Cloud Computing Sector to Witness More M&A in 2011, PwC Report

Cloud Computing Sector to Witness More M&A in 2011, PwC Report

The rush for cloud-based technology solutions and development of virtualization and security technologies will fuel growing interest in cloud computing during 2011 and a new wave of mergers and acquisitions (M&A) is expected, a recent report by PwC revealed. Cost savings opportunities and growing confidence in cloud computing are the driving force behind a new technology trend; namely, switching to cloud-based solutions by large and small and medium enterprises alike.

Companies now have more confidence in security provided by the cloud and a growing number of businesses are migrating to the cloud to host their data and applications while a growing number of cloud start-ups are entering this lucrative market. For their part, larger players want to retain their market positions and one of the methods is to aggressively acquire smaller cloud computing companies. Cincinnati Bell and Montagu Private Equity paid double digit EBITDA multiples for CyrusOne and Host Europe Group, PwC said, adding that these deals look moderate compared with the prices paid by HP and Dell in the data storage space.

More high quality assets are now being brought to market as sellers seek to take advantage of the presence of cash-rich corporates with a renewed appetite for mega-deals, a resurgence of private equity buyers and improving capital markets. We are seeing a change in deal dynamics as appetite returns. The number of pre-emptive deals is on the rise with buyers originating deals rather than competing in traditional auction processes. Growth is firmly back on the corporate M&A agenda,” Andy Morgan, partner at PwC, said in a press release.

Technology Sector Top 10 Global Deals 2010 In Euro’s

Jan 10 – 5,481m – Sun Microsystems acquired by Oracle Corp
Jul 10 – 5,595m – Sybase Inc acquired by SAP AG
Feb 10 – 5,536m – Affiliated Computer Services acquired by Xerox Corp
Apr 10 – 2,798m – Renesas Technology Corp acquired by NEC Electronics Corp
Oct 10 – 2,457m – Dimension Data Holdings plc acquired by NTT
Apr 10 – 2,127m – 3Com Corp acquired by Hewlett-Packard
Sep 10 – 1,837m – 3PAR Inc acquired by Hewlett-Packard
Oct 10 – 1,687m – Intergraph Corp acquired by Hexagon AB
May 10 – 1,516m – Skillsoft plc acquired by Berkshire Partners, Advent and Bain Capital
Nov 10 – 1,466m – Netezza Corp acquired by IBM

Source: PwC

According to the report, about 393 technology sector M&A deals worth EUR 75.5 billion were finalized in 2010 compared to deals worth EUR 36.8 billion in 2009. US companies emerged as global leaders last year, accounting for 39 percent of all global deals. Companies in Asia Pacific accounted for 28 percent of overall technology sector transactions while European business was involved in only 25  percent of all M&A deals. However, European technology companies accounted for just 17 percent of all deals in 2009, hence their involvement in global IT deals rose significantly in 2010.

Mobile applications are another sector which is expected to witness a wave of consolidation, being traditionally more fragmented that other IT sectors, the report said. Advertising, payments, messaging, gaming and content are areas where mobile applications gain momentum and attract attention from big market players as smart phones are gaining market share. Google and Apple acquired advertising vendors in 2010 and now compete for a leading role in mobile payments which is an extremely fast developing market.

In general, we can expect to witness more mergers and acquisitions in the cloud computing sector in 2011 with several major deals already under way while rumors are a number of start-ups are in talks to be acquired by leading market players. Google Inc. will most probably preserve its buying spree and appetite for successful start-ups while other major players will also continue to broaden their service range which will force them to acquire competitors in the small and medium enterprises segment in order to offer a full range of Cloud services.

By Kiril Kirilov

Sorry, comments are closed for this post.

Technology Comics

The Lighter Side Of The Cloud – Connection
The Lighter Side Of The Cloud – Data Storms

Popular Archives

Cloud Infographic: Corporate IT Security Stats

Cloud Infographic: Corporate IT Security Stats

Cloud Infographic: Corporate IT Security Stats Each week on CloudTweaks we provide a few shoutouts to companies who provide engaging and interesting infographics that reflect our readers interests.  In this case, we have an excellent infographic provided by the team at arellia.com which takes a closer look at cyber-security and some of the biggest malware threats…

5 Ways CIOs Can Tackle Cloud Fears

5 Ways CIOs Can Tackle Cloud Fears

5 Ways CIOs Can Tackle Cloud Fears  CIOs are tired of hearing about cloud computing concerns. They’ve spent years reading about how cloud resources are subject to risks, and wonder – what can they do to help people trust the cloud?  The truth is that despite being a hot issue for years, the topic of…

Recent

New Cloud Security Certification In A Maturing Industry

New Cloud Security Certification In A Maturing Industry

New Cloud Security Certification Cloud security certification is getting a new dimension. At the RSA conference earlier this month the Cloud Security Alliance (CSA) and (ISC)² announced a new cloud security certification: Certified Cloud Security Professional, or CCSP for short. (ISC)² is most famous for its flagship certification: Certified Information Systems Security Professional or CISSP.…

Using Mobile Technology To Price, Quote and Engage Customers

Using Mobile Technology To Price, Quote and Engage Customers

Using Mobile Technology To Price, Quote and Engage Customers To remain competitive in the e-commerce age, companies are starting to recognize that one price does not fit all, and in fact, the marketplace demands a great deal of versatility. Individual consumers have experienced this when dealing with sophisticated B2C retailers such as Amazon, a company…

The Lighter Side Of The Cloud – New Responsibilities

The Lighter Side Of The Cloud – New Responsibilities

By Al Johnson Are you looking to supercharge your Newsletter, Powerpoint presentation, Social media campaign or Website? Our universally recognized tech related comics can help you. Contact us for information on our commercial licensing rates.  About Latest Posts kiril Latest posts by kiril (see all) Cisco Survey: The Mobile Cloud Office Generation – September 26,…

NEWS

Smartphone Security More Important Than Ever Thanks To NFC Implants

Smartphone Security More Important Than Ever Thanks To NFC Implants

Smartphone Security More Important Than Ever When was the last time you spared a thought as to whether or not your smartphone is secure enough? Chances are, your security system doesn’t extend beyond a simple lock screen pattern or password. But it should. In fact, the security of your smartphone should be one of your…

Cloud Security Hottest Issue At RSA

Cloud Security Hottest Issue At RSA

Cloud Security Hottest Issue The integral integration of cyber security and cloud technology seemed to be the hottest issue at the busy RSA 2015 Conference in San Francisco. Interested parties packed security and cloud service booths for the duration of the conference. Several prominent publications covered the increased importance of securing their private information that’s…

Technology Sponsors

hp Logo CityCloud-PoweredByOpenstack-Bluesquare_logo_100x100-01
cisco_logo_100x100 vmware citrix100
Site 24x7 200px-KPMG

Established in 2009, CloudTweaks is recognized as one of the leading influencers in cloud computing, big data and internet of things (IoT) information. Our goal is to continue to build our growing information portal, by providing the best in-depth articles, interviews, event listings, whitepapers, infographics and much more.

CloudTweaks Comic Library

Advertising