The Four Hundred

But Wait, There's More . . .

Transoft last week acquired blackboxIT, a fledgling English software company that had landed some surprisingly large customers, such as Capital One and Barclays Bank, with its source-code analysis tool, evolveIT, which Transoft calls an "application understanding" tool for mainframe COBOL applications. According to Paul Holland, Transoft's chief executive, there should be strong demand for his application understanding tool because the stability and the age of mainframe applications often lead to a drop in qualified technicians who are familiar with the code. "In the mainframe world, it's quite funny," he says. "A mainframe shop will say, 'The mainframe runs our business. But the last guy who changed our code, we haven't seen in three years. We don't know if he got lost in there.'" Holland doesn't foresee evolveIT being used for OS/400 COBOL in the near future. Transoft introduced support for OS/400 RPG with its transformation adapters, which help companies transform, integrate, and assemble new applications out of existing business logic, about two years ago.

Gartner's Dataquest unit released its study of the 2001 database management systems market last week, and the results are more positive for IBM than they are for the industry as a whole. According to Gartner Dataquest's numbers, IBM increased its share of the database market from 33.7 percent to 34.7 percent, topping rival database vendor Oracle, whose market share dropped from 34.1 percent in 2000 to 32 percent in 2001. IBM's 2001 acquisition of Informix was the key to Big Blue's rise to the top of the database market. While sales of the Informix database accounted for only $264 million last year, it was enough to put IBM over the top with a total revenue figure for 2001 of $3.06 billion. Oracle, the number-two database vendor, recorded $2.83 billion in database sales last year, according to Gartner Dataquest. The overall database market increased by only 1.4 percent last year, to $8.8 billion. The number-three database vendor, Microsoft, saw the biggest increase in sales last year out of all the database vendors. Revenue from sales of Microsoft databases, including SQL Server, grew about $220 million last year and pushed the company's market share from 14 to 16.3 percent.

Last week DataMirror made its third and final offer to buy a majority stake in IDION Technology Holdings, the South African company that owns Vision Solutions, DataMirror's rival in the OS/400 high- availability market. The Canadian company's last offer to buy enough of the outstanding IDION shares to form a majority--which would be 33.3 percent plus one share, because DataMirror already owns 16.7 percent--is 1.80 ZAR (South African Rand) per share, a 50 percent increase over its second offer, on April 18, of 1.20 ZAR. DataMirror's second offer was an 85 percent increase from its first offer, made March 18, of .65 ZAR, but DataMirror was only going after 50 percent of the stock plus one share (a simple majority) with its second offer, instead of seeking to acquire 90 percent of the outstanding stock, as in its first offer, so the actual value of the offer stayed about the same. At current exchange rates, DataMirror's final offer values all of IDION at $19.4 million, a substantial increase over its second offer, which valued IDION at $12.2 million. DataMirror pointed out that its final offer is still a 75 percent premium, according to the current market value of IDION on the Johannesburg Stock Exchange. IDION initially defended itself by reminding people it spent $54.5 million to buy Vision Solutions two years ago, and still expects some promising technology, such as ORION, to come of it. It appears unlikely that DataMirror will find a majority, as IDION's executives and directors own 44 percent of the company and had commitments from 9 percent of the remaining shareholders in rejecting DataMirror's second bid. Nevertheless, the rules governing public companies are strict about such things, and IDION is convening its independent committee of non-executive directors, assisted by IDION's counsel, PricewaterhouseCoopers Corporate Finance, to formally review DataMirror's final offer, which has a number of qualifications to it and will be automatically revoked on May 28. IDION says its expects to make its decision by May 17.

As DataMirror dragged out its hostile takeover bid of rival IDION Technology Holdings last week, DataMirror directors adopted their own set of rules designed to give the company some shelter from hostile takeovers. The purpose of the new shareholder rights plan is to give DataMirror shareholders time to assess and evaluate unsolicited takeover bids and, in the event a bid is made, to come up with an alternative that maximizes shareholder value, DataMirror says. The new plan, which is now in effect and automatically dies June 20 unless a majority of shareholders vote for it during the company's annual meeting, is not intended to deter takeover bids, nor was it created because of a pending bid to take over the company, DataMirror says. With a market capitalization of around $75 million, none of DataMirror's competitors can come up with the money to acquire it--except Ascential Software, the data transformation side of the former Informix database company, which has $466 million in cash sitting around and a data transformation software business running at about $40 million a year. Having launched an attack on rival IDION, DataMirror may provoke a company like Ascential to think about what a bargain DataMirror might be, even at $100 million.

Infinium Software has launched a new reseller channel program designed to increase the visibility and the customer base of its OS/400-based ERP suite. The Hyannis, Massachusetts, company said it will use the sales forces of its seven new partner companies as an extension of its own established direct-sales force and will co-develop marketing programs with them as well. Each of Infinium's new partners will provide the hardware and services necessary to get customers up and running on Infinium's iSeries software. The companies that Infinium has formed partnerships with include Computer Configuration Services of Irvine, California; Dynamix Group of Atlanta, Georgia; Essex Technology Group of Rochelle Park, New Jersey; Inter-American Data of Lawrenceville, Georgia; Mainline Information Systems of Tallahassee, Florida; SCS of Syracuse, New York; and Sirius Computer Solutions of San Antonio, Texas.

The Original Software Group announced last week that it has signed up the first three members of its new TestBench Proven Program, which seeks to achieve closer integration between Original Software's OS/400 testing software, called TestBench, with popular software change management systems for the iSeries. The first three members of the TestBench Proven Program, along with the products that have been integrated with TestBench, include Aldon Computer Group and Aldon/CMS; MKS and Implementer; and SoftLanding Systems and TurnOver. By integrating the TestBench with the software change management systems, the companies hope to provide AS/400 and iSeries customers with a more unified approach to application development, debugging, and lifecycle management.

Our buddies at DLB Associates have done their good deed for the iSeries community again this week and put together the latest OS/400 PTF Guide, to help you keep track of IBM's latest PTF updates for OS/400 and its related systems programs. There is an index of OS/400 PTF Guides available as well. DLB says that IBM removed a bunch of PTF groups from general availability and rolled them into the cumulative releases, cleaned up OS/400 V4R3, and did away with OS/400 V4R4. DLB says that this house cleaning is in preparation for a whole new stream of group PTFs for OS/400 V5R2.

The word on Wall Street is that IBM will this week announce, either before or during its semi-annual meeting with stock analysts in New York, that it will cut its employee headcount by between 2.5 and 3 percent in the current second quarter. IBM employs some 320,000 people worldwide, with 160,000 of them in the United States. The cuts would come to about 8,000 to 9,000 people. The word is that most of the cuts will come in weak areas of IBM's vast services organization. The company has already announced that it is cutting several hundred jobs from its chip- making operations, that 1,000 employees have been asked to leave at its English subsidiary, and that some 17,000 employees will be transferred out of the company when and if Hitachi and IBM come to terms on the joint disk-drive-manufacturing venture they announced a few weeks ago. If the economy does not improve, expect more of the same from IBM, and that it will have an effect on the services and support IBM provides to you. Also expect IBM to demand that its resellers and channel partners pick up some of the slack in return for a bigger cut of the action.

AS/400 and iSeries disk drive supplier BCC Technologies is keeping the heat on rival IBM for the disk capacity budgets of OS/400 shops. IBM announced dramatic price cuts on its 17.5 GB and 35.2 GB disk drives a few weeks ago in order to better compete with BCC and allay concerns in the OS/400 customer base that its disk prices are too high. BCC has come right back at IBM's cuts with a limbo move, cutting its prices by up to 30 percent, even though its disks were already substantially less expensive than IBM's. BCC cut the price on its 35 GB, 10K RPM disks to $1,400, matching the price that IBM charges for a 17.5 GB, 10K RPM drive. BCC cut the price of its 17 GB, 10K RPM drives to $900, which is $500 less expensive than the equivalent IBM drives. To see a full price list for the BCC products and find out how they compare with IBM's drives, go to BCC's Web site.

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