This is my 30,000 foot look at events in the Tech industry for August 2016. 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 August in previous years …
Five years ago in August 2011 Hurricane Irene hit the US coast, there was a mini-market crash and the world’s economies continued to struggle. Google paid $12.5 billion for Motorola Mobility and IBM paid $387 million to add Algorithmics to its analytics portfolio, they also bought UK based analytics company i2. Skype which was in the process of being merged into Microsoft, bought GroupMe, Bitly bought Twitterfeed and Citrix bought Ringcube.
August 2012 was slow in the M&A space with IBM busiest, paying $1.3 billion for HR solutions and services company Kenexa, plus they bought flash memory developer, Texas Memory Systems. The other “big name” deal was Google’s purchase of social media marketing company Wildfire Interactive, reputedly for $250 million.
Three years ago in August 2013 IBM paid $1 billion for Trusteer, a cybersecurity company specialized in the financial services sector; Qualcomm sold its fleet management software unit for $800 million to private equity firm Vista Equity Partners; and the other big dollar buy was AOL paying $405 million for online video company Adap.tv. Facebook bought speech recognition company Mobile Technology; Software AG bought analytics firm Jackbe; Opentext paid $33 million for cloud based software company Cordys; and SAP bought ecommerce company Hybris.
August 2014 saw no blockbuster deals, however a number of big name companies were out with their cheque books. Intel paid $650 million for the LSI Axxia networking chip business; Vmware bought application delivery provider CloudVolumes; IBM bought Lighthouse Security Group to bolster its cloud based identity and access management capabilities; Google bought two startups, Emu to boost its messaging capabilities and Directr for its video advertising business; Facebook bought a security startup Privatecore, and the last BIG name saw Yahoo buying app company Zofari.
Last year in August 2015 there were two billion dollar deals. Symantec sold Veritas (which it paid $13.5 Billion dollars for 10 years ago) to a group of investors for $8 Billion. IBM also paid ”big bucks”, shelling out $1 billion for Merge Healthcare. Smaller deals saw Calgary based Above Security bought by Hitachi; Transcomos bought 30% of Vietnamese daily deals site Hotdeal; Freshdesk bought live-chat company 1Click; and PLDT bought ecommerce startup Paywhere.
Which brings us back to the present …
August 2016 saw a fair bit of M&A activity although there were no billion dollar deals. The largest deal saw global staffing company Randstad buy one of the larger job boards, Monster for $429 million. A similar sized deal saw Intel shell out $408 million for artificial intelligence company Nervana. Hewlett Packard Enterprises paid $275 million for SGI (what was left of Silicon Graphics); Apple paid $200 million for artificial intelligence company, (there is a pattern here), Turi; Salesforce bought business analytics company Beyondcore for $100 million; and ScanSource paid $83.6 million for telecom cloud services company Intelisys Communications.
Other acquisitions saw Microsoft snap up two companies, artificial intelligence scheduling software company Genee in addition to their XBox division buying interactive livestreaming company Beam. Nutanix is buying two companies to bolster its Enterprise Cloud Platform, Calm.io, a DevOps automation company and PernixData, which offers data analytics and acceleration capabilities. Other smaller deals saw Palantir, an analytics and consulting company buy data visualization startup, Silk; and Magnitude software is buying Vancouver based, data access and analytics company Simba.
Cisco was in the news for more layoffs, announcing 5,500 people, approximately 7% of their workforce, will lose their jobs as the company switches its focus from hardware to software.
Economic indicators around the globe were not too bad, with the US still talking growth, albeit slightly slower than previously expected. Other markets generally saw positive numbers on employment, except perhaps Mexico and Canada (which lost 31,000 jobs in July).
A number of reports looking at emerging tech markets suggest that IoT, Cloud services and Video as a Service are all areas of growth … and thus possible areas for investment.
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 September 2016 industry news in just about a month’s time.
Until then, Walk Fast and Smile!