This is my 30,000 foot look at events in the ICT industry for April 2009. What you see here is a précis of the monthly report I produce, which is available in more detail at the Eagle website. You will also find back issues on the website.
Two years ago in April 2007Google had a busy month, paying a whopping $3.1 Billion for Doubleclick, in addition to buying Marratech’s videoconferencing software; other big deals included CSC paying $1.3 Billion for Covansys; Mitelpaid $732 million for Inter-tel, Software AG paid $546 million for web Methods and Business objects bought Cartesis for about $300 million.
The big M&A deal last year in April 2008saw a merger of the third and fourth largest chip makers STMicroelectronics and NXPinto a $3 Billion company. IBM was busy, making three smaller acquisitions this month Diligent, FilesX and InfoDyne; Yahoo bought TensaKft. Despite the attentions of Microsoft; and speaking of Microsoft they had a couple of acquisitions Farecast and Komoku; EMCalso had a couple of forays into the M&A market with Iomega and Conchangoplc.
Fast forward to April 2009and, other than the recession, the news for the month in the technology world has to be Oracle’s $7.4 Billion purchase of Sun and thus entry into the hardware business! This was not the only big deal this month with EBay offering $1.2 billion for Gmarket(a Korean EBay), Harris Corp paying $675 million for Tyco Electronic’s wireless division and perhaps an end to Satyam’s immediate problems with a $422 million purchase by Tech Mahindra(not IBM … which rumour I had been propagating). There were also a couple of significant deals in my town of Ottawa … private equity firm Thoma Bravo snapped up Entrust for $110 million and Trend Micro bought Third brigade.
If you look at the many and diverse studies/reports this month you might think the IT space is a little schizophrenic … ranging from deep doom and gloom to optimistic! Gartner and Forester tell us IT spending in 2009 will be significantly worse than even the period following the dot com bust! Canada’s unemployment rate hit 8% and the US lost 742,000 jobs in the two months February and March 2009. Cell phone shipments fell 16% in the first quarter of 2009 and the Institute for Supply Management tell us economic activity in the US service sector is shrinking fast.
Many management experts have now suggested that the first quarter of 2009 was likely to be the “bottom” of the recession and I have heard from numerous sources that the third quarter of 2009 should signal the start of a turnaround. So … bad news in the first quarter is expected … there are also signs that things are getting better. The ECRI weekly indicator suggests good news is in sight, The US Conference Board consumer confidence index rose to its highest reading so far this year in April and a couple of smaller survey suggests that many companies are looking at increased IT budgets in 2009.
Remember that statistics and indices are just that … indicators, not facts and we need to be able to cut through the noise. How relevant is it to your business that the unemployment rate in Canada is 8% … if the unemployment rate among knowledge workers is more like 4.5%? Remember that in most countries an unemployment rate below 5% is considered full employment!
That’s what caught my eye over the last month, the full edition is available by clicking here to go to the appropriate part of Eagle’s website. Hope this was useful and I’ll be back with the May 2009 news in just about a month’s time.