Review of the Year: Part III (Sept-Nov)

30 Dec 2005

A flurry of acquisition and a buoyant time for IT vendors suggest that this was the year that finally exorcised the ghosts of the technology slump. Sit back and take a rollercoaster ride through the year

Eircom investors gave the company the final go-ahead to acquire Meteor and initiate a €423m rights issue to finance its purchase. At an extraordinary general meeting shareholders approved both resolutions with more than 99pc of votes in favour of each. Indian technology giant HCL revealed plans to create 600 new jobs as part of a major expansion of its contact centres in Belfast and Armagh. Earlier this year it acquired Armagh-based company Answercall Direct, safeguarding 140 jobs. The expansion, supported by Invest Northern Ireland, will create at least 400 new jobs in Armagh with the balance of the jobs being allocated to Armagh or Belfast depending on operational requirements. ThirdForce agreed to acquire UK e-learning firm Creative Learning Media for £5.5m sterling (€8.1m) in a cash and shares deal. The company described the acquisition as a strategic move that expands ThirdForce’s already strong market presence providing e-learning to thousands of individuals across the UK. Tourism Ireland signed a major €2.6m web development contract with London-based LB Icon following a six-month tendering process. Tourism Ireland already has an extensive online presence, with 24 websites in 14 languages.

Microsoft big-cheese Steve Ballmer rolled into town to endorse the value of the business’s Irish operations, saying that, unlike almost any of the company’s other overseas locations, they offered a “full service”. Exactly what the Microsoft CEO meant by this came into question in the light of a claim made a few weeks later that Microsoft had used its Irish subsidiary to reduce its global tax bill by €500m on profits of US$3.8bn through a company called Round Island. The rate of broadband rollout in Ireland continued to hit the headlines — the latest survey from industrial think-tank OECD finding that Ireland ranked 19th in the world after the Czech Republic. ComReg promised lower mobile charges, saying it had instructed mobile operators to reduce their termination rates. The issue of regulation was also foremost in the mind of Communications Minister Noel Dempsey TD when he told a forum of telecom CEOs that regulation could be scaled back if competition increased but that “radical measures” might be needed if network operators did not pass on the full benefit of new technologies to consumers. This was arguably O2‘s very intention when it became the first Irish mobile operator to launch iMode, the web content service developed by NTTDoCoMo in Japan that promises instant internet access on your mobile. On the security front, global security experts met in Dublin to discuss the growth of malware, with Graham Cluley of Sophos using the acronym QVC (“quantity, velocity, complexity”) to describe the nature of the modern security threat. The PPARS affair continued to rumble with Taoiseach Bertie Ahern TD trying to defuse the issue by introducing new spending controls on acquiring and running IT systems. IT cost savings were what Bord na Móna said it hoped to achieve by deploying a Linux open source platform, following a deal that saw SUSE Linux Enterprise Server 9 from Novell being chosen to run mission-critical applications. A report from the Irish Academy of Engineers and Engineers Ireland warned that Ireland would need to triple its number of engineers if the all-island economy was to reach its full potential.

The skills question prompted Enterprise Minister Micheál Martin TD to announce a dual green card and work permit system aimed at attracting high-skilled workers and filling temporary positions in the economy. The relatively quiet mobile market sprang to life with mobile operator O2 agreeing a €2.6bn takeover by Spanish telecoms giant Telefónica and Smart Telecom securing Ireland’s fourth 3G licence and promising a mobile service by next summer. Following the opening of a €7.5m research facility in Dublin, Xilinx Ireland managing director Paul McCambridge declared Ireland could become one of the world’s most innovative nations but this would require extensive collaboration between industry and universities and a greater supply of engineers. An R&D centre is opened in Swords by PDA pioneer PalmOne, which will employ 35 senior software engineers. Science Foundation Ireland announced it was funding a new €11.7m software R&D centre, the Irish Software Engineering Research Centre, based at University of Limerick. Irish e-learning firm Intuition Publishing won a deal with the UK’s National Health Service to develop an education programme for the NHS’s 1.3 million staff. BT acquired well-known technology provider Cara Group as part of its strategy to build up the services side of its business. Dublin-based middleware firm PolarLake secured US$7m in venture capital funding, while another Dublin tech firm, Mentec, won a €2m contract for a financial management system with Translink, one of Northern Ireland’s biggest transport operators. The number of .IE domains registered by Irish organisations passed the 50,000 mark, with the IE Domain Registry claiming that Irish online development was now ranked ahead of other European countries such as France, Spain and Italy. The Competition Authority gave the go-ahead for the €325m takeover of cable firm NTL by Liberty Global but attaches no fewer than 19 strings. The role of multinational investment in Ireland came under the spotlight again when technology lobby group ICT Ireland claimed the Irish tech sector could suffer if the debate over Ireland’s status as a “tax haven” escalated to the point where the US Government took an active interest in the alleged practice.

By John Kennedy and Brian Skelly