The Eagle Blog

June 2009 – IT Industry news

This is my 30,000 foot look at events in the ICT industry for June 2009. What you see here is a précis of the monthly report I produce, which is available in more detail at the Eagle website. You will also find back issues on the website.

It was three years ago in June 2006 that Warren Buffet donated $30 Billion to the Gates Foundation … given the performance of all of our portfolios I wonder if he regrets giving that much! Two years ago in June 2007 there was some heavy duty money “flying” with Avaya bought for $8.2 billion, Ceridian for $5.3 billion and Solectron bought by Flextronics for $3.6 billion.

Last year in June 2008 the economy was rocked by high oil prices, the fallout from the sub debt crisis and signs of inflation. The big deal saw the Carlyle Group buy the US Government business of Booz Allen Hamilton for $2.54 billion. Other than that deal there was plenty of M&A activity, Nokia paid $410 million to complete its ownership of Symbian; NEC bought Nutcracker for $300 million; Cogeco bought Toronto Hydro Telecom for $200 million; Progress paid $162 million for Iona; Barracuda Networks offered $186 million for Sourcefire and Belden paid $133 million for Trapeze Networks.

June 2009 is a different world … there continues to be some optimism that the economy is beginning to recover, but like the McKinsey report suggests expectations started so gloomy that optimism is a relative thing! General consensus appears to support a long, slow recovery and thus we are still seeing large numbers of layoffs, salary reductions and slow spending. A Robert Half survey in the US suggests that there will be more CIOs hiring than cutting in the next year, and Gartner tells us that sales of business intelligence software grew 22% in 2008 … so there are some bright lights.

On the M&A front June was not a blockbuster month although a couple of deals were significant. Intel paid $884 million for Wind River Systems as a foray outside of the PC world into embedded systems. The other large deal saw Nokia Siemens take advantage of the fire-sale at Nortel, picking up their CDMA and LTE assets for a $650 million. Among the other deals RIM picked up a GPS systems company suggesting that they may be planning on competing with the very impressive iPhone GPS capability.

On the good news front it was good to see Apple boss Steve Jobs back at work following his liver transplant and we all can be thankful that Canada is NOT following China’s lead and installing “Green Dam Youth Escort” on all new PCs!

Until next month!

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 June 2009 news in just about a month’s time.

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