At $3.7bn, AppDynamics sells to Cisco at 17.3x, estimated

Based on the S-1 filings from the business, a $3.7B price implies a 17.3x enterprise value/trailing twelve month revenue multiple, which is 41% higher than the next nearest acquisition, Salesforce/Demandware. There’s no comparable pricing event in the M&A market in the last 10 years.

And, from Simon at The Register:

The Borg’s plucked the company mere days before it was expected to float on the stock market, an event expected to raise around US$1.4bn for a portion of the company.

While AppDynamics could point to over 2,000 customers and nine-figure revenues, it also had rather a lot of red ink to deal with. That’s Cisco’s problem now, as it will make AppDynamics a software business unit in its internet of things and applications business.

Source: The Biggest M&A Multiple in Software History

Cash repatriation could inject $850bn, post-tax

If Congress enacted such a deal, of course, only a fraction of the $2.6 trillion would reach shareholders. It’s important to note that much of the UFE is not actually in cash; it’s invested in overseas plants or provides working capital for foreign subsidiaries. At press time, specifics of a plan hadn’t emerged, and figuring out which assets will ultimately get taxed, and at what rate, will be thorny. But based on Trump’s earlier proposal and on past holidays, investing pros estimate that about 40% of the UFE, or around $1 trillion, will come back to the U.S.—and that companies would net at least $850 billion after taxes.

Tech and health care companies would get most of that.


I think most people believe that cash would be used in stock buybacks and dividend to raise share prices and give cash to investors. Trump would probably want it for creating new jobs, and it could be used for domestic acquisitions.

See the rest from Shawn Tully at Fortune.

TheNewStack: Gartner Purchase of Corporate Executive Board Would Address Changes in IT Advisory Market

Lawrence Hecht has some brief commentary on Gartner buying CEB for $2.6bn – Lawrence takes out the $700m in debt from the actual deal value of $3.3bn. I don’t really know CEB too well.

He also covered some recent analysis of the analyst industry, including the post I did on the topic and podcast at KEA on the idea with other analyst-types, both back in 2015.

All seethe official press release.

Here’s some share price performance, snipping out the time around the acquisition announcement (it goes up, of course):
screenshot-2017-01-17-19-07-24

Link

Five years of declining PC sales

For the year, Gartner estimated shipments at 269.717 million, down 6.2 per cent year-on-year, with each of the major manufacturers except Dell reporting falling sales.

Gartner says high-end PCs are doing well, but of course, are a smaller market:

There have been innovative form factors, like 2-in-1s and thin and light notebooks, as well as technology improvements, such as longer battery life. This high end of the market has grown fast, led by engaged PC users who put high priority on PCs. However, the market driven by PC enthusiasts is not big enough to drive overall market growth.

There may less volume, but it’d be nice to know how that effects profits in the notoriously slim margin PC business.

Meanwhile, on overall, global IT spend:

Companies are due to splash $3.5tr (£2.87tr) on IT this year, globally, although that is down from its previous projection of three per cent.

See some more commentary of that forecast.

Link

451: Container market to be $2.7B by 2020, from $762m in 2016

451-container-market-2017-01-09

451 Research estimated this week the application container segment reached a robust $762 million in 2016 and is forecast to grow at a 40-percent compound rate over the next four years to $2.7 billion.

And, on usage, from an April/May 2016 survey:

451 Research’s Voice of the Enterprise: Software-Defined Infrastructure Workloads and Key Projects survey conducted in April and May 2016 showed that of the roughly 25% of enterprises we surveyed who use containers, 34% were in broad implementation of production applications and 28% had begun initial implementation of production applications with containers.

I’m somewhat suspicious that there’s $762m in container software and services sales, but who knows, really?

I haven’t read through their entire cloud enabling technologies market sizing yet, from Dec 2016, (basically, private cloud software and services, any things used by *aaS vendors, not the actual public cloud services, which are another market) , which is more than just containers. That market is pegged at $23bn in 2016, going to $39bn in 2020:

2016 CET Market Monitor - Public Cloud vs. CET.png

More on 451’s blog.

Source: “Container Market Pegged at $2.7B by 2020”

Gig jobs have high churn, ~40-60% after a year

https://www.theatlas.com/charts/SypDOTv-x

Lots of charts that show a large percentage of workers leave after a year. Also, as better jobs come about, if wages don’t rise in gig jobs, churn will be even higher:

“It doesn’t look like [gig work] is becoming more lucrative for people,” says Fiona Greig, co-author on the JPMorgan Chase Institute report. “As the labor force strengthens in general, more and more people have better options.”

Source: People are quitting gig jobs in the sharing economy — Quartz

Keeping developer skills fresh

My co-worker Richard wrote up a laundry list of tactics to cultivate and maintain developer skills. It’s drawn from the tactics we’re seeing organizations put in place and a recent survey from the Cloud Foundry Foundation.

Internal events

While I used to scoff at internal brown bags and workshops, I’ve seen those be highly effective in organizations looking to buff up at their developer skills. It both transmits actually new information and shows developers that the company actually cares. Upping morale and skills is hard to beat.

Pairing

Also, it looks like the continual cross-training you get from pair programming is effective. Staff keeps up to date from the micro level of new keyboard short cuts to the big picture stuff like architectural patterns and domain knowledge. Plus, they learn and practice working together and trusting each other.

More survey findings

The developer survey that Richard kicks off with has some more interesting answers. Here’s some details from the survey:


– “By a nearly 2:1 margin, they are choosing training over hiring or outsourcing as the preferred method for addressing a shortage of skills in their own companies.”
– “We suspect that the companies further along in their cloud journey are doing more interesting things and are more risk tolerant; developers find those jobs more attractive. However, those companies that still primarily rely on legacy architectures, don’t push the envelope or are only very sluggishly making efforts toward digital transformation, struggle to hire and retain people that have the skills necessary.”
– “the majority of companies (62%) express confidence in the abilities of their developers to “keep current” with their IT knowledge and skills. At an individual level, however, only 47% of developers express confidence in their own ability to keep current.”
– “By a large percentage (60%), companies say they first adopt a technology—then upskill, train, or hire as necessary. This is preferred to selecting a new technology based on the skills already available in the company (40%).”
– “By and large, companies are addressing the shortage of skills by training or upskilling existing people rather than outsourcing (61% versus 39%) or hiring (62% versus 38%). They are making use of a variety of training methods from formal internal trainings, vendor-led trainings to informal trainings like ‘lunch-and-learns.'”
– It was done in 2016Q3, over 845 respondents in an online survey. “The survey divided respondents into four broad IT ‘roles’: Developer 30%, Operations 30%, Manager 20%, and Line of business leadership 20%.” And spread across geographies and industries.