|By Kevin Dee, Co-Founder of Eagle|
This is my 30,000-foot look at events in the ICT industry for October 2019. 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 October in previous years …
Five years ago, in October 2014, we saw a new trend, with two public companies both choosing to split into smaller entities. HP announced it was creating a business service-focused Hewlett-Packard Enterprise and personal computing & printer company HP Inc. Symantec also chose to split into two independent public companies, one focused on business and consumer security products, the other on its information management portfolio. Other interesting news saw IBM pay $1.5 billion to GlobalFoundries so it would take away its money losing semiconductor manufacturing business. NEST bought competitor Revolv; EMC bought three cloud companies: The Cloudscaling Group, Maginatics and Spanning Cloud Apps; and in Korea, Kakao and Daum merged to form a $2.9 billion internet entity.
October 2015 brought some big deals with the biggest seeing Dell offer $26 billion to buy storage company EMC. Interestingly an EMC subsidiary, VMWare, was also out shopping, picking up a small email startup, Boxer. In another deal involving “big bucks”, Western Digital paid $19 billion for storage competitor Sandisk. IBM were also writing a big cheque, paying $2 billion in a big data/internet of things play for The Weather Network (minus the TV operations), and IBM also picked up a storage company, Cleversafe. Cisco paid $522.5 million for cybersecurity firm Lancope; LogMeIn paid $110 million for LastPass; Trend Micro paid $350 million for next generation intrusion prevention systems company HP Tippingpoint; Red Hat picked up deployment task execution and automation company Ansible; Vasco Data Security paid $85 million for solution provider Silanis; and Apple bought a speech processing startup, VocalIQ. As industries converge it was interesting to see Securitas pay $350 million for Diebold’s US Electronic Security business.
Three years ago, in October 2016, there was not a lot of M&A action but Qualcomm paid $47 billion for NXP Semiconductor. The only other sizable deal saw Wipro pay $500 million for IT cloud consulting company Appirio. Google picked up Toronto-based video marketing startup FameBit and Pivot Technology Solutions picked up Ottawa based Teramach.
In October 2017, Cisco paid $1.9 billion for Broadsoft to improve Cisco’s software capabilities. The only other significant deal saw Telus beef up its service provider capability with a $250 million purchase of Xavient.
Last year, October 2018 was an interesting month, with some significant M&A activity and the sad passing of yet another tech pioneer, Paul Allen, who co-founded Microsoft with Bill Gates. On the M&A front, IBM paid $34 billion for Red Hat to increase its game in the cloud systems arena. In the red hot cybersecurity space PE company, Thoma Bravo paid $2.1 billion for Imperva. Twillio also shelled out $2 billion to acquire email company SendGrid rounding out their API offerings. Other deals saw Honeywell bolster its IoT offerings, paying $493 million for Transnorm; Palo Alto Networks is paying $173 million for security startup Redlock; Computacentre paid $70 million for FusionStorm to grow its consulting business in North America; GTT Communications paid $40 million for Access Point to add to its network; and Fortinet paid $18 million for ZoneFox to improve its threat analytics capability. There was plenty more M&A activity with big names involved. Some of them included: Google (chatbot company Onwards); Accenture (DAZ systems); DXC (agodesign); Samsung (Zhilabs); CapGemini (June 21); and NTT Data (Sierra Systems).
Which brings us back to the present …
There was plenty of activity in October 2019. The economy, while slowing down some, is still quite robust in the US and employment figures around the world are generally positive. Reports continue to suggest things will weaken in 2020 but the threat of a recession seems reduced, always bearing in mind that the ongoing trade wars are not helping.
There were numerous reports of the skills shortage, in the US and elsewhere in the world. Couple that with a report suggesting that tech jobs are going to become even more in demand there is a need to guide more students towards tech.
On the M&A side, activity was brisk with the largest deal happening in the robust data center space, Digital Realty paying $8.4 billion for Interxion. There was also a smaller data centre deal that saw Equinix pay $175 million for 3 data centres from Axtel; and another datacenter deal involving ServerFarm buying SNINES. Another big dollar deal saw private equity company Thoma Bravo offer $3.4billion for security platform company Sophos. Big name companies out shopping included Intel buying Pivotal’s Edge Computing platform; Accenture bought Bow & Arrow, a company that helps its clients find new markets; Microsoft bought Mover, a company that helps clients move to the cloud; and Telus is paying $700 million for ADT’s Canadian Security Services business. Some other deals included network company Cienna buying performance and analytics form Centina; Sailpoint paying $37.5 million for two cloud security startups; Tech Data buying DLT Systems; and Trend Micro buying security company Cloud Conformity.
Other companies making news include Microsoft, who are grappling with an activist employee base contesting their government work; HP Inc. who announced significant layoffs; and Oracle who are going to be on a hiring binge.
That’s what caught my eye over the last month. The full edition will be available soon on the Eagle website. Hope this was useful and I’ll be back with the November 2019 industry news in just about a month’s time.
Walk Fast and Smile