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CSC buys Enterprise Services unit of HP Enterprise

The acquisition creates a $26 billion pure-play global IT services company.

Paul Booth
By Paul Booth
Johannesburg, 30 May 2016

The CSC/HPE deal dominated the international ICT market last week.

At home it was very quiet, apart from some year-end financial results.

Key local news

* Mixed interim numbers from Reunert, with revenue up 2.2% but profit down 4.6%.
* Good year-end figures from Amecor, with revenue up 16.6% and back in the black; ISA, with revenue up 15% and profit up 32.2%; and MICROmega Holdings, with revenue up 15.3% and profit up 25.6%.
* Satisfactory year-end figures from Huge Group, with revenue up 5.8% and profit up 63.5%; and MiX Telematics, with revenue up 5.4% and profit up 22.5%.
* Positive trading updates from Ansys and MICROmega Holdings.
* A mixed trading update from MTN.
* KEW IT Outsourcing acquired Interactive Intelligence South Africa, a leader in cloud services for customer engagement, communications and collaboration.
* IT asset disposal service provider Xperien made a 49% investment in Information Technology Asset Management South Africa.
* A withdrawn JSE cautionary by MiX Telematics.
* The appointment of Sifiso Dabengwa (ex-CEO of MTN) as a non-executive director of Gijima.

Key African news

* Nigeria has reportedly suspended discussions with MTN over the record US$3.9 billion fine imposed on the mobile operator's subsidiary there, while the country's parliament investigates the size of the penalty and the way in which it was imposed.

Key international news

Alibaba is the subject of a US SEC probe.

* CSC acquired Aspediens, Europe's leading provider of technology-enabled solutions for the service management sector and a preferred partner of ServiceNow.
* CSC bought the Enterprise Services business of HP Enterprise for $8.5 billion, in a move that allows a standalone HPE to further sharpen its leadership in building the vital end-to-end infrastructure solutions necessary to power the enterprise cloud and mobility industry. The merger has created a $26 billion pure-play global IT services company.
* China's Fujian Grand Chip Investment Fund, which is 51%-owned by Chinese entrepreneur Zhendong Liu, purchased Aixtron, a German chipmaker, for EUR670 million.
* eBay acquired Spain's online ticket platform, Ticketbis, as it looks to expand its StubHub business abroad.
* Intel bought Itseez, a computer vision specialist.
* PC Connection purchased Softmart, a global supplier of IT and service solutions.
* Huawei Technologies is suing Samsung Electronics, claiming infringement of smartphone patents, the Chinese firm's first intellectual property challenge against the world's top mobile maker.
* A jury unanimously upheld claims by Google that its use of Oracle's Java development platform to create Android was protected under the fair-use provision of copyright law. This brings the trial to a close without Oracle winning any of the $9 billion in damages it requested.
* Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industries (SPIL) have reached an agreement to establish a holding company, which will own both ASE and SPIL and will be listed on the Taiwanese Exchange.
* Alibaba is the subject of a US SEC probe.
* Start-up HelloTech and rival in-home tech support company Geekatoo have merged, a sign of consolidation in the hotly competitive on-demand sector.
* Microsoft and Facebook have agreed to jointly build a subsea cable across the Atlantic Ocean to meet growing demand for high-speed cloud and online services. The construction of the new MAREA cable will begin in August and is expected to be completed in October 2017. The 6 600km cable, the first to connect the US with southern Europe, will be operated and managed by Telefonica SA's telecoms infrastructure unit Telxius.
* Good quarterly numbers from Descartes Systems Group and ePlus.
* Satisfactory quarterly results from HPE, Intuit and IXYS.
* Mediocre quarterly results from HP.
* Mixed quarterly figures from Tech Data, with revenue up but profit down; Veeva Systems, with revenue up but profit down; and ViaSat, with revenue up but profit down.
* Quarterly losses from CSC, CSRA, Infoblox, Lenovo, NetApp, Nimble Storage, Palo Alto Networks, Pure Storage and Splunk.
* A full-year loss from Spotify.
* The appointment of Mark Floyd as chairman of Ciber.
* The resignation of Bobby Stevenson, chairman of Ciber.
* An IPO filing for the NYSE from Twilio, a communications start-up and a supplier to Uber and Zendesk.
* An excellent IPO in Warsaw by Sappeers.com, a provider of SAP systems and services.

Research results and predictions

* Worldwide:
Worldwide customer relationship management software totalled $26.3 billion in 2015, up 12.3% from $23.4 billion in 2014, according to Gartner.

Worldwide revenue for big data and business analytics will grow from nearly $122 billion in 2015 to more than $187 billion in 2019, according to IDC. This is an increase of more than 50% over the five-year forecast period.

Stock market changes

* JSE All share index: Up 2.8% (highest weekend close this year)
* Nasdaq: Up 3.4%
* NYSE (Dow): Up 2.1%
* S&P 500: Up 2.3% (highest weekend close this year)
* FTSE100: Up 1.9%
* DAX: Up 3.7%
* Nikkei225: Up 0.6%
* Hang Seng: Up 3.6%
* Shanghai: Down 0.2%

Look out for

International:
* China's Tencent buying SoftBank's majority stake in Supercell, a Finland-based maker of some of the world's most popular mobile games.

Africa:
* Orange acquiring Millicom's interests and operations in Chad, Ghana and Senegal.

South Africa:
* A formal announcement that Robbie Venter, CEO of Altron, will step down early next year.
* The appointment of a new CEO for the MTN Group.

Final word

Forbes has released its 2016 Global 2000 list, which is based on a composite score from equally weighted measures of revenue, profit, assets and market value. In the top 25 largest US companies list are:
* 4: Apple
* 7: AT&T
* 9: Verizon Communications
* 11: Microsoft
* 12: Alphabet
* 15: Comcast
* 18: IBM
* 23: Intel
* 25: Cisco

More analysis of this list will follow next week.

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