The Eagle Blog

January IT Industry News

This is my 30,000 foot look at events in the ICT industry for December 2008. What you see here is a precis of the monthly report I produce, which will is available in more detail at the Eagle website. You will also find back issues on the website.

Two years ago in January 2007 there was no talk of recession, and worker confidence was relatively high. The big news was Microsoft’s launch of Vista and AOL paid $1 Billion for Tradedoubler. One year ago, in January 2008, there was much talk about an impending recession and the ECRI had its worst growth rating since the 2001 recession. IDC was still bullish that Canada’s tech industry would flourish in 2008 and Gartner was predicting huge growth in the Indian IT Services Market. 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. So it wasn’t ALL bad a year ago.

Fast forward to January 2009 and we are definitely seeing the affects of the economic meltdown! There are no blockbuster deals to announce, with one of the few sizeable deals being the $775 million purchase of Interwoven by Autonomy. Confidence with IT workers and CEOs alike is at an all time low, and little wonder when you see the long list of companies making significant layoffs. In addition to the layoffs one of India’s larger outsourcing companies Satyam, announced a major financial accounting scam, DELL moved a production facility from Ireland to “low cost” Poland and former Canadian “tech star” Nortel, filed for bankruptcy protection.

Layoffs were the news of the month with some of the bigger names making deep cuts, Microsoft (5,000), Intel (6,000), Motorola (4,000), Seagate (5,000), SAP (3,000), Lenovo (2,500), EMC (2,400), AMD (1,100) and Sophos (1,500). IBM also announced layoffs but did not announce numbers but rumours range from as little as 5,000 to as many as 16,000. IBM also offered to relocate employees to more “robust” markets such as India.

Obviously the economy is taking a pounding and many companies are taking the opportunity to trim “fat”, make hard decisions and position themselves to survive any worsening in the economy. Economists continue to suggest that we have some way to go yet, but I’m hoping my industry news is not this depressing next month!!

Walk Fast and Smile!

That’s what caught my eye over the last month, the full edition is available by clicking here to go to the appropriate part of Eagle’s website. Hope this was useful and I’ll be back with the February 2009 news in just about a month’s time.

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