Thursday, April 06, 2017

2017 Sees Continued Growth in Mergers and Acquisitions

By: Roger Osmond   Categories:Industry Insights

2017 Sees Continued Growth in Mergers and Acquisitions
2016 was a year of tremendous activity for mergers and acquisitions. Another sign of the major shifts in the IT industry as digitization continues to dominate. 

The list below highlights some of those takeovers:

• Dell acquiring EMC
• Microsoft closed acquisition of LinkedIn
• Oracle buying NetSuite
• Computer Science Corp acquiring Hewlett Packard Enterprises Services Division
• MicroFocus buying Hewlett Packard Enterprise’s Software Division
• Broadcom acquiring Brocade

Having said that, just when we thought it couldn’t get any busier, 2017 has started off with even more IT mergers and acquisitions in the first quarter. Many factors are influencing these changes so let’s take a look at some of them:

It seems that the race for "competitive advantage" is leading to some strategic buyouts in the IT world that will add the missing pieces to foster further growth for these businesses. Cloud partnerships and acquisitions are on the rise, as new technologies and market demands push vendors to evolve their services. Cyber security opportunities are also increasing to counter the rise of cyber attacks. 

The digitization of the enterprise is an additional contributing factor while creating ecosystems that also extend across multiple sectors.

And lastly, the politics in the United States may have an even greater impact this year. Fortune calls it the Trump bump for tech M&A. It seems that President Donald Trump is much more pro-merger than Barack Obama's appointees. Also, the Trump administration is considering a one-time tax holiday to make it more affordable for companies to repatriate overseas cash and profits and return it back to the U.S. This would likely have a huge positive impact on the tech industry and potentially increase M&A activity.

Let’s take a look at some of those mergers and acquisitions:

IBM acquired Agile 3 Solutions, a developer of software used by the C-Suite and senior executives to better visualize, understand and manage risks associated with the protection of sensitive data. The addition of Agile 3 Solutions’ capabilities to IBM Security’s portfolio adds an intuitive tool to improve C-Suite decision making as businesses prepare to defend themselves against cybercrime. 

Hewlett Packard Enterprise (HPE) acquired SimpliVity in order to go after the mid-market IT infrastructure with a hyper-converged play that rivals Nutanix and others. SimpliVity's unique selling point comes from their unique approach to storage and that it provides SDDC (software-defined data center) architecture.

HPE has agreed to acquire Cloud Cruiser, the second startup they agreed to purchase in less than a week. Cloud Cruiser -- founded in 2010 helps companies track and control the use of public and private cloud computing. "Cloud Cruiser's consumption analytics offerings enable enterprises such as Accenture, KPN, and TD Bank to measure, analyze, optimize and control their usage and spend in private, public and hybrid cloud environments," HPE executive Scott Weller wrote.

The dual acquisitions show HPE's focus on hybrid IT models that leverage on-premise and cloud computing power. 

Cisco Systems announced in January its plans to  acquire AppDynamics Inc., snapping up the fast-growing software maker just before it planned to go public. Cisco, the world’s biggest maker of networking gear, will add AppDynamics’ software and services that help companies to monitor and fine-tune the performance of their own business systems. This acquisition reinforces Cisco's strategic direction and its shift to software-centric solutions.

AppDynamics' cloud application and business monitoring platform enables the world's largest companies to improve application and business performance. Together AppDynamics and Cisco will provide customers with intelligent and actionable insights, helping them make speedy business decisions and improve business performance.

OpenText Corp. has completed its acquisition of Dell EMC's enterprise content management business. The Waterloo-based software company, which announced the deal in September, said the acquisition strengthens its market leading position in the enterprise information management space. The deal includes the Documentum enterprise content management platform and Dell's enterprise content management division.

Microsoft is buying Maluuba, a Canadian startup focused on giving software a better understanding of human language. This natural language processing technology is a key underpinning of artificial intelligence (AI.) 

VMware is buying PlumGrid shortly after the startup entered a partnership with Quanta Cloud Technology. The partnership aimed to provide SDN-based OpenStack solutions. The acquisition of PlumGrid also comes after VMware announced it was developing hyperconvergence data centers as a way to tap into the rapidly growing enterprise cloud and mobility markets. As VMware looks to the cloud computing market for growth, the company needs differentiated products to beat the competition. With the acquisition of PlumGrid, VMware has laid hands on technologies it can leverage to create outstanding products for the cloud market.

HPE has acquired security startup Niara, a deal that brings former Aruba executives back to the roost. Niara specializes in behavior analysis. It uses machine learning and big data to establish a baseline for normal behavior, then looks for anomalies that could indicate intrusions.
Symantec  completed its acquisition of LifeLock, a leading provider of identity theft protection. The acquisition transforms Symantec’s consumer business and creates one of the most comprehensive consumer digital safety platforms to help people protect their information, identities, devices and families. Digital safety is an estimated $10 billion market, and is projected to grow nearly 7 percent annually, as more than 650 million people globally were victims of cybercrime last year.

MARCH 2017
HPE acquired mid-range storage vendor Nimble, a flash storage specialist – a simple, modern, and (lately) flash approach to storage. Acquiring mid-range asset Nimble helps shore-up the HPE storage business. “Nimble Storage’s portfolio complements and strengthens our current 3PAR products in the high-growth flash storage market and will help us deliver on our vision of making Hybrid IT simple for our customers,” said Meg Whitman, President and CEO, Hewlett Packard Enterprise.

And on March 30th, Broadcom announced it had reached an agreement to sell the data center switching, routing, and analytics business of its pending acquisition to Extreme Networks. The deal is contingent upon Broadcom closing the acquisition of Brocade it announced last November. This announcement is the latest in a series of acquisitions that Extreme has announced over the last six months to expand the company’s state of the art portfolio of data center, core, campus and edge networking solutions.

What will the rest of 2017 bring?

This infographic from Deloitte offers some interesting industry insights.

Take a closer look here.

Never a dull moment in the technology sector!

Roger Osmond
President, Sentia

Roger Osmond

Roger Osmond

Roger Osmond, President and co-founder of Sentia Solutions, has over 20 years' of Sales and managerial experience in the IT industry. In this capacity he provides strategic direction to ensure progressive growth and optimization of Operations, Marketing and Partner Alliances. Other posts by Roger Osmond
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