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Technology Stocks : RATIONAL SOFTWARE- BUY OR HOLD

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To: Len White who wrote (2402)4/27/1998 11:12:00 AM
From: Hans-Erik Eriksson  Read Replies (1) of 3115
 
Len,

I've talked with both Ericsson people and Rational people in Sweden, and both unofficially confirm some kind of deal has been made or is in the making (though noone are willing to officially go on record, saying "there will be a official announcement later"). I got no numbers and can't evaluate the size of the deal, though rumour says RATL will be general agent (?) in terms of software engineering tools for Ericsson. Ericsson is quite big and uses a lot of RATL tools already, they were also majority owner of ObjectOry (the company) which was sold to RATL a couple of years ago. So I think the deal is for real, though it's hard to evaluate in terms of numbers.

The staff reductions shouldn't be put in relation with this deal, Ericsson is making some changes in their personnel - betting even more on telecommunications and cellular phones rather than their aging AXE technology (switchboard system). There might be a "political" connection in that Ericsson don't want to announce major investments at the same time they are letting people go or are making major reorganizations.

/Hans-Erik
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