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  1. Technology
March 1, 2013

Deals roundup: February 2013

Jason Stamper summarises the most recent technology results and deals announcements.

By Jason Stamper

Of those reporting in this period it is Cisco that’s the bellwether, and its results should give a little encouragement to the sector as a whole. But not a huge amount. However a data points about IT jobs also gave reason to believe that perhaps things aren’t as gloomy in the tech industry as you might think.

Cisco saw sales grow just over 5% to $12.1bn in what it calls its second quarter, while net income was up to $3.1bn from $2.2bn a year ago. "Cisco delivered record earnings per share this quarter and record revenue for the 8th quarter in a row in a challenging economic environment," said John Chambers, Cisco chairman and CEO. "In terms of the future, we are making solid progress towards our goal of becoming the #1 IT company in the world. As new markets grow and are created, such as the Internet of Everything, it’s very easy to see how the intelligent network is at the centre of that future. Our customers already understand that Cisco has the architectures, solutions and services to best help them deliver the business results they need and we are honoured to work with them and serve them each and every day."

Not everyone was impressed. The CEO and founder of network service provider Multiven, Peter Alfred-Adekeye, said, "Cisco’s latest set of results show a company effectively standing still with a restatement of US R&D tax of $132 million passed off as revenue and margins preserved by reduction of its cost base through dismissal of large numbers of its employees. Its figures, which are essentially flat year-over-year, are supported by US government trade protection and procurement policies whilst the rest of the world is pursuing open purchasing."

Meanwhile the digital communication company EE – a 50:50 joint venture between Deutsche Telekom and France Télécom, formed in 2010 through the merger of their respective T-Mobile and Orange businesses in the UK — had a solid quarter with service revenue up 2.7% year on year. EBITDA margins came in at 22%, up around one basis point. The company also claimed it now has spontaneous consumer brand awareness of 43% just two months after launch.

Olaf Swantee, CEO of EE, commented: "In the past year, we delivered solid financial performance, underpinned by good progress integrating the business and success in attracting high value customers. At the same time, we built a strong platform for growth, launching a new company, new network, new customer brand, new retail estate and being the first to provide UK consumers and businesses with 4G mobile services alongside fibre broadband."

Oracle made another acquisition this month, picking up Acme Networks. Analyst firm Ovum’s Dana Cooperson, principal analyst, believes the acquisition should strengthen Oracle’s hand both with enterprises and carriers by giving it a more central role in controlling and improving how devices and subscribers interact and communicate. "Oracle’s move to acquire Acme Packets illustrates several very important on-going trends in global communications," the analyst said, going on to list a blending of IT and telecoms, software increasingly driving network capabilities, and communications needs increasingly being anytime, anywhere.

Cooperson added: "Oracle Communications has a value proposition that encompasses telcos, enterprises, and other ICT (information and communications technology) infrastructure vendors. In fact, Oracle both sells to and competes with telecom infrastructure vendors. But unlike many of these companies, Oracle has a comparatively large bucket of cash to use for acquisitions — as a communications infrastructure vendor bested only by Cisco. Oracle and Cisco can both afford to be aggressive with M&A whereas many of their peers cannot. Expect the buying spree to continue."

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As for the UK technology jobs market, Reed proclaimed that confidence has returned, as over a third of workers (39%) set their sights on new roles for 2013 and job opportunities continue to rise year-on-year. This is according to a new report which canvassed the attitudes of 1,500 employers and employees. The Job Index, a monthly tracker of employment trends across the UK, also showed that the jobs market has grown for the third successive year, with 32% more positions on offer than in January 2010. This indicates that businesses are feeling secure enough to invest in their workforce, according to Reed.

Meanwhile endpoint management and security firm Absolute Software had a good quarter, with revenue for Q2 of $20.6m, a 12% increase. Sales of device management and data security products were up 36% compared to Q2 F2012, growing to 44% of total sales.

"We continue to gain sales traction with corporate and healthcare customers, as they increasingly realise the benefits our offerings provide for governance, risk management and regulatory compliance," said John Livingston, CEO of Absolute. "This trend fueled our Sales Contract growth in the quarter, including the signing of the largest contract in our history with a Fortune 100 healthcare company. More broadly, the marketplace continues to go mobile. From inception, Absolute has focused on solving mobile computing security and management challenges. With the addition of Absolute Service and continuing wins for our persistence technology on Windows and Android tablets, we continue to expand our offerings to manage and protect any device on any platform. This remains unique in the new mobile IT paradigm."


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