ALKHOBAR, 15 August 2006 — There have been a recent spate of announcements concerning acquisitions and partnerships in the IT industry. NETGEAR, a worldwide provider of technologically advanced, branded networking products, has agreed to acquire SkipJam, a leader in integrated software for home entertainment and control. Under the terms of the agreement, NETGEAR will pay up to $9 million in cash for SkipJam, a portion of which is structured as a retention incentive program for the acquired engineering team. The acquisition is expected to close in the third quarter of 2006.
“The Internet has evolved to become not only one of the most widely used means for communication and data transfer, it has also become the primary channel for the delivery of voice and entertainment. Even in the Middle East, the number of Internet users has been steadily rising with more and more entertainment content being digitally distributed over the web, resulting in a growing market for networked entertainment devices,” said Ahmad Zeidan, channel sales manager, NETGEAR ME. “Research shows that in the last five years, there has been a 500 percent increase in the number of Internet users in the Middle East and 90 percent in the UAE. The coming together of NETGEAR’s superior technology for wireless communication and SkipJam’s dynamic multimedia technology will enable consumers to fully enjoy the convergence between home entertainment and IT products.”
According to Parks Associates, an international market research and consulting firm that focuses on all product and service segments that are “digital” or provide connectivity within the home, over 30 percent of network nodes will be multimedia/entertainment focused as early as 2010, up from four percent today. Parks estimates this represents an opportunity of over 200 million multimedia/entertainment/multimedia nodes to be connected.
This acquisition fits NETGEAR’s strategy of expanding its product portfolio, and strengthening its global brand presence. It also accelerates NETGEAR’s participation in the expanding market for digital home entertainment and control. SkipJam’s technology will form the basis of future NETGEAR multimedia products, including media centers, media players, and audio players, building upon NETGEAR’s first generation of digital home entertainment products. The addition of SkipJam’s seasoned team of engineering professionals grows a dedicated, world-class group focused on hardware, software and technology for digital entertainment and control.
In other acquisition news, IBM will purchase FileNet in an all-cash transaction at a price of approximately $1.6 billion, or $35 per share. The acquisition is expected to close in the fourth quarter of 2006.
FileNet is a provider of business process and content management solutions. This acquisition builds upon IBM’s Information on Demand initiative, launched in February 2006, to address the growing market opportunity around combining IBM’s software, services, partners and industry consulting expertise to improve clients’ business performance. The Information on Demand strategy aims to provide clients with data exactly when and how they need it to improve their business processes, quickly respond to market needs and rapidly identify new business opportunities. With information volumes growing and customers facing greater competitive pressures to be more responsive and efficient, enterprise content management (ECM) and business process management (BPM) are becoming more critical for improving business performance.
“The growth in enterprise deployments of ECM and BPM technologies is fueling a global market expansion,” said Lee Roberts, chairman and CEO of FileNet. “The combination of IBM and FileNet will deliver increased innovation and industry-focused content management solutions, enabling our clients, Systems Integrators, ISVs and other partners to create enhanced and more competitive solutions.”
Following completion of the acquisition, IBM intends to:
• Combine FileNet’s operations with IBM’s Content Management business in the Information Management unit led by General Manager Ambuj Goyal.
• Preserve and enhance customer investments in both FileNet and IBM Content Management platforms, leveraging IBM’s market-leading Information Integration technology to develop broader ECM solutions.
• Integrate IBM’s BPM and Service Oriented Architecture technologies with the FileNet platform.
• Train IBM and FileNet partner and services teams on both IBM and FileNet technology.
While this summer has been a hot season for acquisitions, new partnerships have also been popular. Microsoft and LG-Nortel, a joint venture of LG Electronics and Nortel have signed a memorandum of understanding (MOU) for a collaboration in Voice over IP (VoIP), including WinCE-based IP terminals and the new WinCE 6 videophone. WinCE 6, codenamed “Yamazaki,” is Microsoft’s new integrated embedded development environment for the next generation of smart devices.
Under the terms of the MOU, the scope of the strategic alliance will include joint R&D, cooperative marketing to customers and channels worldwide and a licensing agreement for WinCE 6. Terminals based on Microsoft’s new WinCE 6 platform provide more powerful multimedia processing and will serve as a platform for application-oriented enterprise and residential solutions based on innovative embedded devices. Microsoft and LG-Nortel expect to conclude a definitive agreement within the next few months. At that time, new WinCE 6-based IP phone designs and features will be announced.
Microsoft and Nortel have also formed a four-year strategic alliance based on a shared vision for unified communications. By engaging the companies at the technology, marketing and business levels, the alliance will allow both companies to drive new growth opportunities and has the potential to ultimately transform business communications, reducing costs and complexity and improving productivity for customers. Nortel and Microsoft plan to use this alliance to accelerate the availability of unified communications — an industry concept that uses advanced technologies to break down today’s device- and network-centric silos of communication (such as e-mail, instant messaging, telephony and multimedia conferencing) and makes it easy and efficient for workers to reach colleagues, partners and customers with the devices and applications they use most.
Taking a decisive step further, Nortel and Microsoft will transition traditional business phone systems into software, with a Microsoft unified communications software platform and Nortel software products to provide further advanced telephony functionality. This software-centric approach will furnish the easiest transition path for businesses, helping enable them to reduce the total cost of ownership and better protect current and future investments. It will also more quickly enable the creation of new, innovative applications. For further information click to http://www.innovativecommunicationsalliance.com.
While much of the movement in acquisitions and partnerships has pertained to international vendors headquartered outside the Middle East, Dubai-based i-Mate announced that it recently achieved Microsoft Gold Certified Partner Status with a competency in Mobility Solutions. Microsoft Gold Certified Partners are chosen from select Microsoft Business Partners who earn the highest customer endorsement.
“This award signifies two important developments for our business,” said Jim Morrison, CEO, i-Mate. “The first is the high level of expertise in Windows Mobile solutions and customer support we currently offer clients — a direct result of our commitment to producing only Windows Mobile solutions. The second, and most important, is that being Gold Certified status means we will have unrivaled access to Microsoft in terms of support and new product releases. This can only enhance our business over the coming years as the use of Windows Mobile smartphones continues to gain mainstream popularity globally.”
