Industry news

Since March the UK government has granted £10bn worth of COVID-19 related contracts to private companies. 

The £10bn the government has outsourced to provide PPE, testing, call centres and drugs for COVID-19 has come under scrutiny as the contacts weren’t released with competitive tender. 

Critics say that the government should have gone through local authorities rather than outsourcing to private firms as it would be more accommodating to local needs and better value for taxpayer money.

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Trump administration has announced an overhaul of the H-1B visa program for high-skilled foreign workers in a movement to put American workers first.

This will mean that employers will have to pay H-1B workers significantly higher wages, limit the type of degrees applicants can qualify for and shorten the length of visas for certain contract workers. 

These changes introduced by the Department of Labor and Homeland Security will make it harder to qualify for one of the coveted visas.

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US lawmakers have recognised the need for legislation against monopoly power enjoyed by Apple, Amazon, Facebook and Google.

The democratic majority of the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law has published a report on their recommendations on how antitrust laws and enforcement can be changed after a 16 month investigation into the big four tech giants.

The report states as follows:

“First, each platform now serves as a gatekeeper over a key channel of distribution. By controlling access to markets, these giants can pick winners and losers throughout our economy. They not only wield tremendous power, but they also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them.”

“Second, each platform uses its gatekeeper position to maintain its market power. By controlling the infrastructure of the digital age, they have surveilled other businesses to identify potential rivals, and have ultimately bought out, copied, or cut off their competitive threats.”

“Finally, these firms have abused their role as intermediaries to further entrench and expand their dominance. Whether through self-preferencing, predatory pricing or exclusionary conduct, the dominant platforms have exploited their power in order to become even more dominant.”

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IBM are set to split its business into two separate public traded businesses by the end of 2021. One will focus on the rising demand for hybrid cloud services from enterprise and the other will focus on the delivery of managed infrastructure services. 

By splitting the companies it will position Big Blue better for the new era of the hybrid cloud which has been in process for several years. 

In 2018, IBM acquired Red Hat, an open source cloud firm for $34 billion which has enabled the firm to position its off-premise offering to be more open and less proprietary than those of its competitors. This has helped to transform the open hybrid cloud platform IBM will provide.

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Apple is expected to reveal that the new iPhone will have 5G.

Apple is already late to 5G technology as their rivals Samsung and Huawei have already introduced 5G phones. 

The launch of the new iPhone has been delayed since September due to COVID-19 supplier issues. The pandemic has increased sales for Apple, enabling their stocks to rise by 53% this year.

However, their stocks could take a hit as 5G enabled phones cost between $30 and $100 in the market right now. In 2012 when Apple first adopted 4G, they experienced a 10% decline in gross margins according to Pierre Ferragu, an analyst at New Street Research.

Apple is expected to take precautions in order to reduce this hit. The new iPhone could be released without wall chargers or earphones which will reduce costs on components and shrink packaging, enabling them to ship more units. 

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Mukesh Ambani, the Chairman of Reliance Industries says that this is is the right time for India to become a world leader in AI and make the country lead globally in the field.

According to Mukesh “India has the unique advantage to harness its enormous digital capital for AI-driven development, which is bottom-up and inclusive. This is because of our twin strengths of democracy and demography.”

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Huawei is experiencing a tough period with the US sanctions, however, business is continuing with European 5G network clients. 

They are still searching for a solution to aid millions of Huwaei phone users after Google was banned from issuing technical support for the new Huawei phone model using Android operating systems.

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IBM has announced plans to “spin out” its managed infrastructure service unit which accounts for a quarter of its revenue. 

Big Blue’s share price increased by 8% as the investors welcomed the plan as the managed service unit has become a drag on IBMs growth. 

The rise of the cloud computing industry has seen customers reduce their spending on in-house technology and shifting it to cloud companies like Amazon and Microsoft. 

The spin out would allow IBM to invest in cloud and AI businesses as they return to more sustainable growth.

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As technology emerges with the innovation of 5G, AI and IoT, Nvidia sees the acquisition of Arm as a vital step in creating a name for themselves. Arm s a hardware platform which  Nvidia intends to acquire for £31bn. 

In their recent virtual Summit event they announced the sale to Nvidia in order to provide growth opportunity for the hardware and software developers that rely on its technology.

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After a decade long conflict between tech firms Google and Oracle it has reached the Supreme Court this week.

Oracle is claiming $9bn in damages from illegal use of its software. When Google released their Android mobile operating system, they copied APIs from Java, software developed by Sun Microsystems. APIs allow access to specific functions within a programme. In 2009 when Oracle bought the Sun, they sued Google as they believed that its APIs should have copyright protection.

Many have concerns that if Google loses this case then the other dominant firms in the industry will have more power.

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