IT Industry News
July 2014 had plenty of positive news including positive growth in PC sales after eight years of decline!. In Canada, the manufacturer's index, retail sales and projected IT hiring were all good news stories; however, the unemployment rate edged up and Canada lost 9,400 jobs in June. Most indicators coming out of the US were positive, including strong GDP growth, job growth, confidence indicators (except CEOs) and the US leading index. There was even a positive economic outlook for Mexico... so lots of good news. On the M&A front there was a lot of activity but no real blockbuster deals. After a long period of struggle, a positive sign saw Blackberry announce an acquisition of encryption company Secusmart GmbH. Oracle bought cloud services company TOA Technologies; Twitter bought a startup Madbits, a company that focuses on the media space; Yahoo also bought a startup Flurry in the mobile apps space; Teradata bought a couple of smaller big data companies, Hadapt and Revelytix; Apple bought a couple of smaller books & podcast companies Booklamp and Concept.io; Qualcomm education company EmpoweredU; and finally Nokia continue to rebuild after selling its devices and handsets business to Microsoft, this time buying Panasonic's 3G and LTE base station operations division. Speaking of Microsoft buying Nokia's devices and handset division, the company announced that they would be laying off 18,000 people related to that deal. July also saw a fairly interesting partnership, with IBM and Apple combining to offer enterprise solutions... who knows maybe we'll see Google and Amazon collaborating next?
June 2014 saw a number of positive survey results showing increased hiring intentions and improved confidence, most especially in the US, but also there were positive signs in Europe. The UK in particular seemed to demonstrate a "broad based economic recovery" and generally employment in the Eurozone improved. Canada, however, continues to limp along with unemployment rising again to 7% and even one report suggesting we have experienced a slight contraction in 2014 thus far. There were some significant deals announced in June with Oracle's $5 billion purchase of Micros Systems, in its pursuit of the cloud space, the largest this month. Sandisk was next with its $1.1 billion purchase of solid state storage company Fusion-io. Google continues its push into home automation, witnessed by its subsidiary Nest paying $550 million for cloud-based home monitoring service Dropcam. Google itself paid $500 million for Skybox Imaging a satellite maker that will enhance the Google Maps capability. Yahoo is said to be positioning to compete with Youtube, through a proposed $250 million offer for Fullscreen. Twitter paid $100 million for mobile marketing platform Tap Commerce and Red Hat is paying $70 million for eNovance.May 2014
May 2014 was a month with plenty of positive news in the US, Japan and in the UK, but here in Canada the economy remains lukewarm and even disappointing. The one bright news item was the impact of Canada's angel investor community in 2013, which invested almost $90 million into startups; however, the unemployment rate is at 6.9% and we lost 29,000 jobs in April. US employment seems to be rising quickly with the possibility of "full employment" in 2015 and several indices came out with very positive news. Japan's unemployment rate was 3.6% with 108 jobs for every 100 people unemployed. In other news, the fallout from Target's security breach that cost CIO Beth Jacobs her job has now taken down CEO Gregg Steinhael too. It will be interesting to see what happens at eBay who announced a breach that had happened weeks ago! HP is adding to its layoff news by somewhere between 11,000 and 16,000 additional lost jobs and SAP had good news/bad news announcing 1,500 layoffs but probably 3,000 new jobs to be filled. On the acquisition front, the big dollar number was AT&T's $50 billion acquisition of DirectTV, but perhaps there is more buzz with rapper Dr. Dre being a happy camper because Apple are paying $3 billion for Beats! Google continues to invest in its Android strategy, this time with a strategy company Divide, that will bring help breaking into the enterprise. Other acquisitions saw Seagate pay $450 million for some flash capability from Avago (the LSI divisions); GE bought cyber security firm Wurdtech; EMC bought a flash (see the trend) start-up DSSD; Time Warner is buying YouTube video network FullScreen; and SAP is buying behavioral target marketing company SeeWhy.April 2014
April 2014 was an interesting month from a number of perspectives. Microsoft officially entered the handset business with the completion of the $7.5 billion purchase of Nokia’s devices business. Zebra Technologies is paying $3.5 billion for Motorola’s unit that makes mobile devices for business which is a move in the ever expanding Internet of Things space. Apple is looking to improve its battery life and other aspects of its products with the potential $479 million purchase of the LCD chip development unit of Renesas Electronics. IBM snapped up marketing automation software company Silverpop Systems and open source software company Red Hat is paying $175 million for storage company Inktank. April was “Heartbleed month”, a vulnerability that saw big company websites shut down and the Canada Revenue Agency admit to losing social insurance numbers for 900 people. The good news is that it has spawned an investment from several industry giants into the security of open source software. The economy in the US had lots of good news in reports released in April, with most confidence indicators being very positive, outlooks on hiring positive, even the outlook for Summer Student jobs being positive. Here in Canada, we added 42,900 jobs in March and the unemployment rate dropped below 7% to 6.9% and there was a report suggesting that the Greater Toronto Area can expect to add 230,000 jobs over the next four years. In other news, China saw the introduction of WiFi on airplanes with a pilot project and Mozilla CEO Brendan Eich was forced to resign over his support against same sex marriage. Michaels Stores had a data breach affecting 3 million payment cards and Canada’s Privacy Commissioner lost a USB with personal information on it... nice!March 2014
March 2014 was not a banner month for acquisitions but there was one big deal with Facebook making a, somewhat surprising, $2 billion acquisition of virtual reality company Oculus VR. Intel also expanded its horizons with the $150 million acquisition of smart watch maker, Basis Science. Some other interesting moves saw a fair bit of investment in “big data” company Cloudera with both Google (as part of an investment consortium) and Intel involved; SAP added to its purchasing software suite with the acquisition of Fieldglass and Telus made a couple of buys, Enode a management consulting company out of Quebec and Med Access an addition, in British Columbia, to their healthcare division. There were a few other smaller deals plus Embarcadero bought the ERwinDate Modelling software from CA. Other than M&A activity, there were a number of companies making news, and not all for good stuff! IBM’s server sale to Lenovo has generated some significant labor troubles in China, Google was ordered to pay $85 million to SimpleAir for patent infringement and NetApp announced it was laying off almost 5% of its workforce representing 600 jobs. A couple of Bitcoin exchanges ran into serious trouble with Mt.Gox "losing" $500 million in bitcoins and Vicurex freezing all of its accounts after a serious hack. Notable "people events" in March saw Target’s CIO Beth Jacob resign in response to the recent major data breach and Symantec fired their CEO Steve Bennett. Economic news was at best “tepid” in Canada, with the unemployment rate unchanged and indicators generally “blah” (that is one of my best economic terms). Indicators in the US however were generally positive with growth in GDP, several confidence indices showing promise and an outlook of increased hiring.February 2014
February 2014 saw Facebook make a big move with a $16 billion acquisition of WhatsApp, which is probably good valuation news for Blackberry because its BBM product would be a direct competitor. Blackberry, however, had another rough month when IDC released its numbers as the company’s smartphones accounted for only 1.9% of sales in Q4 of 2013. Another company with big news, although not necessarily positive was Sony. They appear to be reinventing themselves in their various niches as they are closing their eReader store and divesting themselves of their PC division (Vaio). In other M&A news, Comcast is making a $45 billion play for Time Warner Cable; Oracle paid a reputed $400 million for data management platform company Bluekai; LinkedIn paid $120 million for online job search company Bright; and Klout was bought for about $100 million by Lithium Technologies. Google made a couple of acquisitions, online fraud company Spider.io and secure logon company Slicklogin. IBM is buying database as a service company Cloudant; and Monster bought a couple of companies, social profile company Talentbin and job aggregation and distribution technology company Gozaic. Other companies making news this month include Microsoft who announced a new CEO, Satya Nadella (who replaces Steve Ballmer) plus a new Board Chair John Thompson (who replaces Bill Gates). Dell starts its new life as a private company with major restructuring, resulting in likely 15,000 job losses. On the good news front, jobs creation and infrastructure additions in Canada come in the form of new datacenters for Bell Aliant and for Telus. In reports from various sources, Android has about 80% of the mobile OS market share, with Apple a distant second. Samsung was the dominant handset hardware supplier with 32% share, with Apple second. Apple, however, accounted for approximately 1/3 of tablet sales in Western Europe last year, with Samsung second. A Cisco study suggests that users will increase mobile data usage by a factor of approximately 8 over the coming 5 years, so make sure you have good data plans! The Canadian federal Government announced an infrastructure investment to put broadband into rural communities and Gartner tell us that IT spending was flat year over year, for the 13th year in a row! Economic news was generally mixed, with no major bad news and no big breakthroughs. Some job growth in Canada and the US, some positive confidence indicators and some not so good. One study seemed to sum it up: Careerbuilder found that 58% of employers feel the recession is still lingering!