Category Archives: M&A

EMC, Joe Tucci, M&A, News & Analysis, Virtualisation, VMware

Report: EMC mulls selling itself to its subsidiary VMware

EMC might be selling itself to VMware in a move that could see the child become the parent

EMC might be selling itself to VMware in a move that could see the child become the parent

Storage giant EMC is reportedly considering a buyout by its virtualization-focused subsidiary, VMware, at the behest of activist investor Elliott Manage according to multiple reports.

The deal according to Re/Code, which first reported the news, would work like this: VMware would issue between $50bn and $55bn in new share, with about $30bn going towards cancelling EMC’s stake in VMware, and the remaining shares in VMware issues to current EMC stakeholders.

While no deal has been agreed or confirmed by spokespeople at EMC, VMware and Elliott Management it is clear the EMC Federation is under increasing pressure to split up and drastically reorganize its operations, something that has been on the cards for a couple of years now amidst flat or declining revenues and a bloating portfolio of products and services.

Elliott has made no secret of its desire to see EMC balkanize the Federation – EMC, VMware and Pivotal – into autonomous entities with more streamlined product portfolios, much like its support of Citrix’s reorganization and divestiture(s).

The market’s reaction to the potential acquisition was mixed, with VMware’s share price dropping from $93.43 to $85.72 per share in the space of just over an hour after the news broke, levelling off at $86.65 per share by the close of trading yesterday. EMC shares, however, rose from about $25.93 per share to $27.05 during the same period, closing at $26.85.

A deal that would see EMC and VMware combine into one entity wouldn’t be too far fetched given EMC’s more recent acquisition streak – namely, software companies that bolster its software-defined storage and enterprise software capabilities. VMware, an embedded component of today’s datacenters, complements that strategy nicely, but with the news sending VMware’s share price downward it doesn’t seem the market favours the child becoming the parent.

In a call with analysts in July EMC chairman and chief executive Joe Tucci rejected the possibility of a split, but emphasized a transformation that puts cloud technology (like VMware’s) at its core.

“Undoubtedly everybody on this call believes deeply that one of the biggest transitions every company has to do is move to the cloud. We talked about digital transformation which I think is an even bigger market where the Internet of Things and all of that falls in. But just take where we live in datacentres. And datacentres are moving to cloud technologies, both private and managed.”

“Obviously, if you were doing that, would you rather do that as just VMware, just EMC, just Pivotal with their past or are you a lot stronger in front of a customer’s doing it together? So, do I think we’re much stronger? The answer is absolutely. So I think splitting this federation or spinning off VMware is not a good idea. I firmly believe that we are better together, a lot better together.”

1010data, Big Data, Bright House Networks, Condé Nast, M&A, News & Analysis, Reddit

Media giant hoovers up analytics specialist for $500m

Advance is buying 1010data for $500m

Advance is buying 1010data for $500m

Advance/Newhouse, the parent company of Advance Publications – owner or majority stakeholder in some of the world’s largest digital publications including Condé Nast and Reddit – announced this week it has acquired analytics and data warehouse specialist 1010data for $500m.

Advance said it intends to help scale 101data’s operations globally, with the capital being used to invest strongly in sales, marketing and engineering efforts.

“Advance believes that 1010data has a compelling vision for helping businesses unlock their true potential through data. It has created a truly innovative approach that is speeding this transition across industries,” said Nomi Bergman, president of Advance’s cable television affiliate, Bright House Networks, and a new member of 1010data’s Board.

“We believe that in the 21st century data and analytics platforms will be a core building block of all businesses. The opportunities that lie ahead for 1010data are boundless, and through our acquisition of 1010data, we are excited to partner with the company’s management team and provide the resources it needs to capitalize on all of them,” Bergman said.

1010data offers big data discovery and data sharing platforms as well as an integrated big data cloud service that can be used to analyse large datasets; it can also be plugged in to third party big data applications and mash up data from a range of sources.

The company claims to have over 750 customers across a range of sectors including telecoms, manufacturing and engineering.

Sandy Steier, co-founder and chief executive of 1010data said: “Advance is the perfect partner to help us maximize our growth potential as they fully recognize how revolutionary and impactful our technology can be. Becoming a part of Advance ensures that there will be no disruption to our customers, our employees or our business while enabling our organization to scale at an even faster rate. We are very excited about being able to leverage Advance’s significant resources to deliver an even better solution for our customers.”

Andrew Gilbert, Datacentre, M&A, News & Analysis, Node4, Peter Bodley-Scott, Premier IT Networks

Node4 buys Premier IT Networks to strengthen cloud portfolio

Node4 said the acquisition would bolster its standing with security-sensitive customers

Node4 said the acquisition would bolster its standing with security-sensitive customers

Cloud and datacentre services provider Node4 acquired Premier IT Networks, a London-based datacentre and communications specialist, for an undisclosed sum this week.

Premier IT Networks offers cloud services to a number of government departments and is one of the few specialised suppliers certified by the UK government to host data classified as ‘Restricted’ (‘Secret’ under the new classification scheme).

“Like Node4, our sights are firmly set on future growth. The acquisition by Node4 will enable us to increase the quality and range of services that we can offer to our cloud customers, which will put us in an excellent position to fulfil our growth potential,” said Peter Bodley-Scott, sales and marketing director at Premier IT Networks. “We felt that Node4 was a perfect fit for us in every respect, sharing our ethical approach to business, cultural values and service ethos.”

Node4 said the move, which will see Premier IT Networks fully absorbed by Node4, would bolster its global reach and strengthen its ability to support security-sensitive industry verticals including government and the legal services sectors.

Andrew Gilbert, chief executive officer at Node4 said: “The Node4 management team is committed to expanding its presence across the UK, as well as its service portfolio, to support the company’s ambitious growth plans. This latest acquisition strengthens our London presence, as well as bringing valuable sector expertise, which will enable us to grow our presence in the legal, not-for-profit and public sectors. Equally importantly, we are gaining a team of IT experts who share our values and customer-centric approach to business.”

Asia Pacific, Cyber CSF, Datacentre, Indonesia, M&A, News & Analysis, NTT Com

NTT Com buys Cyber CSF to boost Indonesian datacentre presence

NTT Com's newest datacentre in Jakarta, Indonesia

NTT Com’s newest datacentre in Jakarta, Indonesia

NTT Communications announced it has reached an agreement to acquire PT. Cyber CSF, one of Indonesia’s largest datacentre and cloud service providers, for an undisclosed sum.

Headquartered in Jakarta, Cyber CSF was founded in 2012 and with 2,800 racks in 7,700 square metres claims to be the country’s largest datacentre operator. NTT Com plans to rename Cyber CSF as NTT Indonesia Nexcenter.

The company’s carrier-neutral facility links up to 32 domestic and overseas fibre operators and will also help NTT Com add another point of presence for its Arcstar VPN service, which it plans to do in October this year.

NTT said it wants to position itself in front of what the company sees as an impending boom in the regional cloud market.

Indonesia is one of the world’s largest countries and according to IDC the Indonesian ICT market is expected to average about 10 per cent annual growth through 2017, exceeding growth rates in most other Southeast Asian countries.

Additionally, the company expects new legislation in the region to influence more financial services companies to outsource their datacentre operations and move more of their systems to the cloud.

The company has in recent months looked to bolster its datacentre presence globally. In April this year the company’s American subsidiary completed a merger with Verio (after acquiring it 15 years ago), and in March bought a majority stake in one of Germany’s largest datacentre operators, e-shelter.

Compose, Database, Derek Schoettle, IBM, Kurt Mackey, M&A, News & Analysis, NewSQL, NoSQL

IBM buys Compose to strengthen database as a service

IBM has acquired Compose, a DBaaS specialist

IBM has acquired Compose, a DBaaS specialist

IBM has acquired Compose, a database as a service provider specialising in NoSQL and NewSQL technologies.

Compose helps set up and manage databases running at pretty much any scale, deployed on all-SSD storage. The company’s platform supports most of the newer database technologies including MongoDB, Redis, Elastisearch, RethinkDB and PostgresSQL and is deployed on AWS, DigitalOcean and SoftLayer.

“Compose’s breadth of database offerings will expand IBM’s Bluemix platform for the many app developers seeking production-ready databases built on open source,” said Derek Schoettle, general manager, IBM Cloud Data Services.

“Compose furthers IBM’s commitment to ensuring developers have access to the right tools for the job by offering the broadest set of DBaaS service and the flexibility of hybrid cloud deployment,” Schoettle said.

Kurt Mackey, co-founder and chief executive of Compose said: “By joining IBM, we will have an opportunity to accelerate the development of our database platform and offer even more services and support to developer teams. As developers, we know how hard it can be to manage databases at scale, which is exactly why we built Compose –to take that burden off of our customers and allow them to get back to the engineering they love.”

IBM said the move would give a big boost to its cloud data services division, where it’s seeing some solid traction; this week the company said its cloud data services, one of its big ‘strategic imperatives’, saw revenues swell 30 per cent year on year. And according to a report cited by the IT incumbent and produced by MarketsandMarkets, the cloud-based data services market is expected to swell from $1.07bn in 2014 to $14bn by 2019.

This is the latest in a series of database-centric acquisitions for IBM in recent years. In February last year the company acquired database as a service specialist Cloudant, which built a distributed, fault tolerant data layer on top of Apache CouchDB and offered it as a service largely focused on mobile and web app-generated data. Before that it also bought Daeja Image Systems, a UK-based company that provides rapid search capability for large image files spread over multiple databases.

Adallom, M&A, Microsoft, Middle East, News & Analysis

Microsoft buys Islraeli security startup Adallom for $320, plans Israel cybersecurity centre – report

Microsoft has reportedly acquired Adallom for $320m in a cloud security push

Microsoft has reportedly acquired Adallom for $320m in a cloud security push

Microsoft has apparently added Israeli cloud security startup Adallom to its arsenal, with multiple reports claiming the software company paid nearly $320m for the firm. The reports also suggest Microsoft is planning to open a cyber security centre in the region using some of the local talent it has acquired.

Adallom has not confirmed the acquisition, while Microsoft spokespeople told BCN that the company has “nothing to share” about the reports.

Adallom (an abbreviation of the Hebrew saying “ad halom,” which means “up to here” or “the last line of defence”) is a security service that integrates with the authentication chain of a range of SaaS applications and lets IT administrators monitor usage for every user on each device.

The software works with a conjunction of end-point and network security solutions and has a built-in, self-learning engine that analyses user activity on SaaS applications and assesses the riskiness of each transaction in real-time, alerting administrators when activity becomes too risky for an organisation given its security policies.

The company, which has its headquarters in California and a research and development outfit in Israel, was founded by cybersecurity veterans Assaf Rappaport, Ami Luttwak and Roy Reznik in 2012.

The acquisition, first reported by Israeli business paper Globes, comes over half a year after its last security purchase; according to that report Microsoft plans to put Adallom and a number of other Israeli startups at the core of a new cybersecurity centre in Israel, a thriving hub from cybersecurity startups.

In November last year Microsoft ended months of speculation when it confirmed it bought another Israel-based security startup, Aorato, which offered software that tracks user behaviour when accessing applications linked to Active Directory, both in the cloud and on premise.

Bluefin, consultancy, HANA, James Appleby, Krishnakumar Natarajan, M&A, Mindtree, News & Analysis, SAP

IT consultancy Mindtree buys Bluefin to bolster SAP expertise

Mindtree has acquired Bluefin to bolster its SAP cred

Mindtree has acquired Bluefin to bolster its SAP cred

Mindtree has acquired Bluefin Solutions, an IT consultancy with particular expertise in SAP software, for an undisclosed sum. Krishnakumar Natarajan, chief executive and managing director of  Mindtree told BCN the move will help boost its European presence and its competencies around IoT, in-memory computing, and mobile.

Headquartered in the UK, Bluefin delivers a range of IT consultancy services with a specialisation in SAP technology, and Natarajan said the acquisition will bolster its reach in traditional European enterprises and public sector organisations, and create opportunities to bring its HANA cloud expertise to the US.

“SAP is not only a powerhouse of innovation, it is the commercial backbone of many of the largest global enterprises,” Natarajan said. “Mindtree and Bluefin can now offer unique integrated front-end, back-end and support services with unrivalled expertise on a global scale. This is essential to truly global organisations looking to use technology to digitize the entire value chain.

James Appleby, group chief executive of Bluefin Solutions told BCN that while its clients continue to look to it for expertise in many traditional areas where SAP has some tech leverage – BI, EPM, CRM, trade investment solutions – its clients are increasingly looking to take those platforms to the cloud, a strong growth area for the company.

“One of our most interesting client-observations is in the UK Public Sector, where the coincidental timing of government cut backs and the maturing of new technologies has been a disruptive force of innovation, particularly around citizen engagement, willingness to share and the opportunities offered by cloud,” he said.

“We certainly see an increased uptake of SaaS solutions in large enterprises with C4C really only taking off in the last 12 months in a meaningful way.  IaaS is now the default choice in many organisations for non-productive solutions and the decisions organisations are taking regarding HANA will increase the uptake of IaaS both as a platform for productive and non-productive use.”

He explained SAP’s HANA Enterprise Cloud had some teething problems at first, which wasn’t helped by the way the firm priced its consumption-based licensing, but that its PaaS – HANA Cloud Platform – remains massively underexploited in today’s market.

“Currently we are seeing it being used to extend SaaS applications but it is a powerful modern platform which could deliver much more for clients in terms of value,” he said.

Bob Stutz, Field service management, FieldOne, M&A, Microsoft, News & Analysis

Microsoft buys FieldOne in field service management software play

Microsoft has acquired FieldOne to strengthen its Dynamics CRM offering

Microsoft has acquired FieldOne to strengthen its Dynamics CRM offering

Microsoft has acquired field service management FieldOne Systems in a move aimed at complementing its Dynamics CRM customer service capabilities.

The cloud-based field service management software is already built on Microsoft technology on the back and front-end (Dynamics CRM), making integration with Office 365 somewhat more straightforward than it would be otherwise.

“Their industry-leading solution specializes in delivering a full set of capabilities that include work order management, automated scheduling, asset contract, inventory and procurement management, workflow capabilities and mobile collaboration – providing enterprises with a comprehensive modern field service solution,” explained Bob Stutz, corporate vice president of Microsoft Dynamics CRM.

“FieldOne is a great fit for Dynamics CRM adding to our extensive customer service capabilities – which includes chat, knowledge management and self-service functionality from Parature which we acquired in January of 2014.  Like Parature, FieldOne is offered to customers as a cloud service. It’s built on Microsoft technology for fast integration, it already works great with other Microsoft productivity offerings like Office 365 and SharePoint, and has cross-platform capabilities meaning it can work on different devices enhancing the mobile experience which is so critically important in field service management.”

Microsoft said the FieldOne acquisition is a “major step” towards helping it round off its customer services software portfolio. The move is reminiscent of a similar acquisition made last year by Oracle when the database and ERP giant bought TOA technologies, which it rolled into its Service Cloud offering.

Datacentre, Digital Realty, M&A, News & Analysis, Telx

Digital Realty to double datacentre footprint with Telx acquisition

Digital Realty is acquiring Telx to bolster its US datacentre footprint

Digital Realty is acquiring Telx to bolster its US datacentre footprint

Digital Realty is to acquire cloud and colocation solutions specialist Telx for $1.9bn in a move the company said would double its datacentre footprint in the US.

Telx is a direct competitor of Equinix and offers a combination of interconnection, cloud and colocation services to enterprises and IT service providers and as of March this year the company managed 1.3 million square feet in 20 facilities across the US – 11 of which are already being leased from Digital Realty.

“This transformative transaction is consistent with our strategy of sourcing strategic and complementary assets to strengthen and diversify Digital Realty’s datacentre portfolio and expand our product mix and presence in the attractive colocation and interconnection space,” said William Stein, Digital Realty’s chief executive officer.

“Telx’s well-established colocation and interconnection businesses provide access to two rapidly-growing segments with long-standing customer relationships in top-tier metropolitan areas such as New York and Silicon Valley.”

“The fact that more than half of Telx’s 20 facilities are run out of Digital Realty properties further highlights the strategic fit as well as the potential incremental revenue opportunities we expect to be able to pursue as one company on a global basis.  This transaction advances our objective of ensuring that Digital Realty’s suite of products and services is able to best serve our customers’ current and future datacentre needs,” Stein added.

Chris Downie, chief executive officer of Telx said: “The combination of Telx’s colocation and interconnection capabilities with Digital Realty’s expansive wholesale platform provides greater flexibility and optionality for our customers and creates a global solutions provider covering wholesale customer applications and smaller performance-oriented deployments in select high-growth urban submarkets across the US.”

The transaction is due to close later this year.

Cisco, M&A, MaintenanceNet, Telco Cloud, telecoms

Cisco to buy MaintenanceNet for $139m to bolster telecoms strategy

Cisco is buying MaintenanceNet for $139m

Cisco is buying MaintenanceNet for $139m

Cisco is looking to buy data analytics and business process automation specialist MaintenanceNet for $139m, the company announced this week. The networking giant said the move will help its partners capture more revenue from contract renewals, and may help strengthen its telecoms strategy.

MaintenanceNet offers data analytics and software that helps automate and manage the customer contract renewal process. It uses data analytics to aim special offers and new services at existing customers that are up for contract renewal in an automated fashion.

“This helps Cisco partners capture high-volume and low-dollar sales opportunities that may risk being overlooked. This streamlined process enables services contract opportunities to be pursued quickly and efficiently,” explained Debbie Dunnam, senior vice president of worldwide services sales at Cisco.

“MaintenanceNet will be joining Cisco’s Global Customer Success (GCS) organisation, a group dedicated to improving customer engagement and delivering a coordinated, end to end experience to our partners and customers. This acquisition is a critical component of our strategy for GCS to simplify and digitize our business processes.”

The move comes less than two weeks after Cisco paid $635m for OpenDNS, a move intended to strengthen its security services portfolio – with a particular view towards offering IoT-focused network security services.

Cisco said the MaintenanceNet purchase will enable it to further facilitate its partners’ businesses, and a segment one can imagine these kinds of capabilities being particularly relevant is telecoms, where Cisco has been working to make inroads with it Intercloud strategy – and where its business has struggled the most in recent quarters.

Telcos depend heavily on driving revenue growth through both new subscriptions and up-selling existing subscribers, not to mention keeping the subscriber attrition rate low, so anything Cisco can offer to help its partners (and itself, particularly as it goes to market with its own cloud services) achieve these goals will be a strategic imperative.