Each month I produce a synopsis of the stories that caught my eye during the previous month. The full version of the July Industry news will be available on our website tomorrow. The following is a synopsis of the synopsis (if that makes sense).

July was a big M&A month with three blockbuster billion dollar deals. AMD was the biggest spender, paying $5.4 billion for graphic chip guys ATI, HP’s $4.5 billion purchase of Mercury Interactive wasn’t too far behind. EMC joined the billion dollar spender’s club by paying $2.1 billion for RSA Security Inc. In addition to those mega-deals Intel invested $600 million into Clearwire Corp and Watchguard was acquired for $151 million by Francisco Partners.

Other than M&A activity, this month saw the EU “ding” Microsoft with a $350 million fine for using its “near monopoly” in PC operating systems to gain unfair advantage elsewhere. Palm paid $22.5 million to Xerox to settle an outstanding patent dispute and the Kazaa people paid out more than $100 million to settle their “file sharing” lawsuits with the entertainment industry. Intel announced that it is laying off 1000 managers and 3Com is “restructuring” to the tune of 250 jobs.

Quite a busy month in the technology world!

Eagle will celebrate ten years in business at the end of August and I have no complaints about our journey to date. At the beginning I can vividly remember the emotions … excitement at the prospects, euphoria as all of the little pieces came together, terror at the prospects of what might happen and a fear that maybe I would not be able to pull this off.

I had a good background in sales, and had learned much from previous bosses. Yet starting and running a company is different from being a sales person or even sales manager. One skill that I learned early in my sales career, and that I often observe to be missing in young sales people today, is the ability to understand what is “good business” and what is not.

Quite often I see the look of disbelief in the sales person’s eyes when I tell them to walk from a piece of business. They sometimes argue fervently in favour of the deal, because it means dollars in our pocket! They cannot understand that sometimes dollars are just not enough … and very often there are not enough dollars!

Companies of every type are measured based on ratios and percentages. If a company today has $1 million in bottom line profits that sounds good, but if that is based on $100 million in revenues … it is not so good! Any kind of market fluctuation could cause that company to go out of business. So … reasonable margins are needed in order to preserve a healthy bottom line.

If company profits are not enough to reinvest in the company to keep up with industry trends then that company is already heading out of business … it doesn’t quite know it yet!

Sometimes the cost of doing business is too high. If a client is a very high maintenance client, and demands excess time from key resources, executives etc. then often that is an account that is just not worth servicing.

Every business has fixed and variable costs. Often sales people just look at the variable costs and forget they need to get paid, they have office space, they have computers, accounting, marketing etc. etc. and that all needs to be paid for. If the dollars don’t cover it then don’t do it!

This is a lesson every sales person needs to understand … not all business is good business!

July has been a very interesting month for merger and acquisition activity in the tech world! It is unusual to see three billion dollar deals in the same month, but who can say what usual is these days!

First we heard that EMC, one of the world leaders in storage systems was buying a big name in the security world, RSA Securities for $2.1 Billion. I guess part of the thinking in synergies between storage and security might relate to all of the client information stored on EMC hardware that might benefit from better security. Certainly there have been many (and often) security breaches involving client data in recent times.

Next up was the deal I referenced a couple of days ago, ATI (the Canadian darling) snapped up by AMD for a cool $5.4 Billion. Adding a serious graphics capability to AMD’s already strong chip set creates some competitive problems for the de facto leader in that space, Intel. Of course I expect to see some kind of response from the big guy!

Finally HP is buying Mercury Interactive for $4.5 Billion. This deal will grow HP’s software business to become a $2 Billion business … and I guess the software business is definitely a higher margin business than a services arm. However, in my humble opinion (and HP didn’t ask for it for sure!) it is the services arm of HP that needs some investment, maybe that will be their next move!

So … the purse strings were loosened this month. Is it a sign of things to come? I do believe we will see more and more consolidation, I am actually surprised that we haven’t seen more Asian companies active at the Billion dollar level. Watch that space!

Are you a person that sets goals in your life? If that is the case, then congratulations, because you are one of a very small minority! In this blog I have from time to time exhorted people to take charge of their lives, to LIVE life and not just let life happen to them. Goals are a great tool to help you actually take charge … so not only am I nagging you to take charge, I am telling you how!

There are a ton of resources to help people with this exercise but only you can DO IT. There are web sites that will help you track goals, there are sites focused on career goals, there are books on goals and there are many other web resources on the subject.

Here are a few “pearls of wisdom” from a guy who believes in this stuff (me). If you take the plunge I guarantee you will see a positive change in your life … that can’t be all bad!

1. Set a couple of goals … just do it! Don’t wait for month end, start of a new week, the New Year or any other procrastination trick do it NOW.
2. Pick something you can do, make it very specific and track it! I will lose 5lb in the next month … starting right now! (Of course the next step is to create the action plan that will meet the target).
3. Write down the goal … and tell someone about it! (Your partner, a friend, or a colleague). This makes it real and a true commitment!
4. Track your progress as often as makes sense … if it’s a weight goal maybe you want to weigh yourself weekly.
5. Reward yourself for meeting goals … do not reward yourself if you miss them. Eg. If I lose 5lb by the target date I will treat myself to some new clothes. If you don’t make it then put off the treat.
6. Once you start to get the hang of this, add some more goals … and keep working on all of your goals.

People who are really successful at this will have goals for many different aspects of their lives … health and fitness; relationships; time management/organization; finances; career; training; hobbies. Etc.

If you decide where your life is going then the more “in control” you will feel, the more confident you will become, the more successful you will be and that positive cycle will continue. Give it a try … what have you got to lose?

This week there was an announcement that AMD has bought ATI, which has been one of the stars among Canadian companies for some time now. Rumours (once again) abound that Cognos is likely to be snapped up by some larger company at some point … maybe a Microsoft or an IBM?

There has been debate in many circles about the impact on Canada as our “jewels” are picked off by larger multi-national companies. Will there be a negative impact on the Canadian economy? Should all of those profits be going offshore etc?

As a business owner and someone who has managed to build a National, not-quite-so-small (by Canadian standards) company my concerns are more about shareholder value and building a sustainable entity than whether we will be bought by some non-Canadian company. For me the market forces will determine how these things play out, my company today competes favourably in a very competitive market. I have no doubt that at some point in the future Eagle will look different … whether we will have acquired other companies or we have been acquired is still to be determined. However it is never going to be determined by organizations or individuals worrying about nationalistic concerns.

We operate in a Global economy and every company is seeking to have continued growth. This will continue to result in M&A activity that will see the landscape change considerably. AMD have put some heat onto Intel with this acquisition, who will no doubt respond appropriately. I really don’t think anyone at AMD or ATI even considered the impact on the Canadian psyche of another “lost Canadian company”.

It’s all about business … and business decisions should not be emotional. They can be passionate (I do read Tom Peter’s blog) … but not emotional.

I am not sure what to make of a society where so many people refuse to take responsibility for their own actions!

There is evidence of the trend all around us. People sue restaurants because they spill hot coffee on themselves! People complain about their weight, yet they continue with poor eating habits, consuming more calories than they burn … Oh is THAT why they are overweight? People complain that they are always tired, have no energy and yet they never exercise and their diets are terrible!

In the workplace we have people that are not being successful in their role (any role) but they don’t change their behaviour … they keep doing the same things. People complain of a lack of knowledge … “I didn’t know” … yet they don’t seek to learn!

Personal responsibility is the type of grown-up behaviour that we should expect from adults, but it seems to be a rare commodity.

If you are complaining (internally or externally) about some aspect of your life but are doing nothing to change it, then perhaps you need to think about that!

The following is a look at the cross Canada IT job market as complied by Eagle’s three Regional Vice Presidents.

Across Canada, a number of organisations have recently indicated that they have streamlined their hiring processes, re-evaluated retention strategies, and initiated in-depth evaluations of their “marketability” as an employer of choice, all in response to the current robust employment market most of Canada is experiencing. Some more sophisticated organizations are now viewing their “employment brand” in much the same way companies have typically evaluated their product or service brands in the past. The latest employment figures, specifically in technology, paint a continued picture of positive growth in both current employment and future hiring expectations. This is good news for the IT market assuming substance comes with the branding spin. Set against all of this is an undercurrent of competing outlooks however, one of tremendous business confidence in the West whereas employers in the East, particularly in Ontario and Quebec, are much more cautious as the manufacturing sector adjusts to the new realities of a higher Canadian dollar.

In the West, the City of Calgary recently announced that it has lost over 200 employees in the last quarter to the hot labour market. While not all of these are IT professionals, the recruitment and retention issue clearly has been cited as one of acute pain for the City to address. Many other firms are facing this identical issue. Salary, wage, and hourly rate inflation continue to skyrocket for organisations, especially across Alberta, and specifically among IT resources, geologists and accountants. This is creating many challenges for firms who are finding the budgetary balance difficult to address effectively and is also fueling an increased willingness for some organisations to listen to outsourcing and offshoring pitches. Professionalism of IT subcontractors has rapidly become one of the hot topics among hiring managers with the advent of many subcontractors ruining their own reputation and future by ‘chasing the immediate dollar’ and leaving unfulfilled contracts and project work behind them. Hiring managers are increasingly becoming savvy at flushing out many of these individuals before they engage them.

Despite what many people perceive to be a usually slower time for organisations to seek and fill IT contract or permanent positions, across Western Canada, the IT labour market continues to stay quite active. In fact, since early June, there has been a significant surge of IT professionals that seem to be intensifying their ‘shopping’ or ‘testing the market’ for new positions with a lot of queries about hiring activity and the current value (hourly rates/salaries) for their expertise. Additionally, there is widespread consensus and speculation that in September an even stronger spike in IT hiring activity will occur.

All-in-all, the IT labour market is good with some fascinating projects on the books of some great companies in the West.

In the GTA, June was slow for the first two weeks but picked up significantly towards the end of the month – just in time for the Canada Day long weekend and celebrations. Demand for IT contract resources within the private sector has softened, especially within the banking industry. Government activity continues to hold steady. This has meant that many projects are moving into new phases. These projects require new contractors specifically Project Coordinators, Project Managers and Technical Architects skills. Key initiatives are starting to build up in the Health Care area of the government, as well as, Educational and Children Services. Overall, there are a number of projects in the implementation phase. That being said, there has not much demand for new development support-type roles.

Full-time placement activity continues to hold strong in the GTA. Many organizations continue to favour full-time hiring over contract resources in an effort to bypass the issues surrounding the tech crunch and securing resources over the long-term. Hot skills for full-time placement include: SAP, EDI, Cognos and Security.

In Eastern Canada most of the technology talk in the last several weeks has centered around what seems to be the never ending saga of Federal Government Technology Procurement as it pertains to the larger overall initiative “The Way Forward”. The Way Forward is Public Works’ series of strategic sourcing initiatives due out this year. The Feds have consulted with the industry over the course of the last 12 months, turned those consultations aside in favour of a US-based outside consultant, gone back again to the industry, based on some serious concerns brought forth at their proposed solution presented in early June and gone back yet again with some further revisions due out in final form soon. All of which has served to keep IT vendors, consultants and federal government client departments themselves, nervously guessing as to what may come next. It’s expected the overall Standing Offer will hit the streets sometime in mid to late July. Then again, it was expected that the Ottawa Senators would win the Stanley Cup! Stay tuned on both fronts.

In Montreal, the Festival season is in full swing as is the market, as things continue to heat up on both the permanent and contract fronts. SAP resources, both technical and functional, are in demand, as well as Project Managers and as always, Oracle resources. In the Atlantic market, hot skills include Oracle Developers, .NET Developers and Project Managers. Ottawa has seen in increase in demand for Change Management Consultants, Business Analysts, QA Testers, Java Developers and SAP FI/CO and MM Consultants. Oh yes, and Ottawa could also use a huge defenseman to replace Zdeno Chara!

One of the most important things to know is that success … at anything … comes at a price. There are very few ways to reach success without working at it, and I’m pretty sure that everyone is told that all the time … but they don’t necessarily understand it, or maybe they just don’t buy it. Tiger Woods has natural talent, but he works with coaches to get better every day, Bill Gates does not sit back and let Microsoft be successful … he works at it.

It’s very easy to cruise through your days, reacting to life around you, dealing with tasks as they arise. People come to work read their email, deal with the issues in email, their phone rings and some issues arise that need to be dealt with, their boss asks them to do something and they deal with it and before you know it the day is done and its time to go home. “Another day, another dollar”! “That boss has his head up his ###”! “Man if this was my company I’d do this and that”!

I’m of the opinion that the vast majority of people feel that they have no control over their life … they can’t make people buy their product, they can’t make opportunities where none exist, they can’t change the inevitable. Wow! What a way to live life, how can so many people be content to just cruise? What did they go to university for? Did they learn anything … who knows? Have they stopped learning? Are they just getting old … living for the weekend … hoping that they find some success by accident? Maybe some client will drop a big order in their lap … wow, some success that is!

WAKE UP! Take Charge! MAKE things happen! Learn! Grow! Be alive! Challenge yourself, stretch to achieve goals, work harder than the person sitting next to you, feel the flush of success because you made it happen! Feel the glow of true achievement! When did you last feel that rush because you worked hard, dug out the opportunity and made it happen? When did you last make a difference … at work, at home, in someone’s life … because you used initiative, worked hard, used that brain you struggled to fill with knowledge through so many years of learning?

Life is for living … not cruising! Follow the lead of James Dean’s who said “Dream like you’ll live forever, live like you’ll die today”!

I subscribe to a newsletter from a motivational speaker, Kit Grant, who I always enjoy. He can be quite irreverent, has a habit of “honing right in” on subjects that can be a little touchy, and telling it like it is! Today he talked about the affect that negative people have on those around them, reminding me of my own thoughts and experiences on that subject.

Some years ago my wife decided to get an Executive MBA. This was a family decision (ie. me and her!) because the impact was going to be significant on our home life. I was going to have to take up Mr. Mom duties if she was going to be able to devote the time to her work. So, while working in a full time job she managed to get her MBA over the course of two years.

One of the major decisions we made was to avoid contact with negative people. This is not always an easy thing to achieve when there really are so many negative people in the world. Some of these people you can totally avoid, some take effort to avoid … and others you just need to minimize to as little contact as feasible! It works! Negative people suck the life out of you, they drag you down, they erase your spark … and when you actively avoid negative people it can have a huge positive affect.

You all know who they are … and hopefully they are not you, or you have even bigger problems because you need to get out of that rut (another blog or two). They are the co-worker who is always complaining about workload, or the boss, or the client or the support staff or anyone else they can find to complain about. They are the person at the bus stop, the person at the gym, the person next to you in church, they could be your Brother/Cousin/Uncle or your boss, her boss or the people that work for you.

So … you have to be absolutely ruthless with your time. Zero contact with negative people that you can possibly avoid! Change church, gym, grocery store, bus route … whatever it takes. You need to minimize contact with everyone else negative … don’t go to the water cooler when the whining co-worker is around, keep your head down busy and be careful to never invite them anywhere. With family … tougher, but just reduce contact by seeing them less often and for shorter periods of time.

You will be amazed at the impact on your own state of mind if you can free it up to be focused on the positive! Try it … it works.

Go visit my friend Kit Grant’s website and get some positive reinforcement too!

I have avoided passing comment on the Canadian Federal Government’s “Way Forward” initiative designed to streamline its procurement practices and save money. Like every taxpayer (probably in the World) I think that government is a terribly inefficient organization and anything done to save taxpayer money has to be a good thing! Having said that, there has been so much BS spouted around the initiative (designed to save money on how they procure staff augmentation services) that I just can’t ignore it any more! I have been very involved in this initiative, representing ACSESS in a process for the last 18 months that was a cooperative government industry working group to achieve the goals of “The Way Forward”. Somebody in power decided this was not a good approach, threw all that work out the window and brought in my old “friends” AT Kearney (now I don’t have anything good to say about these guys … so I won’t say too much) at a cost of about $20 million to save money! Go figure!

The result is pandemonium and I predict the minority Conservative Government is flirting with disaster because the implications on business that serves the Federal Government are dire! There has been much said on this subject (CATA had much to say!), so I will move on to clear up some very major misunderstandings about our industry that have appeared in the press.

1. Staffing Companies are Middle Men that Cost the Crown Money.

I wrote a blog about the Value Proposition offered by staffing companies, all of which applies to the Federal Government just as much as to private enterprises.

An analysis that Eagle has conducted over the last year demonstrates that on a consistent basis procuring services through Eagle has resulted in cost savings for our clients as opposed to when they have found the resources for themselves! This is counter intuitive, because the client believes they are saving the (very skinny) margin paid to an agency. However … their source of candidates is limited, their negotiation power is limited and sourcing people is not their core business! The agency can find people faster, has access to a much bigger pool and can negotiate the best rates!

2. The Staffing Companies Take Money out of the Pocket of Temps and Consultants!

Our clients pay us to provide a service … we pay the consultants and temps to do a job. The temps and consultants are paid at market rates and the amount paid to the agency is added to that. If there was no agency, in theory the temp or contractor would still be paid at market rates and the additional amount would be absorbed in the internal cost of trying to source people.

3. Staffing Companies are Making Huge Profits

Statistics Canada suggests that the average staffing company has a pre-tax profit margin of 4.5% of revenues. Industry sources would suggest that average pre-tax profits in our industry are in the 3 to 5% of revenues range. This is all before the taxman takes his bite!
I have recently seen crazy numbers that talk about markups of 30 to 100% … these are numbers that have no basis in reality. Margins in our industry are in the 15 to 30% range and out of those margins come the operating costs of our businesses … hence the profitability percentages shown above.

There is tremendous value to organizations in having access to a flexible workforce to supplement their own employee base. Misinformation and misinterpreted data is being used to run down our industry and I think people need to do some serious research and understand the facts before they publish “drivel” such as an editorial in the Ottawa Citizen.