Please reload

Recent Posts

What Every Business Should Know About Communications

August 4, 2017

1/10
Please reload

Featured Posts

Tech Mergers and Acquisitions were Big in 2016

January 10, 2017

Investors and Tech Companies Doubled Down in 2016 on Data Center and Cloud

 

Companies placed major bets on cloud, security and the data center in 2016, with six of the year's 10 most important acquisitions for the industry focused around these technology areas. 

 

Vendors, distributors and solution providers spent a total of $133 billion on the year's most significant deals, acquiring more than 230,000 employees from companies delivering a combined $103 billion in annual sales.

 

Five of the acquired entities are based in California's Silicon Valley, three are based in other West Coast locations, and two are headquartered in Massachusetts. Six of the acquisitions were carried out by vendors, one was carried out by a distributor, one was carried out by a solution provider, and two were enacted by entities outside the IT industry.

 

Here's a look back at the 10 deals that were most pivotal to the IT sector.

 

10. Salesforce

 

Company acquired: Demandware

Head count: 800 employees

Annual sales: $237.3 million

Purchase price: $2.8 billion

Deal closed: July 11

 

San Francisco-based cloud powerhouse Salesforce purchased Burlington, Mass.-based Demandware to create a new product line for a new business division: the Salesforce Commerce Cloud.

 

Salesforce said the Commerce Cloud would be an important part of its Customer Success Platform and create opportunities for companies to connect with customers in new ways. Before the acquisition, Salesforce offered software that enabled salespeople to keep track of their customers.

 

Solution providers said the deal will help Salesforce and its partners tap into the e-commerce space, which has been growing rapidly as retailers continue to expand their online presence.

 

9. Tianjin Tianhai

 

Company acquired: Ingram Micro

Head count: 27,700 employees

Annual sales: $43 billion

Purchase price: $6 billion

Deal closed: Dec. 6  

 

Irvine, Calif.-based Ingram Micro was acquired by Chinese logistics firm Tianjin Tianhai, who folded the world's largest IT distributor into affiliated, $29 billion conglomerate HNA Group.

 

Ingram Micro CEO Alain Monie said in November that becoming part of HNA enables the distributor to gain market share in China and invest without being hamstrung by Wall Street.

 

Three of Ingram Micro's top executives have left as part of the acquisition process: President and Chief Operating Officer Paul Read; Chief Financial Officer William Humes; and Executive Vice President, Secretary and General Counsel Larry Boyd. The distributor also turned over much of its board of directors.

 

8. Symantec

 

Company acquired: Blue Coat Systems

Head count: 1,700 employees

Annual sales: $598.3 million

Purchase price: $4.65 billion

Deal closed: Aug. 1

 

Mountain View, Calif.-based Symantec fulfilled the acquisition promises the company made when it became a standalone security vendor earlier this year, bolstering its threat protection, cloud and web security software capabilities with its acquisition of Sunnyvale, Calif.-based Blue Coat Systems.

 

As part of the deal, Blue Coat CEO Greg Clark assumed the role of CEO at Symantec, filling a vacancy left by the departure of Symantec CEO Mike Brown. Later in the year, Symantec Chief Financial Officer Thomas Seifert stepped down and was replaced by former Blue Coat CFO Nick Noviello.

 

The deal created a single security vendor with around $4.2 billion in annual revenue, the majority of which comes from enterprise security.

 

7. Microsoft

 

Company acquired: LinkedIn

Head count: 9,700 employees

Annual sales: $2.99 billion

Purchase price: $26.2 billion

Deal closed: Dec. 8

Six months after revealing an agreement to acquire LinkedIn for $26.2 billion, Microsoft closed its largest acquisition ever.

 

The Redmond, Wash.-based vendor has several product integrations planned, including LinkedIn identity and network with Microsoft Outlook and the Office suite; LinkedIn notifications within the Windows action center; and enabling LinkIn members to draft resumes in Word to update profiles, and discover and apply to jobs on LinkedIn. Microsoft also plans to leverage LinkedIn to help users develop new skills online.

 

LinkedIn CEO Jeff Weiner will remain in charge of that company's affairs under Microsoft's ownership, and said that day-to-day operations will remain essentially unchanged.

 

6. Oracle

 

Company acquired: NetSuite

Head count: 4,600 employees

Annual sales: $741.1 million

Purchase price: $9.3 billion

Deal closed: Nov. 7

 

Oracle struck a deal to acquire cloud application company NetSuite, gaining access to the San Mateo, Calif.-based company's cloud ERP, CRM and ecommerce applications.

 

NetSuite has been a fast-growing company, consistently reporting revenue growth between 30 percent and 35 percent every quarter. But the focus on growth came at a price: The company had yet to turn a profit, and financial analysts said pressure on the company's stock indicated that investors were getting impatient.

 

While NetSuite was originally most successful in selling to small and midsize businesses and organizations, more recently it had been adding large enterprises and global companies to its customer roster. Oracle has been expanding sales of its cloud-based applications in recent years, although its customer base is more weighted toward large enterprises.

 

5. KKR & Co.

 

Company acquired: Optiv Security

Head count: 1,001-5,000 employees

Annual sales: $947.3 million

Purchase price: $2 billion

Date of announcement: Dec. 6

Expected to close: First quarter of 2017

 

Optiv Security is looking to take its vision global under KKR & Co.'s new private equity ownership.

 

One of the first steps under the new owners will be to sit down and "hone the master plan" to expand Optiv globally, said Dan Burns, CEO of the Denver-based company, No. 25 on the CRN Solution Provider 500. Optiv currently sells its products and services in 76 countries, but does so primarily using partnerships and regional distributors.

 

Burns said a large part of that strategy under New York-based KKR will be acquisitions, focusing initially on Europe and then Asia. From there, he said, Optiv could look to expand into South America and other regions two to three years down the line.

 

4. Tech Data

 

Entity acquired: Avnet Technology Solutions

Head count: 6,200 employees

Annual sales: $9.65 billion

Purchase price: $2.6 billion

Date of announcement: Sept. 19

Expected to close: First half of 2017

 

Tech Data plans to purchase Avnet's Technology Solutions business in a blockbuster deal that reshapes the value-added distribution landscape.

The Clearwater, Fla.-based distributor said acquiring Phoenix-based Avnet's T.S. business would supercharge its data center practice, jolting the share of overall revenue coming from the data center from just 29 percent to 45 percent, while more than doubling non-GAAP operating income after cost savings.

 

The combined company expects to flex its muscles in helping customers capture business around next-generation technologies including converged and hyper-converged infrastructure, as well as security, analytics and the cloud.

 

3. Broadcom

 

Company acquired: Brocade

Head count: 5,960 employees

Annual sales: $1.96 billion

Purchase price: $5.9 billion

Date of announcement: Nov. 2

Expected to close: By end of April 2017

 

Semiconductor maker Broadcom is acquiring networking systems supplier Brocade Communications Systems, with plans to retain its fiber channel SAN switching business and divest Brocade's IP networking business – including the recently acquired Ruckus Wireless.

 

The deal breaks up San Jose, Calif.-based Brocade, which had just completed its $1.2 billion acquisition of wireless vendor Ruckus in May.

 

Partners said Broadcom's decision to divest the Brocade and Ruckus IP networking business has opened the door for customers to hold off on purchases. They said the divestiture creates uncertainty that is sure to impact the channel.

 

2. CSC

 

Merger partner: HPE Enterprise Services

Head count: 100,000 employees

Annual revenue: $18 billion

Value of merger for HPE shareholders: $8.5 billion

Date of announcement: May 24

Expected to close: March 2017   

 

Tysons, Va.-based CSC -- No. 8 on the CRN SP 500 -- sent shock waves through the solution provider community when it revealed plans to merge with Palo Alto, Calif.-based HPE's Enterprise Services unit -- No. 3 on the CRN SP 500 -- to create an IT services behemoth with $26 billion in annual revenue.

 

The combined entity will be run by current CSC CEO Mike Lawrie and will have HPE CEO Meg Whitman serving on the company's board of directors. It will serve 5,000 clients across 70 countries, and is expected to generate cost savings of more than $1 billion in the first year and $1.5 billion every year thereafter.

 

1. Dell

 

Company acquired: EMC

Head count: 72,000 employees

Annual revenue: $25 billion

Purchase price: $65 billion

Deal closed: Sept. 7

 

Nearly a year after it was announced, the landmark acquisition of Hopkinton, Mass.-based EMC by Dell is complete, creating Dell Technologies, a more than $70 billion, privately-held global IT behemoth based in Round Rock, Tex., with designs on dominating markets from budget PCs to high-end data center infrastructure and the cloud.

 

With the acquisition, Dell can address markets from its traditional strengths in consumer PCs, servers and small- and midsize-business data centers to the largest data centers in the world, as well as red-hot segments like enterprise hyper-converged infrastructure. EMC also owns about 80 percent of virtualization powerhouse VMware.

 

The Dell and EMC channel programs are currently running in parallel. New global channel chief John Byrne has committed to creating a single, integrated program by Feb. 1.

 

So, what does this mean to businesses caught in the cross hairs of these mergers?

 

Time will tell, but one thing that’s for sure is that it will take these companies months, if not years, to assimilate these acquisitions into their operational processes.  Employee shuffling and downturn will also be an inevitable effect as thousands of positions are realigned as a result. 

 

It’s understandable that businesses using the services of these companies might be concerned, but there is an option to help those business users reduce the potentially painful side effects.  We are technology industry-insiders that have decades of experience guiding businesses through large tech mergers and acquisitions.  We can provide your business with the stability of having a single-point-of-contact to interface with each service provider to provide your business with a smooth transition – either through the M&A process or in the selection of new service providers offering a competitive alternative.

 

###

 

Netari GCG is a leading IT consulting firm and technology services distributor offering network design, sourcing, and life-cycle management for your IT infrastructure. We provide a network of over 200 global suppliers specializing in diverse technologies including: Security, Internet, Network, Voice, Data Center, Cloud, Enterprise Applications, and Managed Services.

 

Are you caught up in a recent tech company merger and looking for answers or a contingency plan?  We can help.  Give us a call at (813) 343-0440 or send us an email at info@netari.com

 

Like this post?  Please comment below and share on your favorite social networks.

 

 

Please reload

Please reload

Archive

© 2018 Netari, LLC.  All Rights Reserved.  All other marks are the property of their respective owners.   This site is for service information purposes only.  Privacy Policy.