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.

Comic
Fintech Systems, Advancements and Investments

Fintech Systems, Advancements and Investments

Fintech Growth According to a recent report, global investment in fintech companies including both venture-backed and non-venture-backed businesses reached $9.4 billion in the second quarter of 2016; investment in venture capital-backed fintech startups, however, fell by 49%. Nevertheless, the Pulse of Fintech, published jointly by KPMG International and CB Insights, suggests venture capital investment in…

How Identity Governance Can Secure The Cloud Enterprise

How Identity Governance Can Secure The Cloud Enterprise

Securing The Cloud Enterprise Cloud adoption is accelerating for most enterprises, and cloud computing is becoming an integral part of enterprise IT and security infrastructure. Based on current adoption trends, it’s clear that the vast majority of new applications purchased by organizations will be SaaS applications. The allure is evident, from cost savings to speed…

Significant Emerging Technologies To Lookout For In 2017

Significant Emerging Technologies To Lookout For In 2017

Emerging Technologies The entire world is being transformed right before our eyes. Emerging technologies are developing at break-neck speeds, and the global community needs to be prepared for what lies in the horizon. As with anything new or evolving there is benefit versus risk to consider. Most of the up-and-coming technologies that will soon affect…

In The Fast Lane: Connected Car Hacking A Big Risk

In The Fast Lane: Connected Car Hacking A Big Risk

Connected Car Hacking Researchers and cybersecurity experts working hard to keep hackers out of the driver’s seat. Modern transportation has come a million miles, and most all of today’s vehicles are controlled entirely by digital technology. Millions of drivers are not aware that of the many devices in their digital arsenal, the most complex of…

Having Your Cybersecurity And Eating It Too

Having Your Cybersecurity And Eating It Too

The Catch 22 The very same year Marc Andreessen famously said that software was eating the world, the Chief Information Officer of the United States was announcing a major Cloud First goal. That was 2011. Five years later, as both the private and public sectors continue to adopt cloud-based software services, we’re interested in this…

Achieving Network Security In The IoT

Achieving Network Security In The IoT

Security In The IoT The network security market is experiencing a pressing and transformative change, especially around access control and orchestration. Although it has been mature for decades, the network security market had to transform rapidly with the advent of the BYOD trend and emergence of the cloud, which swept enterprises a few years ago.…

Digital Transformation: Not Just For Large Enterprises Anymore

Digital Transformation: Not Just For Large Enterprises Anymore

Digital Transformation Digital transformation is the acceleration of business activities, processes, and operational models to fully embrace the changes and opportunities of digital technologies. The concept is not new; we’ve been talking about it in one way or another for decades: paperless office, BYOD, user experience, consumerization of IT – all of these were stepping…

What You Need To Know About Choosing A Cloud Services Provider

What You Need To Know About Choosing A Cloud Services Provider

Selecting The Right Cloud Services Provider How to find the right partner for cloud adoption on an enterprise scale The cloud is capable of delivering many benefits, enabling greater collaboration, business agility, and speed to market. Cloud adoption in the enterprise has been growing fast. Worldwide spending on public cloud services will grow at a…

Are CEO’s Missing Out On Big Data’s Big Picture?

Are CEO’s Missing Out On Big Data’s Big Picture?

Big Data’s Big Picture Big data allows marketing and production strategists to see where their efforts are succeeding and where they need some work. With big data analytics, every move you make for your company can be backed by data and analytics. While every business venture involves some level of risk, with big data, that risk…

Multi-Cloud Integration Has Arrived

Multi-Cloud Integration Has Arrived

Multi-Cloud Integration Speed, flexibility, and innovation require multiple cloud services As businesses seek new paths to innovation, racing to market with new features and products, cloud services continue to grow in popularity. According to Gartner, 88% of total compute will be cloud-based by 2020, leaving just 12% on premise. Flexibility remains a key consideration, and…

Cloud Infographic – Disaster Recovery

Cloud Infographic – Disaster Recovery

Disaster Recovery Business downtime can be detrimental without a proper disaster recovery plan in place. Only 6% of businesses that experience downtime without a plan will survive long term. Less than half of all businesses that experience a disaster are likely to reopen their doors. There are many causes of data loss and downtime —…

Five Cloud Questions Every CIO Needs To Know How To Answer

Five Cloud Questions Every CIO Needs To Know How To Answer

The Hot Seat Five cloud questions every CIO needs to know how to answer The cloud is a powerful thing, but here in the CloudTweaks community, we already know that. The challenge we have is validating the value it brings to today’s enterprise. Below, let’s review five questions we need to be ready to address…

Cloud Computing Offers Key Benefits For Small, Medium Businesses

Cloud Computing Offers Key Benefits For Small, Medium Businesses

Cloud Computing Benefits A growing number of small and medium businesses in the United States rely on as a means of deploying mission-critical software products. Prior to the advent of cloud-based products — software solutions delivered over the Internet – companies were often forced to invest in servers and other products to run software and…

Infographic: IoT Programming Essential Job Skills

Infographic: IoT Programming Essential Job Skills

Learning To Code As many readers may or may not know we cover a fair number of topics surrounding new technologies such as Big data, Cloud computing , IoT and one of the most critical areas at the moment – Information Security. The trends continue to dictate that there is a huge shortage of unfilled…

How Your Startup Can Benefit From Cloud Computing And Growth Hacking

How Your Startup Can Benefit From Cloud Computing And Growth Hacking

Ambitious Startups An oft-quoted statistic, 50% of new businesses fail within five years. And the culling of startups is even more dramatic, with an estimated nine out of ten folding. But to quote Steve Jobs, “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” So while…

Cloud Infographic – The Future (IoT)

Cloud Infographic – The Future (IoT)

The Future (IoT) By the year 2020, it is being predicted that 40 to 80 billion connected devices will be in use. The Internet of Things or IoT will transform your business and home in many truly unbelievable ways. The types of products and services that we can expect to see in the next decade…