Software

EU’s $5 bln fine is the least of Google’s worries

18 Jul 2018

The Alphabet unit can absorb another record European antitrust penalty. A companion order requiring it to stop forcing handset makers to pre-install its Google search app and Chrome browser may cause more damage – and curb the firm from expanding in areas like self-driving cars.

Broadcom’s new M&A strategy has a bug

11 Jul 2018

The $105 bln chipmaker’s prolific dealmaking has supercharged growth. But its size, and the torpedoing of its Qualcomm bid, left it bereft of natural targets. Expanding into software by buying CA brings new opportunities - and substantially increases the risks of pitfalls.

Micro Focus $2.5 bln sale amplifies growth problem

2 Jul 2018

The British tech group’s disposal of an open-source software unit is helping its share price, which halved in March. Yet the source of its problems, a troubled former HP division, now accounts for more of the group’s revenue. A tricky turnaround has become even harder to execute.

China dims chances to shine in Asia’s cloud

27 Jun 2018

Demand is rising for remote data services across the region, including from proliferating startups. Chinese vendors such as Alibaba are best placed to challenge the likes of Amazon. Beijing's push for "internet sovereignty," though, may impede expansion, even by local champions.

Rockwell dabbles in financial overengineering

11 Jun 2018

Paying $1 bln for a non-controlling stake in a rival software company seems odd. PTC doesn’t need the cash. Such shareholdings in peers can have logic, as some drugmakers have shown. The bar is high, though, especially after Rockwell last year turned down a takeover at a premium.

Apple’s value can chug well past $1 trillion

5 Jun 2018

The tech giant is close to being the first to pass that threshold in market capitalization, as Breakingviews predicted seven years ago. Growth has slowed but customers remain loyal and today’s valuation is far from stretched. Apple’s focus on data privacy may help it get there.

GitHub deal displays softer side of Microsoft

4 Jun 2018

The $775 bln IT giant is buying GitHub, the most popular site for developing, sharing and talking about software, for $7.5 bln. The old Microsoft was about extinguishing competition – boss Satya Nadella seems more interested in persuading developers to use his services.

Wall Street’s software roll-up contains a glitch

30 May 2018

Private equity is on a tech binge. KKR’s $8.5 bln purchase of BMC from rivals led by Bain and Elliott sets the firm up for more deals. Enterprise software is sticky, so this play can mint money. But with copycats lining up, the strategy’s popularity will eventually kill returns.

Adobe pays princely sum to add to virtual realm

22 May 2018

Graphics design and video production may be the $120 bln software juggernaut’s crown jewels, but Adobe wants to expand in the lucrative land of helping companies go digital. Magento could be key to unlocking faster growth. Yet at 11 times trailing sales, it’s a stiff price.

Closing tech’s gender gap will take decades

17 May 2018

One in three employees at Google, Facebook and Apple is a woman. Even if just over half of new hires were female, it would take up to 15 years to achieve a balanced workforce, a Breakingviews calculator shows. If Silicon Valley is serious about parity, a bolder target is needed.

Symantec leaves investors suffering from silence

11 May 2018

The maker of anti-virus software lost a third of its value after it revealed an audit investigation and then skipped its earnings Q&A entirely. Not talking about the inquiry is understandable. But ruling all topics off limits encourages shareholders to indulge their worst fears.

Xiaomi puts collective spin on tech IPO vows

25 Apr 2018

The Chinese firm says if net margins on its phones and gadgets ever top 5 pct, users will keep the spoils. Ahead of an IPO at a mooted value of up to $100 bln, this is a stunt worthy of Silicon Valley. It tells investors to focus on apps, and consumers that Xiaomi has their back.

Poker group bets $5 bln on Sky-high sports growth

23 Apr 2018

Canada’s Stars Group is buying UK online sports-gambling specialist Sky Bet. The price is more than current owners CVC and Sky would have got in a mooted IPO. For Stars, the debt-heavy punt only works if Sky Bet’s rapid growth continues - or the U.S. relaxes sports-gambling laws.

Ping An healthcare IPO looks pricey but fit

23 Apr 2018

The Chinese finance giant has launched a $1 bln IPO of its medical arm. By connecting patients with doctors, drugs and health services online, the Good Doctor app supports policy while accumulating valuable data. It’s not yet profitable, but the premium looks justifiable.

Publicis shows WPP benefits of smooth succession

19 Apr 2018

The French group last year bumped longstanding boss Maurice Lévy up to the chairman’s suite. New broom Arthur Sadoun has, under Lévy’s guidance, revamped the strategy and revived growth. That is a lesson for its UK rival, which lost CEO Martin Sorrell without any obvious heir.

Icahn offers poaching insurance for VMware

18 Apr 2018

A stake purchase by the activist investor could add friction in a potential merger of the $53 bln software company with its controlling shareholder Dell. Minority shareholders in VMware ought to expect fair treatment. Icahn's presence might help ensure they get it.

Sage has a big software glitch to fix

13 Apr 2018

Shares in the UK tech group lost a fifth of their value after 2018 sales guidance was cut by an eighth. A U.S. acquisition is growing well. But fewer customers are signing up for the most lucrative contracts. Investors are right to worry the company is still too optimistic.

Fidessa bidding war allows Temenos a sensible exit

5 Apr 2018

The British financial technology group has two further suitors, having agreed a 1.4 bln pound offer from the Swiss bank-software supplier. That price was already high, and a sweeter offer would stretch the financial logic further. Best to let SS&C and Ion fight it out themselves.

Spotify and its direct listing win popular vote

3 Apr 2018

The music service earned a stonking $29 bln valuation in its early moments as a public company. Its non-traditional float scored insiders more liquidity, while saving on fees. Was it a real success, either for the company or for its unusual method? Ask this time next year.

Telegram sends warning to Wall St and Sand Hill Rd

3 Apr 2018

Russian entrepreneur Pavel Durov’s messaging service raised $1.7 bln from private sales of its crypto-currency this year, besting all but three IPOs. Booming coin offerings face more oversight and many ring hollow. But Durov’s tech chops should give bankers and VC firms pause.