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HENNA AALTONEN/GALBE FOR TIME
JORMA OLLILA: Nokia Chairman
and CEO |
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Posted Sunday, Oct. 13, 2002; 2.15 p.m. BST
Gent won his $183 billion hostile bid for the German
mobile giant Mannesmann in February 2000 by securing an alliance
with Vivendi's Jean-Marie Messier. Together they launched Vizzavi,
a portal that promised to beam data to any Internet-enabled
device. Two years later the dream of convergence is still a
fantasy: Messier is out of a job, Vizzavi has fallen flat and
Gent is under fire — but he's not giving up on his bid
to become king of the wireless Web. His three-year, $300 billion
spending spree is not over yet. Vodafone will have spent an
additional $2 billion by March on the roll-out of third generation
(3G) networks and is working to create new offerings such as
games, location-based services and multimedia messaging services
(MMS). Gent says he is encouraged by what has happened in Asia:
Japan's J-Phone, which Vodafone controls, now receives 20% of
its revenues from wireless data services.
The Vision Thing: "Voice has been the main driver of growth, but the rapidly increasing sophistication of mobile terminals, combined with the huge explosion of new applications, will trigger a proliferation of new uses for mobile data and services."
Forward Spin: Gent has the cash and the hubris, but it's unclear whether his bold gamble will pay off. Mobile data services represent a new money stream but they may not be enough to offset an expected drop in voice revenues. The onus is on Vodafone to prove that services like mms can make a significant difference to mobile operators' bottom lines.
Bertarelli, an Italian-born Swiss citizen with a passion
for sailing, has big plans: he's getting ready to compete in
the 2003 America's Cup — and to set a new course for the
pharmaceutical-turned-biotech company his family has steered
for three generations. Serono's first landmark drug, released
in the 1960s, was an infertility treatment made from the urine
of post menopausal Italian nuns. The drug, among the first to
treat female infertility, uses the hormones in urine to stimulate
the ovaries. As managing director and owner, Bertarelli's father,
Fabio, moved the company to Switzerland in 1977 and orchestrated
its expansion into biotech. Today Serono has revenues of $1.4
billion, making it Europe's largest and the world's third-largest
biotech company. Ernesto, who took over in 1996, increased the
company's focus on drugs to treat central-nervous-system disorders
and has done much to raise its profile in the U.S. When Serono
researchers came up with a new pharmaceutical called Rebif to
treat multiple sclerosis (MS) in 1998, Bertarelli set out to
prove that the drug was more effective than Avonex, a product
made by U.S. rival Biogen. The results of clinical trials comparing
the two drugs were so convincing that the U.S. Food and Drug
Administration took the unprecedented step in March of revoking
Avonex's "orphan drug status," which gave it a seven-year
period of marketing exclusivity, and approved Rebif. The decision
— together with a linkup with U.S. giant Pfizer to co-produce
Rebif — leaves Serono well positioned in the billion-dollar-plus
market for MS drugs. Now, Bertarelli is strengthening the company's
move into gene-based medicines, through the recent takeover
of French genomics firm Genset. After sealing the deal in September
Bertarelli, whose personal fortune is estimated at over $4 billion,
set sail off the coast of New Zealand as part of the Swiss Alinghi
challenge for the America's Cup.
The Vision Thing: "The U.S. has clearly been leading the way in biotech, but the opportunity exists for Europe to be as successful."
Forward Spin: Serono is sitting on $1.5 billion of the cash it raised from an initial public offering on the New York Stock Exchange in 2000, and is expected to use the cash to forge European partnerships and make more acquisitions.
In the late 1990s, SAP was one of the software giants
widely derided for missing the Internet boat and the unlimited
growth it promised. But in retrospect, that oversight doesn't
seem to have done the company much harm. That's due in part
to Plattner, a software sage and avid sailor, who has since
got on board the Internet boat by focusing SAP on using the
Net to make traditional businesses more efficient. And products
that increase efficiency are in high demand during this economic
slump. SAP, the world's fourth-largest software company, got
its start by offering products that provide managers with timely
overviews of all their operations, from sales to manufacturing
to accounting. The firm is starting to produce software that
allows clients to integrate their various and
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GABY GERSTER-LAIF FOR TIME |
often incompatible systems without having to first convert all
of the underlying software to conform to a particular manufacturer.
Tech spending has contracted dramatically, though, so SAP now
expects an increase of only 5-10% over last year's revenues
of $7.3 billion, considerably lower than its original forecast
of 15%. Never a flashy firm, SAP's 30th anniversary celebrations
this year were appropriately subdued. Even Plattner, an amateur
electric guitar player who used to do his bit to improve the
company's stodgy image by climbing onstage with rock stars for
impromptu jam sessions, has toned down his act. During an interview
at a gathering for clients and analysts in Orlando, Fla. in
June, Plattner was asked if he was going to play with rock singer
John Mellencamp at a private SAP-sponsored concert. Plattner
hung his head and sheepishly replied: "My people won't
allow me to do that anymore." Times sure have changed.
The Vision Thing: "Businesses have only just started to take advantage of the opportunities provided by the Internet."
Forward Spin: Co-CEO Henning Kagermann is expected to continue to play a key role in the company. But he may end up sharing the spotlight with former SAP Europe, Middle East and Africa president Leo Apotheker, who was recently appointed to the firm's exective board and is now running global operations.
Never mind all the gloom and doom. Handsets are a great
business to be in and Ollila still believes in 3G, third-generation
cell phone technology that promises high-speed always-on video
and multimedia services. Like everybody else, Nokia has been
hit by the worldwide economic downturn, but Ollila says he is
sticking by his projection of 10% growth over the next three
to five years. Confidence in 3G will get a boost if one of the
first mass-market mobile-data plays, multimedia messaging services
(mms), proves a hit. Ollila says he thinks mms messages, which
can transmit audio and images in addition
to text, will start to make a real difference to operators'
balance sheets by mid-2003. Nokia has already started selling
phones like the 7650 with mms capability and a built-in camera.
The introduction of mms and other enriched content services
delivered via mobile phones will also aid Nokia's foray into
the connecting layer of software known as middleware, which
the Finnish phonemaker is selling to other phone manufactures,
such as Samsung, Panasonic and Siemens.
The Vision Thing: "Our success proves that understanding mobility requires different software skills from the personal computer domain."
Forward Spin: Over the next year Ollila wants to work with network operators and content providers to ensure that new data services will work across Europe.
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