jobs bold at Seybold) has won the approval of users, the search. Their sites are funded by advertising that users will not be exposed to if they perform Web searches using Sherlock. This kind of business is becoming more important as search engine companies seek to become users' main access points to the Web -- the so-called 'portals' market. Apple is currently negotiating special deals with various search engine companies, though it refuses to name which of them will ultimately be supported by Sherlock -- and to what extent these engines will be branded within Sherlock.®
Fujitsu has now formally announced the closure of its fab in Newton Aycliffe in the north east of England, barely six weeks since a Siemens fab in the area shut.
American financial analysts are raising their earnings estimates for Intel's third quarter to 79 to 80 cent/share because of what they believe is growing PC demand. With Xeon processors becoming available in the fourth quarter, the new prediction is for earnings around $3.14 for the year. It seems that Wall Street does not throw straw in the air and watch to see which way it blows. Instead, they look to DRAM - production-free New Zealand, the traditional dumping ground for South Korean surpluses. It seems that memory prices have been going up considerably-but the analysts could be misjudging the signals. The NZ economy is in bad shape because Auckland was closed for many weeks on account of power failures, so supply patterns are abnormal. CMP Media, the IT publisher, forecast a gloomy third quarter, with anticipated profits of one to two cents/share on revenue of $116 to £120 million, compared with analysts estimates of 21 cents. Its shares closed at 10 5/8, down 31 per cent. The reason given is that thin margins on PCs results in less advertising. IBM is recovering its position as a bellwether. Paine Webber and JP Morgan rated it as a buy. The reason? Consistency in earnings, large market capitalisation, and a good valuation. IBM has been notching up gains when all around were panicking. Analysts like IBM's share repurchase programme, which is expected to keep its stock price climbing. Hitachi now expects to lose $1.67 billion in the FY ending 31 March 1999 -- its first loss since the second world war. It seems that it is not just the DRAM and LSI businesses that are problematical-most of its other electronic and PC businesses are down too. Staff attrition and redeployment, together with a freeze on investment, are the basis of Hitachi's plans for recovery. Dialog, acquired by MAID in November from Knight Ridder for $421.6 million in a highly-geared move, produced a poor result for the half and saw its shares fall 13 per cent on the London market. Psion shares went up 9.2 per cent, attributed in part to a rebound and in part to better medium term prospects and fair results for its first half. ®
Newbridge Networks has signed a letter of intent to buy Castleton Network Systems, one of its Newbridge Affiliates. Castleton develops packet voice technology and high performance network access products. The companies have worked together previously on a project to develop product solutions in advanced voice and enterprise access markets. The acquisition of Castleton will provide Newbridge with a significant addition to its own product and service offerings in the area of voice, fax and data consolidation for enterprise wide area networks (WANs). According to Terence Matthews, Newbridge CEO, the benefits to Newbridge are twofold: "First we can absorb and further leverage Castleton's existing technology and products. Secondly we gain access to a talented and motivated development team that can be deployed on current and future projects to take advantage of their skills and experience," he said. Seamless integration would enable Newbridge to offer powerful new products and product enhancements across the networking product family, Matthews said.®
Cadence is aggressively pursuing the system-on-a-chip (SOC) market with the acquisition of Ambit, developer of critical design automation technology used in SOC design. The deal is worth $260 million, and will be paid in cash. Ambit, a privately-held company and currently an OEM partner of Cadence, offers a leading-edge product called BuildGates. This is designed for synthesis and timing analysis that specifically addresses the requirements of multi-million gate, "block-based" designs typical of SOC devices. This takeover follows closely behind the recent acquisition of EDA, a division of Bell Labs, also specialists in SOC technology. Ambit's BuildGates technology will give Cadence the industry's most comprehensive suite of tools and associated design flows required for SOC applications, the company said in a statement. "Customers have been asking for a new approach for applying synthesis to SOC design because last-generation technology has hit the wall," said Jack Harding, CEO of Cadence. "They have consistently told us that SOC design is not about point tools, but an efficient methodology." He said that Ambit had established a superior alternative to large, multiple-IP-block designs that characterised the SOC era, and that further research was already underway. Cadence said that it expects most of the 100 staff at Ambit to join it, including the R&D team. The acquisition has been approved by the boards of directors of both companies and is now subject to regulatory and Ambit shareholder approval. ®
Reliable reports said today that there could be an auction between a consortium led by STMicroelectronics and another group from mainland China. The Chinese group are interested in acquiring the fab in north east England outright, according to the sources. Yesterday, it was revealed that STMicro (formerly SGS Thomson) was heading a consortium of European firms which believe that DRAM will be more lucrative than it has been since the launch of Windows 95. The source said that the Chinese consortium, having observed the way DRAM prices were going and the failure of Japanese and Taiwanese firms to keep their businesses going successfully, was in negotiations with Siemens. ®
A Japanese team from Kyocera has arrived at the offices of Mita to look at the prospects of a takeover. Mita makes photocopiers but went bankrupt, largely as a result of offshore development of its products, according to sources. Mr Miyazaki, the court appointed receiver, welcomed the arrival of the six strong team from Kyocera. Staff arriving at the site included Koji Seki, director of Kyocera and general manager of the telco division, and Yoshio Nakajima, manager of the company's subsidiary management division. Mita's European president, Takashi Kadamori, said: "It is becoming increasingly clear that Mita Industrial is receiving the help and support it needs." ®
NEC Direct has moved its corporate sales office to its plant in Livingston, near Edinburgh, from Maidenhead. Manufacturing of NEC's Powermate and Versa notebook ranges will move to the plant from France and Japan, next year. All personnel were told about the move about six months ago, and those that did not want to relocate were offered similar jobs in other NEC subsidiaries. A company representative said that there had been a few redundancies, but "nothing drastic". Colwyn Munro, general manager of NEC Direct, commented: "Below a certain level, a job is just a job. People do not expect to have to move hundreds of miles to keep it which is why we offered alternative positions to those who could not or did not want to move. "The move shows NEC's commitment to the UK market," he continued. "It made no sense to have lot of little sub office dotted around the country costing more money had causing poor communications. Bringing a consolidated manufacturing operation closer to our customer base will allow us to provide a better service." The set up in Scotland is a kernel of what it will become, he said. "Scotland has the skilled labour resources and the infrastructure to fully support this operation."®
Shareware utilities specialist Aladdin Systems has covertly fired its president, John Nesham, and 12 members of staff. The dismissals took place three weeks ago, but were only revealed this week by on-line magazine macweek.com. An Aladdin Systems spokeswoman said the company's board felt Nesham was "not taking the company in the right direction they wanted it to go". Nesham, after two years in the role, has been replaced as president by Aladdin co-founder and board member Jonathan Kahn. The 12 staff members were laid off because of slow summer sales and a new shift toward the Windows platform, said the spokeswoman. Aladdin's offerings, such as the Stuffit suite of compression/decompression tools, were originally developed for the MacOS, but are now being offered to Windows users.® However, she denied the company's sales were ailing -- on the contrart, she said, sales were growing, thanks to the launch of the iMac and the recent release of new Windows versions of DropStuff and Stuffit Expander.®
Sources close to Kyocera said that its UK division will sell satellite phones using the Motorola Iridium system. The company will also sell mobile phones in the UK for the first time, according to a reliable source. A US startup called BrightPoint is involved.
Ingram Micro pumps up ecommerce with pcOrder.com Ingram Micro's plans to compete with Web-based direct PC sellers moved a stage further yesterday as the company licensed pcOrder.com's on-line system configuration technology for its forthcoming ecommerce site. As reported in The Register in July, Ingram Micro is developing an ecommerce site, called PrimeAccess, which is designed to make it easier for resellers to order product. Ultimately, PrimeAccess will support resellers' own ecommerce activities, streamlining the ordering and supply chain from distributor to end user. When PrimeAccess was announced, Ingram chief technology officer Dave Carlson said it would offer a configuration utility. That feature is now in place, thanks to the deal with pcOrder.com. "What pcOrder does is enable us to embed the technology to do configuration into our suite of e-commerce offerings," said Ingram Micro president and worldwide COO Jeff Rodek. "It's really the next link in our chain of e-commerce offerings." Electronic configuration will be available for resellers buying Compaq Computer, IBM, and Hewlett-Packard PCs, non-branded systems, and finished goods, Rodek added. The technology will also allow Ingram sales staff to monitor product availability and pricing. According to the company, the pcOrder configurator will be made available to resellers in November -- PrimeAccess itself will be unveiled to the channel at a conference in Orlando, Florida next week.