Philly Deals: Google mum on plans for Motorola operation in Horsham

Posted: May 24, 2012

Google Inc.’s purchase of mobile-phone maker Motorola Mobility, completed Tuesday, makes the California-based search-and-software giant a major employer in suburban Philadelphia. At least for now.

Horsham remains headquarters for the company’s Motorola HomeTV systems arm, still headed by veteran engineer Dan Moloney. Beyond that, Google is not talking about its plans for the site, spokeswoman Niki Fenwick told me.

Descended from the former General Instruments and its predecessor, the late Pennsylvania Gov. Milton Shapp’s Jerrold Electronics, the business has built generations of set-top boxes and other equipment for cable TV purveyors led by Comcast Corp. The General Instruments boss who opened the Horsham complex, Ed Breen, now head of Tyco International, served on Comcast’s board until last year.

When General Instruments considered leaving three scattered sites in the region in the 1990s, then-Gov. Tom Ridge lured the $65 million, half-million-square-foot complex, and 1,100 engineering, office and skilled production jobs, to Horsham, with more than $10 million in tax breaks and subsidies.

Is Gov. Corbett as eager to keep Google? Corbett’s Department of Community and Economic Development ”will continue to monitor the situation,” said state spokeswoman Theresa Elliott.

“There’s still several hundred people there, but Google has been pretty mum” on confirming where the plant fits in its future, affirmed Peter Putnam, head of Last Mile Communications, a Bucks County-based consultant. “It wouldn’t surprise me if, over time, they move what they want [from Horsham] out to California. Like Cisco did with Scientific Atlanta,” when the router-maker bought another East Coast specialty electronics maker.

“You don’t really need a set-top box anymore,” Putnam added. “The way video is evolving, everything is being built into” the video receiver, or can be plugged into its USB port. “Every Google TV device I saw at the Consumer Electronics Show this year was built into the TV.”

But the end of the TV box has been prophesied before. “Those little boxes eat about $5 a month in electricity because of all that’s happening within them,” marveled Mark Naples, Philadelphia-based managing partner of digital consultancy Wit Strategy. Cable companies want to keep control of that kind of power, not share with Google or anyone, if they can help it, he added.

“Boxes are efficient and entrenched,” and it will take at least a decade for them to be replaced by streamlined technologies, Stefan Tornquist, U.S. research chief for London-based Econsultancy, told me.

“Beyond that, Google” and its smartphone rivals “will be looking to move future capabilities” into tablets and other company-branded handhelds, Tornquist added. “In the future, the only person who’ll be able to program your VCR will be [Apple’s] Siri and her as-yet unnamed counterpart at Google.”

Cloudy

SAP America Inc., Newtown Square-based subsidiary of German software giant SAP AG, says it is paying $4.3 billion, or $45 a share, for California-based Ariba Inc., which operates a “cloud-based” online procurement system for businesses.

That price is about 20 percent more than Ariba’s recent stock value, though it’s a small fraction of the inflated price Ariba commanded in the dot-com bubble of 1999-2000. Ariba sales totaled $444 million last year, up more than 60 percent from fiscal 2010. The company has been profitable in the last three years.

The deal marks SAP’s third multi-billion-dollar acquisition since 2010, following Sybase Inc. and SuccessFactors Inc., as SAP bosses Wiliam R. McDermott and Jim Snabe cram more products into SAP’s sales pipeline to compete with rival Oracle.

SAP said the deal would boost its “growth in the cloud.” Software companies have been scrambling to cope with the shift from managing data and computer systems through old-fashioned company servers, to cheaper software that operates from a “cloud” of commercial servers provided by Amazon.com and others.

SAP employs around 2,600 in Newtown Square; spokesman Jim Dever said that number is likely to grow as SAP adds products.

Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com or @PhillyJoeD on Twitter.

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