The paranoia concerning the Dell or direct phenomena seems to be never-ending - in fact, the whole thing is getting out of hand. Hardly a day goes by without some manufacturer making a bold statement about how it is changing its business plan to take on Dell. But as rival PC manufacturers are falling over themselves to generate demand, resulting in plummeting prices, even Dell must be feeling the pressure to cut back.
But beware. Not even the UK is free, with Dell reportedly setting its sights on Europe and the rest of the world. The company has stated that Europe is expected to drive growth this year, and with just over a third of total sales coming from non-US markets, Dell anticipates strong European revenue. Planned expansion into China and South America should also generate an extra $1 billion in sales over the next few years for Dell.
Holding just over eight percent of the European market means there is plenty room for expansion and Q1 saw an exponential 62 per cent growth, taking sales up to $1 billion. Analysts expect Dell to generate a remarkable $18 billion of revenue during 1999.
Com as you are
As any techie will tell you, developer conferences are fascinating events, packed with interesting information. And Microsoft's Teched developers' conference in New Orleans last week was no exception. In a bid to become a credible player in the corporate sector, Microsoft will open up its Com+ architecture to third party transaction processing products.
Microsoft intends to publish the transaction-based elements of its Com+ software interfaces, to enable third party transaction processing monitors - critical components of high-end corporate systems - to interoperate with the object-based technology.
The scheme, dubbed Bring Your Own Transactions, will improve integration between Microsoft-based applications and the mainframe or Unix-based legacy systems possessed by most large corporates. It will enable users to adopt the Com (common object model) approach for departmental and Web-based e-commerce packages without having to worry about how to hook them into their existing back office, mission-critical applications.
This, the software giant hopes, will give it a foothold in the high-end space, on which it can capitalise as Com+ becomes more robust (for more details, see page 26).
Hahn goes solo
Meanwhile, Netscape has lost its chief technology officer Eric Hahn, who resigned last week to invest in startup technology companies.
Hahn founded Collabra, which was acquired by Netscape in 1995.
He became chief technology officer in 1997. The company will not replace Hahn directly but will appoint technology directors to work under John Paul, senior vice president of enterprise servers and Steve Savignano, senior vice president of application products.
Getting all excited over fluffing
On the other hand, Excite is facing two lawsuits following its rejection of a takeover offer from Zapata. These come at the same time as rumours, currently circulating in the US, that the entertainments companies Disney and Time Warner are both interested in buying a minority stake of the internet search company.
The two suits, brought by Lazer Blisko and Taam Associates, allege breach of duty to Excite's shareholders. Both companies request that Excite acts to protect its shareholders by co-operating with interested parties that would maximise the shareholder value, even if this means a merger or takeover.
The companies claim that Zapata's $72 per share offer was more than acceptable, considering it is about $20 per share above the current Wall Street value of Excite's stocks. Zapata owns food packaging businesses but has recently acquired two online publications as part of its strategy to build up internet operations. This strategy has been spearheaded by a 'Zapata will buy your Website' advertising campaign.
According to US reports, Disney is considering buying up to 40 per cent of the company in a bid to add much needed traffic to its Web offerings.
Japanese plant cultivation
NEC is sticking its corporate neck out with the construction of a $1.4 billion semiconductor factory in Roseville, California, despite the slump in its native Japan.
The company's figures have been hit hard by the drop in demand for PCs in Japan and by falling memory prices, but although most Japanese companies are cutting investment to the point where some analysts fear they may lose their market position, NEC seems to be taking the reverse approach.
The Roseville plant will be built on the site of an existing NEC operation and is aiming at producing 256Mbit and 1Gbit DRam memory chips. It will open in 2002, with initial production targeted at 20,000 units a month.
The plant seems to signify a U-turn in NEC's strategy. It was reported in Japan last December that the company would cut investment this year, but now it looks increasingly likely that NEC has decided to join Samsung in betting heavily on the next generation.
James Harding is US editor of VNU Newswire, based in San Francisco.
He can be reached at [email protected] or on 00 1 650 306 0879.
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