The Eagle Blog

IT Industry News for October 2010

This is my 30,000 foot look at events in the ICT industry for October 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 its 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!

Four years ago in October 2006 Oracle paid $440 Million for Stellent and EMC paid $165 Million for Avamar.  At that time worker confidence was good, unemployment rates in Canada and the US were low and IT spending was relatively strong.  Three years ago in October 2007 Microsoft valued Facebook at $15 billion when it took a minority stake for $204 million, SAP paid $6.8 billion for Business Objects and Nokia paid $8 billion for Navteq, a mapping software company.  IT workers were happier and more secure than ever, NexInnovations closed its doors and a Royalty Review caused consternation for Canada’s oil patch.  Two years ago in October 2008 doom, gloom and market meltdowns were the big news.  The number of IT jobs in the US dropped by 2% quarter over quarter and Symantec, eBay and Yahoo all announced significant layoffs.  A $5.8 billion merger of telcos in the US was the big deal of the month, with rural telephone company Century Tel buying its bigger peer Embarq.  Ebay bought 3 companies, Bill Me Later ($945 million) plus Denmark companies Ben Bla Avis and BilBasen ($390 million).  Symantec paid $695 million for MessageLabs, Tata paid $505 million for Citi’s Indian BPO arm and HP paid $360 million for LeftHand Networks.  Last year in October 2009 news was mixed as the recovery was under way.  Cisco went on a spending spree, paying $3 Billion for Tandberg, $2.9 Billion for Starent  and $183 Million for ScanSafe.  Adecco paid about $1.1 Billion for MPS Group (includes Beeline); Emerson Electric beefed up its datacenter capability paying $1.2 Billion for Avocent and Sprint Nextel avoided some legal issues by shelling out $831 million for iPCS. 

Here we are in October Twenty-Ten and in comparison to Octobers in previous years this was a quiet month.  There was not a ton of M&A activity but some interesting Canadian deals.  Bell Canada was on a bit of a tear buying a data center in Montreal (Hypertec) and purchasing xwave from its subsidiary Bell Aliant.  Interestingly enough another telco, Rogers, was also out spending, paying $425 million for Atria networks.  Other interesting activity saw perennial M&A company, IBM pick up Toronto based Clarity Systems, Ottawa based Dragonwave bought Axerra Networks and again in Ottawa Michael Cowpland’s Zim bought the technology assets of Torch Technologies.  Finally, Software AG continue the “run on” MDM companies with its purchase of Data foundations.

From a dollars a cents perspective the biggest news was not in the M&A world it was news that intel plans to invest $8 Billion on its US manufacturing capability … great news on the job creation front and great news for the anti-offshoring lobby!

Facebook was in the news too (a) because of the amount of malware on the site and (b) because a Canadian court upheld a $386 million judgement against a spammer.

While things were quiet in October, and the stability of the economic recovery continues to be challenged many of the indicators were positive.  One of the most interesting comments came from Germany who claim that unemployment today is lower than before the economic recession!  Bothe the US and Canadian staffing indexes were positive, the Canadian unemployment rate improved to 8.0%, a couple of different surveys suggested that IT spending would increase, US GDP increased and the ECRI index in the US was at its highest point since May.

45% of people responding to a Spherion survey suggests that the recession caused their relationship with their boss to deteriorate.  Wow … layoffs, increased pressures, concern about survival … and there was tension in the workplace.  I sometimes wonder who dreams up these surveys!

Here at Eagle we continue to see growth, the markets across the country are almost all busier and I am getting a little tired of hearing from the doom and gloom crowd.  We can talk ourselves out of the recovery or we can just bear down and continue to create jobs, which at the end of the day, is what pays for everything!

It continues to be a long slow path, but we continue to head in the right direction … until next month, stay positive, walk fast and smile!

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 November 2010 industry news in just about a month’s time.

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