As part of our year-end 2011/beginning of 2012 coverage, we present Part 1 of an article by Philly Tech News’ Tom Paine, which includes a roundup of 2011 happenings in the Philadelphia metro area. Tom takes a look at the Verizon Wireless (Basking Ridge) agreement with Comcast, the ups and downs at Universal Display (Ewing), and French advertising giant Publicis’ acquisition of Rosetta Marketing (Hamilton) as part of his coverage. This year-in-review will be of interest to anyone who wants to know about the vibrant tech community in the Philadelphia area which influences south Jersey. Click here to read the article on his website in its entirety.
There were two fundamental strategic moves by Comcast in 2011: the closing of the NBCU joint venture deal with GE in January, and the startling announcement in December of a plan for it and several other cable companies to sell their wireless spectrum to Verizon Wireless and set up a reselling and cooperative relationship with the wireless carrier, including an “innovation joint venture” that would reportedly be based in Philadelphia. The proposed Verizon Wireless deal could dramatically alter the traditional competitive delineation between the Cable and Telco worlds, and is likely to draw close regulatory scrutiny and, if approved, will probably carry tight limitations on the extent to which they can cooperate.
The move reflected recognition of the reality that Cable needed to have a hand in the wireless game, not so much for the so-called “quadruple play”, but because through 4G LTE wireless will be an important piece of the “TV Everywhere” and broadband puzzle. Clearwire, in which Comcast had invested, clearly hasn’t worked as a stand alone entity, and the cable companies didn’t feel they could achieve (nor did they need) the necessary scale to be competitive on their own in wireless.
As expected, with the NBCU joint venture in place Comcast moved to reorganize its sports properties, putting Versus and Comcast’s regional sports networks under the NBC Sports umbrella. Versus, to be renamed the NBC Sports Network on January 2, will move from Philadelphia to Stamford, Connecticutwhere NBC Sports will be based. Comcast paid dearly to maintain its Olympic rights, extend and enhance its NFL and NHL rights, and gain the US Spanish language rights for the World Cup. Legendary NBC Sports head Dick Ebersol lost out on a power play and left, to be replaced by Mark Lazarus, although he did return to consult on the Olympics and Sunday Night Football.
Comcast Interactive Ventures was renamed Comcast Ventures and left Philly for San Francisco with an expanded scope, although it retains a Philadelphia office.
SAP AG, which has its North American headquarters in Newtown Square, closed 2011 by announcing the $3.4 billion acquisition of SuccessFactors, making a major entry into the Cloud space as its own internal efforts were slow to penetrate the market. SuccessFactors CEO Lars Dalgaard will manage his company as an independent entity within SAP in addition to being responsible for SAP’s overall Cloud strategy, including its Business ByDesign and OnDemand platforms.
SAP’s other big push for the year was the rollout of its HANA in-memory data processing platform, which is now intended to be not just a real-time analytics tool but an environment for running its ERP suites and a possible replacement for relational database management systems all together. An SAP executive recently predicted that it could be the #2 player in the database management market by 2015, through HANA and its Sybase products. While analysts are impressed by HANA’s potential, there is skepticism by some on how far along the offering is and how easy and affordable it is to deploy.
Federal judge Phyllis Hamilton threw out the $1.3 billion jury verdict awarded in November 2010 against SAP in Oracle’s TomorrowNow lawsuit, reducing the amount to $272 million and insisting upon a new trial unless Oracle agrees to accept the lesser amount. SAP also pled guilty and paid a fine in a criminal case against TomorrowNow.
Oracle missed earnings estimates for its quarterly results released in December, a shock because it rarely falls short, sending many other enterprise software stocks downward and raising questions about what to expect from SAP’s quarterly results to be announced in January. And Cloud vendor Workday, considered by many to be the biggest emerging competitive threat to SAP, is said to be planning a 2012 IPO.
The SAP/Oracle soap opera extended to HP, as former SAP CEO Leo Apotheker, who was pushed out in early 2010, ended up running HP before getting a quick and expensive pink slip there in October as the company seemed to be without direction. Apotheker replaced Mark Hurd at HP, who had been forced out under a cloud of scandal and ended up becoming a top lieutenant to Larry Ellison at Oracle. Meanwhile, SAP’s top cloud architect, John Wookey, abruptly left SAP in the Spring and landed later in the year at Salesforce, where he will be responsible for its Rypple acquisition (to be renamed SuccessForce, for whatever reason). Musical chairs in the enterprise software business never stop.
SunGard Data Systems announced in August it would sell its Malvern-based Sungard Higher Education unit, which provides ERP systems to colleges and universities, to PE firm Hellman & Friedman LLC for $1.775 billion. Hellman & Friedman in turn will combine it with Virginia-based competitor Datatel. The deal, which is expected to close early next year, raises questions as to whether there might be a further breakup of Wayne-based SunGard.
Radnor-based QlikTech, the in-memory business intelligence software vendor which did its IPO in July 2010, saw its share price actually decline 5% so far in 2011 despite continued strong growth. It expects revenue for the year of $315 to $320 million, up close to 50% over last year, though it has been operating barely at a breakeven level. Ewing, NJ-based Universal Display, a pioneer in the OLED technology market, is up 13% for the year and has a market value of $1.6 billion, though it was a bumpy year as the stock was constantly buffeted by rumor and speculation as to what deals it might have in the works. Quality Systems Inc., parent of Horsham-based NextGen Healthcare, continues to show strong growth as government subsidies for physicians who adopt Electronic Healthcare Records (EHRs) kick in, though some were concern about the impact of NextGen co-founder and Quality Systems President Patrick B.Cline’s announced resignation earlier this year.