August 31st, 2010
This is my 30,000 foot look at events in the ICT industry for August 2010. What you see here is a précis of the monthly report I produce, which is available in more detail at the News section of the Eagle website, where you will also find back issues.
I think its interesting to look back and see what was news in previous years, and how it might affect news today. Perhaps one of the most noticeable things I see is that some of the most successful and largest companies have a track record of growth through acquisition, and with practice they get very good at it!
Four years ago in August 2006 IBM was busy buying four companies ISS ($1.3B), FileNet ($1.6B), MRO Software ($740M) and Webify; Sandisk bought M-Systems ($1.6B) and LogicaCMG bought WM-data Nordic ($1.5B). There were also a number of announced layoffs at CSC, CA, AOL and Sun. Three years ago in August 2007 Acer paid $700M for Gateway and Wipro bought US company Infocrossing for $600M. Hackers were in the news having scooped 1.6 million records from Monster and a study suggested hacking attempts on banks were up 80%. Two years ago in August 2008 Ricoh paid $1.6B for Ikon Office Solutions, Bae (UK) bid $1B for Detica Group (UK), and Compucom bought Getronics (former Wang) to form a $2.1B company. Hard on their heels was a big move by Indian outsourcing company Infosys, paying $750M plus for Axon group in the UK. A biggish one for Canada was the private equity buy of Q9 networks for $360M by CDC. Last year in August 2009, the weather was lousy (in contrast to a great Summer this year) but there was some optimism about the economy in the air, even though unemployment news was still bleak. There were some household names making acquisitions, but no huge deals … Facebook bought Friendfind and Myspace bought iLike. Google enhanced its video capability with the purchase on On2 Technologies; Rim bought a mobile browser company Torch Mobile; and Fluke Networks improved its wireless capability with the purchase of Airmagnet. CSC grew its Brazilian operation through the purchase of bankrupt Bearingpoint’s local operations.
All of which brings us back to August Twenty-ten and here in Ontario as we continue to enjoy great weather we remain fairly optimistic about our economic future. Certainly if M&A activity is an indicator then August would suggest that we are well on our way … it was a very busy month for acquisitions.
Google made the most buys this month, bulking up with five acquisitions (Socialdeck, Angstro, Slide, Jambool and Like.com). Having said that Intel spent the most money … paying $7.7 billion for McAfee AND $1.4 billion for Infinion Technology’s wireless division! IBM made a couple of buys (Datacap and Unica Corp); HP bought Fortify Software and Stratavia. Another big dollar purchase was the $900 million paid by 3M for Cogent; CA paid $200 million for Arcot Systems; Rim, Cisco, Citrix and Nokia were all out shopping too! I think that makes August the busiest M&A month for a long time … and even on the last day of the month HP and Dell are “duking it out” to see who will by 3PAR, with the latest price in the $2 billion range.
HP made their two acquisitions above and are in the hunt for 3PAR but they had a tough month, losing CEO Mark Hurd to a scandal and paying a $55 million fine for alleged kickbacks on government contracts. Another company with some challenges this month was RIM, which is “under attack” in several countries who have issues with their security … Saudi Arabia, UAE and India are all having issues with RIM’s blackberry service.
There were some good indicators of recovery from Europe, the US added 42,000 jobs in July while Canada lost 9,300 … all supporting the consistent message that the recovery is a two steps forward and one step back kind of process! Another interesting month on the long road to economic recovery! … hope this has been of interest to you.
That’s what caught my eye over the last month, the full edition will be available soon on the Eagle website. Hope this was useful and I’ll be back with the September 2010 industry news in just about a month’s time.