The Eagle Blog

October 2009 – IT Industry News

Three years ago in October 2006 Oracle paid $440 Million for Stellent and EMC paid $165 Million for Avamar. At that time worker confidence was good, unemployment rates in Canada and the US were low and IT spending was relatively strong. Two years ago in October 2007 Microsoft valued Facebook at $15 billion when it took a minority stake for $204 million, SAP paid $6.8 billion for Business Objects and Nokia paid $8 billion for Navteq, a mapping software company. IT workers were happier and more secure than ever, NexInnovations closed its doors and a Royalty Review caused consternation for Canada’s oil patch. Last year in October 2008 doom, gloom and market meltdowns were the big news. The number of IT jobs in the US dropped by 2% quarter over quarter and Symantec, eBay and Yahoo all announced significant layoffs. A $5.8 billion merger of telcos in the US was the big deal of the month, with rural telephone company Century Tel buying its bigger peer Embarq. Ebay bought 3 companies, Bill Me Later ($945 million) plus Denmark companies Ben Bla Avis and BilBasen ($390 million). Symantec paid $695 million for MessageLabs, Tata paid $505 million for Citi’s Indian BPO arm and HP paid $360 million for LeftHand Networks.

That brings us to October 2009 and the news continues to be mixed. Cisco went on a spending spree this month, paying $3 Billion for Tandberg, $2.9 Billion for Starent and $183 Million for ScanSafe. Also this month Adecco paid about $1.1 Billion for MPS Group (includes Beeline); Emerson Electric beefed up its datacenter capability paying $1.2 Billion for Avocent and Sprint Nextel avoided some legal issues by shelling out $831 million for iPCS. Perot Systems, who themselves were bought by Dell last month, announced that they picked up Bearing Point’s Chinese operations, and there were a few other deals that included interesting companies such as Siemens AG, Oracle, AT&T, MTS Allstream and Tibco.

News about the economy was mixed, the Canadian unemployment rate fell for the first time in almost a year, Monster’s unemployment index dropped GDP in the US decreased and Spherion’s employee index shows little change. The staffing industry continues to be hammered with many large players reporting revenues down over same quarter last year by 20% to 30%. There were also more stories related to identity theft with Blue Shield and Blue Cross compromising data on 800,000 doctors and the State of Virginia losing personal data on 100,000 adult education students.

Dell had a tough month announcing plant closures in the US and being bumped by ACER who are now the world’s number 2 PC vendor, after HP. AMD’s CEO joined the list of tech executives to be arrested, this one for insider trading and I guess its related to the case against Raj Rajaratnam who has apparently being receiving insider tips from the tech industry for years.

Most of us continue to work as hard and harder than ever before as we fight to recover from the last year. Companies like Cisco have seized the moment and are getting stronger through acquisition (3 this month), the landscape is changing and it will be interesting to see how this news looks 12 months from now.

That’s the IT sector news for October 2009 … until next month, Walk Fast and Smile!

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