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Shopping List The shares of LogicaCMG rose 10.5p to 177.5p on the basis of speculation by IT market analysts that they might be on the shopping list of Hewlett-Packard, who have made no secret of the fact that they want to make acquisitions in this area, in order to remain competitive with the very biggest of the IT multi-nationals. Even though LogicaCMG are probably our best recognised major software company, they are still not able to break into, in any big way, the extremely lucrative Government market for software, with most contracts going to American companies EDS, Accenture and IBM. It is going to be very difficult for our major software companies to become major multi-national players, if the Government isn’t awarding them much work, and if the Americans continue to snap them up as soon as they get to any reasonable size. Lax Takeover Rules The takeover rules are far less strict in the UK than they are in other European countries like Germany where SAP and Siemens are able to thrive, or in France where companies like Cap Gemini can compete with the best. SAP who have leadership in the ERP market, has been watching the kerfuffle between their three major rivals Oracle, PeopleSoft and JD Edwards. PeopleSoft has bought JD Edwards and move into second place behind SAP, but Oracle have a hostile bid in for PeopleSoft, which would take them into a clear second – and not too far behind SAP. Our Pride and Joy Do we have a major company in that market? Yes, we do. We have Sage, which is one of the fastest growing companies in the Enterprise software area. They are, indeed, the ONLY software company in the UK’s FTSE-100 index. However, it is now believed that they are in play! The company most tipped to buy them out is Microsoft, who hold less of a market share than Sage, and are not growing so quickly, but of course they have heaps of cash, and as they have decided to become a major player in this area, then acquiring strong young fast-growing companies would seem to make sense. Little IPR The world software Monopoly Board looks like it is going to become even freer of UK software companies – even on the cheaper squares. It has been said that there is very little software IPR in the UK, with very few of our software companies worth more than a hundred million pounds – the value of a reasonably sized BMW dealership. It has also been said that, in the future, the IPR for software will mainly reside in the USA and that the software development work will be done in India. That’s probably going too far, but the IT industry certainly needs some tender loving care and nourishing, if our small businesses are to become large businesses, and if our large businesses are to be able to compete at the very highest level on the global stage. Gerry McLaughlin Aug 5, 2003 Email this article Printer friendly page Previous Page
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