2018 in review: what a year
Lenovo regained the number one PC slot and Dell the number one server position.
2018 was another vibrant and exciting year for the technology industry, with worldwide growth expected to reach 4.5%, according to Gartner, although the stock markets haven't necessarily reflected this situation. In this regard, there have been dramatic fluctuations, with some markets still at below their start-of-year positions.
The international market has been dominated by the finalisation of the AT&T/Time Warner deal and IBM's acquisition of Red Hat; the African market by the ongoing MTN/Nigeria situation; and the local market by increased B-BBEE activity.
As has been the norm for the past few years, 2018 has seen the emergence of numerous start-ups; a significant number of IPOs globally; heavy private equity activity that was not limited to the USA alone; and a feverish merger/acquisition scene.
From a business perspective, cost containment remains a high priority, with the areas of BI/analytics and cyber security key for many companies. From a technology perspective, artificial intelligence (AI), the continued move towards the digital world and the rapid growth regarding the Internet of things continues to head up the list of opportunities going forward.
In addition, consolidation continues apace, particularly in the BI/analytics, cyber security, semiconductor and telecommunications/communications fields, and many of the 'bigger boys' continue to streamline their operations by either splitting off, listing or selling off non-strategic elements of their businesses.
This year has been a mixed one for ICT listed companies, with no new listings. On the positive side, though, there were no de-listings.
In addition, PBT underwent a significant change of ownership; Ansys and MICROmega Holdings were renamed as Etion and Sebata Holdings respectively; and Softworx was rebranded as EOH Infor Services.
Don't be surprised at the demise or acquisition of some global names, including CyberArk, Fitbit, GoPro, Proofpoint and Symantec.
Moreover, there were a handful of new entrants and new companies launched into the local market, although some indirectly, including Arcserve, Avanti Communications Group, BlueFinity International, China Unicom, I-Life Digital Technology, PCI Pal, Ring, Thingstream and Workday.
As usual, there was much merger/acquisition and investment activity, including multiple ones by 4Sight Holdings, Datatec, HeroTel and Naspers. Other deals included Adapt IT snapping up Conor Solutions; Agility Group buying Indaba Mobile; Alaris taking over mWAVE Industries; Altron purchasing iS Partners but disposing of Altech UEC; the Argility Technology Group acquiring US-based SkyData Communications; Ayo Technology Solutions buying 55% of Zaloserve, which in turn owns 100% of Sizwe Africa IT; Community Investment Ventures investing in Vumatel; Connection Telecom snapping up Analog and Digital Communications; Dimension Data buying E2y and Millennium 1 Solutions; Enterprise Outsourcing acquiring PwC SA's technology solutions division; EOH buying LSD IT; Epsidon Technology acquiring Even Flow Distribution; Foursight Holds buying AccTech Systems and Dynamics Africa Services; HPE taking over Cape Networks; Jasco purchasing Ramm Technologies; MasterCard acquiring Oltio; MTN taking over Simfy; Partner Technology buying Corex; Reunert taking over Skywire Technologies; Silversoft buying Magnetic; Sureswipe taking over Humble Till; Terragon absorbing Bizerre; and Ulwembu Business Services buying Smart Integration.
Other key events included the cabinet approval of the ECA Bill; the announcement that the Department of Telecommunications and Postal Services is to be merged into the Department of Communications and led by Stella Ndabeni-Abrahams; the merger of Cradle Technology Services and Turnkey Solutions; MTN's sell-off of Monaco Telecom; Naspers undertaking some unbundling with the formation of the Multichoice Group and the sell-off of its Flipkart stake; the closure of Sahara Computers, including Annex Distribution and Sahara Systems; as well as Tariffic and ThoughtWorks; Vodacom completing a major B-BBEE deal and a roaming agreement with Telkom SA; a major restructuring at EOH that included a major BEE deal involving Lebashe; and several disclosures that involved The Guptas.
Key appointments during the year included new country managers/GMs/CEOs/MDs at many companies, including Accenture SA, Ayo Technology Solutions, BCX, Britehouse Group; the Department of Communications, Ellies, EOH, IFS, Jasco, Kyocera Document Solutions, Liquid Telecom, Multichoice Group, Newland ID, NEXTEC, Securicom, Software AG, SqwidNet, Sybrin Systems, T-Systems, Veeam Software, Vumatel and Workday. In addition, Bill Venter, founder of Altron, finally announced his retirement. Unfortunately, Jere Brown, a former CEO of Dimension Data; Libby Lloyd, a major ICT specialist involved with government; and Brian Seligmann, an ICT industry veteran, all passed away.
From an awards viewpoint, the key winners included Teddy Daka, CEO of JSE AltX-listed Etion as the IITPSA's IT Personality of the Year for 2018, and Jacques Barkhuizen, Absa's CIO for virtual channels/digital banking as the Visionary CIO for 2018. In addition, seasoned ICT forerunner and Datacentrix CEO Ahmed Mahomed has been honoured for his leadership and wealth of experience at executive management level, receiving the coveted title of 'Businessperson of the Year'.
The African scene was again dominated by activities in Nigeria and particularly around MTN and its Nigerian subsidiary, which seems to have caused a delay of its planned IPO.
However, as the African market continues to mature, the emergence of potential regional hubs continues apace, with Kenya emerging as the centre for East Africa, and a duel between Ghana and Nigeria for the West African space. North Africa continues to fall under the Middle East/Egypt region. As was the situation previously, there are still no IT companies listed in the current 'Top 500 Companies in Africa' list from outside SA, and still only a handful of telecoms companies included.
Other activities in Africa included American Tower acquiring 723 towers from Telkom Kenya; AI Technologies (Ghana) buying BusyInternet Ghana; the investment by Liquid Telecommunications in CEC Telecom; MTN listing in Ghana; the SACS cable landing; Seacom buying FibreC, as well as SAI, an SME-focused KZN-based Internet service provider; Nigerian-based Teleology Holdings GIB taking over Uganda Telecoms as well as acquiring Nigeria's 9Mobile; TPG Growth purchasing TRACE; Zambia awarding a fourth mobile licence; and Zinox Technologies buying Konga.
In addition, many new EMEA/regional/African appointments were made during the year, particularly in the telecommunications sector, as well as from companies such as Altron, Canon, Cisco, Citrix, Digital International, Ericsson West Africa, F5 Networks, Facebook, Fortinet, IBM Egypt, Kyocera Document, Mitel, Net One, Oracle, SAP Africa, SUSE, Temenos, Trend Micro, Veeam Software, VMware and Westcon-Comstor.
This year has again epitomised a healthy, thriving and growing ICT industry with significant consolidations in many sectors. The most significant happenings were the finalisation of the AT&T/Time Warner deal ($85.4 billion); Broadcom's acquisition of CA Technologies ($18.9 billion); Comcast's successful bid for Sky (£29.7 billion); IBM buying Red Hat ($34 billion); T-Mobile US's $26.5 billion acquisition of Sprint; and Vodafone Group's $21.8 billion acquisition of Liberty Global's assets in Germany, the Czech Republic, Hungary and Romania.
Eleven technology companies have each been involved in at least four or five acquisitions/major investments in 2018. These companies were Accenture; Alibaba, including Ele.me (almost $6 billion) and Ofo (a $3 billion investment); Alphabet/Google; Amazon; Apple; AT&T; Cisco; IBM; Microsoft; Softbank; and Tencent Holdings.
In addition, there were several other significant deals, including Atos's acquisition of Syntel ($3.57 billion); Adobe's acquisition of Marketo ($4.75 billion); SS&C buying DST ($5.4 billion); CommScope purchasing Arris International ($7.4 billion); Francisco Partners taking over Verifone Systems ($3.4 billion); General Dynamics snapping up CSRA ($9.6 billion); KKR buying BMC ($8.5 billion); KLA-Tencor acquiring Orbotech ($3.4 billion); Microchip Technology taking over Microsemi ($10.15 billion); a Macquarie-led consortium buying out TDC ($6.7 billion); Renesas Electronics taking over Integrated Device Technology ($6.7 billion); Salesforce acquiring MuleSoft ($6.5 billion); SAP taking over Qualtrics ($8 billion) and Callidus ($2.4 billion); and CC Capital, Cannae Holdings and funds affiliated with Thomas H. Lee Partners acquiring Dun & Bradstreet ($5.3 billion).
Other major international activities included a settlement of the Apple/Samsung patent dispute; US president Donald Trump's ban on the Broadcom/Qualcomm and Qualcomm/NXP deals, as well as protests/actions against Huawei, Kaspersky and ZTE; Cloudera and Hortonworks entering a definitive mergeragreement; and Facebook suffering significant fallout from the data leak involving Cambridge Analytica.
There were an unprecedented number of IPOs during the year, including the listings of Adyen, Anaplan, Ayondo, Arlo Technologies, Aurora Mobile, Avast, Bilibili, Bytedance Technology, Cardlytics, CATL, Ceridian HCM Holding, China Tower, CLPS, Codemasters, CooTek, Dell, DocuSign, Domo, Dropbox, Endava, Foxconn Industrial Internet, Global Financial Technology, Huya, I3 Verticals, iQiyi, M17 Entertainment, Meituan-Dianping, nLight, One Stop Systems, Opera, Pinduoduo, Pintec Technology, Pivotal, Pluralsight, Qutoutiao, Sensyne Heath, Smartsheet, Sonus, Spotify, StoneCo, Survey Monkey, Tenable, Viomi, Xiaomi and Zuora.
Major international appointments included new CEOs at Avanti Communications, Avid, Bezeq, Black Knight, Bouygues Telecom, BT Group, CDK Global, CDW, Centrify, CenturyLink, Cerner, Diebold Nixdorf, EFI, Equifax, Fluent, IFS, Iliad, Intel, Intellicheck, ITS (UK), KCom, Lattice Semiconductor, Lazada, Lexmark, Nuance, Orange Business Services, Palo Alto Networks, Quantum, Sage Group, SES, Sierra Wireless, Software AG, Sony, Sprint, Systemax, Tech Data, Telecom Italia, Tetra Technologies, TI, Tintri, Toshiba, TSMC, Tyler Technologies, Verifone, Verizon Communications, Vodafone, Xerox, Xplore, ZTE; and, unfortunately, the deaths of Jonathan Flaxman, COO of HP; Jim Shaw (ex-CEO of Shaw Communications); Ron Huddleston, a pioneering former Salesforce and Microsoft Channel executive; Brian Jellison, chairman and ex-CEO of Roper Technologies; Patrick Winter, CEO and co-founder of SoftwareONE; Kazuo Kashio, co-founder and CEO of Casio Computer; Wang Jian, co-founder and chairman of HNA.
During the year, Lenovo regained the number one PC slot and Dell the number one server position, while Apple remained the number one technology company by revenue and Microsoft became the number one most valuable company by market capitalisation (as of the time of the publication of this article). In addition, NXP Semiconductor replaced CA Technologies in the NASDAQ-100 Index, following the latter's acquisition by Broadcom.
2019 and beyond?
The international scene next year looks to be another exciting one, with continued consolidations, particularly within the AI, IOT, semiconductor and telecoms sectors, in addition to the finalisation or otherwise of the proposed $26 billion deal involving Sprint and T-Mobile US.
Don't be surprised at the demise or acquisition of some global names, including CyberArk, Fitbit, GoPro, Proofpoint and Symantec; IPOs from many companies currently controlled by private equity firms, as well as ones from Cloudflare; Hitek Global; ICE Group, a Scandinavian telco; Lyft; Slack; Uber; and Softbank's Japanese telecoms unit; GE disposing of its ICT interests; the continued pillage of the Israeli technology sector; the emergence of more conglomerates that have a growing ICT portfolio; further pronouncements/actions regarding China's networking and semiconductor technology companies; and more from the ongoing legal battles involving Apple and Qualcomm.
In Africa, expect further developments regarding the establishments of regional hubs; Econet Wireless listing some of its entities; further developments regarding the opening up of the telecoms market in Ethiopia; MTN listing in Nigeria and Uganda; and more offices being opened on the continent by the 'big boys' as well as South African-based companies. In addition, expect listings in London and/or New York from some of the global tower companies.
Locally, the focus will be on the government's announcement from the 2018 Budget that the Department of Telecommunications and Postal Services (DTPS) plans to establish a state IT company and a state ICT infrastructure company by 2020; developments regarding the MTN/Nigeria situation; the future of TCS; Telkom SA making another bid for Cell C; and the further expansion of ICT interests by many of the conglomerates.
The ICT industry continues to be very much alive and kicking, with a worldwide growth of 3.23% and a South African growth of 5.14% expected in 2019. As usual, there are bound to be many shocks over the coming year, as nothing is sacred in this industry. So don't be surprised at what may happen or take anything for granted.