In this Issue:
Worldwide tablet shipments grew by 11.5% in the third quarter of 2014, according to the latest numbers from IDC’s Worldwide Quarterly Tablet Tracker study. IDC’s figures support earlier estimates from Gartner, which expected tablet sales to grow by about 11%.
The average cost of attacks at 257 companies in seven countries in fiscal 2014 (April 2013 to May 2014) was $7.6 million (all figures U.S.) according to a study done for Hewlett-Packard by the Ponemon Institute. If that seems small, it’s because the countries studied ranged from the U.S., Britain, France, Germany, Russia, Australia and Japan. The costs ranged from $500,000 to $61 million. For the U.S. alone, the average cost was $12.7 million, up from $11.56 million in the same period the year before.
In the same vein, just over half the people in Britain have been the victim of an online crime, or cybercrime, according to the latest survey of the issue by Get Safe Online, costing £670m a year in fraud. The crimes include ID theft, hacking and illegally accessing and stealing from bank accounts, but a significant proportion of the crime is never reported because people are not sure who they should report the crime to.
The American Institute for Economics Research found recessions and recoveries have changed since the 1990s. Recessions have become less frequent, but they are now caused by structural changes in the economy and lead to longer periods of high unemployment and “jobless recoveries.”
The economy – Canada
Statistics Canada reported that employment increased by 74,000 in September. This pushed the unemployment rate down 0.2% points to 6.8%, the lowest since December 2008. In the 12 months to September, employment grew by an average of 13,000 per month, for a total increase of 150,000 (+0.8%).
81% of mid-sized Canadian companies are looking to hire, according to the inaugural American Express multinational survey of mid-sized companies. The survey included 200 financial decision makers in Canadian mid-size companies, defined as having revenues of C$5.4 million to C$1.1 billion annually.
The Canadian staffing index, a measure of staffing activity in Canada, fell to a reading of 114 in September, a decrease of 2% year over year from a reading of 116 in September 2013.
Statistics Canada reported that Canada’s GDP declined 0.1% in August, following a zero growth month in July and increases of 0.5% (May) and 0.3% (June).
The Conference Board of Canada found organizations plan moderate base salary increases for 2015 in response to sluggish economic growth. It also found 16% of organizations expect growth in the size of their workforce next year. The survey included 382 organizations across Canada and was conducted in June 2014.
The economy – US
The American Staffing Association’s index measuring employment in the US staffing industry rose 4.22% for the week of October 13 to October 19 compared with the same week last year. The index value rose to 104.75, the highest index value since December 2007.
The Conference Board’s consumer confidence index rose in October to a reading of 94.5 (1985=100) from 89.0 in September.
The outlook among American workers rebounded slightly this month after a decline in August, according to Randstad’s U.S. employee confidence index. The index edged up to a reading of 56.4 in September from 55.9 in August. The index measures workers’ confidence in their personal employment situation and optimism about the economic environment.
The Randstad Technologies Employee Confidence Index rose to a reading of 61.7 in the third quarter from a second-quarter reading of 58.7. The index measures workers’ confidence in their personal employment situation and optimism in the economic environment, and the third-quarter reading is the highest level ever recorded in the index’s nine-year history.
US real gross domestic product increased at an annual rate of 3.5% in the third quarter, according to the “advance” estimate by the U.S. Department of Commerce. Real GDP increased 4.6% in Q2 making this the strongest back-to-back readings since the last six months of 2003 and exceeded the median forecast of 87 economists surveyed by Bloomberg, which called for a 3 percent advance.
The Institute for Supply Management’s purchasing managers’ index for US manufacturing fell to a reading of 56.6 in September, down from August’s reading of 59.0. Readings above 50 indicated growth; September’s index indicates continued expansion in manufacturing but at a slower rate than August.
The US Commerce Department reported U.S. consumer spending fell for the first time in eight months in September, suggesting the economy lost some momentum heading into the fourth quarter. But rising consumer sentiment and faster wage growth suggest the weakness in spending will be temporary, with the economy remaining on firm ground.
The US leading economic index rose 0.8% in September to a reading of 104.4 (2004 = 100) in September. This follows no change in August and a 1.1% increase in July.
Hiring expectations in US manufacturing are up for the seventh straight month in October, and service-sector hiring expectations are up for the fifth time in six months in October, according to the Society for Human Resource Management. Both manufacturing and service sector hiring expectations reached a high this month when compared with the previous three months of October.
More employers plan to add full-time permanent workers in the fourth quarter compared to the same period last year, according to CareerBuilder’s fourth-quarter 2014 US job forecast. The survey found 29% of employers plan to add headcount in the fourth quarter, up from the 25% who planned to hire in the fourth quarter of 2013.
The Conference Board’s US employment trends index increased in September to a reading of 121.68, up from August’s upwardly revised reading of 121.32. The September reading is up 6.1% from the same month a year ago
US retailers are expected to hire between 725,000 and 800,000 seasonal workers this holiday season, potentially more than the 768,000 they actually hired during the 2013 holiday season, according to the National Retail Federation. Seasonal employment in 2013 had increased 14% over the previous holiday season.
IT leaders report temporary and full-time hiring has fallen short of 2014 expectations but is catching up, according to TEKsystems’ new quarterly IT Reality Check survey comparing current market conditions with the company’s annual IT forecast released in November 2013. Temp worker hiring has increased throughout the year, coming closer to the percentage of IT leaders who originally forecast increases in this area. Expectations for hiring full-time employees is also on the rise. The new survey found 37% of IT leaders reported increases in full-time hiring, up from 31% in the June survey but down from the 47% forecast in November.
The economy – Outside North America
The leading economic index and the coincident economic index for Mexico suggest economic activity should continue to expand through the rest of the year, but an acceleration is unlikely, according to The Conference Board. The organization reported its leading economic index for Mexico fell slightly in August and was flat in July, following sharp gains in the second quarter of this year.
Microsoft continues with its planned headcount reduction, cutting approximately 3,000 employees in October, believed to be largely support staff in human resources, finance, sales and marketing and IT. They are part of the 18,000 employees Microsoft officials said back in July that they’d be laying off over the course of a year.
The number of data breaches reported by the Canadian Federal Government to the federal privacy commissioner hit a record high according to a new report. There were 228 data breaches (more than twice the previous year) across the federal government were reported for the 12 month period ending March 31.
JPMorgan Chase & Co has revealed that the personal information of 83 million accounts were exposed when the company’s computer systems were infiltrated this year, making the data breach one of the largest in history.
Panasonic recently set up a separate company in the United States dedicated to producing lithium-ion batteries for Tesla Motors, and will invest billions of yen in the first investment instalment. Both Tesla and Panasonic are investors in the construction of the factory, which will produce battery cells, modules and packs for Tesla electric vehicles. The automaker says that by 2020, the factory will be shipping out 35GWh of cells and 50GWh of packs per year.
Kakao Corp and Daum will merge through an equity swap, creating a company with a 3.4 trillion won (about $2.9 billion) market capitalization. Kakao is the maker of KakaoTalk, South Korea’s top messaging service, while Daum is one of the country’s largest Internet portals.
Yahoo, flush with cash from selling a portion of its stake in the Alibaba Group, appears ready to bet on what it believes will be the next big Internet phenomenon. The company has held talks to invest in Snapchat — a popular app that allows people to share photos and messages that self-destruct. The deal has not yet closed.
Boku, the U.S.-based startup that enables consumers to pay for goods on their phones by charging directly on to their phone bills or deducting from available phone credits, is acquiring Germany-based Mopay, one of its biggest competitors. This is Boku’s second acquisition, after the company last year picked up Qubecell to expand its services in India and wider Asia as well as the Middle East. Since 2009 the company has raised $75 million, with investors including Andreessen Horowitz, Benchmark Capital, DAG Ventures, Index Ventures, Khosla Ventures, New Enterprise Associates (NEA) and Telefónica.
EMC announced the acquisition of three cloud technology companies: The Cloudscaling Group, Inc., Maginatics, Inc. and Spanning Cloud Apps, Inc. Each company brings to EMC deep expertise and powerful capabilities that enable EMC to extend the reach of its hybrid cloud vision across cloud infrastructure, storage and data protection. These acquisitions broaden EMC’s cloud capabilities on three key dimensions: the ability to offer customers hybrid cloud solutions based on OpenStack technology, cloud choice with data mobility across multiple clouds, and new protection capabilities for “born in the cloud” applications and data.
Digital Guardian, the only security solution to protect data from insider and outsider threats with a single agent, has acquired Armor5, a 2014 Gartner Cool Vendor in Application and Endpoint Security. Armor5 offers the only zero touch, 100% cloud-based or on-premise solution that enables access to a company’s network, virtualizes enterprise data and applications, and provisions secure and compliant access for every end user.
Ooyala, a Telstra subsidiary and video streaming, personalization and analytics company, is buying video advertising technology and monetization company Videoplaza. Videoplaza operates one of the world’s largest premium video ad serving platforms and programmatic trading solutions, delivering ads to viewers across all devices. It is used by the most successful broadcasters and media companies in Europe and the Asia Pacific region to maximize video monetization. This acquisition allows Ooyala to tap into the fast-growing video ad market and build out a new business dimension in advertising. As more premium video viewing moves away from traditional TV to web and mobile consumption, major media agencies are recommending their clients move up to 25% of their TV ad budgets to digital. In the U.S. alone, digital video ad revenues will increase more than 40% this year, compared to just over three percent growth for TV advertising.
Nest has acquired home automation hub Revolv in order to stop it selling rival products. Following Nest’s $555m acquisition of Dropcam just a few months earlier, Nest’s acquisition of Revolv, which developed its own platform to connect smart products to one another, will go into making the firm’s Works with Nest code more attractive to developers in the Internet of Things.
BSkyB has invested $7m (£4.3m) in Whistle Sports, an American start-up that runs a sports network on YouTube targeting young ‘millennial’ viewers, who are abandoning traditional television. The deal, which it is understood will give BSkyB a minority stake in Whistle Sports, is the latest in a string of investments in start-ups that aim to help safeguard the future of the broadcaster as technologies and viewer habits shift. Whistle Sports describes itself as “the millennial voice and destination for sports”. Industry figures show traditional TV viewing by 16 to 34-year-olds is down 15% in the past 18 months.
Magic Leap, a Florida-based virtual reality startup, has completed a $542 million funding round to develop software development tools, content, and wearable, virtual reality gear. Google led the financing round, which includes participation from Andreessen Horowitz, KKR, Kleiner Perkins Caufield & Byers, Legendary Entertainment, Obvious Ventures, Qualcomm Ventures, Vulcan Capital, and other investors.
IBM wrapped up yet another major divestiture, paying GlobalFoundries $1.5 billion to take over its semiconductor manufacturing operations in New York and Vermont. “We are executing on a clear strategy that is moving IBM to higher value,” said Ginni Rometty, IBM chairman, president, and CEO, in a statement. “This includes the announcement that we will divest semiconductor manufacturing to focus on research and development [and]… we will continue to make the investments and the changes necessary to manage our business for the long term.” IBM’s moves to higher value thus far in 2014 have included exiting a low-margin customer-care outsourcing business, selling its commoditized x86 server business to Lenovo for $2.3 billion, and now giving GlobalFoundaries considerable intellectual property as well as $1.5 billion in cash over three years to take over its costly chip-manufacturing operations. These three businesses combined generated more than $7 billion in revenue in 2013, but they incurred more than $500 million in annual pre-tax losses, according to IBM.
Cloud marketing provider Ensighten has acquired the marketing analytics firm Anametrix. Ensighten is best known for its Agile Marketing Platform (AMP), which the company says enables enterprises to optimize user experiences with one-to-one personalization. According to the company, it simplifies analytics and A/B testing with a single web interface to manage all third-party tags and the collection of data for analytics purposes. Ensighten clients include United Airlines, Sony Electronics and US Bank. By combining AMP with Anametrix’s multichannel marketing analytics technology, Ensighten said it will be able to offer marketers access to a much richer set of data and analytics, resulting in better insights.
Symantec announced a plan to separate the company into two, independent publicly traded companies: one business focused on it’s well-known business and consumer security products and services, and the other on its information management portfolio, which largely is based on Symatec’s 2005 acquisition of Veritas Software. The spinoff is expected to be completed in December, 2015, a decade after the $13 billion Veritas deal was announced.
The second such announcement this month sees HP split into two separate entites, HP Inc. and Hewlett-Packard Enterprise. The split creates business-focused Hewlett-Packard Enterprise, in the infrastructure, software, and services business, and HP Inc., in the personal computing device and printing business. The idea of splitting off the PC business was first proposed back in 2011 by brief-tenured CEO Leo Apotheker. But that hasty plan, bundled with the fateful move of getting out of the smartphone business and acquiring Autonomy Software for $10 billion, proved too much, too fast and was Apotheker’s undoing. Meg Whitman, who succeeded Apotheker in September 2011, has succeeded by managing expectations and methodically planning and rebuilding. She laid the groundwork for this move, even as she initially vowed that the company would remain “one HP.”