Tech mergers and acquisitions in 2017 hardly got any hit with only a few to mention, such as Verizon acquired Yahoo, Apple purchased Shazam and some other deals clutching the main headlines.
However, 2018 is different. The first half of the year alone saw $2.5 trillion in tech mergers, setting a pace to make it the biggest year for major corporate deals ever. Moreover, according to Deloitte’s annual study of M&A activity, technology acquisition became the number one driver of acquisitions in 2018, ahead of expanding customer bases in existing markets, or adding to products or services for the year.
“Corporations have spending firepower; more company’s say their cash levels have increased, and M&A remains the No. 1 intended use of those funds,” wrote Russell Thomson, a managing partner of Deloitte’s Mergers and Acquisitions Services.
Here is a list of the 13 most surprising tech mergers that stole the headlines in 2018:
IBM acquired Red Hat
IT mainstay IBM acquired Red Hat for around $34 billion, making it the biggest business deal involving an open source company yet.
The North Carolina-based company is known for providing open source enterprise software to companies, with Red Hat Enterprise Linux as their main product.
Red Hat is poised to be the first Linux (and open source) company to break the billion-dollar-per-quarter ceiling, especially now with its acquisition by IBM.
SAP acquired Qualtrics
German enterprise software giant SAP agreed to acquire Utah-based tech unicorn Qualtrics for $8 billion in November, just as the customer survey SaaS platform was preparing for an IPO.
The purchase, all in cash, comes just after Qualtrics had set its IPO price range at $18-21. It stated in its IPO filing that revenue for the first half of 2018 jumped 42 percent to $184 million, far outstripping its rival SurveyMonkey, which also went public this year. It was most recently valued at $2.5 billion.
Twilio acquired Sendgrid
San Francisco-based cloud communications company Twilio took in SendGrid, a nine-year-old email delivery service company, for $2 billion in stock.
SendGrid was founded by three developers who were seeking a better way for other developers and businesses to send email.
Twilio hopes to integrate SendGrid with their own cloud communications platform to create an all-in-one platform for business growth.
Oracle acquired SD-WAN specialist Talari Networks
Oracle announced on 15 November that it had agreed to acquire SD-WAN specialist vendor Talari Networks. The Silicon Valley-based company focuses on Software-Defined Wide Area Network (SD-WAN), a modern way of connecting enterprise networks.
“The addition of Talari’s technology is expected to complement Oracle Communications’ leading Session Border Controller (SBC) and network management infrastructure by adding high availability and Quality-of-Experience (QoE) connectivity and cloud application access across any IP network with the reliability and predictability of private networks,” Oracle said in a statement.
Terms of the deal were not disclosed. Taller had raised more than $50 million before being acquired, according to Crunchbase.
DocuSign acquired SpringCM
The San Francisco-based DocuSign acquired Chicago-based cloud company SpringCM for $220 million in cash.
DocuSign is known for providing secure solutions for electronic exchanges of contrasts and signed documents.
By bringing SpringCM under its wing, DocuSign plans to modernize its Systems of Agreement.
Oracle acquired DataFox
Oracle announced that it has acquired business intelligence company DataFox an undisclosed amount in October 2018.
The San Francisco-based startup produces a cloud-based AI data engine that provides real-time insights into businesses by analysing more than 2.8 million public and private businesses, 5 million digital properties, 70,000 daily news articles and 756,000 unique signals. It raised $19 million at a $33 million valuation in January 2017.
Oracle will use DataFox to enhance its cloud applications with additional company-level data and signals to help customers make better business decisions
“Oracle’s portfolio of cloud applications, including ERP, CX, HCM and SCM, and trusted 3rd party consumer data enable customers to reimagine their business with a complete, secure and connected cloud suite,” Steve Miranda, Executive Vice President Applications Development at Oracle said in a letter to Oracle customers and partners.
“Together, Oracle and DataFox will enrich cloud applications with AI-driven company-level data, powering recommendations to elevate business performance across the enterprise.
Twilio acquired SendGrid
In October, 2018, cloud communications platform Twilio announced it would be acquiring SendGrid, a leading email API platform, in a $2 billion deal. Both companies are targeted towards developers, offering APIs to help seamlessly incorporate communications channels into their apps.
Together, the platforms serve millions of developers and count over 100,000 customers. This will mark a marriage of the leading cloud communications platform with the leading email API platform – adding email to the communications channels Twilio currently caters for, namely: voice, messaging and video.
“Increasingly, our customers are asking us to solve all of their strategic communications challenges – regardless of channel. Email is a vital communications channel for companies around the world, and so it was important to us to include this capability in our platform,” said Jeff Lawson, Twilio’s co-founder and CEO.
“The two companies share the same vision, the same model, and the same values. We believe this is a once-in-a-lifetime opportunity to bring together the two leading developer-focused communications platforms to create the unquestioned platform of choice for all companies looking to transform their customer engagement.”
Cisco acquired Duo Security
Cisco took a major step forward in its journey to becoming a security-focused vendor with the acquisition of Duo Security in August, a company that had quickly built itself up to unicorn status (valued at more than $1 billion).
The Ann Arbor, Michigan-based company focuses on cloud-based two-factor authentication, which should help Cisco compete with the leader in this area, the recently public Okta.
David Goeckeler, executive vice president and general manager of Cisco’s networking and security business wrote in a news release: “In today’s multicloud world, the modern workforce is connecting to critical business applications both on- and off-premise.
“IT teams are responsible for protecting hundreds of different perimeters that span anywhere a user makes an access decision. Duo’s zero-trust authentication and access products integrated with our network, device and cloud security platforms will enable our customers to address the complexity and challenges that stem from multi-and hybrid-cloud environments.”
Cisco has already earmarked the $2.35 billion (£1.8 billion) acquisition as a way to boost its ‘intent-based networking’ into multi-cloud environments. Duo’s SaaS product will be integrated with Cisco ISE eventually.
AT&T acquired AlienVault
AT&T completed the acquisition of cybersecurity vendor AlienVault in August.
The Spanish-founded company is now based in Silicon Valley. It specialises in threat intelligence and incident response through its Unified Security Management platform and Open Threat Exchange.
AT&T will create a new cybersecurity solutions division as a result, which will be led by AlienVault President and CEO Barmak Meftah.
“Together we have the opportunity to simplify a complex problem and automate how customers tackle their cybersecurity needs,” Meftah said in a statement. “We will combine our phenomenal threat detection, incident response, and compliance security platform with AT&T’s managed security capabilities, making near real-time threat information actionable and achievable.”
Thaddeus Arroyo, CEO of AT&T Business, added: “AlienVault’s cybersecurity talent and threat intelligence capabilities, combined with our ability to deliver innovative threat detection and response solutions at-scale, will help enable businesses of all sizes to better defend themselves.”
The financial terms were not disclosed. AlienVault had raised nearly $120 million since being founded in 2007, including a $52 million round in 2015 led by Institutional Venture Partners.
Siemens acquired no-code vendor Mendix
German technology giant Siemens acquired the no-code development platform Mendix for $700 million (£539 million) in July.
The Dutch-founded company is now based in Massachusetts and has grown to the point where it is considered a no-code leader by Gartner.
Mendix will still operate out of Boston, but will now be a part of Siemens’ Digital Factory Division.
Jan Mrosik, CEO of that Digital Factory Division said: “As part of our digitalisation strategy, Siemens continues to invest in software offerings for the Digital Enterprise. With the acquisition of Mendix, Siemens continues to add to its comprehensive Digital Enterprise and MindSphere IoT portfolio, with cloud domain expertise, cloud agnostic platform solutions and highly skilled people.”
Mendix CEO Derek Roos wrote in a blog post that joining Siemens will help Mendix “by doubling down on R&D investments and geographical expansion”.
“Becoming a part of Siemens gives us unprecedented access to deep industry know-how, network and expertise,” he added. “Together with our partner ecosystem, we’ll be able to extend the Mendix platform with deeply integrated vertical solutions across a wide range of industries.
“Combining low-code with best-practice solutions and templates will provide even more value and speed to market for our customers.”
Broadcom acquired CA Technologies
Broadcom has agreed to buy CA Technologies for $18.9 billion (£14.3 billion) in cash.
The addition of corporate software to the chipmaker’s business surprised Wall Street analysts. Broadcom CEO and President Hock Tan said the deal was an important building block in his strategy to create one of the world’s leading infrastructure technology companies.
“With its sizeable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market, and its mainframe and enterprise software franchises will add to our portfolio of mission critical technology businesses,” he explained in a press release. “We intend to continue to strengthen these franchises to meet the growing demand for infrastructure software solutions.”
The announcement was made just four months after the Trump administration blocked Broadcom’s planned takeover of rival chipmaker Qualcomm. The deal is expected to close in the fourth quarter of this year, subject to regulatory and shareholder approval.
Slack acquired Atlassian
Workplace collaboration darling Slack is buying up the competition it usurped – Atlassian’s HipChat and Stride assets – to discontinue them, and in exchange Atlassian will take a stake in Slack.
The news broke via Slack’s CEO Stewart Butterfield on Twitter, confirming that Slack will take the Hipchat and Stride IP and move those users onto its own service.
It will provide a boost in users for Slack, as the startup continues to take on established collaboration enterprises like Microsoft, which itself seems to have remodelled its collaboration software on Slack’s with Teams, a sleeker approach to teams-based working than Skype for Business.
Bloomberg reports that the unusual deal will allow Atlassian to focus on its project management services, such as Jira and Trello, while Slack can continue to bolster its chatops efforts.
The deal was for an undisclosed amount, but more details should emerge during Atlassian’s upcoming quarterly earnings report.
Microsoft acquired Bonsai
Microsoft added another AI startup to its expanding portfolio with the acquisition of Bonsai, a Berkeley, California-based company that specialises in reinforcement learning.
Bonsai is building a platform that helps industrial customers improve the operations of dynamic control systems in applications such as robotics, engines and wind turbines.
The platform is designed to give subject matter experts of any AI aptitude the power to specify and train autonomous systems. Gurdeep Pall, Microsoft’s corporate VP of business AI, explained in a statement that Bonsai would form part of Microsoft’s Azure AI platform of tools.
“To realize this vision of making AI more accessible and valuable for all, we have to remove the barriers to development, empowering every developer, regardless of machine learning expertise, to be an AI developer,” says Pall. “Bonsai has made tremendous progress here and Microsoft remains committed to furthering this work.
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Workday’s String of Acquisitions (Complimentary)
Creating its own list of acquisitions, HR and financial planning software specialists Workday made a pair of acquisitions in the summer, starting with Adaptive Insights in June and followed by Stories.bi in July.
Adaptive Insights is a Palo Alto-based cloud financial planning software maker that Workday will look to leverage to improve its existing Workday Financial Management platform.
Chief products officer Petros Dermetzis wrote in a blog post: “With this incredible team and their industry-leading technology unified with Workday, we will accelerate customers’ finance and business transformations across the organisation through a powerful combination of integrated planning and a complete finance suite of products.
“More specifically, this acquisition will fast-track our financial planning roadmap by 2+ years, delivering customers new, advanced modelling capabilities and more, powered by the Adaptive Insights Business Planning Cloud.”
Stories.bi specialises in augmented analytics, which uses machine learning to deliver more automated insights to users.
It will be brought in to boost the Workday Prism Analytics suite, with Workday VP Peter Schlampp writing in a blog post: “With the addition of this incredible team and technology, we will power our analytics products to be more intelligent and our UX to be more conversational. This means our customers can find even more opportunities to improve their business without having to dig through data or wait on detailed reports.”