|By Kevin Dee,
Chairman of the Board at Eagle
This is my 30,000 foot look at events in the tech industry for May 2016. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.
A Little History of May in previous years…
Five years ago in May 2011 the biggest news was Microsoft’s record breaking offer of $8.5 Billion for Skype. Other M&A activity included Nvidia paying $367M for Icera; Rambus buying Cryptography Research for $342M in the security space; Sandisk acquiring Pliant Technology in the storage world for $327M; and Twitter paying $40M for TweetDeck. In May 2012 Facebook went public and there was a fair amount of M&A activity. The largest deal saw SAP’s $4.3 Billion acquisition of Ariba with CGI’s $2.8 Billion acquisition of Logica PLC of particular interest to those of us here in Canada! EMC continued its pattern of acquisitions with the $430 million purchase of XtremIO: perennial acquirer Oracle paid $300 million for social media marketing firm Vitrue; in the storage space Seagate paid $186 million for a controlling interest in LaCie; Microsoft invested $300 million in a Barnes & Noble subsidiary; and LinkedIn paid $118 million for Slideshare. There was plenty more activity, but with the amounts not published. Twitter bought RestEngine; IBM bought customer analytics company Tealeaf Technology; VMware bought Wanova; and Cisco bought Truvisco. The big news three years ago in May 2013 was Yahoo’s $1.1 billion purchase of Tumblr. The $6.9 billion deal to take BMC Software private did not cause the same kind of splash … the power of the brand? Manitoba Tel decided to shed its Allstream division to a holding company for $520 million; McAfee paid $389 million for Finnish security firm Stonesoft; Dell added to its cloud capabilities with the purchase of Estratius; AVG bought PrivacyChoice; and Ottawa based N-Able Technologies became one more Canadian company to be bought by a larger US company, this time Solarwinds for $120 million. In May 2014 AT&T paid $50 billion for DirectTV and Apple paid $3 billion for Beats. Google continued to invest in its Android strategy this time with a strategy company, Divide, that will bring help breaking into the enterprise. Other acquisitions saw Seagate pay $450 million for some flash capability from Avago (the LSI divisions); GE bought cyber security firm Wurdtech; EMC bought a flash (see the trend) start-up DSSD; Time Warner bought Youtube video network FullScreen; and SAP bought behavioral target marketing company SeeWhy. Last year May 2015 saw some very large deals on the M&A front, with the biggest seeing Charter Communications spend $55 Billion to buy Time Warner Cable and a further $10.4 Billion to buy Bright House Networks. This creates the second largest cable company in the US, just behind Comcast. The “Billion dollar club” also saw French Telco Altice pay $9.1 Billion for another US cable company Suddenlink Communications. Keeping with the billion dollar deals involving telcos, Verizon paid $4.4 Billion for AOL to bolster its mobile video capabilities. Another Billion dollar deal saw HP unload 70% of its stake in its China server, storage and technology storage unit to Tsinghua Holdings for $2.3 billion. The final billion dollar deal saw EMC pay $1.2 billion for cloud service provider Virtustream. Apple was out buying a couple of companies in May, snapping up mapping company Coherent Navigation and augmented reality company Metaio. In other deals Avaya bought cloud technology company Esna; and Cisco bought cloud programming interface company Tropo.
Which brings us back to the present …
May 2016 saw some M&A activity with the largest deal seeing HPE merge its services arm with CSC in a $8.5 billion deal to create arguably the largest IT services company. In another large deal Vista Equity Partners is paying $1.79 billion for customer service and marketing cloud provider Marketo. There were some other big names out shopping in May too. Oracle paid $532 million for software as a service for the utilities vertical, company Opower; Google picked up interactive training platform Synergyse; Infor bought consulting services company Merit Globe AS; and ARM paid $350 million for imaging and embedded systems company Apical. Microsoft ended an unhappy period by divesting its feature phone business to FIH mobile for $350 million, and GoDaddy picked up cloud based phone company FreedomVoice for $43 million. New Signature picked up another Microsoft solution provider, Dot Net Solutions; and Edmonton based F12.Net bought Calgary based professional services company XCEL.
One security report out of the UK suggests that two thirds of large businesses have suffered cyber attacks; another IDC report suggests the big data and analytics market will expand by 50% over the next 4 years; and a Gallup report tells us that millennials are changing jobs faster than any other cohort.
Economic data continues to show a Canadian economy that is limping along and a US economy that continues to grow (another 165,000 new jobs last month). Other countries with positive news included the UK, Ireland, Germany and, New Zealand. China also reported that demand exceeds supply for its labour force. The Caribbean and Latin America are however predicting increased unemployment.
That is my look at the May tech news. The full edition will be available soon on the Eagle website. Hope this was useful and I’ll be back with the June 2016 industry news in just about a month’s time… until then, walk fast and smile!