IT Industry News – February 2015



Some 107.5 smartphones were shipped to the Chinese market in fourth-quarter 2014, pushing the year’s total figure to 420.7 million. Local manufacturer Xiaomi edges out Samsung to lead the market with a 12.5% share. Smartphone shipment for the quarter climbed 2% over the previous quarter and 19% over the previous year, according to IDC’s Quarterly Mobile Phone Tracker. Lenovo, Huawei, and Coolpad rounded up the top five list with 11.2%, 9.8%, and 9.4% market share, respectively. While Apple did not feature at all in China’s top five vendor list, the iPhone maker saw the second-highest growth at 99.7% in the fourth quarter of 2014 compared to the previous year.

Nearly 286,000 small businesses across the UK have been the victim of fraud, a new study by Experian has found, losing a total of nearly £8 billion during their time in business. The information services company polled 500 SME bosses and 13% have been the victim of a card, cheque or identity fraud.

MarketsandMarkets found, in a new research report, that the Smart Homes market is expected to grow at a CAGR of 17% between 2015 and 2020, and reach $58.68 billion by 2020. The smart home market opportunity consists of products from energy management system, security and access control, entertainment control, HVAC control, cellular technology and communication technology along with services such as installation and customization. Today the smart home market is valued at $20.38 billion.

The Gartner Worldwide IT Spending Forecast suggests that IT spending is on pace to total $3.8 trillion in 2015, a 2.4% increase from 2014; however, this growth rate is down from earlier projections of 3.9%. The slower outlook for 2015 is largely attributed to the rising U.S. dollar as well as a modest reduction in growth expectations for devices, IT services and telecom services.

More workers will work post-retirement, according to a study released today from CareerBuilder. The survey found 54% of workers over the age of 60 will work after retiring from their current career– up from 45% in a similar survey last year. Of this group, 81% said they will most likely work part-time, while 19% plan to continue working full-time. Customer service, retail and consulting are the three most common jobs these workers plan to pursue.

Handing a significant victory to supporters of net neutrality, the Federal Communications Commission voted to adopt rules that reclassify suppliers of broadband Internet access as telecommunications services under Title II of the Communications Act. The 3-2 vote was hailed by President Obama, who has supported net neutrality, which is the principle that network traffic should be treated in a non-discriminatory manner.

Economy – Canada

Canada’s economy is expected to grow by just 1.9% in 2015 as the collapse in oil prices takes its toll on business investment and corporate profits, according to The Conference Board of Canada’s Canadian Outlook – Winter 2015. This rate of growth represents a substantial downgrade from the outlook of 2.4% released in November 2014. Business investment will be the weakest part of the Canadian economy in 2015, according to the outlook. Real business investment on energy structures and exploration is forecast to drop by 23% in 2015. Many firms in the oil patch have already announced steep cuts to their capital budgets, and significant layoffs are expected both in the oil industry and among businesses involved in its supply chain, according to the Conference Board of Canada. The pain will be particularly severe in Alberta and Newfoundland and Labrador, and, to a lesser degree, in Saskatchewan.
Employment in Canada rose by 35,400 jobs in January from December, according to seasonally adjusted numbers released by Statistics Canada. The unemployment rate edged down to 6.6% from December’s reading of 6.7%.

The Canadian staffing index, a measure of staffing activity in Canada, fell to a reading of 98 in January, a decrease of 6% from the reading of 104 in January 2014. The index fell 3% sequentially from the December index value of 101.

Economy – US

The talent shortage is now the top hiring challenge, according to the Glassdoor Recruiting Outlook Survey. Nearly half, 48%, of hiring decision-makers don’t see enough qualified candidates for open positions and 26% see the situation getting harder in the next 12 months as the US economy picks up.

The number of IT jobs in the US rose 0.4% in January to more than 4.8 million, according to the TechServe Alliance. On a year-over-year basis, the number of IT jobs rose 4.7% in the US for a total addition of 216,800 IT workers. The US also posted a 0.2% increase in engineering jobs in January for a total of more than 2.5 million. On a year-over-year basis, the number of engineering jobs rose 1.8% in the US, adding 43,700 engineering workers.

The US technology industry added 129,600 jobs in 2014 when compared to 2013 for a total of 6.5 billion jobs, according to a new report released by CompTIA. The tech industry now accounts for 5.7% of the entire private-sector workforce. Growth was led by the IT services sector which added 63,300 jobs between 2013 and 2014.

The Conference Board’s US employment trends index increased in January to a reading of 127.86, up from December’s downwardly revised reading of 127.17. The January reading is up 7.6% from the same month a year ago.

US private sector employment rose by approximately 213,000 jobs in January when compared to December, according to the ADP national employment report.

Economic activity in the US non-manufacturing sector picked up speed in January but employment growth decelerated, according to the Institute for Supply Management’s non-manufacturing index. The index edged up in January to a reading of 56.7 from December’s reading of 56.5. Readings above 50 indicate growth. The median forecast of 73 economists surveyed by Bloomberg called for a January figure of 56.4. The employment portion of the index fell to a reading of 51.6 in January from December’s reading of 55.7.

The pace of small business employment growth increased in January, according to the Paychex|IHS Small Business Jobs Index. The index rose 0.09% to 100.65, representing the strongest one-month gain since the national index peaked in April 2014. However, the index fell 0.38% year over year and January’s improvement has not reversed the downturn seen in the latter half of 2014.

The Conference Board’s US leading economic index rose 0.2% in January to a reading of 121.1 (2010 = 100), following a 0.4% increase in December and a 0.3% increase November.

The Randstad manufacturing and logistics employee confidence index rose to 59.0 from 53.2 in the third quarter, the highest reading since Randstad began tracking the index in 2005. The fourth-quarter reading surpassed the prior record of 56.0 set in the second quarter of 2014. Index values above 50 indicate a positive reading.

US finance and accounting workers’ confidence rebounded in the fourth quarter after declining for two consecutive quarters, according to the Randstad Professionals’ finance and accounting employee confidence index for the fourth quarter of 2014. The index rose to 59.9 from 57.5 in the prior quarter. The index remained above 50, which indicates a positive reading

The Randstad US’ office and administration confidence index reported a slight gain in the fourth quarter 2014, rising to 55.0 from 54.4 in the third quarter.

Economic growth is poised to gain momentum in 2015 and the labor market has started the year on an upbeat note, according to Fannie Mae’s Economic and Strategy Research Group. GDP growth is expected to rise to 2.9% for the full year, up from 2.5% growth in 2014.

CFOs in the US are seemingly more confident now than they were in September, according to the quarterly CFO Outlook Survey conducted by Financial Executives International and Baruch College’s Zicklin School of Business. While employment and wage outlook remains positive, CFOs are fairly concerned about economic issues such as healthcare costs and government regulation, and see challenges to their businesses stemming from competition and the looming threat of a cyberattacks, the survey found. The survey’s quarterly optimism index for the US economy jumped to 70.71, up more than five points from 65.26 in the prior quarter’s survey and a 14% increase from 62.0 a year ago.

Economy – Outside North America

Mexico’s economic expansion will likely continue at its current pace in the months ahead, but it will face downside risks due to low oil prices, according to The Conference Board. The leading economic index for Mexico fell sharply in December, driven mainly by falling oil prices. However, November’s small decline in the index was revised up to a gain. The Conference Board reported its leading economic index for Mexico fell 2.6% in December and now stands at 103.6 (2010=100). The leading index rose 1.0% in November and fell 0.8% in October, based on revised data. However, during the six-month span through December, the index fell 3.4%, substantially down from the 1.9% increase for the first half of last year, according to The Conference Board. Meanwhile, the coincident economic index for Mexico, a measure of current economic activity, continues on a slightly upward trend. The CEI edged up 0.3% in December and now stands at 114.4 (2010=100). All three components that comprise The Conference Board’s coincident economic index for Mexico — the number of people employed, retail sales and industrial production — rose in December


IBM will invest $1 billion in its storage software portfolio over the next five years. The company launched Spectrum Storage, a set of applications designed to manage storage and make an enterprise’s data assets more efficient. The move highlights a reality for traditional enterprise storage giants — data centers are becoming software defined. That move to software defined storage, which trails servers and networking, is going to mean more licenses and less hardware sold. In a big data era, storage is becoming a huge line item and companies need to squeeze efficiencies out of how they manage information.

IBM also announced plans to invest more than $60 million (ZAR 700 million) in a new tech hub and startup accelerator in downtown Johannesburg, which will see the firm establishing its twelfth international research centre in the city. The new facility will be the second of its kind in Africa — the first opened in Nairobi, Kenya in 2013 — and will be part of the University of the Witswatersrand’s Tshimologong Precinct. The lab will focus on Big Data, science and healthcare projects, including existing initiatives such as the groundbreaking Square Kilometre Array (SKA) telescope, currently under construction in the Eastern Cape. The Tshimologong Precinct itself is a planned shared workspace in a renovated nightclub, which will provide entrepreneurs access to software skills and hardware resources in a neighbouring makerspace.

The financial consequences of Anthem’s massive data breach could reach beyond the $100 million mark, according to reports. The US health insurance provider’s cyber insurance policy, led by the American International Group, covers losses of up to $100 million. However, when a company has up to 80 million current and previous customers, staff and investors to contact, reassure and notify, this amount may not be enough. Last week, Anthem confirmed a security breach which resulted in the exposure and theft of up to 80 million records. Using a stolen password, hackers were able to break into a database which contained the personal information of former and current clients, as well as employees, including client names, dates of birth, physical and email addresses, medical IDs and Social Security numbers.

Bitcoin exchange MyCoin has closed its doors, potentially leaving as many as 3,000 local investors with combined losses of HK$3 billion ($387 million). Bitcoin exchanges are no stranger to closures and controversy. The most famous example is that of Mt. Gox, once one of the dominant Bitcoin exchanges online. Tokyo-based Mt. Gox closed its doors without warning in February last year, filing for bankruptcy and leaving investors approximately $500 million out of pocket. The closure of Mt. Gox was followed by others struck by cyberattack, including Flexcoin, Poloniex and Bitcurex. However, MyCoin’s case may be different. Approximately 30 MyCoin clients are filing reports with local police that MyCoin was less of a Bitcoin exchange and more like a pyramid-style Ponzi scheme. MyCoin customers were promised up to HK$1 million as a return on their money in four months for buying a HK$400,000 Bitcoin contract. The contract, which was meant to produce 90 bitcoins on maturity, also encouraged clients to lure others to the fold with new customer recruitment rewards such as extra profit, prizes and cars. No customer was given written proof of their investment, and in December, MyCoin changed its trading rules — forbidding clients from withdrawing their virtual currency unless they recruited other customers.

Qualcomm is expected to pay a record fine of $1 billion to the Chinese government in order to end a 14-month antitrust probe. The US chip maker has held recent talks with Chinese investigators to come to a settlement of the dispute, in which China alleges Qualcomm’s licensing practices are anti-competitive. The deal may also result in Qualcomm lowering its royalty rates by approximately a third on patents used in the country.

Intuit is apologizing to its customers for neglecting to tell them it was changing its business model and, to make amends, it’s offering them partial refunds and free upgrades. The Mountain View, Calif.-based company came under fire in January, when the desktop version of its TurboTax Deluxe software began demanding users pay for an upgrade to finish their taxes. Users who were self-employed, investors, or rental property owners were told they needed to pay about $30 to $40 more to be able to access sections of forms required by law to finish their tax preparations. While Intuit did issue an apology on its site, apologizing for not communicating the change and offering a $25 rebate to customers who had already paid the extra fees, customers were still dissatisfied with the explanation and demanded more. Intuit president and CEO Brad Smith took to his LinkedIn profile to provide another mea culpa, with a post and video titled "Sorry Wasn’t Enough.

The cyberattack against Sony Pictures Entertainment in 2014 will cost the company some US$35 million and affect its earnings. In November last year, Sony received a series of threats and its systems were hacked. The attack occurred a few months after the North Korean government public denounced Sony’s movie "The Interview," an action-comedy flick about two journalists who set out to assassinate North Korean leader Kim Jung-un. Sony earlier said investigation and remediation costs for the hack will total $15 million. However, Kazuhiko Takeda, senior general manager of Sony, said the cost will actually be $35 million.


Online travel company Expedia is buying its competitor Orbitz for $1.6 billion in cash. The deal comes just a month after Expedia acquired Travelocity for $280 million. With the three companies now consolidated into one entity, Expedia is essentially at the helm of the largest travel player in the online booking space. Orbitz Worldwide includes brands such as CheapTickets, ebookers and HotelClub and the business-to-business brands Orbitz Partner Network and Orbitz for Business. "We are attracted to the Orbitz Worldwide business because of its strong brands and impressive team. While the acquisitions represent a drastic amount of consolidation, industry watchers consider them a smart move, as the market has become crowded with a number of similar startups.

In what could be seen as the logical conclusion of a long and fruitful relationship, Microsoft is set to buy Israeli pen-tech maker N-trig for some $200 million. The company’s 190 workers will be integrated into the Microsoft Israel research and development structure, with the company’s offices in suburban Tel Aviv being turned into a MS R&D facility, the company’s third in Israel. Should the deal go ahead, it will be Microsoft’s ninth acquisition in Israel since 2000, making Israel the third largest source for Microsoft acquisitions behind the US and Canada. Last year, Microsoft dumped long-standing pen-tech supplier Wacom for N-Trig, which supplied the stylus technology for the Surface Pro 3 tablets. Besides Microsoft, N-Trig had dozens of other OEMs as customers, including Lenovo, Intel, Acer, Asus, to name just a few. Founded in 1999, N-Trig, still privately held, has raised over $150 million since it was established. A recently-proffered IPO on the Tel Aviv stock Exchange was withdrawn last November, because the company sought a higher valuation than it was given by analysts.

ARM has bolstered its new mbed OS for Internet of Things devices with the acquisition of a Netherlands-based security software firm, Offspark. The acquisition gives the UK-based ARM Offspark’s PolarSSL technology, which the company claims is the most widely deployed transport layer security system (TLS) for encrypting traffic between for embedded devices. ARM says the technology will remain open source and will be available to developers for commercial use. ARM launched mbed as a free OS last October with a dozen partners including IBM, Freescale, Ericsson, NXP, and some European mobile carriers, such as Telefonica.

Office supply chains Staples is paying $6.3 billion for Office Depot. Office Depot bought OfficeMax back in 2013, which means that now all three of the main office supply chain retailers will now be combined into one entity. The company expects the deal to reduce global expenses and optimize the chain’s retail footprint as it works out a reinvention play that could mean breaking out beyond the office supply category. As for Staples and Office Depot, the two retailers have had a long, complex relationship. While they are certainly rivals in the office supply space, a previous merger was attempted back in 1997. At the time, the FTC denied the deal, but thanks to increased competition from the likes of Walmart and Amazon, it is widely expected that won’t be the case this time around. By joining forces, the unified office supply giant can consolidate and cost save on the back-end (with an estimated $1 billion of synergies) while refocusing and revamping its consumer-facing strategy on the front end. "Paper-ased office supplies are being replaced by technology, customer demand continues to shift online, we’re going up against a wider set of competition," the company said. "This transaction creates significant value for Staples and Office Depot shareholders."

Twitter is acquiring Niche, a network of social media creators available for hire to make branded content. Niche offers creators of popular content on Twitter and Vine a suite of tools to perform even better. Users can showcase their best content on a single page, track analytics about their content and followers, and even make money by connecting with brands interested in reaching their audience.

Microsoft is paying $100 million for Sunrise, which has created a suite of calendar products for mobile and desktop. The calendar products allow users to connect calendars from different providers on their iPhones, iPads, Android devices, in the Mac App store, and on the web. Microsoft will most likely continue to support the apps as their own products, though it may tap into the company’s technology in developing other products. That’s what happened with Acompli, a company it acquired in December 2014, when Microsoft took its email product and essentially rebranded it for its Outlook app for iOS and Android. The new Outlook app drew its appeal from being issued by Microsoft, but also being compatible with other popular email services like iCloud, Gmail, and Yahoo! Mail, as well other Microsoft standbys like Office 365 and Exchange.

The smartphone battle between Samsung and Apple has been heating-up the handset market, and it looks like the next skirmish in the ongoing conflict may be fought around mobile payments. With an eye on Apple Pay, the mobile payments platform that Apple introduced to much fanfare with the iPhone 6 and iOS 8, Samsung is responding with its own mobile payments play. In a deal announced Wednesday, Samsung acquired mobile payments vendor LoopPay based in Burlington, Mass. While Apple Pay only works with Apple handsets, LoopPay is compatible with both Android and Apple handsets. Both solutions let you make payments with your smartphone but, while Apple Pay only works with Near Field Communication-compatible payment systems, LoopPay claims compatibility with a wider range of systems, allowing it to be used at 90 per cent of credit card accepting retailers. "With our earliest supporters at our side, we have been at the forefront of contactless payments to create a platform that brings together issuers, merchants and consumers that facilitate a seamless and rewarding digital wallet experience," said LoopPay CEO Will Graylin. According to a report from Time, it’s not immediately clear if Samsung will integrate LoopPay into its upcoming smartphones, although it would certainly make sense. The new flagship Galaxy A6 is expecting to make its debut in March. Google Wallet is already a player in the mobile payments and BlackBerry was first to the game with BBM Money.

Parallels has acquired 2X Software with the intention of improving virtual desktop solutions in the enterprise. Merging the two firms will improve cross-platform solution development. 2X Software is the developer of the 2X Remote Application Server (2X RAS), a platform-independent virtual desktop which includes application support and delivery, as well as a Windows client usable on today’s modern operating systems. In addition, 2X Software runs a stand-alone solution called 2X Mobile Device Management (MDM) which enables customers to monitor and manage corporate and employee mobile device from one dashboard.

Communication-as-a-service provider Twilio has purchased the Y Combinator-backed startup Authy. Authy specializes in two-factor authentication, a measure used to ensure account security. Twilio has been working with Authy since 2012, with Twilio powering the underlying voice and SMS communications for the startup. Twilio has offered its own two-factor authentication features, but by buying Authy, the company is looking to bake those features in more seamlessly. Current Authy customers include Box, Intuit, and Bitcoin processor Coinbase, among others. Its elite list of backers include Box CEO Aaron Levie, CEO Sam Yagan, Winklevoss Capital, Digital Garage, and Data Collective.

British data centre provider Telecity Group Plc has agreed a non-binding $2.2 billion all-share deal to buy New York-listed Interxion Holding NV, looking to tap growing demand for "cloud" technology. Demand for premium data centres such as those run by Telecity is being driven by cloud technology, whereby the data and processing for devices like smartphones is carried out on millions of remote servers. "Demand for data centre services is evolving rapidly as enterprise data and digital applications migrate to the cloud," Telecity said, adding the combined business would provide customers with greater product choice and better global access. Europe-focused Interxion runs 39 data centres in 11 countries and Interxion Chief Executive David Ruberg said he expected the deal to help customers move to the cloud.

Communications and information technology company Harris is buying Exelis in a cash-and-stock deal valued at approximately $4.75 billion. The new company will have approximately 23,000 workers worldwide. Harris is based in Melbourne, Florida. Exelis, an aerospace, defense, information and services company, is based in McLean, Virginia. There are plans to consolidate the companies’ headquarters.

South Korea-based Yello Mobile is acquiring a majority stake in Adplus, a homegrown adtech company in Indonesia. Adplus co-founder and CEO Yazid Faizin confirms that he and his fellow co-founder Pandu Wirawan, along with the startup’s previous investors, will retain the minority ownership of the company. Yello Mobile covers online shopping, mobile media, advertising and digital marketing, online travel, and online-to-offline business models. The move in Indonesia illustrates how the company is following through on a Southeast Asian expansion. Yello Mobile went on a bona fide acquisition spree last year, eating up 61 companies within 12 months.

Chinese Craigslist-style site has acquired Chinese real estate portal Anjuke for US$267 million., which IPO’ed on the NYSE in 2013 and took in a major investment from Tencent in late 2014, is a C2C ecommerce and listings site not unlike Craigslist. It already features real estate classifieds, but the company apparently wants to bolster its presence in that sector with its acquisition of Anjuke, a real estate listings site. Anjuke’s team, app, and site will be left more or less as-is, continuing operation as its own brand.

India’s ecommerce superstar Snapdeal is buying luxury fashion estore Exclusively. With this, Snapdeal plans to build an online luxury mall where top fashion brands can open their estores. "We have witnessed a surge in demand from consumers across the country for premium and luxury products. Given that access to luxury brands is severely limited in our country, we have brought Exclusively into our family to provide our 40 million plus users access to the widest range of aspirational, high-end products, and services," co-founder and CEO of Snapdeal Kunal Bahl said. Four-year-old ecommerce marketplace Snapdeal, founded by Kunal Bahl and Rohit Bansal, has close to 100,000 sellers onboard, and a distribution network spanning over 5,000 cities and towns in India. It scaled up quickly last year, especially in mobile ecommerce, and raised a whopping US$627 million investment from SoftBank, making it one of India’s highest funded tech startups. Snapdeal is aiming to hit a GMV (gross merchandize value) of US$2 billion in its fashion category this year.

Foodpanda, the online meals delivery service, has bought six rival sites across seven countries in a huge acquisitions spree. "With the recent acquisitions, Foodpanda becomes the market leader across Southeast Asia," said Ralf Wenzel, co-founder and CEO of Foodpanda. Here’s all of them: Just Eat in India – This deal pertains only to the Indian segment of UK-based Just Eat. Along with Foodpanda’s recent TastyKhana buy-up, Foodpanda now claims to cover over 200 Indian cities and 12,000 restaurants. This gives the Rocket company a strong hold of the Indian market. EatOye in Pakistan – This startup came into life this time last year. It covers 1,000 partner restaurants in 15 cities. Food Runner in Malaysia and Singapore – This is the food delivery subsidiary of Singapore-based DealGuru. The acquisition also includes sister site Room Service. City Delivery in the Philippines – This is also a spin-off from DealGuru, so it’s technically the same deal that snapped up the above two sites. Koziness in Hong Kong – Foodpanda’s Hong Kong deal means it runs not only Koziness but also the related sites Dial-a-Dinner, SOHO Delivery, and Ring-a-Dinner. Food By Phone in Thailand – This started out in 1998 for phone-based orders, but later opened up on the web as well. It covers over 650 restaurants in three of Thailand’s biggest cities.

Australia’s online employment market got a bit more friendly to job seekers ages 45 and over today with the announcement that OneShift, one of the country’s top job-seeking sites, has acquired Adage. Adage is an Australian job board startup serving job seekers over 45. As more and more older Australians enter the labor market, there is a need for some way to connect them with employers. And since Australia’s elderly labor force is only expected to increase in the coming years, OneShift’s investment in the Adage team makes a lot of sense. Theirs is a market that is expanding. OneShift, which launched just a couple of years ago, now features more than 412,000 job seekers and 35,708 businesses. The company also recently expanded to New Zealand, so it’s likely that Adage could be on its way over sometime in the not-so-distant future, too.


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