Here on the Tech Desk at the Financial Times, we get sales pitches from vendors now and again and emails from confused reporters, thinking they’re contacting IT Support for help with software updates and laptop problems.
Tech in every business has traditionally been associated with the IT crowd, a basement floor of techies, surrounded by servers and computer parts, wearing RTFM T-shirts and answering the phone with “Have you tried turning it off and on again?”
How things have changed. Moderating virtual roundtables of CTOs during the pandemic, I’ve been impressed with tales of how they have become saviours of their companies, with their rapid cloud adoption and equipping of a remote workforce. They now have an enhanced status at the centre of the enterprise, driving new revenues and business models rather than being a capex drag on resources.
This is reflected in forecasts, from the Gartner research firm on Wednesday, that worldwide IT spending will reach $4.1tn this year, up 8.4 per cent on 2020.
“IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery,” said Gartner’s John-David Lovelock. “Not only does this shift IT from a back-office role to the front of business, but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the thing that drives revenue.”
Gartner expects the highest growth in spending on devices (14 per cent) and enterprise software (10.8 per cent) as “organisations shift their focus to providing a more comfortable, innovative and productive environment for their workforce”. Data centre systems spending should grow 7.7 per cent and IT services by 9 per cent.
Predictably topping all this is money spent on social and collaboration software — expected to grow by 17.1 per cent. “Have you tried turning your microphone on?” might be this year’s version of that IT Support call.
The Internet of (Five) Things
1. Toshiba could be Japan’s biggest buyout
CVC Capital Partners has made a $20bn offer for troubled Toshiba, joining KKR and other private equity funds in a potential bidding battle that could generate Japan’s biggest buyout deal in history. Lex says a business once known for the quality of its consumer electronics is now a tired conglomerate laden down with legacy units. Leo Lewis says humiliations do not come much bigger for the Tokyo Stock Exchange, which would see one of its biggest household names taken private.
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2. Grabbing a Spac
Grab, south-east Asia’s most valuable start-up, is set for the largest merger between a private business and a blank-cheque vehicle in a deal that will value the SoftBank-backed tech group at about $35bn. Singapore-based Grab, whose offerings include ride-hailing and financial services, could finalise an agreement to list in New York as soon as this week. #techAsia says the deal could blaze a trail for south-east Asian tech unicorns in US capital markets.
3. Plaid played up, UK fintechs play through pandemic
Investors have valued Plaid at $13.4bn in the fintech start-up’s first round of fundraising following its abandoned sale to Visa, marking a rebound in fortune after the US government sued to block the deal on antitrust grounds. Meanwhile, Nicholas Megaw reports Monzo, Revolut and Starling are back on the offensive as they emerge from the pandemic.
4. Smartphones boost Samsung profits
Samsung Electronics has projected an almost 45 per cent jump in its first-quarter profits on strong sales of smartphones and home appliances, helping offset a hit to its chip production from storms in Texas. Edward White in Seoul looks at how companies are responding to supply chain risks.
5. UK tech watchdog at bay till 2022
The UK’s much-anticipated technology watchdog, the Digital Markets Unit, is not expected to be given powers to police Big Tech until 2022, despite being launched this week. Austrian privacy activist Max Schrems has filed a complaint against Google in France alleging it is illegally tracking users on Android phones.
Tech tools — LG soundbars
LG announced its exit from the smartphone business this week, but it is doubling down on soundbars. The rollout this month and pricing of its 2021 line-up has been declared and includes five new models: the catchily named SP11RA, SP9YA, SP8YA, SP7Y and SPD7Y. Key features are compatibility with Google Assistant, Amazon Alexa and Siri and Dolby Atmos and DTS: X support for dynamic three-dimensional audio. They range from the 440 watt SP7Y at £400 to the 770 watt SP11RA at £1,500.