IT Industry News - May 2020

What happened last month in tech?

Overview

General Interest

Global Job Markets

Merger & Acquisition Activity

Overview

A Little History of May in previous years

Five years ago, in May 2015, there were some very large deals on the M&A front, with the biggest seeing Charter Communications spend $55 billion to buy Time Warner Cable and a further $10.4 billion to buy Bright House Networks. This created the second largest cable company in the US, just behind Comcast. The "Billion-dollar club" also saw French Telco Altice pay $9.1 billion for another US cable company Suddenlink Communications. Keeping with the billion-dollar deals involving telcos, Verizon paid $4.4 billion for AOL to bolster its mobile video capabilities. Another billion-dollar deal saw HP unload 70% of its stake in its China server, storage and technology storage unit to Tsinghua Holdings for $2.3 billion. The final billion-dollar deal saw EMC pay $1.2 billion for cloud service provider Virtustream. Apple was out buying a couple of companies in May, snapping up mapping company Coherent Navigation and augmented reality company Metaio. In other deals, Avaya bought cloud technology company Esna; and Cisco bought cloud programming interface company Tropo.

May 2016 saw some M&A activity with the largest deal seeing HPE merge its services arm with CSC in a $8.5 billion deal to create arguably the largest IT services company. In another large deal, Vista Equity Partners was paying $1.79 billion for customer service and marketing cloud provider Marketo. There were some other big names out shopping in May 2016 too. Oracle paid $532 million for software as a service for the utilities vertical, company Opower; Google picked up interactive training platform Synergyse; Infor bought consulting services company Merit Globe AS; and ARM paid $350 million for imaging and embedded systems company Apical. Microsoft ended an unhappy period by divesting its feature phone business to FIH mobile for $350 million, and GoDaddy picked up cloud-based phone company FreedomVoice for $43 million. New Signature picked up another Microsoft solution provider, Dot Net Solutions; and Edmonton-based F12.Net bought Calgary-based professional services company XCEL.

The most significant purchase in May 2017 was the $1.86 billion sale of CenturyLink’s data centres and colocation business to a consortium led by BC Partners, Medina Capital Advisors and Longview Asset Management. Cybersecurity startup, Hexadite, was bought by Microsoft for $100 million. Goldman Sachs entered the BI space by purchasing a minority stake in Information Builders of New York City. Apple acquired Beddit, a Finnish sleep sensor product, for an undisclosed amount. Finnish cybersecurity firm, F-Secure acquired British security consultants, Digital Assurance also for an undisclosed amount.

Two years ago, May 2018 was a very active month for M&A activity, with Microsoft’s $7.5 billion purchase of GitHub leading the pack in size. Microsoft also bought AI company Semantic Machines. PayPal paid $2.2 billion for European payments company iZettle; Recruit paid $2.1 billion for Glassdoor; Investment firm KKR paid $2 billion for BMC Software; and Office Depot paid $1 billion for CompuCom. Other big names out shopping saw Oracle buy collaboration platform Datascience.com; Google bought cloud migration startup Velostrata; HPE bought Plexxi; Rackspace bought RelationEdge; and Splunk bought Phantom Cyber Company.

Last year, in May 2019, HPE paid $1.3 billion for supercomputer manufacturer Cray. Palo Alto Networks continued growing its cybersecurity capability with the purchase of two companies, Twistlock and PureSec. There was some M&A activity among a number of well know companies, Amazon bought mesh network company Eero; Symantec bought Luminate Security; Rogers bolstered its podcast capability with the purchase of Pacific Content; NCR added to its point of sale depth, buying Texas POS; and Foursquare bought competitor location tech company, Placed; ServiceNow picked up the assets of mobile analytics company Appsee; Comcast bought WiFi company Deep Blue Communications.

Which brings us back to the present

In May 2020 we continue to fight the COVID-19 pandemic and things are tough everywhere. In March and April Canada lost 3 million jobs, and in April alone the US lost more than 20 million jobs. The IMF is calling it the worst economic downturn since the Great Depression.

IT spending worldwide is expected to fall by 8% this year; however, cloud spending is up. Cloud spending has been the silver lining of COVD-19, with the rise in WFH, companies like Zoom have taken advantage. The home entertainment industry, Netflix et al have also benefited as people have been forced to stay home.

For all of the disruption there is still a fair bit of M&A activity. This month, Intel bought mobility startup Moovit for $900 million; and also picked up Texas-based networking company, Rivet Networks. Apple bought Virtual Reality company NextVR; VMWare bought Kubernotes security vendor Octarine; and Microsoft is planning for its 5G offerings with the purchase of Metaswitch; Mictrosoft also picked up robotic process company Softomotive. Cisco splashed out (possibly close to $1 billion) for network monitoring company Thousand Eyes; Zoom is working to improve security with its purchase of Keybae; and Nvidia is buying Cumulus Networks. There were a number of lesser-known deals, that include Beanfield Metro buying the WAN network from Aptum Technologies.

General Interest

Global Job Markets

Merger & Acquisition Activity

Intel Paying $900 Million for Moovit

Intel has confirmed that it’s buying Israeli urban mobility startup Moovit, in a deal worth $900 million. Intel noted that it was buying Ness Ziona-based Moovit to help make Mobileye a "complete mobility provider," which will eventually include driverless taxi services.

Intel Buys Rivet Networks

Intel has acquired Rivet Networks, a Texas-based networking company, in a move the chipmaker hailed as "a terrific complement" to its existing Wi-Fi products as more users than ever consume bandwidth from home. Rivet Networks offers a mix of hardware, software and cloud-based technologies for networking connectivity. The company is known for its "Killer" line of networking products that deliver speed, intelligence, and control for gamers and performance users alike.

Apple Buys NextVR

NextVR’s eponymous VR video service never fully took off with users, despite offering 360-degree video access to select concerts and sporting events, including NBA games, WWE wrestling matches, and NHL highlights. But Apple apparently saw value in the company, and has acquired NextVR for purposes unknown.

VMware Buys Octarine

VMware plans to buy early-stage Kubernetes security vendor Octarine to simplify DevSecOps and enable cloud native environments to be intrinsically secure from development through runtime. The Palo Alto, Calif.-based enterprise software vendor said its proposed purchase of Sunnyvale, Calif.-based Octarine will provide full visibility into cloud-native environments so customers can better identify and reduce the risks posed by vulnerabilities and attacks. Octarine will be embedded into the VMware Carbon Black Cloud to better secure containerized applications running in Kubernetes, VMware said.

Microsoft Buys Metaswitch

Microsoft revealed an agreement to purchase U.K.-based Metaswitch Networks, telegraphing with its second networking acquisition in rapid succession a major commitment to building out the Azure Cloud as an end-to-end platform that advantages its ecosystem for the coming 5G era.

Microsoft Buys Softomotive

Microsoft revealed the acquisition of Softomotive, a deal aiming to empower the software giant’s partners to create and deploy artificially intelligent bots that automate business workflows. The London-based robotic process automation developer offers a popular platform, WinAutomation, used by more than 9,000 customers to automate Windows desktop processes involving both legacy and modern applications. Terms of the deal were not disclosed. Microsoft plans to merge that platform with Microsoft Power Automate to enhance its native capabilities for building bots and integrating apps from other software platforms, including SAP, Citrix and Java.

Cisco Buying Thousand Eyes

Cisco Systems plans to acquire network monitoring company ThousandEyes. The San Jose, Calif.-based tech giant will acquire its San Francisco-based neighbor, ThousandEyes. Bloomberg earlier reported that the price tag was nearly $1 billion.

Nvidia to Buy Cumulus Networks

Nvidia said it plans to acquire Cumulus Networks, signaling that the GPU powerhouse’s data center networking ambitions aren’t ending with its recently closed acquisition of Mellanox Technologies. The Santa Clara, Calif.-based company announced its intention to acquire Cumulus Networks, a provider of open networking software, Monday, saying that the move will allow the chipmaker to "innovate and optimize across the entire networking stack from chips and system to software."

Zoom Buys Keybase

In an effort to boost security on its platform, Zoom Video Conferencing has acquired Keybase, a provider of secure messaging and file-sharing services. Keybase was founded in 2014 by Chris Coyne and Maxwell Krohn, the co-founders of the popular dating website OKCupid and SparkNotes, a provider of study guides. Keybase itself has raised $10.8 million led by venture capital firm Andreessen Horowitz and has 16 employees, according to Crunchbase and LinkedIn.

Zscaler Buying Edgewise Networks

Zscaler has purchased early-stage vendor Edgewise Networks to better protect application-to-application communications in public cloud and data centers. The acquisition of the Burlington, Mass.-based Edgewise Networks will significantly improve the security of east-west communication by verifying the identity of application software, services and processes. This will measurably reduce the attack surface, Zscaler said, thereby lowering the risk of application compromise and data breaches.

Venafi Buys Jetstack

Venafi has agreed to purchase open source machine identity software provider Jetstack to better assist enterprises using Kubernetes for mission-critical infrastructure. The Salt Lake City, Utah-based cybersecurity vendor said it has been working closely with London-based Jetstack for the past two years to accelerate the speed of innovation for machine identity protection in Kubernetes, multi-cloud, service mesh and microservices ecosystems.

Sirius Computer Solutions Buys Advanced Systems Group

Solution provider behemoth Sirius Computer Solutions is going back to the future playing the role of ‘serious consolidator’ in the channel with its acquisition of one of the most highly regarded solution providers in the country, Advanced Systems Group (ASG).

Beanfield Buys Aptum Technologies WAN business

Aptum Technologies this week announced the completion of a transaction with Beanfield Metroconnect for Aptum’s WAN business, capping off a very active couple of months for the global hybrid cloud and managed services provider. Beanfield Metroconnect signed a recapitalization deal with Colony Capital’s Digital Colony worth CAD $255 million, and according to the telecom infrastructure provider, the money is being used to support growth and increase scale, and to buy the metro network of Aptum.

Chesapeake Systems Buys StorExcel

Chesapeake Systems, an integrator with a focus on the media and entertainment market, is looking to diversify its business with the acquisition of StorExcel, which has a focus on the government market. The acquisition, for which no dollar value was provided, makes the government market a new strategic focus for Chesapeake Systems, said Jason Paquin, CEO of the Baltimore-based solution provider.

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IT Industry News – May 2020

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