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Cisco, Ericsson in back-scratching move

The strategic partnership should generate additional revenue of $1 billion for each company by 2018.

Paul Booth
By Paul Booth
Johannesburg, 16 Nov 2015

The strategic partnership between Cisco and Ericsson was the main story of the international ICT market last week.

At home, the resignation of the MTN Group's CEO dominated the local media.

Key local news

* Satisfactory interim numbers from Vodacom, with revenue up 6.4% and profit up 2.3%.
* A positive trading update from Ansys.
* Huge Group made an additional investment in Eyeballs Mobile Advertising, bringing its stake up to 96%.
* The JSE announced a censure on Total Client Services.
* Niel Schoeman, founder and CEO of Vumatel; and Peter du Plooy, CIO of Engen Petroleum, scooped the IT Personality and Visionary CIO awards respectively.
* Renewed JSE cautionaries by MTN, TCS and Telkom SA.
* The appointments of Danny Drew as Avaya's MD of its South African operations; Phuthuma Nhleko as executive chairman of MTN Group (was non-executive chairman); and Pierre Spies as joint-CEO of Pinnacle Holdings (as from 1 January 2016).
* The resignation of Sifiso Dabengwa, CEO of MTN Group.

Key African news

* Helios Investment Partners acquired Orange's 70% stake in Telkom Kenya.
* Icolo, a new player in the IT space in Kenya, plans to launch two new data centres in Nairobi and Mombasa, to provide colocation services.
* Botswana authorities said Botswana Telecommunications' IPO will be completed before the end of the year.

Key international news

The IPO of Botswana Telecommunications will be completed before the end of the year.

* Fossil Group acquired start-up Misfit, a maker of wearable fitness trackers, for $260 million.
* Microsoft bought Secure Islands, a data security company based in Israel.
* A strategic business and technology partnership between Ericsson and Cisco Systems that should generate additional revenue of $1 billion for each company by 2018.
* A strategic partnership between NCR and Blackstone, including an $820 million equity investment by the latter to accelerate NCR's transformation.
* Very good quarterly figures from NetEase and Tencent Holdings.
* Good quarterly numbers from Alarm.com, Formula Systems and Rackspace Hosting.
* Satisfactory quarterly results from Applied Materials, CGI, Cisco, Quanta Computer, TowerJazz, Trend Micro and Ubiquity Networks.
* Mediocre quarterly results from ChipMOS Technologies, SingTel and ViaSat.
* Mixed quarterly figures from Amdocs, with revenue up but profit down; Asustek, with revenue up but profit down; Envestnet, with revenue up but profit down; Magic Software, with revenue up but profit down; Opera Software, with revenue up but profit down; TeleTech, with revenue up but profit down; and Vodafone, with revenue up but profit down.
* Quarterly losses from Adesto Technologies, Epistar, Himax Technologies, Lenovo, Lumentum, RealNetworks and SunEdison Semiconductor, Top Image Systems, Zayo Group and Zebra Technologies.
* Half-year losses from Aveva and Toshiba.
* The appointment of Pei Ing Lee as chairman of Inotera Memories.
* The resignation of Charles Kau, chairman of Inotera Memories.
* IPO filings for Nasdaq from AmeriQuest, a provider of technology-enabled business-to-business solutions that address the financial process, procurement and asset management needs of businesses; and software-tools maker Atlassian, the company behind enterprise-focused products such as HipChat, JIRA, and Confluence.
* A good IPO on the LSE by Softcat, a software reseller.
* A satisfactory IPO on Nasdaq by Xtera Communications, a telecommunication infrastructure company that provides optical transport solutions to deploy and manage optical networks worldwide.

Research results and predictions

South Africa:
* The South African IT services market reached a value of R47.4 billion in 2014, reflecting a year-on-year growth of 4.8%, according to BMI-TechKnowledge. The IT services market is expected to grow at a CAGR of 7.4% over the five-year forecast period, reaching a total of R67.7 billion by 2019, driven by the continued pressure on companies to reduce costs and become more lean, as well as by the impact of mega trends such as Internet of things (IOT) and hybrid cloud computing.

EMEA/Africa:
* The East Africa PC market, comprising Kenya, Uganda, Tanzania, and Ethiopia, suffered a year-on-year decline of 24.8% in Q3 2015, with shipments slipping to 108 088 units, according to IDC. Each of the four countries monitored recorded double-digit declines year-on-year in Q315, with Ethiopia suffering the steepest drop at 36.7%. Uganda saw its shipments fall 23.2%, while Tanzania and Kenya posted year-on-year declines of 22.3% and 19.7%, respectively.

Worldwide:
* CIOs expect digital revenue will grow from 17% in 2015 to 38% of total private sector revenue by 2020, according to Gartner.
* A total of 6.4 billion connected things will be in use worldwide in 2016, up 30% from 2015, and will reach 20.8 billion by 2020, according to Gartner. In 2016, 5.5 million new things will get connected every day. Gartner estimates IOT will support total services spending of $235 billion in 2016, up 22% from 2015.
* The big data market continues to exhibit strong momentum as businesses accelerate their transformation into data-driven companies, according to IDC. This momentum is driving strong growth in big data-related infrastructure, software, and services. It forecasts the big data technology and services market will grow at a CAGR of 23.1% over the 2014-2019 forecast period, with annual spending reaching $48.6 billion in 2019.

Stock market changes

* JSE All share index: Down 3.3%
* Nasdaq: Down 4.3%
* NYSE (Dow): Down 3.7%
* S&P 500: Down 3.6%
* FTSE100: Down 3.7%
* Nikkei225: Up 1.7%
* Hang Seng: Down 2.1%
* Shanghai: Up 5.6%

Look out for

International:
* Time Warner buying a stake in Hulu.
* The possible spin-off by BT of its fixed-line telephone and broadband network Openreach.

South Africa:
* More news regarding the MTN/Nigeria situation and the possible Vodacom/Neotel deal.

Final word

IDC recently announced its worldwide IT industry predictions for 2016 and beyond in a new IDC FutureScape report.

In 2007, IDC identified the third platform - built on the technology pillars of mobile computing, cloud services, big data and analytics, and social networking - as the foundation for the IT industry's future innovation and growth. Since then, the rapid adoption of third platform technologies has moved into the "Innovation Stage" - an explosion of innovation and transformation on top of the third platform's foundation.

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