This is my 30,000 foot look at events in the ICT industry for May 2015. 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 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.
Three 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 continued 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.
Last year in May 2014 AT&T paid $50 billion for DirectTV and Apple paid $3 billion for Beats. Google continued 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 firm Wurdtech; EMC bought a flash (see the trend) start-up DSSD; Time Warner bought Youtube video network FullScreen; and SAP bought behavioral target marketing company SeeWhy.
Which brings us back to the present …
May 2015 saw some very large deals on the M&A front, with the biggest seeing Charter Communications spend $55 Billion to buy Time Warner Cable and a further $10.4 Billion to buy Bright House Networks. This creates the second largest cable company in the US, just behind Comcast. The “Billion dollar club” also saw French Telco Altice pay $9.1 Billion for another US cable company Suddenlink Communications.
Keeping with the billion dollar deals involving telcos, Verizon paid $4.4 Billion for AOL to bolster its mobile video capabilities. Another Billion dollar deal saw HP unload 70% of its stake in its China server, storage and technology storage unit to Tsinghua Holdings for $2.3 billion. The final billion dollar deal saw EMC pay $1.2 billion for cloud service provider Virtustream. Apple was out buying a couple of companies in May, snapping up mapping company Coherent Navigation and augmented reality company Metaio. In other deals Avaya bought cloud technology company Esna; and Cisco bought cloud programming interface company Tropo.
Another company in the news was Blackberry, but for the wrong reasons, announcing another layoff as it continues the journey back to significant market share in the smart phone world.
A Trend Micro security and threat report had Canada scoring quite high as a target for online threats. Clearly not a report in which you want to score high! There was another report highlighting the growing IT skills gap in Canada. Canada’s economy took a bit of a beating primarily due to the low price of oil; however things look better later in the year. Part of that optimism is the uptick in the US economy and almost all indicators, reports and surveys for the US were positive in May.
That is my look at the May tech news. Big dollar acquisitions mostly in the US cable space and AOL, a legend, being swallowed up by Verizon. Is it really 3 years since the Facebook IPO, and five years since that volcanic ash issue in Europe? The next few months will be telling for the Canadian economy, a bit of luck on the oil price side, a weakened Canadian dollar and a positive impact from a booming US economy should see things pick up. Meanwhile it seems like companies are out spending, so we will see what happens!
The full edition will be available soon on the Eagle website. Hope this was useful and I’ll be back with the July 2015 industry news in just about a month’s time… until then, walk fast and smile!