Back to Resource Centre
Blog Img

IT Industry News June 2010

This is my 30,000 foot look at events in the ICT industry for June 2010. What you see here is a précis of the monthly report I produce, which is available in more detail at the News section of the Eagle website, where you will also find back issues.

In June of 2008 the economy was rocked by high oil prices, the fallout from the sub debt crisis and signs of inflation. The big deal saw the Carlyle Group buy the US Government business of Booz Allen Hamilton for $2.54 billion. Other than that deal there was plenty of M&A activity, Nokia paid $410 million to complete its ownership of Symbian; NEC bought Nutcracker for $300 million; Cogeco bought Toronto Hydro Telecom for $200 million; Progress paid $162 million for Iona; Barracuda Networks offered $186 million for Sourcefire and Belden paid $133 million for Trapeze Networks.

Last year in June 2009 there was optimism that the economy was beginning to recover. The general consensus supported a long, slow recovery (and they were right) and so the layoffs, salary reductions and slow spending continued. A Robert Half survey in the US suggested there would be more CIOs hiring, than cutting, in the next year, and Gartner told us that sales of business intelligence software grew 22% in 2008 . so there were some bright lights. Intel paid $884 million for Wind River Systems and Nokia Siemens took advantage of the fire-sale at Nortel, picking up their CDMA and LTE assets for $650 million.

Which bring us up to date and June 2010and the continuation of the long, hard, slow road to recovery. June saw the G8 and G20 groups of countries gather in and around Toronto, amidst disgusting scenes of destruction . and some consensus on financial policy moving forward. Canada continues to be held up as a good example in this recovery, but it still “feels” tough out there!

The Canadian Staffing Index index dipped down again, but overall we are about 10% better than this time last year and consumer prices are up about 1.4% over a year ago. In the US, economic growth is slowing and consumer confidence is down a little but employment seems to be on the rise. Looking across the Atlantic, Europe is seeing an uptick in employment and The UK in particular is forecasting improved growth in 2010. All in all . slow, steady, two steps forward and one step back as we recover.

Both HP and Oracle are still struggling to swallow their big acquisitions (EDS and SUN) resulting in some layoffs. It was also interesting to see an Alberta staffing company charged for collecting fees from foreign workers. (It would be nice if McGuinty’s Ontario government could get that concept … punish the companies deemed to break the law, not a whole industry).

On the M&A front a Canadian data centre company Fusepoint was snapped up by Savvis for $135 million. Web analytics companies were popular, with Twitter buying SmallThought Systems and IBM buying Coremetrics. The biggest deal of the month was in the Health Systems world with Allscripts paying $1.3 Billion for Eclipsys . neither exactly household names, but big bucks changing hands. There were a few other smaller or “undisclosed amount” deals, with HP buying technology from Phoenix, HTC buying Abaxia and Checkpoint buying Liquid Machines . certainly not a busy month in mergers and acquisitions.

That’s the news in June 2010, Summer holidays approach and it remains to be seen whether the pace of recovery picks up or whether it will be Fall before the momentum changes. That’s what caught my eye over the last month, the full edition will be available soon on the Eagle website. Hope this was useful and I’ll be back with the July 2010 industry news in just about a month’s time.