Cloud and SaaS market into technology mergers and acquisitions fastest growing segment

Last year, mergers and acquisitions of technology companies around the world were particularly depressing, with prices falling and the volume more balanced. But there is a "beacon of hope", according to a recent report: Cloud computing and software as services, the fastest-growing segment in 2012, three times times the year before.

The total number of mergers and acquisitions (M&A) in the cloud and software as a service (SaaS) market was 450-500 transactions, or 15% of the total technology mergers and acquisitions announced in 2012, as a result of the London accounting and professional services company Ernst & Young, The company recently released its global Technology M&a update: October 2012 to December and annual review reports. In the fourth quarter of 2011, five consecutive high-priced mergers and acquisitions took place.

"You've started to see about more than 1 billion dollars of SaaS and cloud trading per quarter," said Joe Steger, director of trade advisory services at Ernst & Young, who is "really showing the destructive power of Cloud and SaaS." ”

Oracle paid 1.9 billion dollars for SaaS provider Taleo in February, Taleo focused on human resources specialist management software. SAP AG signed the largest cloud transaction of the year in May, with a turnover of 4.5 billion dollars, which acquired Ariba, a cloud-based sourcing software provider. At the end of the third quarter of August, IBM followed Oracle's footsteps to receive Kenexa, a SaaS provider focused on recruiting and talent management software, with a turnover of 1.3 billion dollars. Oracle made another push in December, with a 956 million dollar hand hook for the market automation SaaS provider Eloqua.

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

"If you think of software as a service and a cloud, these are very new parts, and not many big vendors can do this mega-scale deal," Steger said. ”

As with any new trend in technology, mergers will continue, he added. Cisco March 25 announced plans to buy Solvedirect, a Vienna manufacturer and service ibid, focusing on cloud-based IT service management software that has yet to reveal the turnover. Also in March, Google acquired a Web application server start-up, Talaria, but accelerated its cloud platform strategy. SaaS giant Salesforce.com in February quietly acquired a French start-up company, Entropysoft, which offers content-integration software. In March Salesforce also announced the amount of funding for its future acquisitions.

"It's hard to believe that Salesforce and Google are now the ' traditional ' cloud companies that make these technology acquisitions," he said. "Thus, it may not be a traditional definition of consolidation, but more determined vendor participants will need to acquire these technologies in the future." ”

Although all transactions revolve around the cloud, the total value of all deals in the technology market has changed from 2011 to 2012 to 35% and the price has dropped from $175.7 million to $114.1 million. Last year at least 1 billion of the turnover also allowed the market to shrink further, 2011 was 63%, 2012 trading value of 45%.

As with the rest of the market, the technical part is too stupid to feel confident about bigger deals because of persistent economic uncertainty, Steger said. Instead, companies pursue smaller and more strategic acquisitions.

"Last year we all went through the eurozone crisis, the presidential election, the fiscal cliff and all the comments on the sluggish economic growth," he said, "which has curbed buyers ' access to the big-personality deals." ”

It is premature to say how much the 2013 will change. Ernst and Young released a barometer of capital confidence in October, and the report showed that 45% of the 150 technology operators said buyers had priced their products to customers or that their sellers overestimated their value.