The Eagle Blog

IT Industry News – December 2010

This is my 30,000 foot look at events in the ICT industry for December 2010. 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. 

I think it’s interesting to look back and see what was news in previous years, and how it might affect news today. Perhaps one of the most noticeable things I see is that some of the most successful and largest companies have a track record of growth through acquisition, and with practice they get very good at it! 

IT news in December can be slow.  Four years ago in December 2006 an earthquake in Taiwan showed the vulnerability of the internet infrastructure, causing damage to 6 undersea cables and resulting in widespread service disruption in Asia.   AOL was trying to reinvent itself resulting in layoffs and management changes.  Sony BMG paid out big bucks for installing rootkits (spyware) on their CDs for copyright protection purposes and Cisco was tripling its workforce in India. The most significant acquisition of the month saw Alliance data systems pay about $500 million for Doubleclick’s Abacus unit.  Three years ago in December 2007 the big deal was in the gaming space with Warcraft maker Vivendi Games merging with Activision in a $9.85 Billion creation of a new gaming entity, there were a number of other deals but nothing huge.  Two years ago In December 2008 the poor economy was the big news.  Sony, Yahoo, Adobe, Nokia and AT&T all announced layoffs.  Mass layoff numbers were up and various studies were cautious about hiring plans for 2009.  On the M&A front the biggest deal involved a couple of private equity companies buying a Danish IT company (KMD) for $375 million; Sierra Wireless paid $277 million for Wavecom; and Wipro paid $127 million for the IT arm of Citigroup.  Last year in December 2009 Tiger Woods was hogging the limelight, and again the IT world was a little quiet … although I expect his sponsor Accenture was spending time on a new marketing strategy.  Globalive’s ability to operate in the wireless business in Canada was enabled by Industry Canada, introducing the Wind mobile brand to Canada. On the M&A front there were no big announcements … Microsoft had a couple of smaller (by their standards) acquisitions focused on different verticals, Opalis for the data centre business and Sentillion for the Health Care world.  Google made a small acquisition (AppJet), IBM added database security vendor Guardium and there were a couple of other deals during the month. 

So back to the present and December 2010.  CIOs in the US suggest that they will increase IT hiring by 8% in the first quarter of 2011.  There was some positive news out of Europe with 75% of Irish employers expecting to hire, both Belgium and the Netherlands seeing increased employment and German companies starting to talk about skills shortages (which is good news for employment and the economy … but a different kind of challenge.  The UK however looks like it is in for a challenging year of high unemployment and wage restraint.  

Alcatel hit the news for the wrong reasons, paying a fine to settle charges of bribery, and Facebook was valued at $41.2 Billion (A good year for Mark Zuckerberg by anyone’s standards!) 

On the M&A front December2010 was probably more active than previous Decembers.  Dell is making a big play in the storage world, with two acquisitions this month Compellent Technologies ($820 million) and Insite One.  Siemens and Atos Origin formed a new European IT outsourcing company in a deal worth more than $1 billion.  J2 Global Communications bought (Ottawa based) Protus IP Solutions ($213 million); Juniper Networks bought Altor Networks for $95 million; bought a software development platform Ruby from Heroku (can’t understand that one) for $212 million; Earthlink paid $370 million for One Communications; BMC Software bought GridApp Systems; and L&T Infotech established a significant Canadian presence through the acquisition of Citigroup’s IT outsourcing arm.

 So ends Twenty-ten and a year many will be happy to see end.  Let’s hope that 2011 is a better year for all of us!  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 January 2011 industry news in just about a month’s time.

Kevin Dee is CEO of Eagle (a Professional Staffing Company)

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