Solution 6 tries a bit of acquisition therapy

Solution 6 has shrugged off a loss of almost $A80 million in the 1999/2000 financial year by acquiring New Zealand software developer exo-net International for $A10 million in cash and $A20 million in scrip. The three-year old Kiwi company develops e-business software, much of which is distributed through accounting firms and has operations in NZ, Australia and Singapore.

"Within 12 months exo-net has amassed 2500 end-users," noted Graham Maribito, vice president of acquisitions and marketing at Solution 6. He added that exo-net's server-based and ASP-delivered ERP software, e-commerce transaction engine and online workshops deliver a close fit to Solution 6's strategy.

"Exo-net's e-commerce infrastructure tools, which assist integration between e-commerce marketplaces, ASP solutions and a range of financial services are also expected to become important components of Solution 6's e-business platform.

"It forms the core of what Solution 6 sees as the future role of the accountant - as a virtual CFO to SMEs," he concluded.

USC opens US development arm

To capitalise on the growth expected to come from the knowledge management marketplace Utility Services Corporation (USC) has opened a subsidiary - Percipience -- in Silicon Valley and forged a licensing agreement for the Darwin concept retrieval technology with 80-20 Software.

A spokesman said the combination of Darwin and the MOSAIC database from USC's IT arm MITS will enable Percipience to develop knowledge management systems that will become a core technology for corporate systems of the future.

"The potential in the knowledge management area is enormous," noted Geoff Lord, chairman of USC. "To capture e-business, organisations need products with fast reaction time, scalability and fault tolerance, as well as the ability to handle the volume of e-information an organisation processes.

"By combining MITS's online intellectual property with 80-20's retrieval technology it is hoped that USC will be in a position to exploit opportunities, particularly in the US."

Leighton's new comms move

Leighton Contractors has formed Vytel, a wholly owned telecommunications company, just a week after announcing that its Nextgen joint venture with Macquarie Bank planned to run fibre optic cable from Brisbane to Perth.

Bob Merkenhof, Leighton's managing director, acknowledged that telecommunications is now a large part of the company's operations. "Over the past 10 years Leighton Contractors has turned over approximately $A2 billion from telecommunications activity and has significant design, construction, installation and operation and maintenance capabilities," he explained. "Last year, revenue from telecommunications was over $A250 million. Through Vytel our aim is to increase the size of our telecommunications business to at least $A500 million a year."

Vytel is headed by Phil Cooper, managing director, who claimed that Vytel will be the first multi-disciplined service provider in Australia's telecommunication market offering both cable and wireless expertise as well as project development and investment capabilities.

"Vytel will operate through three contracting arms -- Visionstream, LSE, and Vytel Asia - and will have a separate investment division to manage our shareholdings in businesses such as Nextgen and Reef Networks," Cooper said.

Quadtel expands into software

Broadband product and service supplier Quadtel has opened a content and software division in an effort to become a provider of complete broadband solutions encompassing broadband hardware, software and content.

"We are working with Internet service providers across the Asia/Pacific as they roll out broadband networks and they all tell us the same thing: developing and implementing their content strategy is just as challenging as rolling out the actual network hardware," explained David Ramsay, CEO of Quadtel. "The new division offers a range of consultancy and software services to help."

Quadtel also plans to launch a portal known as QBlazel to explain broadband to narrowband users. "Overseas experience shows that broadband is a very confusing place," Ramsay said. "By making it easier to understand we aim to push uptake beyond the early adopters and get the market moving."

Business briefs

Australian smart card specialist Keycorp has forged a development agreement with US company Network Commerce covering the provision of payment solutions for Keycorp's terminals to be certified with transaction processors in the US. Network Commerce will provide certification technology that will provide Keycorp payment terminals with access to all major US transaction processors, a spokesman explained.

IT integrator Data#3 has signed up as a reseller of software products from US developer Candle Corp. The agreement covers the full range of Candle's application performance and availability management solutions and installs Data#3 as the first national reseller for Candle in Australia.

Telstra's massive deal with Pacific Century Cyberworks (PCCW) is edging ever closer as PCCW's takeover of C&W Hong Kong Telecom is in the bag and, more recently, company chairman Richard Li has resigned as deputy chairman and executive director of Hutchison Whampoa, which is chaired by his father Li Ka-Shing. Analysts believe the resignation was simply a token gesture, since the family - through the two companies - controls more than 59 per cent of all mobile telephony subscriptions in Hong Kong.

Corporate quarters at home

In the year to June 30 troubled Solution 6 lifted revenue 142 per cent from $A74.3 million to $A179.5 million but suffered an overall operating loss of $A79.5 million after accounting for abnormal losses of $A67.5 million. The abnormals were attributed to non-cash charges associated with R&D capitalisation in the previous year; ASP and Web portal development costs; the write-off of previously capitalised software, systems and distribution network; and restructuring and redundancy costs.

A spokesman said revenue from consulting business units exceeded $A100 million and accounted for 57 per cent of all sales revenue. Forty-five per cent of revenue was derived from professional services companies, 29 per cent from other businesses and 26 per cent from government.

Telecom New Zealand made a net profit of $NZ783 million ($A602 million) including the impact of investing in AAPT in the year to June 30. Excluding AAPT the Kiwi carrier lifted net profit 2.4 per cent to $NZ846 million (about $A650 million). During the year the company lifted operating revenue by 4.2 per cent to $NZ3.60 billion ($A2.77 billion) on the strength of growth in data services and international call traffic, and the increasing take-up and usage of mobile phones.

In the year to June 30 AAPT lifted revenue 25.4 per cent to $A941.9 million, while EBITDA rose 35.5 per cent to $A83.3 million. The company also reported a net profit before abnormals and tax of $A34.2 million.

Corporate quarters abroad

Hewlett-Packard lifted revenue 15 per cent from $US10.3 billion to $US11.8 billion in its third quarter to July 31. Net profit rose 23 per cent from $US853 million to $US1.046 billion and prompted CEO Carly Fiorina to claim that HP is the "fastest growing PC vendor worldwide". She said the company's home PC business lifted revenue 62 per cent, and notebook revenue increased 93 per cent. The company's board has now approved a two-for-one stock split.

In its third quarter to July 31 Novell saw its net profit slump from $US49.3 million a year ago to $US8.6 million on revenue that fell from $US327 million to $US270 million. The poor performance was attributed to weak sales of packaged software globally, and an especially weak result in Europe. NetWare server software sales fell 29 per cent to $US120 million and revenue from older Novell software products fell 42 per cent to $US16 million.

Network Appliance lifted revenue 124 per cent from $US103.3 million to $US231.2 million in its first quarter to July 28. Net profit for the quarter, before accounting for in-process R&D and amortisation of intangible assets, jumped from $US12.5 million to $US32.3 million Actual net profit for the quarter fell from $US13.5 million a year ago to $US5.0 million.

"Revenue for the quarter was driven by the overall growth in the external storage market as customer demand for high-end scalable systems and data management software expanded," explained Dan Warmenhoven, CEO. "Storage is becoming the most critical element of IT infrastructures for today's content-centric global businesses."

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