Vendors Announce Acquisitions and Splits

Skype Ltd. said that it is purchasing Qik, Inc., a provider of mobile video sharing software and services. Meanwhile, Qualcomm, Inc. announced plans to acquire Atheros Communications, Inc., and Dell Inc. announced a definitive agreement to buy SecureWorks, Inc. In other news, Motorola Inc. has completed its split into two new companies, both of which are being publicly traded.

Focal Points:

• Skype has agreed to acquire Qik, a provider of mobile software and services for capturing and sharing live or recorded videos across desktops, phones, and the Web, for an undisclosed amount. Qik's applications are currently available on more than 200 mobile phones running Apple Inc.'s iPhone, Google Inc.'s Android, Microsoft Corp.'s Windows Mobile, Research In Motion Ltd. (RIM)'s Blackberry, and Symbian, said the vendors. The deal is expected to close later this month. In related news, Skype dropped the beta tag from its group video calling service, which is available on desktops and the iPhone. As such, the service is now available as part of Skype's new Premium package, and includes live chat customer support, Skype added. A Premium day pass is available for $4.99, while subscriptions are priced at $8.99 per month, according to the vendor.
• Qualcomm has agreed to purchase Atheros for $45 per share in cash, or a total of $3.1 billion. With this announcement, Qualcomm has acquired Atheros, its market share (approximately one-quarter of the Wi-Fi technology market), and its intellectual property (IP). Atheros president and CEO, Craig Barratt, is expected to join Qualcomm as president of the networking and connectivity division, said Qualcomm. The transaction has been approved by both vendors' boards, and is expected to close in the first half of 2011, Qualcomm added. Meanwhile, Dell announced that it would acquire SecureWorks, a provider of Managed Security Services, Security and Risk Consulting Services, and Threat Intelligence services, for an undisclosed amount. Dell plans to maintain SecureWorks' current operations and continue to invest in enhanced security offerings. The transaction is expected to close in early 2011.
• Motorola has finally divided itself into two new companies – Motorola Mobility and Motorola Solutions. Motorola Mobility and Motorola Solutions are both being traded on the New York Stock Exchange (NYSE) under the tickers MMI and MMS, respectively. Motorola Mobility will focus on consumer products, including handheld communication and computing devices, mobile phones, and set-top boxes, said Motorola. Motorola Solutions will focus on enterprise and network business products, such as public-safety equipment and video surveillance technologies, Motorola added.

Experton Group believes the mobility segments will be undergoing major changes over the course of the next five years as client devices and connectivity components continue to morph. Skype's acquisition of Qik will enhance its services and expand its usage globally, putting even greater pressure upon the incumbent Telco providers. IT executive should expect to see Skype usage move further into the enterprise, which means IT needs to ensure its policies and procedures support the ways users intend to operate. Qualcomm's acquisition positions the company as a prime provider of networking chips for the cellular, home, smart grid and sensor network markets. With the smart grid and sensor markets expected to explode over the next few years, users can expect Qualcomm to be a major player in shaping these markets. Dell's purchase of StorageWorks is the third in three weeks and helps round out Dell's offerings so that it can better serve the commercial markets and provide more complete cloud services. Dell is rapidly reshaping itself to better compete against its prime enterprise competitors – Hewlett-Packard Co., IBM Corp., and Oracle Corp. Dell still has not explained its strategy completely and IT executives should understand the impact of the company's new business model.  Motorola's split has been long anticipated. The company could not sell the parts separately so now they have to survive on their own. Motorola Mobility is off to a strong start but the company's history has been a series of roller coaster rides. How well the two divisions will do long-term remains to be seen.

IT executives should prepare for the upheaval in the mobility and networking markets by first meeting with their strategic suppliers to understand their roadmaps and strategies and then mapping these plans to their own requirements and strategies.