This is my 30,000 foot look at events in the ICT industry for May 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 May in previous years …
Five years ago in May 2009 there were early signs of a recovery but still lots of bad news. Some big layoffs announced this month Sony (8,000), BT (15,000), Seagate (1,100) and HP (6,000). On the M&A front the telcos continue to feel pain with Verizon selling off 14 states worth of wireline assets to Frontier Communications for $8.6 Billion. Facebook received an injection of $200 million from Digital Sky Technologies (valuing the company at $10 Billion); and NetApp paid $1.5 Billion for Data Domain.
In May Twenty-Ten economies were recovering, but there was still plenty of concern including the financial impact of the volcanic ash hitting air schedules and the meltdown of the Greek economy. The big deal was SAP’s $5.8 Billion purchase of Sybase. Google picked up two companies GIPS and BumpTop and invested in a third Recorded Future (a company that claims to forecast the future). Cisco added Moto Development and CoreOptics. The other big dollar deal was Symantec’s $1.28 Billion deal to buy the security assets of Verisign.
In May 2011 probably the biggest news was Microsoft’s record breaking offer of $8.5 Billion for Skype. Other M&A activity included Nvidia paying $367M for Icera; Rambus buying Cryptography Research for $342M in the security space; Sandisk acquiring Pliant Technology in the storage world for $327M; and Twitter paying $40M for TweetDeck.
Two years ago, May 2012 saw the long anticipated, but somewhat disappointing start of Facebook’s appearance as a public company! There was also a fair amount of M&A activity, the largest deal being SAP’s $4.3 Billion acquisition of Ariba with CGI’s $2.8 Billion acquisition of Logica PLC of particular interest to those of us here in Canada! EMC continues its pattern of acquisitions with the $430 million purchase of XtremIO: perennial acquirer Oracle paid $300 million for social media marketing firm Vitrue; in the storage space Seagate paid $186 million for a controlling interest in LaCie; Microsoft invested $300 million in a Barnes & Noble subsidiary; and LinkedIn paid $118 million for Slideshare. There was plenty more activity, but with the amounts not published. Twitter bought RestEngine; IBM bought customer analytics company Tealeaf Technology; VMware bought Wanova; and Cisco bought Truvisco.
The big news in May 2013 was Yahoo’s $1.1 billion purchase of Tumblr. The $6.9 billion deal to take BMC Software private did not cause the same kind of splash … the power of the brand? Manitoba Tel decided to shed its Allstream division to a holding company for $520 million; McAfee paid $389 million for Finnish security firm Stonesoft; Dell added to its cloud capabilities with the purchase of Estratius; AVG bought PrivacyChoice; and Ottawa based N-Able Technologies became one more Canadian company to be bought by a larger US company, this time Solarwinds for $120 million.
Which brings us back to the present …
May 2014 was a month with plenty of positive news in the US, Japan and in the UK, but here in Canada the economy remains lukewarm and even disappointing. The one bright news item was the impact of Canada’s angel investor community in 2013, which invested almost $90 million into startups however the unemployment rate is at 6.9% and we lost 29,000 jobs in April. US employment seems to be rising quickly with the possibility of “full employment” in 2015 and several indices came out with very positive news. Japan’s unemployment rate was 3.6% with 108 jobs for every 100 people unemployed.
In other news the fallout from Target’s security breach that cost CIO Beth Jacobs her job has now taken down CEO Gregg Steinhael too. It will be interesting to see what happens at eBay who announced a breach that had happened weeks ago! HP is adding to its layoff news by somewhere between 11,000 and 16,000 additional lost jobs and SAP had good news/bad news announcing 1,500 layoffs but probably 3,000 new jobs to be filled.
On the acquisition front the big dollar number was AT&T’s $50 billion acquisition of DirectTV, but perhaps there is more buzz with rapper Dr. Dre being a happy camper because Apple are paying $3 billion for Beats! Google continues to invest in its Android strategy this time with a strategy company Divide, that will bring help breaking into the enterprise. Other acquisitions saw Seagate pay $450 million for some flash capability from Avago (the LSI divisions); GE bought cyber security form Wurdtech; EMC bought a flash (see the trend) start-up DSSD; Time Warner is buying Youtube video network FullScreen; and SAP is buying behavioral target marketing company SeeWhy.
It would be nice to see the Canadian economy pick up, and maybe after some elections we might see some renewed confidence. We can hope, but in the meantime 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 June 2014 industry news in just about a month’s time.