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Column

Foxconn, Softbank have an eventful week

Investments, mergers, contracts and acquisitions were all part of an action-packed week for the companies and their subsidiaries.

Activities involving Foxconn and Softbank dominated the international ICT market last week.

At home, MTN's first loss was the main local story.

Key local news

* Very good interim figures from Pinnacle Holdings, with revenue up 46.5% and profit up 42.4%.
* Satisfactory interim numbers from Blue Label Telecoms, with revenue up 2.9% and profit up 53.8%.
* A full year loss from MTN, with revenue up only 0.5%.
* The proposed R2 billion investment by Net1 UEPS Technologies in Cell C.
* The proposed investment (49.6%) by Net1 UEPS Technologies in DNI-4PL Contracts, a distributor of mobile subscriber starter packs for Cell C, and which also distributes prepaid airtime through an extensive network of field operatives and agents.
* Bytes Technology Group has sold a 51% stake in its Bytes Conference Centre business to empowerment group Iyavaya HR Solutions, a 51% black women-owned and managed company that provides specialist services in the fields of black economic empowerment, employment equity, skills development, health and safety, and staffing strategies and solutions.
* A new JSE cautionary from AdaptIT.

Key African news

* Millicom's interest in Ghana has merged with Bharti Airtel's operation in that country.
* Uganda Telecom has been taken over by the government, after the telco's 61% majority shareholder, Ucom, a subsidiary of LAP Greencom Networks, which itself is a subsidiary of Libya Posts, Telecommunications and IT Company, said it would no longer fund the indebted operator.
* Vodacom plans to raise R2.8 billion when it lists Vodacom Tanzania on the Dar es Salaam Stock Exchange, for which it has now obtained approval.
* The appointments of Samer Abu Ltaif as Microsoft's president of its MEA region; and Niral Patel as Hitachi Data Systems' GM for sub-Saharan Africa.

Key international news

* Accenture acquired Davies Consulting, an innovative provider of utility asset management, risk management, grid and pipeline network modernisation and emergency management services.
* Cognizant Technology Solutions bought Japan-based Brilliant Service, an intelligent products and solutions company specialising in digital strategy, product design and engineering, the Internet of things and enterprise mobility.
* Equinix bought ICT-Center, Zurich's data centre operating business in Switzerland.
* Genesys purchased Silver Lining Solutions, a provider of employee performance optimisation software.
* Verisk Analytics acquired UK-based Emergent Network Intelligence, an innovator in insurance claims efficiency and fraud detection solutions.
* Verisk Analytics bought Fintellix, a Bangalore-based data solutions company specialising in the development of data management platforms and regulatory reporting solutions for financial institutions.
* Foxconn Electronics' subsidiary Foxconn (Far East) invested $600.6 million (54.4%) in SoftBank Group's subsidiary, SoftBank Group Capital APAC; and Fabrigene, another subsidiary, acquired a 51.2% stake ($25 million) in Sharp Healthcare and Medical Company KY, a joint venture to be established by Sharp and Foxconn Electronics.
* Intelsat and Softbank's OneWeb have entered into a definitive combination agreement pursuant to which Intelsat and OneWeb will merge. In addition, SoftBank will invest $1.7 billion in newly issued common and preferred shares of the combined company.
* Very good quarterly figures from Ambarella and Tactile Systems Technology.
* Good quarterly numbers from CyberOptics, Ebix, Sapiens International and Veeva Systems.
* Satisfactory quarterly results from American Tower, Entravision Communications, MDC Partners (back in the black), Methode Electronics, VimpelCom and XO Group (back in the black).
* Satisfactory year-end figures from Gemalto and Sopra Steria Group.
* Mediocre quarterly results from Opera Software and Perficient.
* Mixed quarterly figures from 3D Systems, with revenue down but back in the black; Broadcom, with revenue up but profit down; Cable One, with revenue up but profit down; Intelsat, with revenue down but back in the black; SBA Communications, with revenue up but profit down; and Sykes Enterprises, with revenue up but profit down.
* Quarterly losses from Autodesk, Box, Everbridge, Frontier Communications, GCI, JD.com, Kratos Defense & Security Solutions, Marvell Technology Group, Maxwell Technologies, Nutanix, Orbcomm, Palo Alto Networks, Pure Storage, Salesforce.com, Systemax, Tetra Technologies, Windstream Holdings and Workday.

MTN's first loss was the main local story.

* A full-year loss from Deutsche Telekom.
* The appointments of John Donahoe as president and CEO of ServiceNow; and Leigh Fox as president and CEO of Cincinnati Bell.
* The death of Anand Nallathambi, president and CEO of CoreLogic.
* A very good IPO on the NYSE by Snap.

Research results and predictions

EMEA/Africa:
* Middle East and North Africa IT spending is projected to reach $155.8 billion in 2017, a 2.4% year-on-year increase, according to Gartner.

Worldwide:
* Worldwide server revenue declined 1.9% year-on-year in Q416, while shipments fell 0.6%, according to Gartner. In all of 2016, worldwide server shipments grew 0.1%, but server revenue declined 2.7%.
* Worldwide mobility revenue will reach $1.57 trillion in 2017, an increase of 2.6% over 2016, according to IDC. Purchases of mobile hardware, software and services is expected to continue apace over the next several years, achieving a CAGR of 2.1% over the 2015-2020 forecast period, and reaching $1.67 trillion in 2020.
* Vendor revenue in the worldwide server market declined 4.6% year-on-year to $14.6 billion in 4Q16, according to IDC. Worldwide server shipments decreased 3.5% to 2.55 million units year-on-year.
* Worldwide smartphone shipments will rebound in 2017 and beyond, according to IDC. While growth is expected to remain in the low single digits, it predicts shipment volumes to grow 4.2% in 2017 and 4.4% in 2018, with a CAGR of 3.8% over the 2016-2021 forecast period. Shipments are forecast to reach 1.53 billion units in 2017 and grow to 1.77 billion in 2021.
* The worldwide wearables market reached a new all-time high as shipments reached 33.9 million in 4Q16, growing 16.9% year-on-year, according to IDC. Shipments for the entire year grew 25% as new vendors entered the market and previous champions refreshed their product line-ups. The year came to a close with 102.4 million devices shipped.
* Total worldwide enterprise storage systems factory revenue was down 6.7% year-on-year, while reaching $11.1 billion in 4Q16, according to IDC. Total shipments were up 18.3% year-on-year to 52.4 exabytes during the quarter.
* 2016 fintech funding totalled $24.7 billion, a decline from the record-setting $46.7 billion of 2015, according to KPMG's latest survey forecast.

Stock market changes

* JSE All share index: Up 0.2%
* FTSE100: Up 0.2% (highest level reached during the week)
* DAX: Up 1.9% (highest weekend close for over two years)
* NYSE (Dow): Up 0.9% (highest level reached during the week)
* S&P 500: Up 0.7% (highest level reached during the week)
* Nasdaq: Up 0.4% (highest level reached during the week)
* Nikkei225: Up 1%
* Hang Seng: Down 1.7%
* Shanghai: Down 1.1%

Look out for

International:
* Foxconn's bid for Toshiba's chip business.
* SoftBank Group making an investment in US-based office sharing start-up WeWork, which is expected to be worth over $3 billion.
* Toshiba divesting its smart meter group Landis+Gyr.

South Africa:
* Further developments regarding Cell C and its restructuring.

Final word

CRN magazine recently published its latest list of ‘100 Coolest Cloud Security Vendors'. The list included as its top 20:
* Cato Networks
* Check Point Software Technologies
* CipherCloud
* Cisco Security
* Dell Security
* Digital Guardian
* Fortinet
* Gigamon
* Hytrust
* Mimecast
* Netskope
* Palo Alto Networks
* Qualys
* Skyhigh Networks
* Sophos
* Symantec
* Twistlock
* Unisys
* vArmour
* Zscaler

Unfortunately, there will be no column next week as I am travelling extensively. My next column will be published on 20 March, and will cover the two-week period.


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