This is my 30,000 foot look at events in the ICT industry for January 2014. 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 Januarys …
Five years ago in January 2009 the world’s economies melted down! The one sizeable M&A deal was 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 and former Canadian “tech star” Nortel, filed for bankruptcy protection.
Twenty-Ten saw some cautious optimism, but not much in the way of blockbuster M&A deals however 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 also released the much anticipated iPad.
In January 2011 economic news was generally positive, Steve Jobs announced his leave of absence from Apple and Larry Page assumed the CEO role at Google. There were also some big M&A deals, the largest being the $3.1 Billion acquisition of Atheros Communications by Qualcomm. Verizon paid $1.4 Billion for Teremark Worldwide and IGate paid $1.2 Billion for Patni Computer Systems. Also out spending money were Dell, Google, Cisco and Salesforce.com.
Things were very quiet in M&A two years ago in January 2012. Former tech giant JDSU was back on the acquisition trail, even if just to pick up a small Vancouver based company, Dyaptive Systems. Symantec paid $115 million for LiveOffice to help with its storage capabilities, Google bought a bunch more IBM patents, and Xerox picked up Laser Networks in the managed printing space. Rim (now Blackberry) also announced a change in leadership.
Last year January 2013 saw Cisco buy mobile network software company Intucell for $475 million and sell its Linksys division to Belkin. The biggest dollar value deal was AT&T’s purchase of some of Verison Wireless’s airwaves for $1.9 Billion. Other deals saw NCR buy video software ASTM company uGenius Technology; Canon Canada acquired long-time partner and document management company Oce Canada; NetSuite bought retail management systems company Retail Anywhere; and AVI-SPL bought Duocom-Duologik. The Canadian Federal Government also released details about how it would make $400 million available for startups.
Which brings us back to the present …
January 2014 was an interesting month with a few big M&A deals. Google was an especially busy player, selling its Motorola Mobility handset unit to Lenovo for $2.9 billion but paying $3.2 billion for Nest Labs and the company also bought Bitspin. The other big deal saw VMware pay $1.17 billion for mobile device management company AirWatch. Other big names on the acquisition trail included Oracle who bought cloud based service delivery company Corente; Microsoft paid a reputed $100 million for cloud based service company (seems to be a theme) Parature; Ricoh purchased IT service company Mindshift from BestBuy; and Hootsuite bought analytics company uberVu.
Elsewhere IBM announced a $1.2 billion investment in adding datacenters, whilst also hinting at upcoming layoffs, anticipated to be in the 5,000 to 8,000 range. Intel also announced layoffs of 5,000 jobs in 2014. Apple released interesting information about the AppStore which generated $10 billion in 2013.
The overall theme of surveys and indices suggest a positive outlook towards 2014, with the US looking particularly good. Numerous surveys suggest growth in jobs, positive consumer and CEO confidence plus decent leading indicators. Interesting research from KPMG suggests that UK tech companies are enjoying their fastest growth in a decade, creating opportunity in that’s sector.
I think January was a more positive month than many in the near past so I’m hopeful it is a sign that 2014 will be a good … Walk Fast and Smile!