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January 2010 - IT Industry News

Three years ago in January 2007 there was no talk of recession, and worker confidence was relatively high. The big news was Microsoft's launch of Vista and AOL paid $1 Billion for Tradedoubler. Two years ago, in January 2008, there was much talk about an impending recession but IDC was still bullish that Canada's tech industry would flourish in 2008 and Gartner was predicting huge growth in the Indian IT Services Market. Dell, Palm and Yahoo all announced layoffs, while Oracle paid $8.5 Billion for BEA, Microsoft paid $1.2 Billion for FAST and SUN paid $1 Billion for MySQL. January 2009 was a different story altogether with many impacts from the economic meltdown! There were no blockbuster deals to announce, with one of the few sizeable deals being the $775 million purchase of Interwoven by Autonomy. Confidence with IT workers and CEOs alike was at an all time low, and there was a long list of (significant) companies announcing layoffs. Satyam announced a major financial accounting scam, DELL moved a production facility from Ireland to "low cost" Poland and former Canadian "tech star" Nortel, filed for bankruptcy protection.

So ... here we are in January Twenty-Ten and there is cautious optimism in the air, but not much in the way of blockbuster M&A deals! There were several positive indicators in January particularly in the US ... US GDP grew at an annual rate of 5.7% in the latest quarter; the ECRI weekly measure of the US economy reached an 18 month high; the number of lost jobs was the smallest decline since March 2008; and, CEO confidence was up. Forrester are bullish on tech spending expecting strong growth in 2010. Here in Canada unemployment was pretty steady at 8.5% although 2,600 jobs were lost in December. Having said that, Eagle's experience has been a steady increase in activity of the last few months and January was one of our busiest months in a long time!

As mentioned, no blockbuster M&A deals but Oracle, Apple, EMC, and Cisco continued their fairly steady acquisition pace. Perhaps the most interesting acquisition saw PWC here in Canada return to the IT consulting business with the acquisition of Allstream's non-telecom consulting business, several years after exiting the business by selling it to IBM.

Apple released the much anticipated (and curiously named) iPad which has received mixed reviews and received its share of humour around the name. CA also announced a replacement for John Swainson, with ex-IBMer William McCracken taking the top job.

It looks to me like 2010 is shaping up to be a good year, we need this recovery to keep happening and before we know it we'll all start smiling again! Or maybe I have rose coloured glasses, because I also expect 2010 to be a year of big change as all companies continue their relentless pursuit of the cheapest possible solution to everything that they do. We can anticipate more offshore solutions, more creative use of the web and if the employee satisfaction surveys are to be believed a mass game of musical chairs as the whole world switches jobs ... maybe it's a great time to be in the staffing business?

Walk Fast and Smile!