CEO Blog

Category Archives: IT Staffing Industry

All blog posts by Kevin Dee, Chairman at Eagle — Canada’s premier staffing agency, related to the information technology (IT) staffing industry.

Technology Industry News for June 2015

Tech News HeaderThis is my 30,000 foot look at events in the ICT industry for June 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 June in previous years …

Five years ago in June 2009 Intel paid $884 million for Wind River Systems and Nokia Siemens took advantage of the fire-sale at Nortel, picking up their CDMA and LTE assets for $650 million.  June 2010 was a slow month in M&A but Canadian data centre company Fusepoint was snapped up by Savvis for $135 million; Twitter bought Oracle logo a large software company originally noted for its databaseSmallThought Systems; and IBM bought Coremetrics.  In June 2011 the big deal of the month was Ericsson’s $1.5 Billion purchase of Tecordia; Oracle made a couple of acquisitions (storage vendor Pillar Data and Fatwire Software); Google also made a couple of acquisitions, (analytics company PostRank and advertising management company Admeld).  Two years ago in June 2012 Microsoft’s $1.2 billion purchase of Yammer was the big deal of the month.  Salesforce paid $689 million for Buddy Media; Google reputedly paid $100 million for Meebo; Facebook bought facial recognition company Face.com; and Oracle bought “social intelligence” company Collective Intellect.  Another “buy” of interest to us at Eagle was the reputedly 7 figure purchase of Bullhorn by Vista Equity Partners (Bullhorn Salesforce logois Eagle’s front office software). In June 2013 Salesforce.com’s $2.5 billion purchase of marketing technology company ExactTarget was the big buy of the month.  Other acquisitions saw Irish mobile company Three pay $780 million for O2 Ireland; SanDisk paid $307 million for SMART Storage Systems; Cisco bought Composite Software for $180 million; IBM bought cloud company SoftLayer Technologies; and Buytopia.ca has been on a spree with six recent acquisitions .  June 2014 Sandisk logosaw some significant deals announced with Oracle’s paying $5 billion for Micros Systems;  Sandisk paid $1.1 billion for solid state storage company Fusion-io.  Google continues its push into home automation, witnessed by its subsidiary Nest paying $550 million for cloud based home monitoring service Dropcam.  Google itself paid $500 million for Skybox Imaging a satellite maker that will enhance the Google Maps capability. Twitter paid $100 million for mobile marketing platform Tap Commerce and Red Hat is paid $95 million for eNovance.

Which brings us back to the present …

jobs section of a newspaperJune 2015 was another decent month for the US economy, with another 200,000 jobs created and hiring plans positive.  There were however some negative influences, including the oil and gas sector which is no surprise and a slowdown in growth expectations which given the rate of growth recently was just inevitable.  Overall the US still looks very positive.  Canada announced that it added almost 59,000 jobs in April but other indicators are less positive with hiring prospects diminished and the impact of the oil prices on the economy.

Blacks logoThis month we saw Telus shut down all Blacks stores in Canada, which is the end of an era for a, previously well known, brand.  Intel also announced an interesting diversity program investing $70 million in its venture fund towards minority start-ups.  Uber continues to hit the news beyond protests and jailings, with its desire to build its own mapping technology.

Intel logoOn the M&A front Intel paid $16.7 Billion for semiconductor company Altera Corp.  Cisco paid $635 million for security firm OpenDNS in addition to picking up OpenStack company, PistonCloud Computing. Microsoft bought 6Wunderkinder, maker of task management app Wunderlist; Ricoh Canada bought Graycon Group a professional services firm headquartered in Calgary; and finally IBM bought OpenStack company Blue Box Group.

Jolly RogerThe final word goes to a story with a twist on the malware front. because it appears criminals are now using extortion to release people’s data back to them!  Be careful out there!

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 July 2015 industry news in just about a month’s time.

Walk Fast and Smile.

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Board!
Have you tried Eagle’s (very cost effective) Virtual Recruiter service?
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Technology Industry News for May 2015

Tech News HeaderThis 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 Microsoft logoto 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 YahooTechnology; 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, The apple logo and apple with a bite out of itthis 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 …

Time warnerMay 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 AOL logobillion 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.

canadian flagA 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!

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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Technology Industry News for April 2015

technologyThis is my 30,000 foot look at events in the ICT industry for April 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 April in previous years …

HP logoFive years ago in April 2010 HP paid $1.2 Billion in the somewhat surprising purchase of Palm; Twitter bought a couple of companies, Cloudhopper and Atebits.  Symantec also bought a couple of companies (PGP ($300 Million) and GuardianEdge ($70 Million).  Oracle paid $685 Million for Phase Forward, Juniper paid about $100 Million for Ankeena Networks and Salesforce bought Jigsaw for $142 Million.  Three years ago in April 2011 Texas Instruments bought National Semiconductor for $6.5 billion, Level 3 Communications paid $3 Billion for Global Crossing, Lawson Software was sold for $2 Billion to GGC Software Holdings (an Infor company) and Seagate bought the hard disk Facebook logodrive operations of Samsung.  In April 2012 Facebook made a $1 billion bid for Instagram, Facebook also bought a piece of the patent action from Microsoft after Microsoft had paid AOL more than $1 billion for the patents.  DELL made three acquisitions this month, Wyse technology, Clerity Solutions and Make Technologies.  IBM picked up Toronto based BI company Varicent Software; Intel paid $140 million for some assets from Cray; Citrix picked up Podio; and Twitter bought a startup to acquire its team of developers. Last year in April 2013 Rogers paid $200 million for Primus’s Blackiron subsidiary, including datacenter capability; Toronto based Softchoice also chose to go private in a $412 million private equity deal; Shaw paid $225 million for an Enmax fibre network subsidiary in Calgary; Best Buy sold its stake in Carphone Warehouse for $775 million (having paid $2.1 billion in 2008).  Google paid $30 million for social company Wavii.  Other big names on the IBM logoacquisition trail this month include Intel (Mashery), IBM (Urbancode); Computer Associates (Nolio).  Finally Facebook had a couple of small acquisitions Osmeta and Parse.  April 2014 saw Microsoft officially entered the handset business with the completion of the $7.5 billion purchase of Nokia’s devices business.  Zebra Technologies paid $3.5 billion for Motorola’s unit that makes mobile devices for business which is a move in the The apple logo and apple with a bite out of itever expanding Internet of Things space. Apple paid $479 million purchase of the LCD chip development unit of Renesas Electronics.  IBM snapped up marketing automation software company Silverpop Systems and open source software company Red Hat paid $175 million for storage company Inktank.

Which brings us back to the present …

Nokia logoMy impression of April 2015 was of a month where not too much happened, but when I looked at the facts there was plenty of action!  Nokia was the biggest story, paying $16.5 Billion for telecom company Alcatel-Lucent, but there was also a $4Billion deal that saw Capgemini buy services firm IGATE and LinkedIn made its largest acquisition ever, LinkedIn Logopaying $1.5 Billion for training portal Lynda.com.  LinkedIn also bought a predictive insights startup company, Refresh.  Netsuite paid $200 million for ERP and Commerce software company Bronto Software and Blackberry reputedly shelled out $150 million for file sharing security company Watchdox.  Salesforce was also out shopping, picking up mobile two-factor authentication startup, Toopher.  In another deal involving billions, Informatica decided to follow in DELL’s footsteps and go private for a $5.3 Billion price tag.

There were a few studies out giving some mixed messages, worldwide sales of PCs declined but not as much as expected; the Canadian Internet of Things market is projected to grow from $2.9 Billion in 2013 to $6.5 Billion in 2018; Samsung shipped the most smartphone last quarter and global IT spending is expected to be hit by the strong US dollar to the tune of $48 Billion in 2015.

Canadian dollar the LoonieThe economic indicators this month were not as strong as we have seen previously with confidence in both the Canadian and US markets dampened.  The US did have decent growth in jobs, just not as much as in previous months and Canada was essentially static remaining at a 6.8% unemployment rate.  Some indicators suggest a slowdown in the US, but others think it is just a short term impact due to bad weather and port closings.  With most indicators up, employment up and the dollar strong I think the US is going to be just fine.  Canada is still feeling the effects of the hit to the oil patch but other sectors are still performing strongly.  Given everything that I am seeing, I would expect the indicators to be looking better next month.

That is my monthly look at the IT industry, and a little market commentary.  Until next month, walk fast and smile!!!!!!

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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It is Time to Take a Hard Look at Payrolling

Jack Welch quote about teamsCompanies have many excellent reasons why they use a flexible workforce to supplement their full time staff.  Like any purchase, organizations want to get the best price possible for these services and one of the ways they try to save money is by sourcing the people themselves and then “payrolling” them through a third party, for a small fee.  The rationale is that the fee paid to the agency is reduced and thus the company saves money.

A detailed analysis of the facts shows that (a) companies do NOT save money, in fact they actually pay more.  PLUS (b) those organisations introduce increased corporate risk!

Here is a look at the real costs of payrolling:

  1. The average payrolled resource will actually be paid above market value, because there is no competitive process.
  2. By the time a payrolling fee is added, the amount paid by the organisation is higherthan they would have paid the agency to do the work for them.  Eagle’s internal analysis would suggest that on average the difference is greater than 10%!
  3. The increased rate paid to the individual causes a market issue over time because they expect that increased rate for all of their future work.  So overall market rates get edged up artificially and companies end up paying EVEN more for these resources into the future.
  4. There is also a hidden cost for the internal company resources who will have spent their efforts in finding this person, instead of focusing on their company’s core business.

In addition to dollar considerations there are corporate risk issues:

  1. The independent resource is not as independent as one sourced through a third party.  They have a relationship to the organisation’s hiring manager, they won their role without competition thus creating a potential conflict of interest with the organisation’s hiring manager.  This can make it more difficult to handle potential performance issues.
  2. Employer/employee relationships are a tricky area when talking about independent contractors or worse still “sole proprietors” who operate as independents. Many government departments, both federal and provincial, led by CRA are very interested in this area.  Payrolling erodes the independence factor and thus increases risk to the hiring company.
  3. Recent practices by some third parties of charging the payrolling fee to the individualscauses an even greater risk.  Positioned as an easy “money saving” scheme to the client, it can end up being a minefield as evidenced by a recent $384 million class action lawsuit launched against one large Canadian company and their third party provider!  It is worth noting that it is illegal in Canada to charge an individual a fee for work, so if an independent contractor is not really independent, then in addition to scrutiny on remittances you might have a big legal problem.

Companies can benefit most by engaging credible suppliers to compete on every resource requirement.  This approach means that companies can focus on their actual costs, not on other factors such as what their supplier might make.  According to Statistics Canada, the average bottom line in the staffing industry in Canada is 3 to 5% of revenues.  So chances are, your staffing supplier is NOT making out like a bandit!  Let the market forces work, and everyone benefits!

So the best choice for organizations, for both price AND risk management, is the competitive market.

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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CANADIAN JOB MARKET Review First Quarter 2015

Newspaper jobs sectionGeneral Observations:

As always, the intent of this summary is to provide some insight into Canada’s job market with input from many sources including our own “from the trenches” view.  We want to bring value to both job seekers and hiring managers with these observations and opinions.

The first quarter started with a bang, and not a good one!  The price of oil took a hammering from its mid-2014 highs above $100 a barrel down into the mid $40s.  In addition there were a slew of layoffs in the retail space with Target, Sony, Mexx and Holt Renfrew all announcing cut backs or just closing up Canadian operations.

The unemployment rate at the end of Q1 was 6.8%, up from 6.6% at the end of the last quarter and Canada had added 50,000 less jobs in the 12 months to March 31, 2015 than it had in the 12 months to December 31st 2014.

TSXAs another economic indicator the TSX has been fairly steady, despite other volatility in the markets.  At the end of Q1 it had a reading of close to 15,000 (and is up from there today).  This reading was not a marked contrast from the reading of 14,700 at the end of the last quarter.

As already mentioned the price of a barrel of oil has plummeted and is currently sitting around $55 a barrel, but at the end of Q1 was below $50.  This had a significant impact in the oil patch, resulting in cut backs, reduction in spending and layoffs.  When coupled with a low Canadian dollar however it is not ALL bad news, and Canadian manufacturers and exporters are benefiting. One prediction suggests that the oil patch will ultimately lose about 8,000 jobs through this period, however in that boom and bust world we will see it come back with a vengeance at some point.

One of the largest employers in Canada is the financial sector, centered primarily in Toronto, but with a significant presence in Montreal. There are many reasons why this sector remains busy including its highly competitive nature, evolving technologies, regulatory change and volatile markets.  In addition to these factors the booming US economy means that I expect this sector to remain busy.

The telecommunications sector is another big employer in Canada and remains busy.  The demands on their infrastructure, technology advancements, retiring boomers and expansion into new markets are all drivers of their need for people in addition to the ongoing need to compete in a very competitive space.

ConstructionThe construction industry continues to be a great place to find work, both in the trades and in the head offices of the large companies. There are construction sites in most major cities with infrastructure projects, office towers and condo developments. There has been an impact, particularly in Alberta from the drop in oil price.  I expect this to be a point in time “bust” and a recovery can be expected if not in the second half of 2015, then it should happen in the first half of 2016.  There continues to be high demand for “trades” in the home renovation and small scale construction world.

Despite the need for governments to contain costs we have seen a fairly steady demand in Federal, Provincial and Municipal Governments.  They are huge employers, and people with the right skills are always in demand. The required downsizing is generally achieved through attrition and there is always work to be done. Regulatory change, policy development and general administrative needs dictate the need for a large and skilled workforce that receives competitive incomes and very attractive pensions and benefits. The wild card here will be the effect of upcoming elections and the impact of lost oil revenue taxes.

The Canadian Staffing Index is an indicator of the strength of the largest provider of talent in any economy (the staffing industry) and an excellent barometer of the health of Canada’s economy. The index suggests a slowdown in the demand for talent in Q1 of 2015, and a slower quarter than the Q1 of 2014.

Eagle E logoHere at Eagle we have seen significant impact on our Western Canada business however other markets remain busy.  The first quarter saw a drop in demand by more than 30% in orders, most specifically from Calgary but with some impact in other Western markets too.  The GTA remains very busy and the National Capital region is experiencing its annual government year-end slowdown, but nothing unexpected.

More Specifically:

cn towerThe GTA (Greater Toronto Area) is Canada’s and Eagle’s largest market.  The number of head offices located here plus a population size that makes it the 4th largest city in North America mean there is a lot of business here.  This market accounts for approximately 60% of Eagle’s business which comes from the major industries here, which include the financial, insurance and telecommunications sectors.  The retail sector and the construction industry generate significant demand, in addition to the engineering space.  The GTA is also home to a large part of the Ontario provincial government and multiple municipal governments.  Hence the GTA offers the most opportunity in Canada, but is also the most competitive city in Canada.  It is definitely the city I would want to be in if I were looking for work.

oil rigsIn Western Canada Calgary has taken the brunt of the hit from the drop in oil prices, and it has been a significant hit.  Having said that, the city has always experienced a boom and bust economy, but just hasn’t had a bust for a while!  Things will return, and as the “hub” for Western Canada, with the second largest number of head offices and the attraction of the low Alberta tax rate (for now) we expect it to boom again.  Edmonton will also be affected by the oil price as The Alberta Government is dependent on taxes from oil revenues, although the impact has not as yet been significant.   Saskatchewan is also generally a fairly hot market for talent but will feel the effect of a lower oil price.  The opportunity in the current market is for companies to upgrade their low performers, taking advantage of the available talent which will quickly disappear as the economy rebounds.

Parliament building in OttawaEagle’s Eastern Canada region covers Ottawa, Montreal & the “Maritimes”. Ottawa has been a steady government market for some time now and we don’t see that changing as boomers retire and new opportunities arise.  Montreal continues to be steady, particularly in the financial sector, the telcos and the construction industry. There will be some impact from the oil price felt particularly in Newfoundland.  This region is typically slower for job creation at the best of times, so I expect it to be even slower than normal until we see an uptick in oil prices

AT Eagle our focus in on professional staffing and the people in demand from our clients have been fairly consistent for some time. That would include Program Managers, Project Managers and Business Analysts who always seem to be in demand. It might just be our focus, but Change Management and Organizational Excellence resources are in relatively high demand too. Big data, analytics, CRM and mobile expertise are specializations that we are seeing more and more. On the Finance and Accounting, side we see a consistent need for financial analysts, accountants with designations and public accounting experience plus controllers as a fairly consistent talent request. Technology experts with functional expertise in Health Care is another skill set that sees plenty of demand

Summary:

Always look on the bright side of life
The first quarter has been a tale of East versus West.  The West has suffered through the predictable fallout from a dropping price of a barrel of oil, the Eats have continued somewhat unabated.  Now is a tough time to be looking for work in the oil patch and we are seeing an increase in willingness to travel to where there is demand for talent.  While our crystal ball is no better than any other, we expect this situation to correct through the latter part of 2015 and first half of 2016.

While the impact in Calgary has been significant we have not seen too much impact in other markets, including Edmonton which we would have expected.  This may happen yet, with an impending election and the impact of dropping revenues from oil taxes.

The other big verticals such as Financial, Insurance, Telecommunications and Construction have not been greatly affected by the price of oil. Demand for talent appears to be strong and we are seeing these sectors benefit from newly available talent, previously employed in the oil sector.

Despite the current crunch, we expect continued skills shortages in our knowledge economy, partly fuelled by the boomers retiring, but also caused by our education system not turning out the right skill sets and the advancements in technology creating a shortage as the skills catch up.

The unemployment rate at 6.8% is not great but it is also not terrible.  When you factor in the fact that unemployment amongst professionals is probably more like 4% companies are still having trouble finding the right talent, at the right time for the right price!

That was my quarterly look at the Canadian job market and some of its influences.

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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Technology Industry News for March 2015

Tech pictureThis is my 30,000 foot look at events in the ICT industry for March 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 March in previous years …

Five years ago, March 2010 saw a continuation of the economic recovery.  It was a quiet month for M&A activity with CA buying both 3Tera for about $90 million and Nimsoft for $350 million.  Chordiant was bought by Pegasytems for a little over $160 million, and the other notable deal was Avnet’s $340 million purchase of Bell Microproducts.   Three years ago, in March 2011 world events included Japan’s earthquake, tsunami and subsequent nuclear woes.  Montreal’s Radian6 was snapped up by Salesforce.com for about $276 million; Facebook made a couple of acquisitions in the mobile space Snaptu and Beluga; YouTube paid about $50 million for Next New Networks; McAfee bought database security firm Sentrigo; Cisco logoCisco bought portal company newScale; Teradata bought data analytics startup Aster data … a continuation of the consolidation in the red hot data space;  and OpenText bought a mobile app development tool vendor WeComm.  In March 2012 there was some activity with a couple of (then) young companies receiving significant capital Appirio ($60 million) and Hootsuite ($20 million).  Cisco made a couple of acquisitions, paying a wopping $5 billion for video software and content company NDS Group in addition to a smaller network management buy, ClearAccess.  NEC paid $450 million for the information management business of Convergys and Avaya paid $230 million for an Israeli videoconferenceing and telepresence company Radvision.  Other companies on the acquisition trail were DELL, EMC, SafeNet, Avnet and Oracle logo a large software company originally noted for its databaseThe Utility Company.  Two years ago March 2013 saw some of the “usual suspects” making acquisitions, but there were no billion dollar deals announced.  Oracle continued its move into the telco space with the purchase of Tekelec; Google bought a small Toronto University based company DNNresearch in the machine learning vertical; Microsoft sold Atlas Advertiser Suite to Facebook; and Yahoo bought Summly.  Last year in March 2014 Facebook made a, somewhat surprising, $2 Billion acquisition of virtual reality company Oculus VR.  Intel also expanded its horizons with the $150 million acquisition SAPof smart watch maker, Basis Science.  SAP added to its purchasing software suite with the acquisition of Fieldglass and Telus made a couple of buys, Enode a management consulting company out of Quebec and Med Access an addition, in British Columbia, to their healthcare division.

Which brings us back to the present …

March 2015 saw some significant M&A activity with HP paying $3 billion for Aruba Networks; Lexmark paying $1 HP logobillion for customer management software company Kofax; eCommerce company Rakuten paid $410 million for ebook marketplace Overdrive; Cheetah Mobile is paying $58 million for mobile ad networkMobPartner;  TeraGo Networks paid $33 million for cloud provider RackForce; IBM bought natural language and image processing company AlchemyAPI; and in the cable TV world Charter Communications is paying $10.4 billion for Bright House Networks.

The apple logo and apple with a bite out of itOther companies in the news includes SAP laying off 3% of its workforce (2,250, jobs); Ericsson is cutting 2,200 jobs and Sharp is cutting 6,000 jobs.  Aplle released details of its new Apple watch, and also had good news about its market positioning of mobile phone sales since its release of the iPhone 6.

oil rigFor yet another month the reports and surveys out of the US were all positive demonstrating a strong recovery in that economy.  Canada’s news was less than stellar with unemployment creeping up to 6.8% from 6.6% in January.  The collapsing oil price is anticipated to cost 8,000 jobs in the Canadian oil patch.  Another report suggests that skills shortages will see Canada short by 182,000 people in the tech sector by 2019.

On a final note the FAA moved a little bit on approval of drone deliveries in the US, however the limitations are likely to limit that industry in the near term.

That is it for my look at what was happening in the technology space over the last month, compared to the same month in previous years.  I’ll be back at the end of April, until then … walk fast and smile!

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Kevin Dee is CEO of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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The Recruiter Value Proposition Continued

Famous People on the bus quote from Jim CollinsIn recent articles I talked about some of the reasons why hiring managers should invest in a relationship with their recruiters.   I talked about three key reasons:

  • Just in time staffing. Their reach in finding talent when you need it;
  • Upgrading.  Their ability to help you improve your team; and
  • Knowledge Transfer. Their ability to bring expertise that can share their knowledge with your existing team.

Here are just a couple more reasons why you might want to spend some regular time with your recruiter.

“The secret of my success is that we have gone to exceptional lengths to hire the best people in the world.”  Steve Jobs

Market Knowledge:

Recruiters have an excellent pulse on the market and know what skills are in demand, what are scarce, what rates are and what the trends are.

If you have an upcoming project that will require a particular skill set it would make sense for you to understand the availability of that skill set in your market and the associated potential cost.

Managers can a learn a lot about what their competition is doing from recruiters.  Are they hiring or laying off?   Is there a buzz about their culture … do people like working there?  There are often times where companies can benefit from hiring someone with experience at a competitor (obviously respecting non-competition clauses) and your recruiter can find those people.

I wish I had a dollar for every manager that wanted to understand their own value in the market!

“Often the best solution to a management problem is the right person.” Edwin Booz

Cost containment:

This can come in many flavors, and a recruiter with a partner attitude will try to bring value where they can.

Many companies have a tendency to hire friends … people they know and trust.  Clearly there are very good reasons for doing this, but it is never the most cost effective solution … because there is no competitive process to ensure that the contract rate, or salary is competitive.  We always recommend our clients compete the position, with the “friend” as one candidate.  This allows the hiring manager to see if there are potentially better candidates and ensure the cost is in line with the market.

There is a misconception that contract employees are more expensive that full time staff, and this can color a decision the wrong way.  A good recruiter can guide a hiring manager through an analysis that takes into account the “real cost” of an employee.  Sometimes the answer is NOT to go full time … especially when flexibility, training and management costs and the impact of pensions and company benefits are taken into account.

“The key for us, number one, has always been hiring very smart people.” Bill Gates

The traditional way that recruiters can help clients to get cost effective solutions is as relevant as it always has been.  Often clients think they need an expert to do the job, so having a few candidates to look at and understand the relative cost/experience/capability can result in a better fit!

I read a FastCompany article just this morning that suggests one of the biggest challenges that CEOs will face in 2015 is finding the right talent.  Having a relationship with a good recruiter is a great way for companies to be ahead of the game with that challenge.

“The marketplace is incredibly competitive in every industry around the globe.  The difference between success and failure is talent, period!”  Indra Nooyi, CEO Pepsico

So … go ahead hug your recruiter today!
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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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Technology Industry News for February 2015

technologyThis is my 30,000 foot look at events in the ICT industry for February 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 previous year’s Februarys …

Five years ago in February 2010 M&A activity was slow with no huge buys.  Google bought Aardvark; Oracle purchased a couple of smaller entities; IBM bought a small network software company that focuses on the telco vertical; and Sybase bought a company that has a strong foothold in the financial services HP logovertical.  There were lots of signs that the recovery was under way and Canada saw some job growth after a period of decline.  February 2011 was another quiet month for M&A with HP buying Vertica; Opentext bought Metastorm ($182 million); and Rackspace acquired Anso Labs.  World news was dominated by the popular uprisings in a growing number of countries and the reactions of those governments including the brutality of Gaddafi’s Libyan supporters.  Three years ago, February 2012 was not a blockbuster month for M&A, but there was some interesting activity.  The biggest deal of the month saw Oracle pay $1.9 billion for talent management company Taleo.  Siemens Canada paid $440 million for networking equipment company Rugged.com.  IBM bought BYOD company Worklight; Dell bought backup and recovery company AppAssure; Apple bought mobile search company Chomp; and LM Ericsson bought Ottawa based BelAir Networks.   Two years ago in February 2013 Dell dell logowent private in a $24.4 billion deal, that included a $2 billion investment by Microsoft.  Oracle paid $1.7 billion for networking company Acme Packet Inc.; Rackspace bought big data company ObjectRocket; Telus was busy with two acquisitions, electronic medical records division of the Canadian Medical Association and digital forensics company Digital Wyzdom; HP also sold the Palm operating system to LG for their smart TVs.  Last year in February 2014 it was busy in M&A. Facebook make a big move with the $16 billion acquisition of Whatsapp.  Comcast made a $45 billion play for Time Warner Cable and regulatory approval or otherwise is imminent; Oracle paid a reputed $400 million for data management platform company Bluekai; LinkedIn paid $120 million for online job search company Bright; and Klout was bought for about $100 million by Lithium Technologies.  Microsoft logoGoogle made a couple of acquisitions, online fraud company Spider.io and secure logon company Slicklogin.  IBM bought database as a service company Cloudant; and Monster bought a couple of companies, social profile company Talentbin and job aggregation and distribution technology company Gozaic. Finally, Microsoft announced Steve Balmer’s retirement and appointed a new CEO, Satya Nadella.

Which brings us back to the present …

StaplesFebruary 2015 saw some interesting activity.  The $6.3 billion merger of Staples and Office Depot and the $1.6 Billion purchase of Orbitz by Expedia are two examples of sectors experiencing massive consolidation.  There was a big buy in the communications and IT space with Harris paying $4,75 billion for Excelis to establish a 23,000 person company.  There was a big data center play with UK based Telecity Group paying $2.2 billion for Interxion Holdings.  Microsoft made a couple of acquisitions, paying $200 million for pen-tech maker N-Trig and $100 million for mobile calendar company Sunrise.  Samsung bought a mobile payment company (competing with Apple pay), LoopPay.  Also out buying was Twitter logoTwitter which picked up Niche, a network of social media creators.  There were a number of interesting deals in Asia, including Sapdeal buying luxury fashion estore Exclusively; Foodpanda made six acquisitions of online meal delivery services to establish itself as a powerhouse in that space.  Showing some forethought Australian job board OneShift has bought Adage, which is a job board serving people over 45 … maybe I should register!

The US economy continues its recovery with almost every indicator being extremely positive.  Confidence indicators, GDP, unemployment figures … all show an economy that is growing.  So much so that the number one concern of businesses is now the talent shortage!  Canada on the other hand is not so buoyant and continues to “go sideways” … clearly not helped by the price of a barrel of oil these days, and Obama playing politics by vetoing the Keystone Project.

BitcoinIn other news supporters of net neutrality had a victory this month when the US Federal Communications Commission voted in their favor.  Another Bitcoin exchange went bust, this time amidst rumors of some less than ethical practices.  Gartner tells us that worldwide IT spending will increase, Careerbuilder tell us more people want to (need to?) work after retirement and the growth of smartphone sales keeps on rolling.

That is it for my monthly look at what was happening in the technology space over the last month, compared to the same month in previous years.  I’ll be back at the end of March, until then … walk fast and smile!

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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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The Continuing Value of a Recruiter to The Client

invest in people There are many reasons why clients will go to a recruiter.  Some of those reasons are fairly common and others are not so common.  Typically clients look to a recruiter when they have an urgent need for talent … but an ongoing relationship with your recruiter will mean you can actually get proactive!

Today I will talk about the kind of situation many managers face, the need to bring new knowledge into the organization.  There are many reasons why this is needed.

  • You do not have a key skill amongst your employees;
  • A key resource leaves and the skill leaves with them; or
  • A new technology comes into the company and you have no-one with that skill.

Typically companies will approach these situations in a few different ways:

  • Hire someone new into the position who has that skill;
  • Hire a contractor into the position;
  • Muddle through; or
  • Outsource the responsibility to an external supplier.

There are however many times when you have good employees, who could do the work if they had the right experience.  They are also people you would want to reward with this kind of opportunity and if your could then it would strengthen their tie to your organization.

What can you do?

Your recruiter can help you to identify the right kind of contract resource, who can bring the experience and the skill.  Their task would NOT be to do the work themselves but to partner with the internal employee through the process of getting them up to speed, while ensuring the work is done well.  As a part of their mandate they could even train a few in house people in relevant skills to ensure adequate backup for your new in-house expert.  This approach is more attractive to in house resources who might resent the “sexy” projects being given to contract resources.

The short term cost might be a little higher than hiring a net new person, or even hiring a contractor for the duration.  Longer term you have the skills you need, happy employees and your costs are likely to be less.

“If you take care of your employees they will take care of your customers and your business will take care of itself.”  J W Marriott

It requires a little more planning and the right expectation setting with both the contractor and the employee.  It might require a willingness to put in a little extra effort on the part of the employee, but they will be getting new skills in return.

“The best time to plant a tree was 20 years ago. The second best time is now.”  Chinese Proverb

This is just one more reason why hiring managers should have an ongoing relationship with their recruiter.  A good recruiter will be able to understand the business issue, find exactly the right candidate and set the right expectations with an incoming contract resource.
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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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The Value of a Recruiter to a Hiring Manager

Rob Crandall quote about upgrading your teamFor some people a recruiter is a “necessary evil” … someone that they call as a last resort, when they are desperate to fill a role.  The rest of the time they will avoid them.

The fact is that in addition to being a source of talent there are many reasons why a hiring manager should cultivate a relationship with their recruiting supplier, especially when there is no immediate and burning need.  The recruiter is a great resource that can help with a number of management challenges … so I would counsel hiring managers to put their recruiters to work!

Today I will focus on how a good recruiter can help you improve your existing team.  This is especially important during quieter economic times.

“Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out.”  Ronald Reagan

During a downturn, excellent talent comes on the market or at the very least is willing to have conversations about other opportunities.  It might be their company is struggling, a project lost funding or just the uncertainty of their particular situation … but it spells opportunity for the astute hiring manager.   Especially if they have a good recruiter finding these people for them!

In my management experience the number one source of pain has always been the underperforming employee with the attitude problem.  They might do just enough to “get by”, but they cause their manager heart burn, take more management time than the rest of your staff and they disrupt the team dynamics.

I would suggest that most managers that have a number of people on their project, or working for them will have their “problem child”.

Imagine how much better your days would be if that person were replaced by someone like one of your top performers!  Suddenly stress would be reduced, productivity would be increased and you would find time to spend on more enjoyable activities.  Your team would be happier and so would you.

If you have a relationship with your recruiter you can talk about these things.  You can have them keep an eye out for the “A’ player that might fit your team.  If you have a relationship they will know the soft skills that are needed, they will understand the hard skills that are mandatory and they will not waste your time by firing over resumes of people who might just be another problem child.

Companies always talk about the cost of recruiting and how expensive it is … well think about the real return on investment in this one move!  What dollar benefit would your company receive by replacing one poor performer with an “A Player”?

This is just ONE reason you need to have a relationship with your recruiter!

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Kevin Dee is Chairman and founder of Eagle (a Professional Staffing Company)
Want to know where Canada’s hot jobs are?   Visit the Eagle Job Centre!
Have you tried Eagle’s (very cost effective) VirtualRecruiter service?
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