In this Issue:
With the growing popularity of cloud services and hosted services, IDC is forecasting there will be fewer data centres in the future. The ones remaining, however, will be larger. The total number of data centres worldwide is expected to peak in 2017 at 8.6 million and then begin a slow decline. However, because they will be bigger, the total worldwide data centre space is forecast to grow from 1.58 billion square feet in 2013 to 1.94 billion square feet in 2018.
Brian Krebs has released a book Spam Nation: The Inside Story of Organized Cybercrime — From Global Epidemic to Your Front Door. An interesting read if you want some insight into the never decreasing world of cybercrime, spam, spyware, viruses and their connection to the Russian underworld.
Cloud growth will surpass the overall IT market by a factor of six, according to a new forecast from IDC. Public IT cloud services spending will reach US $56.6 billion in 2014 and surpass $127 billion in 2018. That would be a five-year compound annual growth rate of 22.8% and by 2018, would represent more than half of global software, server, and storage spending growth.
Gartner has set out its predictions for growth in the use of connected "things" – network or internet-enabled devices – over the next six years. There will be almost five billion things connected by the end of next year and 25 billion – or three for every person on the planet – by the end of 2020. Gartner estimates the IoT will support total services spending of $69.5 billion in 2015 and $263 billion by 2020.
The economy – Canada
An IT World Canada article suggests that IT spending in Canada is forecast to total $102 billion Canadian Dollars in 2015, a 3.3% increase from the 2014 projected spending of $98.8 billion.
Canada added approximately 43,000 jobs in October, and the unemployment rate edged down to 6.5% — the lowest since November 2008, according to Statistics Canada.
The economy – US
The US leading economic index rose 0.9% in October to a reading of 105.2, The Conference Board reported, following a 0.7% increase in September, and no change in August.
The American Staffing Association’s index measuring employment in the US staffing industry rose 3.17% for the week of Nov. 10 to Nov. 16 compared with the same week last year. The index value rose to 105.84, the highest value since the index’s inception in June 2006.
US real GDP increased at an annual rate of 3.9% in the third quarter, according to the second estimate released by the US Department of Commerce. The growth rate is up from a previous estimate of 3.5%. In the second quarter, real GDP increased 4.6%.
The Institute for Supply Management’s purchasing managers’ index for US manufacturing rose to a reading of 59.0 in October, up from September’s reading of 56.6. Readings above 50 indicated growth; September’s index indicates continued expansion in manufacturing and at a faster rate than September. The employment portion of the index rose to a reading of 55.5 in October from the September reading of 54.6.
The outlook among American workers rose in October, according to Randstad’s US employee confidence index. The index rose to a reading of 58.2 in October from 56.4 in September.
US private sector employment rose by 230,000 jobs in October, according to the ADP national employment report. October’s increase is the highest since June and the second-highest gain of 2014.
Hiring activity will reach four-year highs for the month of November in both the US manufacturing and service sectors, according to the leading indicators of a national employment report released by the Society for Human Resource Management. Hiring expectations in US manufacturing are up for the eighth straight month in November, and service-sector hiring expectations are up for the sixth time in seven months.
The Conference Board’s US employment trends index increased in October to a reading of 123.09, up from September’s upwardly revised reading of 121.91. The October reading is up 7.7% from the same month a year ago.
Total US nonfarm employment rose by 214,000 and the unemployment rate edged down to 5.8% in October, according to the U.S. Bureau of Labor Statistics(BLS) in its monthly jobs report.
Nearly three-quarters of US companies, 73%, expect an increase in their demand for "middle-skills" jobs — those that generally require more than a high school diploma but less than a four-year degree — over the next few years, according to new research from Accenture. Currently, 56% of those companies surveyed struggle to find people with the qualifications to fill existing middle-skills vacancies.
US finance and accounting workers’ confidence declined for the second consecutive quarter, according to the Randstad Professionals’ finance and accounting employee confidence index for the third quarter of 2014. The index edged down to 57.5 from 58.0 in the prior quarter. However, the index remained above 50, which indicates a positive reading.
Employers plan to hire 8.3% more new college grads from the class of 2015 for their US operations than they did from the class of 2014, according to a survey of 260 employers by the National Association of Colleges and Employers.
Confidence levels among US manufacturing and logistics workers declined in the third quarter of 2014 after hitting an all-time high last quarter, according the Randstad manufacturing and logistics employee confidence for the third quarter of 2014. The index fell to 53.2 from 56.0 in the second quarter, the highest reading since Randstad began tracking the index in 2005. However, the index remained above 50, which indicates a positive reading.
Most IT organizations plan to increase IT staff headcount, according to the IT spending and staff outlook for 2015 released by Computer Economics. However, capital spending on data center and network infrastructure will remain lackluster.
The number of IT jobs in the US rose 0.2% in October compared to September, reversing a nine-month downward trend, the TechServe Alliance reported. IT jobs totaled 4.70 million. Meanwhile, the number of US engineering jobs rose by 0.1% in October from the previous month to approximately 2.5 million jobs.
The economy – Outside North America
The Reserve Bank of Australia has confirmed a dreary jobs outlook, suggesting "Labour market conditions remain subdued," in its quarterly Statement on Monetary Policy. The RBA forecasts suggest that unemployment may rise further than the current 11-year high of 6.2%.
One in two Germans between the age of 55 and 70 continues to work while approximately a quarter of those in retirement age are still active in the labour market. This is according to the study ‘Transitions and Old Potential’ by the Federal Institute for Population Development. The study also explored the personal motives for working of 5,000 respondents. Only four percent of respondents stated that they work solely for financial reasons. Over half of those surveyed said that they worked for non-financial reasons including enjoyment of work, mental stimulation or contact with other people. Approximately 70% state that they continue to work in order to pass on knowledge and experience to younger generations.
A third of Britain’s jobs are under threat from technology and could be replaced within the next two decades, according to research by Deloitte and Oxford University. The study predicts that as many as 10.8 million jobs could be replaced by automation and robots with low paid jobs five times more likely to be replaced than high paying jobs.
Chinese network equipment manufacturer Huawei Technologies is increasing its investment in Ontario in hopes that will persuade enterprises to buy its switches and routers. The company is committing $210 million in new investment to create 325 new jobs over the next five years. When combined with existing research, development and operational plans, Huawei’s total investment in Ontario over the next five years will be $500 million.
When a company like Yahoo hires Mike Kail as its CIO, it’s probably in part to bring forward some of the best practices he applied while working in the same role at an innovative tech company like Netflix. A new lawsuit against Kail, however, suggests there were some other practices going on that cast shame on the entire profession. According to stories on Re/Code and many other sites, Netflix is suing Kail, who left the streaming video pioneer this past summer to join Yahoo under Marissa Mayer, for allegedly taking kickbacks from vendors.
According to CB Insights, Canadian VC-backed companies continue to be on a tear, raising $700+ million in Q2-Q3’14, and over $1.5 billion over the past four quarters. Over the past two quarters, early-stage investments to Canadian VC-backed companies continued to account for 60%+ of all deals; however, Q3’14 saw a surge in mid-stage financings.
BT is in talks with Telefonica about buying its O2 mobile network, a move which could see a major shake-up in the fixed and mobile telecoms markets in the UK. While no deal has been announced yet, this is one to watch.
Yahoo! has just acquired BrightRoll, a company that provides a platform for video advertising, for $640 million in cash. BrightRoll operates in the programmatic ad buying space. BrightRoll serves 87 of AdAge’s top 100 U.S. advertisers, all of the top 15 advertising agencies, and all 10 of the top demand-side platforms. BrightRoll also gets about two billion ad requests per day from websites and apps.
Private equity firm The Carlyle Group LP is paying $700 million for financial data provider Dealogic Ltd., a 30 year old technology company for investment banks. The Carlyle Group, said, "Dealogic is a globally recognized and trusted brand and its software and data platform is the de facto standard for the investment banking industry." Dealogic feels that the relationship with Carlyle and will bring significant experience in the financial services technology sector and deep relationships across the financial community. Headquartered in New York and London with offices in Hong Kong, Budapest, Tokyo, Mumbai, Sydney, Beijing, and São Paulo, Dealogic provides its solutions to more than 500 clients globally including each of the world’s top 50 investment banks.
The contraction of the semiconductor industry continued with embedded chip and flash memory makers Cypress Semiconductor and Spansion announcing a merger plan worth $4 billion. Both companies make flash memory and low-power circuits used in industrial equipment, medical instruments, smart devices and cars. The combined company will have in-house wireless capabilities, which are key for data transfer between IoT devices. Both the companies also specialize in NOR and SRAM memory, which are used in industrial IoT equipment. Spansion, which was a spin-off of Advanced Micro Devices, last year bought Fujitsu’s microcontroller business and is doing interesting work in energy harvesting. The combined company will compete with Freescale, Atmel, STMicroelectronics and Texas Instruments. Freescale has in-house memory assets, while TI has a strong portfolio in analog and digital circuitry. Both companies are based in Silicon Valley. They say the merger could create a company with $2 billion in annual revenue. The deal will close in the first half of next year, the companies said in a joint statement.