IT Industry News – June 2015

In this Issue:
> General Interest
> Company News
> Merger & Acquisition Activity
> Primary Sources


Malware that locks a user’s files until a ransom is paid is costing consumers as much as $18 million, the FBI said. In an online bulletin at the Internet Crime Complaint Center, which works in conjunction with the FBI and other agencies, the financial impact to victims can go “beyond” the ransom fee itself, including legal fees and technical countermeasures. In more than a year, the IC3 received almost 1,000 CryptoWall-related complaints, the note said. However, some are working to counter the efforts with “rescue kits,” in order to unlock files without having to pay any ransom fee.

One study suggests that the average cost to an organization of a data breach in Canada last year was just over CDN$5.3 million , about $2 million higher than the global average. That’s according to research conducted by the Ponemon Institute and sponsored by IBM, which looked at the actual costs of data loss or theft suffered by 21 Canadian companies in 11 industry sectors. The costs were based upon estimates provided by the organizations interviewed over a 10-month period. Ponemon acknowledges that the 21 companies sampled were not statistically representative of all companies here that suffered a breach last year. Note that’s an average cost: The study didn’t include organizations that lost over 100,000 records because they wouldn’t have been representative of most breaches.

Stress levels for IT professionals have decreased sharply since 2014, according to TEKsystems’ third annual IT stress and pride survey.  According to the survey, 11% of entry- to mid-level IT professionals and 13% of senior IT professionals consider the work they are currently doing to be the most stressful of their career, a significant decrease from the 30%, and 32%, respectively that said the same in another survey 2014

The economy – Canada

Employment in Canada rose by 58,900 in May from April, driven by gains in the number of private sector employees, according to Statistics Canada. Since the beginning of 2015, employment gains have averaged 20,500 per month. Total employment in Canada was approximately 18 million in April, and the Canadian unemployment rate remained at 6.8% for the fourth consecutive month.

Canadian CIOs plan to hire fewer workers according to the Robert Half Technology IT Hiring Forecast and Local Trend Report.  Only 7% of CIOs intend on expanding their IT teams in the second half of 2015. That is down from 17% who said the same in a survey representing the first half of 2015 and 14% in the survey for the second half of 2014. However, 98% of Canadian survey respondents said they are confident in their company’s prospects for growth in the next six months and cited no plans to reduce the number of IT professionals currently on staff.  Among the Canadian CIOs surveyed, 29% said it’s somewhat or very challenging to find skilled IT professionals today.

The Canadian staffing index, a measure of staffing activity in Canada, remained at a reading of 101 in May, the same index value as April.

The economy –  US

Hiring in the mid-market has cooled off since fall 2014, in line with broader US employment trends, according to Deloitte’s Mid-Market Perspectives: 2015 Report on America’s Economic Engine. Some 55% of midmarket executives reported increases in their domestic, full-time workforce over the past 12 months. However, the number of midmarket executives who plan to hire in the coming year fell to 58% from 63% in fall 2014.

The American Staffing Association’s index measuring employment in the US staffing industry fell 2.11% for the week of June 8 to June 14 compared with the same week last year. The index value fell to 95.66.

The number of IT jobs in the US rose 0.3% in May from April, according to the TechServe Alliance. That compares to a 0.2% increase in total nonfarm jobs in the US. Year over year, IT jobs rose by 4.8% since May 2014, adding 225,000 workers for a total of more than 4.9 million jobs.  The organization suggests that while demand for IT talent remains strong, an inadequate supply of IT professionals in high-demand skill sets is restricting the rate of growth. There are simply too few US students pursuing careers in IT coupled with restrictive immigration policies that are inadequate to meet the needs of US businesses.

The TechServe Alliance said that Engineering jobs edged up by 0.1% in May from the previous month and 0.9% year over year, adding 22,000 engineering workers since May 2014 for a total of more than 2.5 million US engineering jobs.

A new estimate says US real GDP decreased in the first quarter at an annual rate of 0.2%, revising an earlier estimate that cited growth of 0.7%, according to the US Bureau of Economic Analysis.

US private sector employment rose by approximately 201,000 jobs in May when compared to April, according to the ADP national employment report. May’s job gains exceeded the 165,000 additions in April —a downward revision from a previously reported increase of 169,000 jobs — and surpassed the 200,000 jobs added mark, considered a bellwether number for healthy employment growth.

The Conference Board’s US employment trends index rose in May to a reading of 128.60 from April’s downwardly revised reading of 128.10. The May reading is up 5.1% from the same month a year ago.   The Conference Board expects employment to grow by about 200,000 new jobs per month, rather than the 250,000-300,000 experienced in 2014.

The number of US job openings in April rose 5.2% from March to almost 5.4 million, according to seasonally adjusted numbers released today by the US Bureau of Labor Statistics. April had the highest level of job openings since the series began in December 2000.

CEOs now expect 2015 US gross domestic product growth of 2.5%, down from last quarter’s estimate of 2.8%, according to the Business Roundtable’s second-quarter 2015 CEO Economic Outlook Survey. CEOs said they expect sales, investment and hiring to decrease in the next six months.

US CIOs plan to add more IT staff in the second half of 2015 than they did in the first half, according to the Robert Half Technology IT Hiring Forecast and Local Trend Report. The US survey found 22% of CIOs plan to expand their IT teams in the second half of the year, up from 19% in a similar survey for the first half of 2015 and 14% in a survey for the second half of 2014. Sixty-seven percent of the CIOs surveyed said they plan to hire only for open IT roles, down slightly from 68% who had similar plans for the first half of 2015.  Among the CIOs surveyed, 59% said it’s somewhat or very challenging to find skilled IT professionals today.

More than half of small to mid-sized businesses plan to hire amid persistent concerns regarding healthcare costs, talent availability and rising competitive worries, according to the SMB Job Generation Outlook survey released by Lucas Group.

The Conference Board’s US leading economic index rose 0.7% in May to a reading of 123.1 (2010 = 100), following increases of 0.7% in April and 0.4% in March.

Companies in the creative field plan to ease up on hiring plans and increase hiring freezes in the second half of the year, according to a new survey from The Creative Group. The survey found 21% of hiring managers at advertising agencies and marketing departments said they will add new positions to their creative teams in the second half of 2015. Although this is down from 33% in a similar survey six months ago, it is an increase from 12% in a year-ago survey.

Oil and gas companies continue to curtail recruitment as a result of ongoing market uncertainty, according to a global survey of oil and gas hiring managers conducted by Rigzone.  Most global oil and gas hiring managers remain reluctant to expand hiring efforts: 65% report decreased hiring plans over next six months, 54% indicate they believe job cuts are more likely in the next six months, and 65% expect a loss of budget for approved headcount for the year.

The economy –  Outside Canada & US

Mexico’s employers report relatively stable hiring plans for the third quarter, according to a survey by ManpowerGroup. The survey found 14% of employers in Mexico plan to increase staff in the third quarter, 3% plan to make reductions and 81% expect no change, yielding a net employment outlook of 10% on a seasonally adjusted basis. The forecast indicates hiring prospects are relatively stable when compared with the previous quarter but down by four percentage points from one year ago.

Improvement in the six-month change in the leading economic index and the steady growth in the coincident economic index suggests Mexico’s economic growth is likely to improve, albeit at a modest rate in the coming months, according to The Conference Board. The leading economic index for Mexico held steady at 102.5 (2010=100) in April, having increased 1.3% in March and fallen 0.3% in February.

The unemployment rate across the 28 Members States of the European Union was 9.6% in May 2015, down from 9.7% in April and down compared with 10.3% in May 2014, according to the latest figures from Eurostat.  Unemployment across the 19 Eurozone countries was 11.1%, unchanged from March, but down compared with 11.6% in May 2014.  Among the Member States, the lowest unemployment rate in May 2015 was recorded in Germany (4.7%), and the highest in Greece (25.6% in March 2015), and Spain (22.5%).


A satellite broadband service that wants to bridge the digital divide by beaming the internet from space has announced $500m in funding. OneWeb said it has raised funds from companies including Airbus Group, Bharti Enterprises, Hughes Network Systems, Intelsat, Qualcomm, Coca-Cola, the Virgin Group, and Totalplay. It said the money will allow it to develop technologies to offer affordable broadband for rural and poorly served locations. The company said the network, delivered from 648 orbiting micro-satellites, will also provide high speed, low latency access to ships, planes, trains, and oil platforms. “The dream of fully bridging the digital divide is on track to be a reality in 2019,” said Greg Wyler, founder of OneWeb. “We are committed to solving one of the world’s biggest problems – enabling affordable broadband internet access for everyone.” Currently two-thirds of the world’s population does not have internet access.

Makers of the connected car platform Automatic have announced a $24 million Series B round led by the investment arm of USAA, an insurance firm for military families. Also participating in the round are CDK Global and Comcast Ventures, as well as previous investors Y Combinator, RPM Ventures and Anthemis Group. Founded in 2011, Automatic is one of the many tech firms targeting the smart car ecosystem. The San Francisco-based startup first developed a sensor that plugs into a vehicle’s diagnostics port and sends data to the driver’s smartphone via Bluetooth, helping the driver track mileage, MPG and other detailed data about the status of their car. In May, Automatic announced partnerships with more than 20 third-party app makers, expanding the company into a platform for apps and services that range from roadside emergency assistance to a parked car locator.

Telus announced the closure of all Blacks stores, effective August 8, 2015. In total, 59 Blacks stores, nearly all of which are in Ontario, will be closed. “Technological innovations have changed the way Canadians take and share photographs, with fewer of us using retail photo outlets,” Telus said in the statement. “Despite the positive momentum and financial improvements our BLACKS team has delivered over the last year, we have been unable to realize profitable growth and it would take considerable investment to adapt BLACKS to ongoing change. After careful consideration, we have made the decision the best approach is to turn down the BLACKS business by August 8, 2015.” The company added that its approximately 485 Blacks staff will be offered positions in the Telus or Koodo head offices, retail outlets, call centres or transition packages. The Scarborough, ON-based retailer, which sells photography-related devices, phones, photofinishing services and home decor items was founded in 1930.  Following expansion it was bought several times by companies including Fuji Film in 1993, and Telus in 2009. At the time of Telus’ purchase, Blacks had 113 retail locations across Canada.

Cohesity emerged from stealth mode in June and announced a total of $70 million in venture capital funding. Cohesity was founded in June 2013 by former Nutanix founder Mohit Aron, who serves as the company’s CEO. Aron previously worked on the Google File System at Google from 2003-2007. The company’s foundational product, the Cohesity Data Platform, folds storage, backup, development, and analytics onto its single platform. According to a Cohesity press release, the main value add is the lower overhead that comes from eliminating separate products and lowering data redundancy.

As part of its Diversity in Technology Initiative, Intel Capital has launched a $125 million fund to invest in startups founded by female and minority entrepreneurs. The fund will be led by Lisa Lambert, the vice president of Intel Capital. “Our goal with this new fund is to meaningfully support a technology startup workforce more reflective of society, and ultimately to benefit Intel and the broader economy through its success.”

Uber has acquired some of the technology behind Bing Maps, along with several Microsoft employees, as part of the ride-hailing company’s ongoing efforts to build out its own mapping tech.  About 100 Microsoft employees will join Uber as a result of the deal.


Intel is buying Altera Corp., a maker of programmable logic semiconductors, for $16.7 billion to defend its presence in data centers, forging a deal that will add to a record year for industry consolidation.  Intel, like other chipmakers, is seeking to contend with growth and rising costs, while trying to defend its most profitable business. Altera earlier rejected an Intel bid, spurring some shareholders to pressure Altera to reconsider an offer they thought valued the company higher than it would be on its own.

Intel has been looking for growth beyond the struggling personal-computer market, which has been declining since it peaked in 2011. Altera chips are used in a variety of markets, ranging from communications to consumer electronics.  Altera’s devices can have their function updated, even after they’ve been installed in end-devices. While they’re sold in relatively small volumes, programmable logic usually requires the latest in production technology because it’s some of the largest chips in the industry. Acquiring Altera may help Intel defend and extend its most profitable business: supplying server chips used in data centers. While sales of semiconductors for PCs are declining as more consumers rely on tablets and smartphones to get online, the data centers needed to churn out information and services for those mobile devices are driving orders for higher-end Intel processors and shoring up profitability.

Vivendi raised its stake in Telecom Italia to 14.9%, replacing Telefonica as its biggest shareholder and gaining a foothold in a country it said had significant growth prospects. The move makes Vincent Bollore, Vivendi chairman and top shareholder, a major player in European telecoms again only months after the group finished selling nearly 36 billion euros of telecom and video game assets to focus exclusively on media.  “This investment represents an opportunity for the group to be present and to expand in a market with significant growth prospects and a very strong appetite for quality content,” Vivendi said. It also said it planned to support Telecom Italia over the long term.  With Telecom Italia seen by sector executives and bankers as a potential takeover target, billionaire Bollore could play king-maker in any coming consolidation. It will also make him more influential in Italy where his Bollore Group owns 7.46 percent of investment bank Mediobanca.   Telefonica plans to fold GVT into its Vivo-branded Brazilian mobile phone business to create the country’s biggest telecom group, Telefonica Brasil.  The stake transfer by Telefonica came after it, Italian insurer Generali, bank Intesa Sanpaolo and Mediobanca decided to break up a vehicle controlling 22.4 percent of Telecom Italia. They are exiting what has been a money-losing venture for them since they entered in 2007.

Blue Box Group Inc., a firm that provides an OpenStack cloud Platform-as-a-Service, is being acquired by IBM to expand its hybrid cloud services. Blue Box Group in Seattle offers customers the chance to access OpenStack cloud operations without actually implementing OpenStack software in their enterprise data centers. Blue Box also manages workloads sent to its OpenStack data center, making it a “managed cloud” provider that injects more human supervision into managing the customer workload and making sure it runs in an optimized fashion. IBM now offers a single management tool for OpenStack-based private clouds, whether it’s public infrastructure as a service or inside the enterprise data center.

In 2012, Piston Cloud Computing was one of a handful of OpenStack startups bent on packaging OpenStack for easy implementation. By September 2014, it was clear the market wasn’t ready for OpenStack packages, or they weren’t as easy to implement as prospective customers hoped. Fast forward to June 2015 and Cisco Systems has announced it is acquiring Piston. Cisco is basing a future set of enterprise cloud services on the rapidly evolving OpenStack platform.

Washington, D.C.-based New Signature, a solution provider that captured Microsoft’s 2014 American Partner of the Year award, has acquired Toronto-based CMS Consulting Inc. along with its sister company Infrastructure Guardian. As a result New Signature will operate as New Signature Canada. New Signature labels itself as a Microsoft specific national solution provider. The company has locations in 14 U.S. states. CMS and Infrastructure Guardian, which just began its business life this year, is part of New Signature’s aggressive strategic expansion plans. CMS compliments New Signature Azure practice and next-generation IT infrastructure.

Montreal-based Acceo Solutions is broadening its retail-sector expertise with the acquisition of Multipost, a Toronto-based developer of point-of-sale (POS) terminal software. With over 1,000 employees and offices in Quebec, Ontario, Manitoba and Paris, Acceo specializes in the design, implementation, integration, and support of management software, as well as e-business development and payment, professional, and technical services. Toronto’s Multipost was founded in 1980 and has developed POS terminal software for specialized small and medium-sized business industries such as clothing, convenience stores, garden nurseries and health food.  The acquisition expands Acceo’s product range with the addition of the SmartVendor POS software suite, which boasts 2,700 business customers. Acceo said its expertise in SMB e-business operations will allow it to develop a deeper relationship with Multipost customers.

Microsoft provided another example of its mobile first, cloud first strategy with the announcement that the company had acquired 6Wunderkinder. The Germany-based 6Wunderkinder is the developer of a task management app called Wunderlist. Wunderlist will be an upgrade for Tasks in Outlook. And because Wunderlist was developed as a mobile device app from the start, it doesn’t feel kludgy on a mobile device like a converted desktop app almost always does.

Cisco is paying $635 million for threat protection security firm OpenDNS.  The move will accelerate the development of the Cisco Cloud Delivered Security Portfolio, and OpenDNS will prove a boost to advanced threat protection services for Cisco clients.  In addition, the OpenDNS cloud delivered platform will give Cisco better visibility and more insight into the threat landscape.  The acquisition is a part of Cisco’s Internet of Everything (IoE), linked to the Internet of Things (IoT) concept.

Ricoh Canada Inc. is buying Graycon Group Inc. of Calgary, an IT consulting solution provider specializes in security, infrastructure, cloud and networking systems. The acquisition is a strategic investment to expand the company’s managed services portfolio. Graycon will continue to operate under its current name and under the leadership of the current management team. Besides Graycon’s headquarters in Calgary, the company has operations in six cities across Western Canada.