Symbol-Motorola Deal Moves Forward

On Sept. 19, Motorola and Symbol Technologies signed a definitive merger agreement, under which Motorola agreed to acquire all of the outstanding shares of Symbol for $15 per share. The transaction has a total equity value of approximately $3.9 billion. Last Friday, Symbol announced that putative class action lawsuits have been filed against the company seeking to enjoin the proposed acquisition. Symbol believes the lawsuits are without merit and intends to defend against the claims.

As a company, Symbol specializes in designing, developing, manufacturing and servicing products and systems used in end-to-end enterprise mobility solutions featuring rugged mobile computing, advanced data capture, radio frequency identification (RFID), wireless infrastructure and mobility management.

Christopher J. Kardish, principal research analyst, Nemertes Research, pointed out that Motorola has already been working with Symbol so the acquisition came as no surprise. “In fact,” said Kardish, “it brings our attention to the reality of the virtual workplace, and how technologies are beginning to merge to make this concept happen.”

According to Nemertes, the key to the virtual workplace is to ensure that remote workers can connect to corporate application resources, regardless of device and/or location. Devices created by Symbol help do just that.

“So with one purchase, Motorola is getting access to tools that support the entire Enterprise Resource Planning (ERP) application — from inventory to production, sales and delivery. One of the neatest features Symbol has recently added is VoIP connectivity on its general purpose mobile computers, enabling workers to get immediate access to help,” explained Kardish.

Nemertes believes however that the “biggest black mark against Motorola is the proprietary nature of its radio communications.” Apparently some enterprises complain they feel trapped if they do a deal involving Motorola’s technology because they can’t buy interoperable equipment, and they can’t afford to replace the equipment already installed. This can lead to “vendor lock-in.”

Kardish advises that, “Mobile equipment vendors should ensure their devices include secure wireless networking options. One source is privately held IPUnplugged (www.ipunplugged.com) which provides secure roaming clients, as licensed by Cisco. Enterprise IT managers should avoid vendor lock-in by requiring interoperability at the link and network layers. For example, specify WiFi certified 802.11g, and Cisco certified IPSec with 3DES.”

Linux Usage Increases in Large Companies

According to Evans Data Corp’s latest Enterprise Development Issues Survey, Linux use in the servers of large companies is continuing to rise. The survey, to which nearly 400 developers and IT professionals from companies with 1,000+ employees contributed, found that 73 percent of enterprise companies are running Linux on at least some of their servers. Just six months ago that figure was 67 percent and a year ago, 65 percent.

“We continue to see Linux making deeper inroads into the Enterprise space as it matures to handle more critical business workloads,” stated John Andrews, president of Evans Data. “We are continuing to see more and more enterprise IT managers make better use of Linux, integrating it into their heterogeneous environments where it makes the best business sense.”

Other findings from Volume I of the 2006 Enterprise Survey of almost 400 developers:

• Grid computing is on the rise. Fifteen percent of respondents are currently using a grid computing strategy, up from 10 percent six months ago. One-third of enterprise companies either have a grid in place or expect to in the next 12 months.

• Eighteen percent of those surveyed are currently implementing Rich Internet Applications, a 50 percent increase from six months ago.

• Desktop database usage is slipping. Only about half of respondents use desktop databases compared to 66 percent one year ago.

Electronic Component Costs Increase

Viasystems, Inc., a global provider of printed circuit boards and electro-mechanical components and assemblies, plans to increase prices to its printed circuit board customers as a result of significant ongoing increases in raw material costs. This price increase is the second interim price increase implemented this year, as a result of these continuing increases on its cost base.

“We have seen the prices of raw copper, crude oil, gold and silver hit record highs. This unprecedented increase in commodity costs has driven our material suppliers to increase their prices to us, specifically laminate, copper foil and resin costs. These material cost increases, together with ongoing labor rate and currency exchange rate inflation, have adversely impacted our cost base, where we have experienced increases as high as 20-30 percent,” said David M. Sindelar, CEO of Viasystems. “We have been aggressively pursuing cost reduction activities in order to minimize the impact of the cost increases on Viasystems and our customers. We have also used alternate materials or suppliers whenever possible. Unfortunately, we are unable to offset these recent cost increases and, therefore must again pass on some of the cost impact to our customers. With material costs representing approximately 50 percent of our costs, increases such as these are difficult to absorb.” Effective immediately, Viasystems will begin the implementation of a price increase that should average approximately five percent.

India’s FoBaz Ties Up With PhotoWorks

India’s first comprehensive online photo service, FoBaz (www.fobaz.com) has become partners with PhotoWorks, an Internet-based digital photo-publishing company. Launching in time for India’s holiday and gift-giving season in October, FoBaz will leverage PhotoWorks’ digital imaging platform to deliver photo products and services.

“PhotoWorks’ significant ownership stake in FoBaz provides us with a key foothold in the world’s fastest-growing online population,” said PhotoWorks CEO Andy Wood. “Until today, the more than 18 million web users in India have not had viable alternatives for sophisticated digital imaging services and products.”

Similar to services in the US, FoBaz will provide the expanding Indian market with high-quality prints, personalized photo cards and gifts, online sharing and storage for digital images.