The Eagle Blog

IT INDUSTRY NEWS – January 2013

This is my 30,000 foot look at events in the ICT industry for January 2013. 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 Januarys …

Five years ago in January 2008, there was much talk about an impending recession.  Dell, Palm and Yahoo all announced layoffs, while Oracle paid $8.5 Billion for BEA, Microsoft paid $1.2 Billion for FAST and SUN paid $1 Billion for MySQL.  In January 2009 the world’s economies melted down! The one sizeable M&A deal was the $775 million purchase of Interwoven by Autonomy.  Confidence with IT workers and CEOs alike was at an all time low, and there was a long list of (significant) companies announcing layoffs.  Satyam announced a major financial accounting scam and former Canadian “tech star” Nortel, filed for bankruptcy protection.  Three Januarys ago in Twenty-Ten there was cautious optimism in the air, but not much in the way of blockbuster M&A deals however Oracle, Apple, EMC, and Cisco continued their fairly steady acquisition pace.  Perhaps the most interesting acquisition saw PWC here in Canada return to the IT consulting business with the acquisition of Allstream’s non-telecom consulting business, several years after exiting the business by selling it to IBM.  In other news Apple released the much anticipated iPad.  In January 2011 economic news was generally positive, Steve Jobs announced his leave of absence from Apple and Larry Page assumed the CEO role at Google.  There were also some big M&A deals, the largest being the $3.1 Billion acquisition of Atheros Communications by Qualcomm.  Verizon paid $1.4 Billion for Teremark Worldwide and IGate paid $1.2 Billion for Patni Computer Systems.  Also out spending money were Dell, Google, Cisco and Things were very quiet in M&A last year in January 2012.  Former tech giant JDSU was back on the acquisition trail, even if just to pick up a small Vancouver based company, Dyaptive Systems.  Symantec paid $115 million for LiveOffice to help with its storage capabilities, Google bought a bunch more IBM patents, and Xerox picked up Laser Networks in the managed printing space.  Rim also announced its change of leadership. 

Which brings us back to the present …

January 2013 was a big month for Canadian darling Research in Motion with the long awaited release of its next generation PDA and associated software.  The company also changed its name to Blackberry.  Early reviews were generally positive, the proof however will require the recapture of significant market share.

In M&A activity Cisco was busy picking up yet another Israeli company, mobile network software company Intucell for $475 million.  Cisco is investing heavily in Israel, with this being its 10th acquisition there in the last 12 years.  Cisco also sold its Linksys division to Belkin.  The biggest dollar value deal was AT&T’s purchase of some of Verison Wireless’s airwaves for $1.9 Billion.  Other deals saw NCR buy video software ASTM company uGenius Technology; Canon Canada acquired long-time partner and document management company Oce Canada; NetSuite bought retail management systems company Retail Anywhere; and AVI-SPL bought Duocom-Duologik.  The Canadian Federal Government also released details about how it would make $400 million available for startups.

Speaking of Federal Government departments HRSDC ran into data leak problems for the second time in just a few months, losing a portable hard drive with 585,000 personal records.  Apple also did some house cleaning of suppliers identifying and cutting ties with companies supplying child labour.

Economic indicators continue to be mixed … how long have we been saying that now?  In December Canada’s job situation was decent gaining 40,000 jobs and the unemployment rate dropping 0.1% to 7.1%.  A BMO survey also showed some optimism among Canadians about hiring plans. The US released January labour data that was generally positive, other than the unemployment rate rose from 7.8% to 7.9%.  Over in the UK the number of people out of work dropped in the September to November quarter by 37,000 and the unemployment rate dropped to 7.7% which is down 0.7% from a year ago.  The ILO released a report suggesting global unemployment rose in 2012 after two years going the other way, with 197 million people unemployed globally.

I would have to characterize January as “more of the same” that we have been seeing for some time now.  One of these months I will be talking about the buoyant economy, but until then … Walk Fast and Smile!

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