|By Kevin Dee, Co-Founder of Eagle|
This is my 30,000-foot look at events in the Tech space for May 2020. 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 2015 there were 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 created 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.
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 was paying $1.79 billion for customer service and marketing cloud provider Marketo. There were some other big names out shopping in May 2016 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.
The most significant purchase in May 2017 was the $1.86 billion sale of CenturyLink’s data centres and colocation business to a consortium led by BC Partners, Medina Capital Advisors and Longview Asset Management. Cybersecurity startup, Hexadite, was bought by Microsoft for $100 million. Goldman Sachs entered the BI space by purchasing a minority stake in Information Builders of New York City. Apple acquired Beddit, a Finnish sleep sensor product, for an undisclosed amount. Finnish cybersecurity firm, F-Secure acquired British security consultants, Digital Assurance also for an undisclosed amount.
Two years ago, May 2018 was a very active month for M&A activity, with Microsoft’s $7.5 Billion purchase of GitHub leading the pack in size. Microsoft also bought AI company Semantic Machines. PayPal paid $2.2 Billion for European payments company iZettle; Recruit paid $2.1 Billion for Glassdoor; Investment firm KKR paid $2 Billion for BMC Software; and Office Depot paid $1 Billion for CompuCom. Other big names out shopping saw Oracle buy collaboration platform Datascience.com; Google bought cloud migration startup Velostrata; HPE bought Plexxi; Rackspace bought RelationEdge; and Splunk bought Phantom Cyber Company.
Last year in May 2019 HPE paid $1.3 billion for supercomputer manufacturer Cray. Palo Alto Networks continued growing its cybersecurity capability with the purchase of two companies, Twistlock and PureSec. There was some M&A activity among a number of well know companies, Amazon bought mesh network company Eero; Symantec bought Luminate Security; Rogers bolstered its podcast capability with the purchase of Pacific Content; NCR added to its point of sale depth, buying Texas POS; and Foursquare bought competitor location tech company, Placed; ServiceNow picked up the assets of mobile analytics company Appsee; Comcast bought WiFi company Deep Blue Communications.
Which brings us back to the present …
In May 2020 we continue to fight the COVID-19 pandemic and things are tough everywhere. In March and April Canada lost 3 million jobs, and in April alone the US lost more than 20 million jobs. The IMF is calling it the worst economic downturn since the Great Depression.
IT spending worldwide is expected to fall by 8% this year … however cloud spending is up. Cloud spending has been the silver lining of COVD-19, with the rise in WFH, companies like Zoom have taken advantage. The home entertainment industry, Netflix et al have also benefited as people have been forced to stay home.
For all of the disruption there is still a fair bit of M&A activity. This month Intel bought mobility startup Moovit for $900 million; an also picked up Texas based networking company, Rivet Networks. Apple bought Virtual Reality company NextVR; VMWare bought Kubernotes security vendor Octarine; and Microsoft is planning for its 5G offerings with the purchase of Metaswitch; Mictrosoft also picked up robotic process company Softomotive. Cisco splashed out (possibly close to $1 billion) for network monitoring company Thousand Eyes; Zoom is working to improve security with its purchase of Keybae; and Nvidia is buying Cumulus Networks. There were a number of lesser known deals, that include Beanfield Metro buying the WAN network from Aptum Technologies.
That is my look at the May tech industry news. The full edition will be available soon on the Eagle website. Hope this was useful and I’ll be back with the June 2020 industry news in just about a month’s time… until then, walk fast, smile and wash your hands!