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In this issue: 4 Industry News |
In July 2006, AMD bought ATI for $5.4B, HP bought Mercury Interactive for $4.5B and EMC paid $2.1B for RSA Security. A year later, in July 2007, HP paid $1.6B to buy Opsware, Steria paid $1B for Xansa, IBM paid $160M for BI company Datamirror and Google paid $625M for Postini. Three years ago, in July 2008, the big deal was the purchase of Foundry Networks by Brocade Communications for $3B but we were on the brink of what would be one of the worst economic periods in a long time. In July 2009, the economy was suffering and unemployment was high. There was, however, some brisk activity on the M&A front with Ericsson paying $1.1 Billion in a fire sale auction for Nortel’s wireless carrier assets. That was not the biggest deal of the month however as EMC agreed to pay $2.4 Billion for Data Domain AND IBM paid $1.2 Billion to add to its BI capability with the acquisition of SPSS. Last year, in July 2010, the iPhone 4 sparked the “antennagate” debate and Spain won the World Cup, the economy was recovering and it was a fairly busy month in M&A. NTT paid $3.2 Billion for Dimension Data and Nokia Siemens paid $1.2 Billion for Motorola’s wireless network equipment unit. IBM bought data compression company Storwize and in the same space Dell bought Ocarina Networks. EMC bought data analytics company Greenplum, Google added to its semantic search capability with the purchase of Metaweb Technologies, Adobe paid $240 Million for a Swiss web software maker, Day Software Holdings and SAS increased its presence in the US Federal market through its purchase of Vision Systems and Technology.
That brings us up to date and July 2011 and most recently news was dominated by the political debate over the US debt ceiling, a debate that played chicken with the world’s economies and brings us dangerously close to a double dip recession, not cool at all. The EU still has its struggles too, but Germany continues to shine while other member countries struggle, Greece for example posted an unemployment rate of 15.8%, as opposed to Canada at 7.4% and the US at 9.2%.
July’s M&A news was relatively low key in the pure tech world, however Adeccos’ purchase of Drake Beam Morin, and Randstad’s purchase of SFN Group (Spherion, Technisource, Mergis Group, Tatum, Sourceright & Todays’ Office Professionals) will impact the world of staffing, which affects us all. Dell’s move into networking with the purchase of Force10 is possible the most significant tech deal, with Google (Punchd), Twitter (Backtype) and Adobe (EchoSign) all picking up smaller players to help move their agenda.
Both Cisco and RIM announced layoffs, with RIM not having much fun at all these days, but you have to wonder why such a profitable and dominant company as Cisco would be cutting 10% of its workforce.
RIM also got a mention as its blackberry lost market share to Android in the mobile operating system world. Android outpaced Apple iOS in the US market.
Google+ hit the street this month, as a potential competitor to Facebook and perhaps Twitter. Early days yet, but there is a lot of interest in the tool and its potential when fully integrated with all of the other Google suite of tools.
Here in Ontario we have been enjoying a long hot stretch of Summer, Canada’s economy has performed well with the Canadian dollar flirting with record levels and business has been good. There is a general air of cautious optimism about the future, and once the US can get their recovery plan on track, we believe we will see even better times ahead. That will bring different challenges, full employment will mean skills and labour shortages, but that is a better problem than recession!!!
Until next month, Walk Fast and Smile!
IT JOB MARKET ACROSS CANADA – MINI MARKET UPDATE
General Observations:
After three months of growth, employment in Canada basically remained steady in July, although there were regional differences such as Ontario losing jobs and Alberta gaining jobs. The unemployment rate did however improve from 7.4% to 7.2%, primarily because less people participated in the labour market. Overall Canada has added 252,000 jobs since July 2010.
The Canadian Dollar weakened slightly against the US dollar but is still above par at $1.01 US. The strong dollar is one indicator of the strength of Canada’s economy, and while it can help in terms of buying power it hurts the sale of Canadian content. The world markets continue to be exceptionally volatile and over this last month we saw a number of events. The US credit rating was downgraded to AA+, partially caused by the debt ceiling debacle that shook the world’s financial systems even harder! We saw riots in the UK that are partially blamed on austerity measures and unemployment. The “PIGS” continue to cause concern within the EU and around the world. The result of all this turmoil has been some of the biggest market declines since the recession! Despite a strong Canadian economy the TSX has not been immune to the impact of these events. After many months of a steady recovery on the TSX it has been hammered, and today sits more than 1,000 points down from when we wrote this update last month, Tuesday reading 12,308 versus 13,324 a month ago. Oil too has been affected with the price per barrel, although still healthy, down to $84 a barrel versus $97.99 a month ago.
Here at Eagle, the July volumes both in terms of resumes submitted and orders received from our clients was down very slightly from the previous two months, however, we would attribute that to the typical Summer vacation period and not to a downturn in demand.
More Specifically:
We have seen little change in the GTA (Greater Toronto Area) and it remains the hottest job market in Canada. Although the concerns about the world markets may yet affect this, it is the financial sector that continues to drive demand, with the telecommunication sector close behind. There is a general buzz in the city and we are regularly seeing candidates turn down good offers because they have several to choose from. The Ontario election will come in the fall, and until that is all said and done, the government sector will be a little slower in demand than the rest of the market. Summer vacations caused a little slowdown in demand and decision making, but nothing more than the normal annual July slowdown.
Again, little change month over month in Western Canada with Calgary almost as busy as the GTA. The resources sector continues to have high demand and like the GTA we are seeing a regular trend of candidates having multiple offers from which to pick and choose. Other Western markets are steadily busy, but not at the same scale as the big two Canadian (head office) cities Toronto and Calgary.
In Eagle’s Eastern Canada region, comprised of Ottawa, Montreal and the Maritimes, it is still Montreal that is the busiest market. Ottawa remains a little slow as the government works through its plans for renewal and shared services, and the influence of the summer vacation period. Ottawa expects to get busy in the fall, as new requirements hit the street and some promised larger initiatives start to shape up. The Maritimes continues to be a slow area for Eagle, and Canada’s employment numbers would suggest the region continues to struggle.
The following are some facts/indicators we are watching as of time of writing:
- The price of oil dropped a fair bit, from $98 a barrel to $84.
- The TSX lost a whopping 1,000 points month over month as the markets are generally hammered. Current reading is 12,240 as against 13,324 last month.
- The Canadian dollar remains strong at $1.01 US, down slightly from $1.03 last month.
- Prime remains at 3% and is expected to remain steady through to the fall.
- Canada did not add or lose jobs in July, but the unemployment rate improved from 7.4% to 7.2%.
- Eagle continues to be busy in its largest markets Toronto and Calgary with steady business in most other markets.
Summary:
This past month has been tough on the world’s economy. The protracted US debate about the debt ceiling led directly to the US credit rating downgrade and contributed greatly to undermining the already shaky confidence in the world’s markets. When the EU continued to highlight the struggles of the “PIGS” and the UK suffered riots somewhat attributed to the austerity measures and high unemployment, the effect on the markets was probably unavoidable. The markets have tumbled, but most experts suggest this is not like the recession and expect the markets to come back; however, a very recent report suggests that the US and EU are both very close to slipping into recession. A tough backdrop for an update on employment!
Canada has fared well, despite all of the above. Our unemployment rate improved to 7.2%, we have added 252,000 jobs over the last 12 months and we remain one of the brighter lights in an increasingly bleak world economy.
Across the country we have not seen any appreciable decline in demand, other than a slight seasonal dip attributable to the summer vacation period. The two hottest markets, Toronto and Calgary, continue to set the pace yet there are decent signs in most markets. We are hearing from many clients that they expect to pick up the pace of their projects in the fall, our government clients both Federal and Provincial seem to fall into that camp too. The early October election Ontario may slow things a little, but opportunity should follow. The Federal Government seems to be bringing change forward which can only mean opportunity in the National Capital Region, which will be a breath of fresh air for that market. Montreal continues to be fairly busy and most of the smaller markets should be adding jobs this fall.
Unless the world slips back into recession I anticipate strong demand for skilled labour this Fall, which will lead to skills shortages which we are already seeing in those two very hot markets (Toronto and Calgary). Hence I will end this write up with my “standing advice” to ANY company needing people:
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(a) Start the process now with a strong PLANNING phase;
(b) Develop very clean processes to find, screen, choose, hire and onboard these new resources;
(c) Know that you will have a lot of competition and therefore speed in decision making will be critical;
(d) The job doesn’t stop there … retention becomes the next challenge!
That was my monthly look at the Canadian job market and some of its influences.
10 IT Skills that Today’s High School Kids Have – Do You?
As IT Professionals, we’ve seen technology change very rapidly over the past 10 years. We’ve managed to keep pace and learn new skills on the job or through training courses. What might surprise you are the skills that high school kids possess today. Here is a look at some skills that many high school kid have – do you? More…
An Executive’s Guide to Tablets
Patrick Gray reviews several of the major players in the tablet market to see what they really offer executives on the go, including the iPad 2 and the Asus Transformer. More…
Google+ was the subject of 35% of all news links tweeted last week. Make the most of the new service–before everybody else does. More…
7 Unwritten Rules of Social Media
Social media seems easy especially because the barrier to entry is low. You can be up and running on any social media platform in minutes, and usually for free. In reality, social media is hard for exactly the same reason. When the barrier to entry is low, the barrier to attention is high. More…
Bad Cell Phone Behaviour: Are you Being Rude?
More than 20% of those surveyed can’t stand it when people talk too loudly on their phone in public. Here are more examples of bad cell phone behavior that get on our nerves. More…
Five Acts of CIO Best Practices
While some Canadian chief information officers are pursuing one million acts of innovation, our columnist suggests there might be another approach that could also yield results. More…
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