This is my 30,000 foot look at events in the ICT industry for May 2011. 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 news from previous years, and how it might affect news today and so I do a quick recap of the larger events, mostly M&A related this month in previous years. This month it was interesting that the largest deal of May 2011 became Microsoft’s largest acquisition, since it bought aQuantive in May four years ago!
In May 2007 there was some interesting, and big dollar, M&A activity. Goldman Sachs and Texas Pacific Group paid $27 Billion for Alltel, the 5th largest cell phone company in the US, Microsoft made its largest acquisition ever (at the time), paying $6 Billion for aQuantive, an internet advertising company. The other big deal was the sale of Axiom, again to equity firms, for $3 Billion.
May 2008 saw HP pay almost $14 Billion for EDS, and CBS paid $1,75 Billion for the CNet suite of web based sites. There was much concern about the impending economic crisis and the sub-prime debt debacle.
Two years ago in May 2009 the early signs of a recovery were evident, but there were still bad-news stories, revenue at the large staffing companies was down 30% in the first quarter; Sony (8,000), BT (15,000), Seagate (1,100) and HP (6,000) all announced new layoffs, while Microsoft continued with its second round of planned layoffs. On the M&A front the telcos continue to feel pain with Verizon selling off 14 states worth of wireline assets to Frontier Communications for $8.6 Billion. Facebook received an injection of $200 million from Digital Sky Technologies (which would value the company at $10 Billion); and NetApp paid $1.5 Billion for Data Domain.
Last year in May Twenty-Ten the world was in much better shape economically, but there are still plenty of concerns ranging from the financial impact of the volcanic ash on the world’s airline, to the meltdown of the Greek economy to the lingering effects of the recession and the debts that countries incurred to help the recovery. 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 to buy the security assets of Verisign.
Which brings us to May 2011 and probably the biggest news is Microsoft’s record breaking offer of $8.5 Billion for Skype. Other M&A activity this month includes 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 a Twitter Application, TweetDeck. There were a number of other deals where the finances were not disclosed but “big name” acquirers involved like Deloitte, HP and SoftwareAG.
This month Canada moved up (or down … depending on your point of view) the rankings and became the second ranked country for hosting phishing sites! Sony hit the press for a huge security breach that continues to plague a company that was also hurt by the Japanese tsunami earlier this year, and Facebook’s reputation was hurt by its attempt to run a smear campaign against Google.
Canada’s economy continues its recovery with employment back at the levels achieved pre-recession, however the unemployment rate remains relatively high at 7.6%. Yet another global study warms about the coming labour shortages … which for many still seems incongruous as many countries still struggle to recover from the recession. There were many positive indicators from the US economy, and Europe continues its “uneven” recovery with a clear delineation between the “haves” (Germany, France) and the “have nots” (Greece, Ireland, Spain). The UK seems to be somewhere between, certainly not booming but painfully slowly turning the corner.
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 June 2011 industry news in just about a month’s time.
Walk Fast and Smile.
Kevin Dee is CEO of Eagle (a Professional Staffing Company)
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