Archivo de la categoría: acquisition

acquisition, data centre, Datacentre, Equinix, News & Analysis, Telecity

Equinix makes $874m data centre deal to keep EC happy

Equinix has announced the sale of eight data centres across Europe to Digital Realty Trust for approximately $874 million, reports Telecoms.com.

The deal forms part of a trade-off with competition authorities, as part of the agreement to acquire Telecity which was completed in January. For the acquisition to be accepted by the European Commission, eight data centres had to be relinquished by Equinix, which have now been confirmed as:

Recently acquired Telecity assets:

  • Bonnington House (London)
  • Sovereign House (London)
  • Meridian Gate (London)
  • Oliver’s Yard (London)
  • Science Park (Amsterdam)
  • Amstel Business Park I (Amsterdam)
  • Lyonerstrasse (Frankfurt)

Existing Equinix assets:

  • West Drayton data centre in London

The $3.8 billion acquisition of Telecity added 34 data centres to the Equinix portfolio, and more than doubled the company’s footprint in Europe. Equinix claims it is now the largest retail colocation provider in Europe and globally. Through the deal, Equinix opened up new markets in Dublin, Helsinki, Istanbul, Manchester, Sofia, Stockholm, and Warsaw, now totalling 145 IBX data centre facilities in 40 markets worldwide.

“Equinix’s acquisition of TelecityGroup added critical network and cloud density to better serve our global customers,” said Steve Smith, CEO at Equinix. “Completing this last milestone in the acquisition process paves the way for us to focus fully on helping our enterprise customers leverage our highly interconnected, global data centers for accelerated business performance and innovation.

“Additionally, the purchase of the Paris facilities is an important step in managing our real estate portfolio and ensuring we have the ability to add more capacity in this key market in the future.”

acquisition, Financing, LinkedIn, Microsoft, News & Analysis, Social

SEC filing shows LinkedIn negotiating skills are worth $5bn

Microsoft To Layoff 18,000The US Securities and Exchange Committee has released its filings outlining the road to Microsoft’s acquisition of LinkedIn, during which $5 billion was added to the value of the deal, reports Telecoms.com.

Five parties were involved in the saga, which eventually led to the news breaking on June 13, with Microsoft agreeing to acquire LinkedIn in an all-cash deal worth $26.2 billion. Although it has not been confirmed by the companies themselves according to Re/code Party A, which kicked the frenzy, was Salesforce. Party B was Google, which was also interested in pursuing the acquisition.

Party C and Party D were contacted by LinkedIn CEO Jeff Weiner to register interest however both parties declined after a couple of days consideration. Party C remains unknown, though Party D is believed to be Facebook, who even if had shown interest in the deal, may have faced a tough time in passing the agreement by competition authorities.

In terms of the timeline, a business combination was first discussed by Weiner and Satya Nadella, Microsoft’s CEO during a meeting on February 16, with Party A being brought into the frame almost a month later on March 10. Salesforce CEO Marc Benioff has confirmed several times in recent weeks his team were in discussions with LinkedIn regarding the acquisition. In the following days, Party B was brought into the mix, also declaring interest. Once the interest of Party A and B were understood, Microsoft was brought back into the mix on March 15 with the report stating:

“Mr. Weiner called Mr. Nadella to inquire as to whether Microsoft was interested in discussing further a potential acquisition of LinkedIn, and explained that, although LinkedIn was not for sale, others had expressed interest in an acquisition. Mr. Nadella responded that he would discuss the matter further with Microsoft’s board of directors.”

Prior to the agreement LinkedIn was valued at roughly $130 per share, with the initial offer recorded at $160. Microsoft eventually paid $196 per share, though this was not the highest bid received. The company referred to as Party A in the document put an offer forward of $200 per share, though this would be half cash and half shares in the company. Weiner negotiating skills have seemingly added approximately 50% to the value of LinkedIn shares and bumping up the total value of the deal by $5 billion.

The exclusivity agreement was signed on May 14, though pressure had been put on LinkedIn by both Microsoft and Party A in the weeks prior. It would appear Party A had not been deterred by the agreement, as additional bids were made, once again driving up the perceived value of LinkedIn shares. Microsoft’s offer of $182 was no longer perceived high enough, and encouraged to match Party A’s offer of $200. The report states LinkedIn Executive Chairman Reid Hoffman was in favour of an all cash deal, allowing Microsoft extra negotiating room. Nadella was eventually informed on June 10 the offer had been authorized by the LinkedIn Transactions Committee.

Although Microsoft could be seen to overpaying on the price, it would be worth noting LinkedIn has been valued at higher. The company initially launched its IPO in 2011 and had a promising year in 2013 increasing the share price from $113.5 to over $200 across the 12 month period. Share prices rose to over $250 last November, following quarterly results in February, share prices dropped 44% after projected full-year revenues at $3.6 billion to $3.65 billion, versus $3.9 billion expected by analysts. Considering the fall in fortunes, it may be fair to assume shareholders would be pleased with the value of the deal approaching $200 per share.

While Microsoft has been a relatively quiet player in the social market prior to the acquisition, though this could be seen as a means to penetrate the burgeoning market segment. Although the place of social media in the workplace remains to be seen, Microsoft has essentially bought a substantial amount of data, including numerous high-net worth individuals and important decision makers throughout the world. LinkedIn currently has roughly 431 million members and is considered to be the largest professional social media worldwide.

Another explanation for the deal could be the value of Microsoft to IT decision makers. A report from JPMorgan stated Microsoft would be considered the most important vendor by CIOs to their organization due to the variety of services offered. AWS is generally considered to be the number one player in the public cloud market, though Microsoft offers a wider range of enterprise products including servers, data centres, security solutions, and cloud offerings, amongst many more. Now social can be added to the list. As Microsoft increases its offerings, it could penetrate further into a company’s fabric, making it a much more complicated decision to change vendor.

acquisition, Cisco, cyber security, News & Analysis

Cisco cracks open wallet for $293m CloudLock acquisition

Cisco corporateCisco has announced its intent to acquire cloud security company CloudLock in a $293 million deal which is expected to close in Q1 2017, writes Telecoms.com.

CloudLock specializes in cloud access security broker (CASB) technology which provides insight and analytics focused on user behaviour and sensitive data in the cloud. The move builds on Cisco’s ‘Security Everywhere’ strategy, its initiative designed to provide protection from the cloud to the network to the endpoint.

“As companies are migrating to the cloud, they need a technology partner that can accelerate that transition and deliver critical security capabilities for all their users, apps and data in a seamless way,” said Rob Salvagno, VP of Cisco Corporate Development. “CloudLock brings a unique cloud-native, platform and API-based approach to cloud security which allows them to build powerful security solutions that are easy to deploy and simple to manage.”

CASB technology is an aspect of cloud security which has caught the attention of a number of decision makers in recent months. When we spoke to Intel Security CTO Raj Samani earlier this month, he told us CASB solutions were set to be one of the largest talking points for the cloud security market segment in the next couple of years.

“Companies will find controls and measures to give them a level of trust in a vendor to ensure they can operate effectively,” said Samani at the time. “CASBs will be one of the biggest trends we’ll see in the next couple of years.”

“CASB is the ultimate business case, because you can do things faster and more efficiently – you can actually but an ROI and a TCO next to it.”

The purpose of CASB solutions is to sit between the cloud provider and cloud consumer to consolidate multiple types of security policies including authentication, single sign-on, encryption, tokenization and malware detection. The CASB solution offers a level of assurance for those customers who have concerns over the security provided by cloud providers themselves, as the concept of secure and risk with vary dependent on the company.

By integrating CASB solutions, a cloud consumer can dictate how many additional layers of security are placed on top of a cloud provider’s offering, to allow the cloud consumer to define their own risk profile. The concept of CASB on the whole could go some way to mitigate the security concerns for those companies who have not currently adopted the cloud for more sensitive workloads.

Aside from this acquisition, Citrix has been bolstering its security capabilities through additional purchases, including Lancope for $452.5 million last December. Lancope helps customers monitor, detect, analyse and respond to modern threats on enterprise networks through continuous network visibility and threat analysis.

Citrix is one of a number of tech giants who have been forced to reconsider their primary focus, as cloud computing continued to increase its grip on IT decision making. During the company’s most recent earnings call, IoT was outlined as a target growth segment, though the security business unit was prominent during the financials, growing 17% year-on-year.

acquisition, cyber security, Intel, McAfee, News & Analysis

Intel reported to be looking for security exit

IntelAlmost six years after purchasing antivirus specialists McAfee, Intel is reported to be in the market to sell off its security arm, according to the FT.com.

Intel has yet to make a comment on the speculation, though those close to the deal expect it to be one of the largest in the security sector to date. The company initially announced the McAfee acquisition in August 2010 for $7.6 billion at a time where the concept of IoT was beginning to gain traction, and the size of the online security challenge was being realized.

“With the rapid expansion of growth across a vast array of Internet-connected devices, more and more of the elements of our lives have moved online,” said Paul Otellini, who was serving as Intel CEO at the time of the acquisition. “In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.”

While the introduction of cloud computing has provided smaller business and entrepreneurs a platform to innovate and challenge the tech giants, Intel are one of a number of organizations who have had to evolve their own proposition to remain relevant in the cloud-enabled world. Back in April, CEO Brian Krzanich outlined the long-term Intel strategy, which was split into five areas; cloud technology, IoT, memory and programmable solutions, 5G and developing new technologies under the concept of Moore’s law. While the security business unit is one of the larger within the Intel portfolio, security was not mentioned in the announcement.

The new strategy intends to move Intel away from the PC market place, as declining sales have continued to impact the business. Despite reporting year-on-year growth of 7% during the last quarterly earnings call, this was not enough to deter the company from announcing 12,000 job cuts, equivalent to 11% of the global workforce.

“Our results over the last year demonstrate a strategy that is working and a solid foundation for growth,” said Krzanich, who is leading the company’s shift away from client computing and towards IoT and the cloud. “The opportunity now is to accelerate this momentum and build on our strengths. These actions drive long-term change to further establish Intel as the leader for the smart, connected world. I am confident that we’ll emerge as a more productive company with broader reach and sharper execution.”

Security is an area which is seemingly gaining traction in the venture capitalist arena, as there have been numerous deals announced in recent months. Blue Coat was acquired by Symantec earlier this month from majority shareholder Bain Capital for $4.65 billion, with Bain Capital agreeing to reinvest $750 million, and Silver Lake committing to an additional investment of $500 million. Vista Equity Partners has also agreed to purchase identify management company Ping Identity for an undisclosed sum.

acquisition, Dell, EMC, M&A, News & Analysis, software

Dell sells software business for $2bn to fund EMC deal

Dell has announced Francisco Partners and Elliott Management have agreed to purchase its software business unit as the company moves towards deadline day for the EMC merger, reports Telecoms.com.

The deal, initially reported by Reuters, will include the Quest Software and SonicWALL assets reportedly for just over $2 billion. Both assets were acquired by Dell in recent years, for a combined total of $3.6 billion, and while this could be seen as a big loss for the company, details of what the transaction will include and what will remain in the Dell business have not been confirmed.

The acquisition represents two growing trends within the industry. Firstly, venture capitalists have been making some notable moves in recent weeks, possibly indicating confidence in backing cloud companies have returned. Vista Equity Partners bought Marketo for $1.8 billion last month, then this followed up with a deal for Ping Identity for $600 million. Thoma Bravo also bought Qlik for $3 billion and Providence Strategic Growth invested $130 million in Logic Monitor recently.

Secondly, Dell is starting to peel back layers of their business. For the most part, this shouldn’t be seen as a particular surprise; an acquisition the size of the one Dell is currently going through requires funding, and there is also likely to be a certain level of crossover between the two business units. Characterising sale of Quest Software and SonicWALL, as well as Dell Services in March, as panic sales could be tempting, though it could also be seen as logical.

Dell’s buy-out of EMC was initially announced in October last year for $67 billion, billed as one of the largest acquisitions in the history of the technology industry. At EMC World this year, the team took the chance to launch the new brand, Dell Technologies, but also outline the integration strategy of the two tech giants. Dell’s Chief Integration Officer Rory Read and EMC’s COO of the Global Enterprise Services business unit Howard Elias highlighted while a reduction in headcount and sales would be limited, it would not be entirely unavoidable; two companies as large as Dell and EMC are naturally going to have crossover.

The sales to Francisco Partners and Elliott Management could be seen as a means to raise capital for the acquisition, this is hardly surprising as it was highly unlikely $67 billion was going to be found down the back of the sofa. The team have not commented on the specifics of the agreement to date, however one thing it does highlight is sales are a necessity to funding one of the largest deals in the history of the technology industry.

acquisition, IoT, Joyent, Mobile, News & Analysis, Public Cloud, Samsung

Samsung acquires containers-cloud company Joyent

Money Tree, Currency, Growth.Samsung has agreed to buy San Francisco based cloud provider Joyent in an effort to diversify its product offering in declining markets, reports Telecoms.com.

Financial for the deal have not been disclosed, however the team stated the acquisition will build Samsung’s capabilities in the mobile and Internet of Things arenas, as well cloud-based software and services markets. The company’s traditional means of differentiating its products have been through increased marketing efforts and effective distribution channels, though the new expertise will add a new string to the bow.

“Samsung evaluated a wide range of potential companies in the public and private cloud infrastructure space with a focus on leading-edge scalable technology and talent,” said Injong Rhee, CTO of the Mobile Communications business at Samsung. “In Joyent, we saw an experienced management team with deep domain expertise and a robust cloud technology validated by some of the largest Fortune 500 customers.”

Joyent itself offers a relatively unique proposition in the cloud market as it runs its platform on containers, as opposed to traditional VM’s which the majority of other cloud platforms run on. The team reckons by using containers efficiency it notably improved, a claim which is generally supported by the industry. A recent poll run on Business Cloud News found 89% of readers found container run cloud platforms more attractive than those on VMs.

While smartphones would now be considered the norm in western societies, the industry has been taking a slight dip in recent months. Using data collected from public announcements and analyst firm Strategy Analytics, estimates showed the number of smartphones shipped in Q1 2016 fell to 334.6 million units from 345 million during the same period in 2015. The slowdown has been attributed to lucrative markets such as China becoming increasingly mature, as well as pessimistic outlook from consumers on the global economy.

As a means to differentiate the brand and tackle a challenging market, Samsung has been looking to software and services offerings, as creating a unique offering from hardware or platform perspective has become next to impossible. In terms of the hardware, the latest release of every smartphone contains pretty much the same features (high-performance camera, lighter than ever before etc.), and for the platform, the majority of the smartphone market operates on Android. Software and services has become the new battle ground for product differentiation.

Last month, the team launched its Artik Cloud Platform, an open data exchange platform designed to connect any data set from any connected device or cloud service. IoT is a market which has been targeted by numerous organizations and is seemingly the focus of a healthy proportion of product announcements. The launch of Artik Cloud puts Samsung in direct competition with the likes of Microsoft Azure and IBM Bluemix, as industry giants jostle for lead position in the IoT race, which has yet to be clarified. The inclusion of Joyent’s technology and engineers will give Samsung extra weight in the developing contest.

The purchase also offers Samsung the opportunity to scale its own scale its own cloud infrastructure. The Samsung team says it’s one of the world’s largest consumers of public cloud data and storage, and the inclusion of Joyent could offer the opportunity to move data in-house to decrease the dependency on third party cloud providers such as AWS.

As part of the agreement, CEO Scott Hammond, CTO Bryan Cantrill, and VP of Product Bill Fine, will join Samsung to work on company-wide initiatives. “We are excited to join the Samsung family,” said Hammond. “Samsung brings us the scale we need to grow our cloud and software business, an anchor tenant for our industry leading Triton container-as-a-service platform and Manta object storage technologies, and a partner for innovation in the emerging and fast growing areas of mobile and IoT, including smart homes and connected cars.”

acquisition, Enterprise IT, Managed services, News & Analysis

Solarwinds acquires LogicNow to form new MSP business unit

Expansion1SolarWinds has completed the acquisition of LogicNow, which it plans to merge with the N-able business unit to create SolarWinds MSP. The new company will now serve 18,000 managed service providers worldwide, managing more than five million end-points and one million mailboxes.

For LogicNow’s General Manager Alistair Forbes combining his company’s expertise with capabilities of SolarWinds was an opportunity to take the business to the next level.

“This acquisition is the culmination of a journey which we’ve been on for the last 12 years,” said Forbes. “We saw the opportunity to combine with SolarWinds and the N-able division, and really shift gears into the next phase of our business. Since N-able was acquired by SolarWinds we’ve really seen them become a much more prominent player in the market.

“If you have a look at opportunity SolarWinds gave N-able, we see this as the best way we can accelerate the growth of the LogicNow business and take it to the next level.”

What is worth noting is that the growth of LogicNow has not hit a glass ceiling, Forbes highlighted the business has grown 40% over the last twelve months, however the association with SolarWinds can open up new doors for the team. While LogicNow is in itself a respected brand in the industry, SolarWinds has made its name as a specialist for enterprise scale organizations. By leaning on the SolarWinds brand, Forbes believes opportunities will be created which would have been significantly harder by taking the organic route.

The SolarWinds MSP business will now focus on a number of areas including remote monitoring and management, security including anti-malware, multi-vendor patch management and web access control, backup and disaster recovery, data analytics and risk and vulnerability assessment, amongst other areas.

First and foremost, the new brand will focus on understanding the technology, expertise and assets which are now available, to both business units. “The immediate focus of the business will be to take the combined assets and see what we can create,” said Forbes. “There will be some areas of overlap and also a few redundancies, but nothing massive. This acquisition is all about putting two and two together to make something bigger.”

For the moment, the LogicNow and SolarWinds N-able brands will continue, though this will be phased out over time. Internally, both units are working to shift the culture from the separate businesses to the SolarWinds MSP mentality, though it is thought the restructuring and integration process will be a relatively simple one. For the most part, there is little overlap, and although certain functions will require redundancies, there are only a couple of offices which would be deemed to clash. Boulder, Colorado is one of those offices, and there will be a requirement to merge into one physical location, though the headcount reduction will be minimized overall, Forbes claims.

acquisition, CRM, eCommerce, Enterprise IT, News & Analysis, Salesforce

Salesforce ventures into e-Commerce with $2.8bn acquisition

Salesforce 1Salesforce has taken another step towards the e-Commerce market after announcing it has signed a definitive agreement to acquire Demandware for $2.8 billion.

Demandware provides a cloud-based e-commerce platform and related services for retailers and brands worldwide, going public during 2012 after raising $88 million in its initial public offering of $16 a share. Salesforce has announced it will commence a tender offer for all outstanding shares of Demandware for $75 per share, with the deal set to complete by July 31, 2016, the end of Salesforce’s second quarter.

As with the Marketing Cloud proposition, Salesforce is seemingly happy to pay healthily above share value to break into new markets when it cannot develop the capabilities organically. The company acquired ExactTarget for $2.5 billion in 2013, this was previously Salesforce’s largest acquisition, which built the foundation of the Marketing Cloud proposition.

“Demandware is an amazing company—the global cloud leader in the multi-billion dollar digital commerce market,” said Marc Benioff, CEO at Salesforce. “With Demandware, Salesforce will be well positioned to deliver the future of commerce as part of our Customer Success Platform and create yet another billion dollar cloud.”

The idea of ‘omnichannel’ business would generally not be considered new to the industry, though this is one of the first major steps Salesforce has made in diversifying its core business offering. The company is widely recognised as a leader in the CRM space, though the Demandware acquisition offers a number of upselling opportunities for its current customer base (those who are using Marketing Cloud and its CRM offering), who may well favour having their CRM and e-Commerce platform from the same vendor.

Demandware currently works with a number of brands around the world including Design Within Reach, Lands’ End, L’Oreal and Marks & Spencer, to deliver customized experiences for customers across web, mobile, social and in the store. The acquisition is expected to increase Salesforce’s revenues by approximately $100 million to $120 million through the remainder of the financial year.

acquisition, Artificial intelligence, Intel, Internet of Things, IoT, Machine learning, News & Analysis

Intel continues to innovate through Itseez acquisition

IntelIntel has continued its strides into the IoT market through the acquisition of Itseez, a computer vision and machine learning company.

Itseez, which was founded by two former Intel employees, specializes in computer vision algorithms and implementations, which can be used for a number of different applications, including autonomous driving, digital security and surveillance, and industrial inspection. The Itseez inclusion bolsters Intel’s capabilities to develop technology which electronically perceive and understand images.

“As the Internet of Things evolves, we see three distinct phases emerging,” said Doug Davis, GM for the Internet of Things Group at Intel. “The first is to make everyday objects smart – this is well underway with everything from smart toothbrushes to smart car seats now available. The second is to connect the unconnected, with new devices connecting to the cloud and enabling new revenue, services and savings. New devices like cars and watches are being designed with connectivity and intelligence built into the device.

“The third is just emerging when devices will require constant connectivity and will need the intelligence to make real-time decisions based on their surroundings. This is the ‘autonomous era’, and machine learning and computer vision will become critical for all kinds of machines – cars among them.”

The acquisition bolsters Intel’s capabilities in the potentially lucrative IoT segment, as the company continues its efforts to diversify its reach and enter into new growth markets. Last month, CEO Brian Krzanich outlined the organizations new strategy which is split into five sections; cloud technology, IoT, memory and programmable solutions, 5G and developing new technologies under the concept of Moore’s law. Efforts have focused around changing the perception of Intel from a PCs and mobile devices brand, to one which is built on a foundation of emerging technologies.

Intel’s move would appear to have made the decision of innovation through acquisition is a safer bet than organic, in-house innovation. There have been a small number of examples of organic diversification; Apple’s iPhone is one example, though the safer bet to move away from core competence is through acquisition.

Intel has dipped its toe into organic diversification, as it attempted to develop a portfolio of chips for mobile devices, though this would generally not be considered a successful venture, similar to Google’s continued efforts to organically grow into social, which could be seen as stuttering. On the contrary, Google’s advertising revenues now account for $67.39 billion (2015), with its platform being built almost entirely on acquisitions. The AdSense and Adwords services have been built and bolstered through various purchases including Applied Semantics ($102 million in 2003), dMarc Broadcasting ($102 million in 2006), DoubleClick ($3.1 billion in 2007), AdMob ($750 million in 2009) and Admeld ($400 million in 2011).

While diversification through acquisition can be seen as the safer, more practical and efficient means to move into new markets, it is by no means a guaranteed strategy. Intel’s strategy could be seen as a sensible option as there are far more examples off successful diversification through acquisition compared to organic growth. The jury is still out on Intel’s position in the IoT market but there are backing the tried and tested route to diversification.

acquisition, IBM, M&A, Merger, Opinion

CIOs look to the cloud for seamless M&A

IBM speaker

Sebastian Krause, General Manager for IBM Cloud Europe

For senior CIOs, knowing how to respond to an M&A and divesture situation is key, as mergers, acquisitions and divestitures are a critical component of business strategy.

Projections for European M&A transactions show total deal values are set to rise from US$621 billion in 2014 to US$936 billion by 2017. M&A activity is likely to be bolstered by continued positive monetary policy, with additional cross-border M&A activity likely to take place as a result of a strong US dollar, primarily in Spain, Germany, and Italy.

Increasingly, businesses are using M&A to grow their organisation, achieve economies of scale, expand product portfolios, globalise and diversify.

In the intense negotiations around this business change, IT operations are likely to face dramatic reorganisation as various stakeholders analyse existing systems and look at the potential for efficiencies.

This is about survival and the IT division is likely to be under intense scrutiny during this period, under pressure to perform critical functions such as the integration or separation of critical systems and data, the provision of an uninterrupted service during the transition period, and the prompt delivery of synergy targets. IT strategy is therefore core to any successful M&A or divestiture plan and a critical contributor to its success or failure.

Increasingly, CIOs are under pressure to meet these challenges quickly and at lower cost. Their ability to do so can even impact the way analysts assess potential deals. IT dependent synergies have been found to be responsible for a large proportion (30 to 60%) of M&A benefits, but 70% of M&As fail to meet their synergy targets in the planned timeframe.

Realising these M&A and divestiture targets for enterprise IT environments is complex and requires a holistic approach that considers public, private, IaaS, PaaS, and SaaS as well as non-cloud delivery models.

Some CIOs may approach the situation by simply making adjustments to the existing IT landscape – from CRM, ERP through to office.

This can involve singling out certain components of an established Enterprise Resource Planning (ERP) system, cloning the existing ERP environment, deploying existing systems into the acquired business asset or transferring data between differing systems with the expectation that no issues with integration will arise. These approaches have certainly worked in the past, but can be costly, challenging to implement and disruptive.

This is why many CIOs are looking at a move towards cloud-based applications and infrastructure, which can take the pain out of the M&A process. Broadly, the drivers for moving to cloud services are increased agility, speed, innovation and lowering costs.

They can help organisations going through mergers and acquisitions to realise synergy benefits more quickly, simplify integration and accelerate the change programme, reduce costs through efficiencies, mitigate costly migration investments and encourage financial flexibility.

Top cloud benefits for M&A:

  • Achieving synergy more quickly: Cloud enabled applications simplify portability, integration and deployment.
  • Lowering costs: The cloud can provide temporary burst capacity for the migration.
  • Increased financial flexibility: Cloud provides a flexible cost model, allowing organisations to easily move between CAPEX and OPEX to impact EBITA and cash flow.
  • Simplifying changes: Cloud simplifies the creation of APIs to hide the underlying complexity of multiple, overlapping systems.
  • When preparing for an M&A or divestiture, it’s worth considering what the future IT model will look like, which APIs are needed to simplify required activities and how applications can be cloud enabled for portability and deployment.

Developing a repeatable platform that delivers these benefits and simplifies M&A activities will greatly improve an organisation’s ability to grow and be successful. It may even open up new opportunities that might not have been possible without the cost, flexibility, and scalability benefits that cloud solutions can deliver.

With businesses already realising real benefits, the cloud’s role in M&A is only set to grow. By building a cloud model that works, organisations can avoid reorganising IT operations for each merger or acquisition and ensure a much more seamless transition.

Through implementing an approach that can speed the execution and success of these deals, CIOs can look to deliver value from the IT department that goes far beyond just support, to true business leadership.

Written by Sebastian Krause, General Manager for IBM Cloud Europe