FutureLink Heads to South as Magic Software Looks North
Just when it seemed the ominous news emanating from the networking gear market couldn’t get any worse for Orange County, we find yet another analyst talking smack.
The culprit this time: the ever-bullish Merrill Lynch & Co., saying fiber-optic gear maker Corning Inc., which is putting the roof on its new Fountain Valley facility, will be going through a “nuclear winter.”
The brokerage downgraded Corning’s stock to “neutral” from “accumulate.” As an extra kick in the teeth, Wit SoundView Group Inc. analyst Kevin Slocum cut annual earnings estimates by $100 million this year and $300 million the next.
North America’s fiber market will see “extraordinarily weak demand in the second half of the year,” CNet Networks Inc.’s News.com reported Fox saying. And “pricing pressures (may) even spread to healthy markets in Asia.”
Now of course this is another nail in a coffin that was already sealed shut several months ago. But there is added interest given that Corning’s new facility is slated to be completed by the fall.
“You try to do your best in a cyclic market, but right now we’re in a downward cycle,” said Kevin McCarthy, plant manager at Corning’s facility in Garden Grove, two months ago when Corning was just putting up the walls on the facility. “If the market keeps slowing, we’ll have to adjust.”
Corning officials didn’t return phone calls seeking comment on the status of the Fountain Valley facility.
Still, the rest of the company is adjusting to the slowdown. Corning delayed construction of a new Oklahoma City facility and expansion of its Concord, N.C., facility. This year, Corning cut 825 of its 40,000-person workforce and indicated there could be more downsizing if conditions don’t improve. A companywide hiring freeze is in place.
The slowdown took McCarthy’s group by surprise. At this time two years ago, Corning officials had estimated there would be 30 to 50 people working in OC by 2001. As the demand for networking gear peaked, the company developed facilities and hired more people here. Corning’s OC division now has fattened up to more than 200 people.
The new Fountain Valley facility could house as many as 800 employees. For now, though, the new plant likely will house just existing workers who’ll transfer from Corning’s Garden Grove and Cypress facilities.
Let’s just hope the fiber doesn’t keep unraveling.
FutureLink Goes South
A local software and technology consultant went south this summer. FutureLink Corp., a Lake Forest-based software and technology consultant, opened offices in Atlanta, Charlotte, N.C., and Tampa, Fla. to handle clients in a 12-state swath from North Carolina to Texas.
“Our proximity to customers is significantly beneficial,” said FutureLink Chief Executive Howard Taylor. He said the offices will handle existing clients and work to attract more.
Magic Software Inks Deal
Israeli company Magic Software Enterprises, which has its North American subsidiary in Irvine, recently inked a deal with German firm adidas-Salomon AG’s Canadian unit to sell it software for building a business-to-business Web site.
The new site will allow adidas-Salomon Canada’s customers access to sales, order status and payment information via the Web. Under the terms of the agreement, Magic developers will train adidas-Salomon Canada programmers on Magic’s software development technology to enable them to independently create and deploy what will be one of the first business-to-business e-commerce sites for adidas-Salomon AG.
“The choice really came down to Magic or Lansa,” said Paul Leone, technology director for adidas-Salomon Canada. “In the final analysis, however, it was Magic’s productivity, and platform- and database-independence that made us realize Magic was the best solution for our very personalized needs.”
California Software Gets SF Chronicle
Irvine-based California Software Corp., which sells products that help companies transfer data when upgrading servers, now counts the San Francisco Chronicle among its growing list of media customers, the company said recently.
California Software also sells its software to the New York Times and AOL Time Warner Inc.
