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Technology Industry News for October 2013

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This is my 30,000 foot look at events in the ICT industry for October 2013. 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 Octobers …

Five years ago in October 2008 doom, gloom and market meltdowns were the big news.  The number of IT jobs in the US dropped by 2% quarter over quarter and Symantec, eBay and Yahoo all announced significant layoffs.  A $5.8 billion merger of telcos in the US was the big deal of the month, with rural telephone company Century Tel buying its bigger peer Embarq.  Ebay bought 3 companies, Bill Me Later ($945 million) plus Denmark companies Ben Bla Avis and BilBasen ($390 million).  Symantec paid $695 million for MessageLabs, Tata paid $505 million for Citi’s Indian BPO arm and HP paid $360 million for LeftHand Networks. 


In October 2009 news was mixed as the recovery was under way.  Cisco paid $3 Billion for Tandberg, $2.9 Billion for Starent  and $183 Million for ScanSafe.  Adecco paid about $1.1 Billion for MPS Group (includes Beeline); Emerson Electric beefed up its datacenter capability paying $1.2 Billion for Avocent and Sprint Nextel avoided some legal issues by shelling out $831 million for iPCS.

October Twenty-Ten saw Bell Canada buy a data center in Montreal (Hypertec) and pick up xwave from its subsidiary Bell Aliant.  Rogers paid $425 million for Atria networks and IBM picked up Toronto based Clarity Systems. 

EMC logo

Two years ago in October 2011 an industry icon, Steve Jobs passed away and IBM announced Virginia Rometty as their first female CEO.  On the M&A front Oracle made a couple of buys, including RightNow Technologies ($1.5 Billion) and Endeca Technologies; Sony bought Ericsson out of their Sony Ericsson joint venture ($1.5 Billion); Red Hat bought storage company Gluster ($136 million); and Cisco bought BNI Video ($99 million). 

October 2012 news was dominated by Hurricane Sandy, the US presidential election and here in Canada, my “favorite” Premier (Dalton McGuinty) stepping down, declaring a political “down tools”.   The big deal of the month was a $1.5 billion merger of two US cell carriers, T-Mobile and MetroPCS.  There were also a number of smaller deals, with EMC beefing up in the security area (Silver Tail), Telus expanding its medical solutions portfolio (Kinlogix Medical) and Avnet improving its IBM capabilities (BrightStar and BSP).  In the social networking world Yelp bought its European competitor Qype in a $50 million deal.

Which brings us back to the present …

Oracle logo a large software company originally noted for its database

October 2013 was not a dynamic M&A month, although there was certainly some activity.  Oracle announced two acquisitions in October, both “cloud based companies.  The first company is Big Machines which provides pricing and quote date for sales and orders; and the second is Compendium, a content marketing company.  Other “names” out shopping include Avaya buying the software division of ITNavigator for its call centre and social media monitoring software; Rackspace bought ZeroVM a tech company with a software solution for the cloud; Intuit bought consulting company Level Up Analytics, primarily to acquire its talent; VMWare bought “desktop as a service” company Desktone; Netsuite bought human capital software company TribeHR; and Telus enhanced its mobile offering with the purchase of Public Mobile.

Parliament building in Ottawa

There were a few interesting survey results this month.  Forrester’s survey tells us that less than 40% of companies think their IT shop can deliver projects on time and on budget (probably not a big surprise to anyone in IT).  The PC market continues to take a hammering experiencing its sixth consecutive quarter of contraction!  A Fortinet survey suggests that many GenY employees will use their own devices at work despite company policies.  It also appears that Canadian government data breaches are on the rise according to a Privacy Commissioner report.

On the talent front, an Accenture study suggests 46% of CIOs believe they will face skills gaps in the next couple of years.  Meanwhile Gartner tells us that smart machines will cause significant job losses amongst skilled workers over the next decade.

Statistics Canada data shows a positive picture on the unemployment front with employment rising and the unemployment rate dropping to 6.9%.  GDP growth in August also exceeded analyst expectations.

The US economy suffered from the continuing saga in Washington, with Forrester suggesting the impact on technology spending is about 2% in 2013, reducing anticipated growth in that sector from 5.7% to 3.9%.  Not surprisingly, CEO confidence is down and Independent Business optimism is reduced.

That is my update on tech news for October 2013 … until next month, stay positive, walk fast and smile!