Monday, July 18, 2016

SoftBank Confirms Acquisition of ARM

SoftBank Group Corp. agreed to acquire ARM Holdings Plc in an all-cash deal valued at £24.3 billion. (US$32.4 billion), or 1,700 pence per ARM share, and representing a premium of 43% over the closing price on preceding trading day. The deal would be Softbank's largest to date.

SoftBank, which is based in Tokyo and is headed by Masayoshi Son, said it intends to preserve the ARM organization and business model, including ARM's senior management team and its headquarters in Cambridge, England. The companies said they intend to double employee headcount in the UK over the next five years.

ARM is the leading developer of RISC processor designs that are widely licensed for use in smartphones, tablets, laptops, desktops, embedded systems, and, increasing, servers. The company posted 2015 revenue of £968.3 million. A total of 14.8 billion ARM-powered SoCs shipped in 2015, up from just over 12 billion in 2014.

SoftBank will fund the acquisition with cash on hand and a load from Mizuho Bank of Japan.

“We have long admired ARM as a world renowned and highly respected technology company that is by some distance the market-leader in its field. ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the “Internet of Things,” stated  Masayoshi Son, Chairman and CEO of SoftBank.

Regarding strategic rationale, both companies said they see big opportunities ahead with IoT.

ARM's next generation designs are expected to increase the number of processors per chip from a maximum of 8 today to 256 cores per chip.

  • In July 2013, Softbank paid $22.2 billion for a 78% ownership interest in Sprint.

Softbank to Sell $7.9 Billion of its Stake in Alibaba

Softbank announced plans to sell US$7.9 billion of the shares it holds in Alibaba Group Holding Limited (“Alibaba”).

Specifically, the transactions are comprised of (i) the intended sale of $2.0 billion of Alibaba ordinary
shares to Alibaba, (ii) the intended sale of $400 million of Alibaba ordinary shares to members of the Alibaba Partnership acting collectively, and the sale of $500 million of Alibaba ordinary shares to a major sovereign wealth fund pursuant to an exemption from registration under the U.S. Securities Act and (iii) an intention to offer, subject to market conditions and other factors, $5.0 billion aggregate purchase price of its mandatory exchangeable trust securities exchangeable into American depositary shares of Alibaba in a private placement to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act.

After the sale, Softbank would continue to hold approximately 28%3 of Alibaba’s total outstanding shares.

“When I first met Jack Ma, I knew immediately he had the vision and passion to build the world’s leading e-commerce company, and I was very happy to invest alongside him to help him realize his ambition.” said SBG Chairman and CEO Masayoshi Son. “This investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects. In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership.”

Infineon to Acquire Wolfspeed for $850 Million

Infineon Technologies AG agreed to acquire the Wolfspeed Power and RF division of Cree for US$850 million in cash (approximately Euro 740 million.  The deal also includes the related SiC wafer substrate business for power and RF power.

Wolfspeed, which is based in Research Triangle Park, North Carolina, is a premier provider of SiC-based power and GaN-on-SiC-based RF power solutions. This also includes the related core competencies in wafer substrate manufacturing for SiC, as well as for SiC with a monocrystalline GaN layer for RF power applications. It has more than 550 highly skilled employees and a strong IP portfolio of approximately 2,000 patents and patent applications.

Infineon said it expects next-generation wireless standards such as 5G, which will use frequencies up to 80 gigahertz, will require advanced compound semiconductors.  GaN-on-Si allows higher levels of integration and offers its advantages at operating frequencies of up to 10 gigahertz. GaN-on-SiC enables maximum efficiency at frequencies of up to 80 gigahertz.

“Wolfspeed’s and Infineon’s businesses and expertise are highly complementary, bringing together industry leading experts for compound semiconductors. This will enable us to create additional value for our customers with the broadest and deepest portfolio of innovative technologies and products in compound semiconductors available in the market. With Wolfspeed we will become number one in SiC-based power semiconductors. We also want to become number one in RF power," stated Dr. Reinhard Ploss, CEO of Infineon Technologies AG.

IBM Cites Strong Growth in Cloud and Analytics

IBM reported Q2 revenue from continuing operations of $20.2 billion, with second-quarter revenues from the company’s strategic imperatives --- cloud, analytics and engagement --- increased 12 percent year to year. Cloud revenues (public, private and hybrid) for the quarter increased 30 percent. Cloud revenue over the trailing 12 months was $11.6 billion.

The annual run rate for cloud as-a-service revenue --- a subset of total cloud revenue --- increased to $6.7 billion from $4.5 billion in the second quarter of 2015. Revenues from analytics increased 5 percent (up 4 percent adjusting for currency). Revenues from mobile increased 43 percent and from security increased 18 percent.

"IBM continues to establish itself as the leading cognitive solutions and cloud platform company. In doing so, IBM is pioneering new business opportunities beyond the traditional IT marketplace," said Ginni Rometty, IBM chairman, president and chief executive officer. "In the second quarter we delivered double-digit revenue growth in our strategic imperatives, driven by innovations in areas such as analytics, security, cloud video services and Watson Health, all powered by the IBM Cloud and differentiated by industry. And we continue to invest for growth with recent breakthroughs in quantum computing, Internet of Things and Blockchain solutions for the IBM Cloud."

Segment Results

  • Cognitive Solutions (includes solutions software and transaction processing software) -- revenues of $4.7 billion, up 3.5 percent (up 3.8 percent adjusting for currency). Cloud revenue within the segment grew 54 percent. Solutions software revenue grew, led by Analytics (including Watson) and Security.
  • Global Business Services (includes consulting, global process services, application management) -- revenues of $4.3 billion, down 2.0 percent (down 2.5 percent adjusting for currency). Strategic imperatives revenue within the segment was up 14 percent (up 13 percent adjusting for currency).
  • Technology Services & Cloud Platforms (includes infrastructure services, technical support services, integration software) -- revenues of $8.9 billion, down 0.5 percent (flat adjusting for currency). Growth of 35 percent in strategic imperatives revenue within the segment was driven by strong hybrid cloud infrastructure services performance.
  • Systems (includes systems hardware and operating systems software) -- revenues of $2.0 billion, down 23.2 percent (down 23.3 percent adjusting for currency). Revenue reflects z Systems product cycle dynamics; gross profit margin improved in both z Systems and Power.
  • Global Financing (includes financing and used equipment sales) -- revenues of $424 million, down 11.3 percent (down 10.0 percent adjusting for currency).

VMware Posts Q2 Revenue of $1.69 Billion, up 6%

VMware reported GAAP and non-GAAP revenues for the second quarter were $1.69 billion, an increase of 6% from non-GAAP revenues for the second quarter of 2015, and an increase of 11% from GAAP revenues for the second quarter of 2015.

  • License revenues for the second quarter were $644 million, an increase of 1% from the second quarter of 2015.
  • GAAP net income for the second quarter was $265 million, or $0.62 per diluted share, up 54% per diluted share compared to $172 million, or $0.40 per diluted share, for the second quarter of 2015. Non-GAAP net
  • income for the quarter was $414 million, or $0.97 per diluted share, up 5% per diluted share compared to $396 million, or $0.93 per diluted share, for second quarter of 2015.
  • strong bookings growth with NSX, vCloud Air Network andh hyper-converged solutions
  • completed Arkin acquisition
  • headcount reached 19,075, up from 18,691 a year earlier

Q2 was a continuation of the good start to the year we experienced in Q1, both for results and against our strategic goal of building momentum for our newer growth businesses and in the cloud,” said Pat Gelsinger, chief executive officer, VMware. “Customers are turning to VMware to help them run, manage, secure and connect their applications across all clouds and all devices, with unparalleled connectivity, security and visibility.”

Zane Rowe, executive vice president and chief financial officer, VMware, said, “This was another good quarter for VMware, and I’m particularly pleased with our financial performance and increasing strength of our balance sheet. We’re also looking forward to returning value to our stockholders through the $1.2 billion stock repurchase we announced last quarter.”

US Ignite's Advanced Wireless Consortium Looks Beyond 5G

US Ignite, which is a non-profit organization inspired by the White House Office of Science and Technology Policy and the National Science Foundation, has formed a new Advanced Wireless Industry Consortium "to help align and focus US efforts to exploit new wireless technologies beyond 5G."

The group is aiming to speed up the transfer rate of breakthrough ideas from university research to industry end users, overcoming what is sometimes called the “valley of death” between basic research and commercialization. Big breakthroughs of 1000X are targeted in areas such as millimeter wave (mmWave), dynamic spectrum, 5G+ architecture, and wide-area white space – all areas in which the US will need to excel to sustain its leadership in the global wireless industry.

The Consortium includes 21 companies and organizations: ATIS (Alliance for Telecommunications Industry Solutions), ATT, Carlson Wireless Technologies, CommScope, CTIA, HTC, Intel, InterDigital, Juniper Networks, Keysight Technologies, National Instruments, Nokia Bell Laboratories, Oracle, Qualcomm, Samsung, Shared Spectrum, Sprint, TIA (Telecom Industry Association), T-Mobile, Verizon, and Viavi Solutions.

Saudi Telecom Deploys Juniper Contrail SDN

Saudi Telecom Company (STC) has deployed Juniper Networks Contrail Networking and NFV to create automated cloud services for its customers.

With dedicated cloud services powered by Contrail Networking, STC now has a fully scalable, flexible resource to sell to subscribers and customers on-demand as their IT requirements evolve and change. Contrail Networking enables full automation, better scalability, security and flexibility for STC's NFV-based cloud computing services.

Juniper's Contrail Networking SDN solution automates and orchestrates the creation of highly scalable virtual networks. It interoperates with an OpenStack cloud orchestration platform, enabling the agile creation and dynamic scaling of service instances with high availability and reliability.

"At STC, we have a 'customer-first' approach. We aim to earn our customers' trust and enrich society with comprehensive, innovative services and solutions. The network, underpinned by advanced NFV and automation capabilities, can deliver substantial value to our customers by providing the agility, speed and simplicity that today's businesses require. Juniper is an ideal partner with the same customer-centric approach, providing us with state-of-the-art technology for our cloud-based offerings," stated Dr. Tarig M. Enaya, senior vice president for enterprise at Saudi Telecom Company.