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IT Industry News - November 2012

This is my 30,000 foot look at events in the ICT industry for November 2012. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.


A Little History of previous year’s Novembers …November 2007 was an active M&A market with IBM paying $5 Billion for Cognos, Telus buying Emergis and Randstad buying Vedior (to create the second largest staffing company in the world).  In November 2008 the big news was the economic maelstrom that took the world by storm.  There was some M&A activity with AT&T paying $944 Million for Centennial Communications and Fujitsu paid $575 Million to buy out Siemens from a joint venture but the biggest “noise” was about layoffs and the general impact of the recession.  Two years ago in November 2009 there was still a “hangover” from the recession, but the general mood was more optimistic.  There were still layoff announcements, Adobe (680), Microsoft (800), and Rogers (900) all announced layoffs and Right Management told us that as many as 80% of employees may look to change job as the economy recovers!   The big news in M&A saw HP buying 3-Com for $2.7 Billion and Nortel continued to sell off its assets, this time its Metro Ethernet Networks business to Cienna

for $769 Million.  Google also made a couple of acquisitions, including paying $750 million for AdMob.  In November Twenty-Ten perennial acquirer EMC paid $2.25 billion for Isilion; Attachmate bought Novell for $2.2 Billion; Oracle paid $1 Billion for Art Technology Group; NTT paid $1 Billion for Keane; Amazon paid $500 million for Quidsi; and Juniper Networks bought Trapeze Networks for $152 million.  In November 2011 Mosaid was sold to Sterling partners for $590 million, ending a WiLan hostile takeover attempt.  Japanese company Rakuten paid $315 million for e-book company Kobo; Huawei technologies bought Symantec out of a storage and security joint venture to the tune of $530 million; Yahoo paid $270 million for online advertising company Interclick; and Best Buy paid $167 million for internet technology company Mindshift.

Which brings us back to the present …

November 2012 saw a slight increase in M&A activity over the previous three months, although Cisco alone might account for that with two significant “buys” cloud infrastructure company Meraki ($1.2B) and cloud datacentre and software company Cloupia ($125M).  There were some other big names out with the cheque books this month … Dell bought software tools company Gale Technologies, NCR bought retail software company Retalix ($650M), Cray bought software company Appro ($25M) and Sprint Nextel bought a chunk of US Cellular ($480M).  Locally, Toronto based NexJ (headed by another ex-Andersen Consulting alumni) bought Broadstreet for $8.2 million.

Unemployment remains a concern in most parts of the planet and Canada continues to be comparatively better off with a 7.4% unemployment rate, which remains steady from September.  The US is showing some positive signs with IT job growth most months in the last year and up 2.8 % year over year, in addition the US economy added 158,000 non-farm jobs in October and consumer confidence is up.  Europe on the other hand reached a record high unemployment rate of 10.7% in October.  Still lots of bad news there, but there were some positive signs from the UK and Ireland.

In other news Paul Otellini, another industry veteran, announced he will be stepping down at Intel after 7 years as CEO.  Apple and HTC buried the hatchet on their bitter patent battle, and came out with partnering opportunities!  Final word goes to the demise of the Lotus name, which will soon be retired by IBM.  Until next month, Walk Fast and Smile!