Questions raised as BHP IT is jilted at the altar again and the IT services sector sets itself for a shakeup

BHP jilted at the altar yet again

Confusion persists about who's doing what to whom within the Australian IT services sector. At first it seemed that IBM Global Services Australia was about to take over BHP IT, but that deal fell flat at the last minute. Some sources claim the decision was left so late that BHP IT sheepishly had to cancel a meeting it had called to explain the takeover to staff.

It now appears that IBM GS has shifted its sights to GE Capital IT Solutions, but may have to compete with CSC if it wants to proceed with a full bid.

The real loser out of all the fun and games is BHP IT, which has been courted before and jilted before. Many observers are asking what's wrong?

CSC sells off Australian health products armCSC has sold its Australian health products business to a venture formed by a group of former CSC employees and British company iSoft. The 50:50 joint venture, which will do business as iSoft, is headed by managing director Graeme Wilson, a former CSC staffer. About 80 CSC employees will transfer to the new operation.

The new company will take from CSC the Homer, Himas, Topas and Reality X products and associated customer contracts, and will focus its activities on the health industry, and particularly the hospital sector, Wilson explained. "Our joint venture partner iSoft provides state-of-the-art health applications based entirely on Microsoft technologies. We will be able to offer our customers an upgrade path to an application suite that fits within a modern information systems strategy," he added.

In the wake of the sale, CSC will focus on the delivery of professional services, like systems integration and program management and outsourcing to healthcare customers, explained George Bell, managing director of CSC Australia. "Where appropriate we will work co-operatively with iSoft," he added.

ISoft was a member of the CSC consortium that recently won a contract to replace patient administration systems in all NSW public hospitals.

Ongoing rumours send LibertyOne shares to new highA revival of rumours that China.com was about to mount a takeover bid for LibertyOne sent the Australian company's share price to new highs last week. Two weeks after the rumours first sparked the market's interest and led to a "please explain" letter from the Australian Stock Exchange, the tale surfaced again on Friday and drove LibertyOne's shares to $A1.73. They closed the day at $A1.67, which represented a gain of 23 cents for the day.

LibertyOne has a small stake in China.com, which recently undertook a successful initial public offering on NASDAQ. The market believes China.com is prepared to pay up to $A3.30 for the Australian company.

In response to the ASX demand after the first surge LibertyOne noted that it is "part of a rapidly-growing industry that is subject to constant speculation and rumour about joint ventures, licensing deals, mergers and takeovers".

MYOB buys Kiwi developer

Australian accounting software developer MYOB has agreed to buy New Zealand developer CA-Systems for $A14.6 million in cash plus shares worth $A3.3 million. CA-Systems was founded in Christchurch in 1990 and now has a staff of 50. It produces software solutions for accounting practices in NZ, and recently expanded into the Australian market.

In the wake of the takeover, the business of CA-Systems will be merged with MYOB's Teletax subsidiary in Australia, forming a business unit that will focus on servicing accounting practices.

"CA-Systems and Teletax have worked together in the past and will provide a powerful combined solution for accountants in the Australian market. In addition, our small business software in New Zealand will add depth to MYOB Limited's existing product range in this market," explained Mike Chisholm, managing director of CA-Systems, who will become general manger of the enlarged business unit.

OzEmail squeezes Telstra out of Harvey NormanOzEmail has won a contract to provide Internet starter kits for use as promotional tools by giant retailer Harvey Norman. Similar kits, which are given away with purchases of computer or communications equipment worth more than $A50, were previously supplied by Telstra Big Pond.

John Slack-Smith, general manager of Harvey Norman, said that a number of factors had influenced the decision to change suppliers, and reliability had been high on the list. "Being able to connect when you dial your ISP is fundamental", he explained. "In addition, OzEmail offers 24x7 technical support second to none for its customers."

Justin Milne, general manager of OzEmail Internet, said the deal was important in giving the company exposure in the consumer arena. "We see the retail channel as a crucial part of our marketing mix going forward," he explained.

Internet researcher sets up shop

US Internet research company Media Metrix has entered the Australian market via a joint venture with Australia Market Interactive (AMR). The Australian operation, managed by David Steward-Hunter, will provide meter-based Internet and digital media audience measurement services for Australia and NZ.

The services will include Internet statistics, such as audience size, reach, frequency, and time spent online, by category and for specific Web sites. The company uses a patented software meter to record all of an individual's activities while online.

Prior to joining Media Metrix, Stewart-Hunter was managing director of ACNeilsen's custom research division. He is also deputy chairman of the Market Research Society of Australia.

Business in brief

ANZ is offering its customers access to E*Trade Australia's online stockbroking services from its banking Web site. Services offered include straight-through order processing' real-time price quotes for companies listed on the ASX, NASDAQ and New York Stock Exchange; market news; and watch lists. Kerry Roxborough, CEO of E*Trade Australia, said the company expects a surge in the client acquisition rate with the launch of the service. "The recent reduction in brokerage rates will further encourage strong interest in the service amongst ANZ customers," he explained.

An alliance between PricewaterhouseCoopers and Clarify involving customer relationship management ventures is being implemented in the Asia/Pacific region. The aim of the alliance is to offer customers a single point of contact for the provision of Internet-based customer loyalty solutions, a spokesman claimed. PwC is creating a Clarify team with experience in the developer's eFrontOffice products.

Microsoft has set up a team of about 35 companies intent on accelerating the adoption of broadband technology by consumers. While the aims of the Microsoft Windows Media Broadband Jumpstart initiative are ostensibly to create compelling content to exploit broadband technology and to establish an infrastructure for delivery of streaming media to consumers, it seems Microsoft really has its sights set on RealNetworks, the current leader in the streaming media field. The members of Microsoft's consortium include cable companies, content developers and distributors, and network companies.

Intel has formed a new business operation, Intel Online Services, to specialise in second-generation Web hosting and particularly the provision of electronic commerce solutions. A number of companies have already signed up to work with the new business unit, including PricewaterhouseCoopers, Razorfish and UUNet. Initial customers include the e-Citi unit of Citigroup, Excite@Home and NEC.

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