IT Industry News – March 2018

A Little History of March in previous years

In March 2013 Oracle continued its move into the telco space with the purchase of Tekelec; Google bought the small Toronto University-based company DNNresearch in the machine learning vertical; Microsoft sold Atlas Advertiser Suite to Facebook; and Yahoo bought Summly. In March 2014, Facebook made a somewhat surprising $2 billion acquisition of virtual reality company Oculus VR. Intel also expanded its horizons with the $150 million acquisition of smart watch maker, Basis Science. SAP added to its purchasing software suite with the acquisition of Fieldglass and TELUS made a couple of buys, Enode, a management consulting company out of Quebec and Med Access, an addition in British Columbia, to their healthcare division. Three years ago in March 2015 HP paid $3 billion for Aruba Networks; Lexmark paid $1 billion for customer management software company Kofax; eCommerce company Rakuten paid $410 million for ebook marketplace Overdrive; Cheetah Mobile paid $58 million for mobile ad network company MobPartner; TeraGo Networks paid $33 million for cloud provider RackForce; IBM bought natural language and image processing company AlchemyAPI; and in the cable TV world Charter Communications paid $10.4 billion for Bright House Networks. In March 2016, we saw the $3 billion sale of Dell Services to NTT, a direct result of Dell’s restructuring following the recent purchase of EMC. IBM was out bolstering its services business with a couple of acquisitions; the first was Optevia, a UK-based integrator focused on Microsoft Dynamics; and the second was Bluewolf Group, a global salesforce consulting partner. Montreal-based Yellow Pages picked up Toronto-based Juice Mobile, primarily for its mobile marketing capability. Another Toronto company, Influitive, raised some cash ($8.2 million) and bought a couple of mobile app companies, Ironark Software and Triggerfox; and Netsuite bought IQity Solutions, a cloud-based manufacturing software company. Last year in March 2017 Intel bought Israeli computer vision company, Mobileye, for a hefty $15.3 billion. HPE bought storage solution provider, Nimble, for $1 billion. Amazon Web Services, a public cloud infrastructure provider, acquired Thinkbox Software, a company that provides software for managing media rendering workloads. Mozilla acquired Pocket, a startup that developed an app for saving articles and other content.

Which brings us back to the present

In March 2018, there was a significant amount of M&A activity. The deal of the month saw Salesforce pay $6.5 billion for cloud integration company Mulesoft. Plantronics is paying $2 billion for unified communications company Polycom; and Amazon is paying $1 billion for smart home company Ring. Other deals saw eBay shell out $700 million for the commerce platform Qoo10; Cognizant is buying Bolder Healthcare Solutions; HPE Aruba is buying Cape Networks; VMWare is buying security company E8; and Deloitte is buying API Talent in New Zealand. It’s also nice to see Avaya buying Spoken Communications after leaving Chapter 11 bankruptcy protection.

Facebook received a lot of attention around the world this month with questions about improper use of client data and their potential role in major political situations like the US election and Brexit vote.

The Canadian economy has enjoyed a reasonably decent run in 2017, but 2018 is starting to look less than rosy. Indications are that GDP and employment growth will slow down as the year progresses. Obviously, NAFTA negotiations and interprovincial spats will have some influence, in addition to new labor laws and the carbon taxes beginning to take effect. The US economy is benefiting from the recent tax decreases and the general tone around the world is focused more on positive employment numbers and skills shortages rather than high unemployment.

That is it for my look at what was happening in the technology world over the last month, compared to the same month in previous years. I’ll be back at the end of April, until then walk fast and smile!

In this Issue:

> General Interest
> Company News
> Merger & Acquisition Activity
> Primary Sources


> GENERAL INTEREST

General

Fully closing the gender pay gap could increase total female earnings by $2 trillion across the economies of the OECD (Organisation for Economic Co-operation and Development) countries, according to the latest Women in Work Index by PricewaterhouseCoopers. Findings from the index showed that Iceland, Sweden and Norway remain the top three performing OECD countries in the index. Of the total 33 OECD countries, all have shown improvements from last year, with the exception of Finland, Switzerland, Chile and Australia.

The economy – Canada

While the Canadian economy fired on all cylinders in 2017, the rate of growth tapered off toward the end of the year, according to The Conference Board of Canada. Its latest Canadian Outlook expects the slowdown to continue this year, with the economy forecast to expand by a more sustainable 1.9%, down from 3.0% in 2017. Additionally, tighter labor markets and increased retirements from baby boomers will lead to much slower employment growth in 2018. Job gains are expected to slow to 232,000 jobs in 2018, down from 336,900 last year. On a more positive note, a tight labor market will help support wage growth which could help cushion the impact of rising interest rates.

Canada added 15,400 jobs in February from January to a total of almost 18.6 million jobs, according to Statistics Canada. A gain of 54,700 part-time jobs in February offset a loss of 39,300 full-time jobs. The unemployment rate edged down to 5.8% in February from 5.9% in January.

Canadian employers report the strongest hiring plans since 2011, with employers in the public administration sector reporting the strongest hiring prospects, according to ManpowerGroup. The Canada survey found that 20% of employers expect to increase staffing levels and 3% anticipate cutbacks. This results in a net employment outlook of 14% on a seasonally adjusted basis, the strongest reported in more than six years.

The Canadian staffing index, which measures staffing activity in Canada, rose 2% in February on a year-over-year basis to a reading of 95. On a month-over-month basis, the index fell 10% in February.

 The economy – US

US private sector employment rose by 235,000 jobs in February, down from the gain of 244,000 in January but still “red hot,” according to the ADP National Employment Report.

Job growth in the US increased sharply last month, according to The Conference Board’s Employment Trends Index. The index rose in February to a reading of 107.74 from 106.50 in January.

US employers reported that the hiring outlook remains strong for the second quarter, according to the latest Manpower Employment Outlook Survey. The US ranked among the strongest outlooks for hiring among 44 countries surveyed in the report. Other countries with strong hiring outlooks included Croatia, Taiwan, Japan and Hungary.

IT job growth in the US started 2018 “essentially flat,” according to the TechServe Alliance. It reported the number of IT jobs in the US edged up by only 0.01% sequentially in February to more than 5.3 million; on a year-over-year basis, the increase was 1.2%. Engineering employment increased by 0.23% sequentially in February to almost 2.6 million jobs. The increase was 1.7% on a year-over-year basis.

US real gross domestic product grew at an annual rate of 2.9% in the fourth quarter, according to the third estimate of GDP growth by the US Commerce Department. The new estimate is up from the previous one, which pegged growth at 2.5%; the general picture of economic growth remains the same, but personal consumption expenditures and private inventory investment were revised upward. Real GDP for the US increased 3.2% in the third quarter of 2017.

The Conference Board’s consumer confidence index declined in March, following an increase to an 18-year high in February. The index fell to a reading of 127.7 (1985=100) from 130.0 in February. Despite the modest retreat in confidence, index levels remain historically high and suggest further strong growth in the months ahead.

The American Staffing Association’s staffing index rose 0.7% to a rounded reading of 95 in the week of March 12 to March 18, reaching the best reading for this particular week in 10 years. Staffing employment rose 2.2% compared to the same week last year. The index’s four-week moving average remained at a rounded figure of 94, a 10-year high for the same period. Year over year, the four-week average rose 1.3%.

The Conference Board’s US Leading Economic Index edged up 0.6% in February to a reading of 108.7 (2016 = 100), following increases of 0.8% in January and 0.7% in December.

Economic activity in the US nonmanufacturing sector decreased slightly in February, according to the Institute for Supply Management’s nonmanufacturing index. While down slightly, it is still a strong reading at 59.5 compared to January’s reading of 59.9. Readings above 50 generally indicate improving conditions.

The employment portion of the index decreased in February to 55.0 from the seasonally adjusted January reading of 61.6.

 The economy – Outside North America

The euro area (EA19) seasonally-adjusted unemployment rate stood at 8.6% in January 2018, down from 9.6% in January 2017. This is the lowest rate recorded in the euro area since December 2008, according to data from Eurostat, the statistical office of the European Union. The EU28 unemployment rate stood at 7.3% in January 2018, down from 8.1% in January 2017. This is the lowest rate recorded in the EU28 since October 2008.

The average level of skilled talent shortage in the STEM (Science, Technology, Engineering and Mathematics) sector increased from 6% in 2014 to 12% this year, according to the Economic Times of India. The shortage of STEM talent persists despite India producing the maximum number of graduates globally with 78 million fresh graduates in 2016 alone, of which 2.6 million were from STEM.

China’s total urban employment increased by 10.34 million people last year, reports Reuters with data from the Chinese National Bureau of Statistics. Meanwhile, the country’s working-age population fell to its lowest level since 2009 last year and was below a billion for the first time since 2010.

The Swiss’ registered unemployment rate fell to 3.2% in February from 3.6% in the same period last year, according to figures from the State Secretariat for Economic Affairs.

The seasonally-adjusted unemployment rate in Japan fell to 2.4% in January, down 0.3% from the same period last year, and the lowest rate since April 1993, according to data from the Statistics Bureau of Japan.

Japan is set to open its doors to approximately 200,000 IT professionals from India, according to the Japan External Trade Organisation. It comes after US Citizenship and Immigration Services announced changes that would make it tougher to get H-1B visas. The IT professionals will be issued green cards to settle down in Japan, which could provide permanent resident status in as short as one year.

Employers around the world reported optimistic hiring outlooks in Q2 2018, according to the latest ManpowerGroup Employment Outlook Survey which showed that employers in 43 of 44 countries plan to add staff. The survey showed that hiring confidence is strongest in Croatia, Taiwan, Japan, Hungary and the US. When compared to the previous quarter, hiring intentions improved in 17 countries.

Mexican employers report steady hiring plans for the upcoming quarter, according to a survey by ManpowerGroup. The survey found 18% of employers in Mexico forecast an increase in staffing levels in the upcoming quarter; 4% anticipate a decrease, 77% expect no change and 1% don’t know their plans. This yields a net employment outlook of 12% on a seasonally adjusted basis — unchanged when compared to hiring intentions for the previous quarter and when compared to the same survey conducted at this time last year.

February saw a 2% increase in overall talent demand with job growth being consistently robust, according to the latest RecruiteX report from TimesJobs of India. The report also highlighted month-to-month growth in overall talent demand with an increase of 3% in February when compared to January. Month-to-month figures showed that the retail sector in India registered a 13% rise in hiring in February 2018, followed by a 10% rise in talent demand in the consumer durables/fast-moving consumer goods sector. The automobile sector saw a 9% rise in talent demand.

2018 is set to be a positive year in the Philippine job market, with both employers and talent expressing an optimistic view in relation to their hiring and job search activities, according to this year’s JobStreet.com Job Outlook Report.

Unemployment in Ireland was down for the fourth quarter of 2017, marking the twenty second quarter in succession where unemployment has declined on an annual basis, according to figures from the Central Statistics Office. The seasonally adjusted unemployment rate stood at 6.4% for Q4 2017. During the quarter there were 144,100 people unemployed, down 23,400 from the same period last year.

The unemployment rate in South Korea stood at 4.6% in February, down 0.3% when compared to the previous year. Data showed that the number of unemployed persons totaled 1.26 million in February, which decreased by 76,000 thousand people, year-on-year.

Singapore’s seasonally-adjusted resident unemployment rate declined over the course of 2017 to 3.0% in December 2017 according to the Ministry of Manpower.

Malaysia’s jobless rate decreased slightly in January to 3.4% from 3.5% in the same period last year, according to figures from the Department of Statistics.

The number of employed persons in Malaysia stood at 14.6 million in January, up from 14.3 million in the same period last year.

The impact of Brexit, falling net migration and an ageing population are set to cause a UK workforce crisis by 2025, according to a study from consulting firm Mercer.

The study showed that the UK’s available workforce is projected to increase by 820,000 (2.4%) in 2025, a fall from the 9% figure in the 10 years to 2015.

Mercer added that, for the first time in half a century, the overall population will be increasing at a faster rate than the workforce, creating long term structural challenges for the economy.

Confidence in the UK economy remains negative as more employers think that economic conditions will get worse, compared to those who think it will get better, according to the latest JobsOutlook survey from the Recruitment and Employment Confederation.

The total number of job vacancies in Australia increased by a seasonally-adjusted 4.4% in the three months to February when compared to the previous three-month period, according to the Australian Bureau of Statistics.

Germany’s labour market is predicted to see an improvement this year along with a rise in employment and a record labour force number, according to the latest forecast from the Institute of Employment Research (IAB). The IAB stated that this year, the number of people in employment will rise to 44.94 million, which is 650,000 more than last year. Furthermore, on average, 2.33 million people will be unemployed which is 200,000 fewer than last year and the lowest level since 1990.

For 2018, the IAB also expects GDP to grow by 2.1%, 0.1% less than in the previous year. According to Eurostat, Germany’s unemployment rate stood at 3.6% in January, the third-lowest after the Czech Republic (2.4%) and Malta (3.5%).

The seasonally adjusted unemployment rate in Hong Kong stood at 2.9% for the three-month period from December 2017 to February 2018, same as the previous period from November 2017 to January 2018, according to figures from the Census and Statistics Department.

The unemployment rate in Taiwan stood at 3.70% in February, down from 3.85% during the same period last year, according to figures from the Directorate-General of Budget, Accounting and Statistics.


> COMPANY NEWS

Less than two weeks after allegations emerged that data analytics firm Cambridge Analytica improperly harvested user data from Facebook in 2014, the Federal Trade Commission announced that it is investigating “substantial concerns” about the privacy practices of Facebook. Cambridge Analytica has been the subject of scrutiny over the past 18 months, as reporters and politicians have sought to uncover the role it may have played in President Donald Trump’s 2016 election victory, the 2016 Brexit referendum, and other political campaigns around the globe. The Trump campaign hired Cambridge Analytica in 2016 to work on its data operations.


> MERGER & ACQUISITION ACTIVITY

Salesforce paying $6.5 billion for Mulesoft

Salesforce is buying popular cloud-based integration and API management vendor MuleSoft for $6.5 billion. MuleSoft, which went public last March, offers the promise of natively connecting apps built on the CRM leader’s development platforms with enterprise solutions from other vendors. Salesforce is a MuleSoft customer, along with the likes of Accenture, Coca-Cola, Netflix, and Tesla.

Plantronics paying $2 billion for Polycom

Communications equipment giant Plantronics announced a deal to buy unified communications leader Polycom in a cash and stock transaction valued at $2 billion, giving the company more ammunition to conquer the crowded UC and collaboration market. The two companies said that the soon-to-be combined company will become a “communications and collaboration gold standard” and offer a stronger business proposition for channel partners by removing the costs of managing complexity.

Amazon paying $1 billion for Ring

Amazon has acquired Ring, maker of smart home doorbells, cameras, and security systems. The company was acquired for more than $1 billion, according to Reuters. The acquisition was likely made to fuel its fight for the emerging in-home delivery and in-home services market

Deloitte buys API Talent

Global systems integration and consulting giant Deloitte expanded its cloud chops in New Zealand with an agreement to purchase one of that country’s leading Amazon Web Services partners. API Talent will be integrated into London-based Deloitte’s cloud and technology practice after the deal closes on May 1.

Cognizant buying Bolder Healthcare Solutions

Professional services powerhouse Cognizant moved to strengthen its grip on the health-care space through the acquisition of Louisville, Ky.-based Bolder Healthcare Solutions (BHS) for an undisclosed amount. BHS, billed as “one of the fastest-growing” players in its market, specializes in delivering revenue cycle management (RCM) solutions to hospitals, physicians’ offices and other health-care organizations. The business employs more than 1,500 people in the U.S. and India and is the parent company of multiple RCM providers.

HPE Aruba buying Cape Networks

HPE Aruba says it will acquire Cape Networks in a move to bolster its position in network analytics and give partners an opportunity to sell a complete set of artificial intelligence-based networking capabilities. Cape Town, South Africa-based Cape Networks will bring HPE Aruba added telemetry and sensor data from a user perspective.

eBay paying $700 million for Qoo10

eBay has confirmed that it’s buying the Japanese arm of Giosis, a Singapore-based business that operates the Qoo10 ecommerce platform across a number of Asian markets, including China, Hong Kong, Indonesia, Malaysia, Singapore, and Japan. Giosis is actually a joint venture with eBay, which invested in the group at its inception back in 2010. As part of its acquisition of Giosis’ Japanese unit, eBay said it will give up its stake in Giosis’ businesses in other markets. Neither company has officially confirmed a value for the deal, but a Bloomberg report earlier this week pegged the impending transaction at around $700 million.

Infomart sells Data Centres to IPI Data Centre Partners Management

Infomart Data Centers is selling three of its data centers to investment firm IPI Data Center Partners Management, as Infomart continues to sell off its facilities. Dallas-based Infomart, a national wholesale carrier-neutral data center provider named to CRN’s 2017 Data Center 100, is selling its centers located in San Jose, Calif., Hillsboro, Ore., and Ashburn, Va. The three data centers total 665,000 square feet with 27.2 megawatts of total capacity. San Francisco-based IPI Partners is an investor in data centers and other technology management assets. The firm will also acquire Infomart’s management company, according to a release

Windstream pays $37.5 million for MASS Communications

Windstream has scooped up privately-held telecom network management provider MASS Communications for $37.5 million. Combined, partners and customers will have access to a broader range of custom voice, networking, and global cloud solutions. Windstream will gain a “customer-first” company with a strong track record of revenue growth, according to the Little Rock, Ark.-based telecom service provider.

VMWare Buying E8

VMware acquired startup E8 Security, taking hold of a technology intended to bolster recent upgrades to its Workspace ONE endpoint management platform. The E8 Security solution uses artificial intelligence to monitor anomalies in system behavior, much like the Workspace ONE Intelligence security service, the virtualization leader introduced last week to better protect devices used by customers in the field. The Redwood City, Calif.-based startup employs machine learning to detect suspicious behavior. By analyzing data from different sources, it can discover malicious activity and tackle cyber threats in their early stages.

Avaya buys Spoken Communications

Avaya announced the acquisition of Spoken Communications. The deal will include more than 170 patents and patent applications. The partnership will help small to medium-sized businesses adopt modern cloud-based contact centers. Avaya underwent serious changes last year after leaving Chapter 11 bankruptcy protection – its Canadian subsidiary was not part of the filing. Avaya became a publicly traded company on the New York Stock Exchange, which is expected to free up roughly $350 million in one year, CDN learned in November. That money will go towards research and development, marketing and re-branding, new cloud solutions and if there’s money left over, additional acquisitions. Chirico said 80 per cent of Avaya’s current revenue comes from software.

Ooma buying Voxter Communications

Ooma is increasing its footprint in the VoIP marketplace by acquiring Voxter Communications Inc. The acquisition will allow Ooma to support businesses of all sizes with its smart communications platforms. Voxter, a provider of custom UCaaS solutions for mid-market enterprises, will help improve Ooma’s existing business communications portfolio by giving small and large businesses even more options when it comes to the cloud, said Eric Stang, chief executive officer of Ooma, in a press release.

Nutanix Buying Minjar To Boost Multi-Cloud Capabilities

The hyper-converged infrastructure pioneer unveiled plans to acquire Minjar, a company providing a platform with centralized cost control and visibility into public cloud workloads.

Intervision Buying Bluelock

Solution provider InterVision has acquired one of its peers, Bluelock, in a move to make the latter’s disaster recovery as-a-service capabilities part of its complete MSP offerings. InterVision acts both as a traditional solution provider as well as an MSP and a managed security services provider, and also provides hosted data center services in its four data centers.

Cloudian is buying Infinity Storage.

Cloud-based object storage technology developer Cloudian has acquired Milan based, storage startup Infinity Storage to better integrate file and object storage into a scalable storage pool. The two companies have a history together, Infinity Storage provides the technology behind Cloudian’s HyperFile, which was introduced in December.

CyerArk buys Vaultive

CyberArk has purchased certain assets of Vaultive to boost proactive cloud security controls and streamline the user experience for privileged accounts and cloud administrators. The Newton, Mass.-based privileged account security vendor said its acquisition of Boston-based Vaultive will provide for greater visibility and control over privileged business users, as well as Software-as-a-Service, Infrastructure-as-a-Service, and Platform-as-a-Service administrators.


> PRIMARY SOURCES:

IT World Canada – http://www.itworldcanada.com/
TechRepublic –  http://www.techrepublic.com/
ZDNet – http://www.zdnet.com/
Information Week – http://www.informationweek.com/
Staffing Industry Analysts – http://www.staffingindustry.com/

 


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