The “Cloud” is Causing it to Rain M&A

The 2^nd quarter M&A results are in and Technology M&A is on a tear. The Tech M&A market is up 57% over last year with $52.4 Billion in Global announced M&A in 2Q 2014. What is driving a material chunk of this M&A storm – Cloud Technology/Services. E&Y estimated that 42% of the volume last quarter was directly related to Cloud and Smart Mobility transaction activity.

The business world is changing rapidly leaving even the most technology savvy vendors playing catch up. You only have to look at Microsoft and Oracle to see two leading technology vendors breathlessly trying to catch up to the Cloud/SaaS/Mobile transition taking place in the market. The result of this rapid pace and the need to bring together both leading technology solutions built for today’s infrastructure with a leading team of skilled employees to help deliver the promised solution to clients, has led many firms to look at M&A as their only viable option to compete.

Of the dozen or so $1 billion plus M&A deals last quarter, over three-quarters targeted cloud/Saas businesses and firms linked to the “internet-of-things” trend that is gaining momentum. There is a significant shift taking place in how businesses are seeking to leverage technology, infrastructure (cloud & mobile), and data analytics. The astute vendors are feverishly working to knit together the ideal solution for their clients by using M&A both strategically and tactically to attempt to regain their leadership position and to truly deliver the best solution to their clients.

When we launched Clearsight three years ago, it was predicated on the premise that this convergence across Technology, Services & Data was just beginning to gain traction. Well, the market activity we are seeing and the cross “business model” M&A that is occurring to leverage high-end professional services with technology & data is well underway. We do not expect this trend nor the pace of M&A to abate any time soon. Stay tuned as we share more detail from the front lines of this convergence strategy which is being accentuated by the storm currently surrounding Cloud & Mobile Technology solutions.