Lighthouse of Hope: Cloud and SaaS Markets

During the past year, technology companies worldwide mergers and acquisitions are extremely boring, the price drop seems to be more balanced. But in spite of this, there is still a "beacon of hope" in the market. According to a study published some time ago: cloud computing and software as a service were the fastest growing segments in volume in 2012, trading three times the previous year .

M & A in the Cloud and Software as a Service (SaaS) markets totaled 450-500 transactions, or 15% of the total number of technology mergers and acquisitions announced in 2012, based in London Ernst & Young, an accounting and professional services company, recently unveiled its global technology M & A update: October-December 2012 and annual review. In the fourth quarter of 2011, five consecutive high-price mergers and acquisitions took place.

"You've started to see about $ 1 billion in SaaS and cloud deals on a quarterly basis," said Joe Steger, Ernst & Young director of hands-on technology industry advisory services. "It really shows the destructive power of cloud and SaaS."

In February, Oracle paid 1.9 billion U.S. dollars for SaaS provider Taleo, which specializes in HR specialist management software. SAP AG signed the largest cloud deal of the year in May with a turnover of $ 4.5 billion and acquired Ariba, a cloud-based sourcing software provider. At the end of the third quarter, IBM took over Kenexa following Oracle's footsteps, a SaaS provider focused on hiring and talent management software with a turnover of $ 1.3 billion. Oracle again made headway in December, hooking Eloqua, the market-automation SaaS provider, to $ 956 million.

The price tags for these deals are somewhat unusual for such a young cloud market, Steger said.

Steger said: "If you think of software as a service and the cloud, these are very new parts, then not many large manufacturers to carry out such large billion-million transactions."

As with any new trend in the technology market, the merger will continue, he added. Cisco announced on March 25 that it plans to acquire SolveDirect, a Vienna-based manufacturer and service provider that focuses on cloud-based IT service management software and has not yet revealed its turnover. Also in March, Google acquired Talaria, a start-up for Web application servers, without disclosing the deal, but it accelerated its cloud-platform strategy. SaaS giant Salesforce.com quietly acquired EntropySoft, a French start-up, in February, which offers content-integrated software. Salesforce also announced in March its financing of future acquisitions.

"It's hard to believe that Salesforce and Google are now 'traditional' cloud companies that make these technology acquisitions," he said. "So it may not be the traditional definition of consolidation, but more certain vendor needs need to be in the future Get these technologies. "

Although all transactions are geared to the cloud, the total value of all transactions in the technology market has been 35% from 2011 to 2012 and the price has dropped from $ 175.7 million to $ 114.1 million. Last year, the turnover of at least one billion also allowed the market to further narrow the 63% in 2011, the transaction value in 2012 was 45%.

As with the rest of the market, technology partly feels too stupid because of ongoing economic uncertainty that the idea of ​​greater confidence in bigger deals is too stupid, Steger said. Instead, companies pursue smaller and more strategic acquisitions.

"Last year we all experienced the Eurozone crisis, the presidential election, the fiscal cliff, and all the comments we had on the downturn in economic growth," he said. "All these have deterred buyers from getting into big, individualized deals."

It is too early to say how much change will take place in 2013. Ernst and Young released the Barometer of Capital Confidence in October, reporting that 45% of 150 tech execs said that buyers underestimated the value of their products to customers or their sellers.