Tech Deals is a weekly column covering the latest deals in one of the busiest sectors for M&A. To read previous articles go to our Tech Deals page.
Qantas and Virgin's WiFi dogfight
The battle for the corporate dollar in Australian skies has ticked up a notch with Virgin Australia ready to go head to head with Qantas in providing the best in-flight systems money can buy, taking the mobility message to new heights. Both airlines are looking to ride the mobile device wave sweeping across the globe and with Qantas’ Q streaming trial already a hit with flyers Virgin has announced it will be offering Android-based Samsung Galaxy Tab 10.1 touch-screen tablets in business class from April this year.
The first question that springs to mind here is why Galaxy and not the iPad, which is far more popular with the travelling public.
Presumably, it has something to do with the fact that Qantas is handing out iPads for its service and Virgin is keen to maintain a point of difference. However, Virgin boss John Borghetti might be going out on a limb with his comments to the Australian Business Traveller that the Galaxy is a better product than the iPad.
The underlying technology behind both Qantas and Virgin’s plans is provided by Germany’s Lufthansa Systems and its BoardConnect wireless streaming in-flight entertainment (IFE ) system is the necessary backbone that will eventually allow flyers to connect their own devices to the system.
According to Lufthansa Systems senior vice-president for Asia-Pacific Oliver Kruger, the competition in Australia has ramped up significantly in recent years and there is clear competitive edge in using the technology on offer given the popularity of smart devices
Qantas has the early advantage given it has already started its trial and according to Norbert Muller, head of program management, BoardConnect, Lufthansa Systems, the iPad was always seen as the device of choice during the initial phase.
“We selected Apple because we see it as a very attractive device for these sorts of trials because the video quality is brilliant and even with the same quality in the underlying material it just looks better,” Muller says.
The other aspect was that handling of Apple devices is very intuitive so it’s very easy to hand them out to passengers without too many instructions,” he adds.
Both Muller and Kruger told Technology Spectator that they are very keen to work closely with Lufthansa Systems with regards to the integration of the technology. Both are expected to roll the system out progressively across the fleet but it is likely to be a slow drawn out process. Qantas is busy tackling a number of issues on a number of fronts, while Virgin Australia is still busy bedding down the merger of Virgin Blue and V Australia, so wholesale implementation is a still a long way away.
NBN Co will be relieved that at least one of the key regulatory hurdles standing in the way of the NBN has been cleared, although the overall future of the initiative currently seems shaky at best. The key regulatory hurdle is the structural split of Telstra which in turn would set in stone the telco’s $11 billion NBN deal with the government. Telstra’s decision to hand in an updated structural separation undertaking (SSU) to the ACCC should now finalise a deal that opens up the telco’s infrastructure to NBN Co.
The fact that the competition regulator has ruled out any chance of further consultation on the SSU is a clear indication it’s happy with what it sees so the tick should be forthcoming. The one big unknown is what impact the showdown between Kevin Rudd and Julia Gillard will have on the NBN. A change of party leadership seems unlikely but the prospect of Labor retaining power at the next election is looking bleaker by the minute. Just what the coalition has in store for the NBN is still a mystery but there will inevitably be changes, although many are hopeful that scrapping the entire endeavour won’t be on the cards.
Telstra will be keeping a close eye on the circus unfolding in Canberra but NBN or no NBN, the structural separation of the telco is still going to happen. That means Telstra is still has billions headed its way and the telco’s shareholders will no doubt be more interested in whether David Thodey & Co plan to give them a piece of the billions rather than the politicking in Canberra.
Seek razzle dazzle, TradeMe hits its targets
Online jobs site Seek wowed the market last week with stellar numbers and investors would be really heartened by the fact the company’s foray into the education sector and its investment in China is paying off. Revenue growth in Seek's education business was up 15 per cent on the previous corresponding period, at $59.9 million. Meanwhile, Zhaopin, a Chinese employment website in which the company holds a 56.1 per cent interest, posted revenue growth of 39 per cent. There is growing speculation that Seek is on track to list its Chinese recruitment site Zhaopin and the latest results should provide investors a healthy confidence boost ahead of the possible listing.
Meanwhile, Fairfax Media’s half year numbers may not have been worth writing home about, but its recently listed Kiwi offshoot Trade Me has managed to beat the guidance expectations laid out in its IPO prospectus. The online auction company posted an after tax profit of $36.4 million. Not only is the company sticking with its prospectus targets for the second half, it is evidently in the mood to tap new markets with CEO Jon Macdonald saying that growing new goods sales and the mobile market are key areas of focus.
Dimension Data, DST Global Solution Pacific Technology Solutions
Finally, IT infrastructure manager Australian Centre for Advanced Computing and Communications (ac3) has picked Dimension Data as its preferred cloud service provider to support its clients in the public and private sector.Under the terms of the agreement, ac3 will now implement Dimension Data’s Managed Cloud Platform (MCP), for all of its cloud services, and the CloudControl management system to automate its provisioning, orchestration, administration and billing processes. Meanwhile, software and IT services vendor for the investment management industry, DST Global Solution, has strengthened its client relationship team with two new appointments. The company has appointed Tasman Tanner as senior client relationship manager – global third party administrators, and Michele Harrick as client solutions manager. Pacific Technology Solutions’ (PTS) has secured a major contract with leading accounting firm Grant Thornton LLP in Canada. Elsewhere, Sybase 365, a subsidiary of global mobile messaging and mobile commerce services Sybase Inc, has been selected as the preferred mobile money technology provider in MasterCard’s Mobile Money Partnership program.
Apple's Aussie bite
Apple's $100 million cash pile is justifiably generating a lot of interest, after all when you are the world's richest company your shareholders want to know what that cash is good for. Lucky for them Apple seems to be doing pretty well when it comes to deploying it's fiscal strength.
Apple has never had a reputation for blockbuster M&A and has relied on small scale acquisitions to scoop up patents and talent. And its a strategy that Apple is sticking if it's latest acquisition is anything to go by. What's more there's an Australian angle to the deal with the target ,Chomp , the brainchild of Aussies Ben Keighran and Cathy Edwards. Keighran is the CEO of Chomp while co-founder Cathy Edwards is the chief information officer.
Chomp has been in the business of providing a search engine for apps for the last two years and given the plethora of apps, good and bad, available across multiple platforms it was only a matter time before an offer was on the table. Apple has reportedly shelled out $50 million for Chomp and it looks like money well spent.
With 550,000 apps in its database the App store could use an assist when it comes to app discovery and that's where Chomp will come in handy. So, Apple is picking up the tech and the talent but the buy is also a clever way to slam the door on Google's Android Market. Chomp's search engine had been platform agnostic with iOS and Android apps both featured in the search results, that obviously won't be the case anymore.