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July 2009 - IT Industry News

This is my 30,000 foot look at events in the ICT industry for July 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.

Three years ago in July 2006 AMD bought ATI for $5.4B, HP bought Mercury Interactive for $4.5B,EMCpaid $2.1B for RSA Security and Microsoft was fined $350M by the EU for abusing its “near monopoly”. Two years ago in July 2007 HP paid $1.6B to buy Opsware, Steria paid $1B for Xansa, IBM paid $160M for BI company Datamirror(and still bought Cognos) and Google paid $625M for Postini. Last year in July 2008 the big deal was the purchase of Foundry Networks by Brocade Communications for $3B. The economy was beginning to turn for the worse, but we didn’t know it …NACC Bin the US announced record IT employment and CDW suggested that 51% of businesses would increase IT budgets in the last 6 months of 2008. July 2008 also saw the official retirement of Windows XP!

So … here we are in July 2009 and the economic battle continues! Unemployment is still high, reaching 9.5% in the US and somehow a Techni source survey tells us that IT employee confidence increased. That could be a little premature given that a Computer Economics survey suggests nearly half of IT organizations are planning cuts this year! Those layoffs will be especially hard on older workers according to a Career builder survey that suggests more than 70% of that demographic that were laid off have not found new jobs … as opposed to less than 30% for other demographics. Having said that, news from Europe suggests that things are worse there and they expect to recover later than most other developed nations!

At Eagle we instituted a diversity program some time ago and it appears that DELL should have done something similar. They will pay $9.1 Million to settle a class action lawsuit that accused them of sexual discrimination.

There was some brisk activity on the M&A front this month. Here in Ottawa we watched the Nortel situation closely and I’m not sure which was more discouraging, our wet Summer or the break-up of a Canadian business icon! It looks like Ericsson is the winner (barring political intervention) in this round, having offered $1.1 Billion in an 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, also Big Blue (IBM) is paying $1.2 Billion to add to its BI capability with the acquisition of SPSS. Amazon splashed out to the tune of $850 million to meanwhile Google sold its stake in AOL for $283 million, when it had paid $1 Billion for that same asset 4 years ago. Accenture, Nokia, HP, Oracle and SAP were all out with their cheque books this month making it a busy M&A month.

This week Mark Carney, the Governor of the Bank of Canada announced that the recession is technically over … but of course there is still some pain to come. Here at Eagle we are seeing signs of life in the GTA and even glimmers out in the oil patch, so our largest markets are coming to life. If we can only get some sun for the rest of the Summer things might start to look really rosy!

Until next month!

Hope this was useful and I’ll be back with the August 2009 news in just about a month’s time.