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Software Domination. Trends In Technology M&A

    
Puzzle

Mergers and acquisitions (M&A) allow businesses to innovate in a way that's cost effective and highly profitable. In 2012, Ernst & Young reported that Cloud/SaaS was a “megatrend” in tech M&A. In the first quarter of 2013, Cloud/SaaS and mobile devices M&A continued to grow, being energized by increasing consumer demand for mobile devices, the rise of social media, and their concomitant tsunami, “big data.”

Mobile Devices

According to PwC, the mobile revolution is full-blown and shows no signs of stopping. As a sector known for profitable innovation, mobile devices are an essential component of the tech M&A equation. The rapid assimilation of mobile devices in all aspects of consumers lives gives this trend staying-power. The numbers are evidence: The Pew Foundation estimates that 91 percent of adults in the US have cell phones. The report also says that : "the cell phone is the most quickly adopted consumer technology in the history of the world." Touch screen technology, sophisticated cell phone cameras, and the BYOD (Bring-Your-Own-Device) movement in the workplace are additional factors driving the consumer demand for mobile devices, and it shows no signs of slowing down- and neither does mobile M&A. The mobile reach will continue to be unabated.

Look to the Cloud

Cloud services are being rapidly adopted by both consumers and businesses because of cost/ time savings, and ease of access. The latter factor is extremely important in an increasingly mobile workforce. Software, which is very expensive for small to medium sized businesses to own, store, and (continuously) upgrade, becomes more affordable when services are cloud-based. In addition to cost containment, small and large businesses are challenged to find the space to store all their software and data. In 2012, cloud/SaaS was the largest tech merger trend, comprising 15 percent of all deals, globally.

Looking forward, it is expected that the remainder of 2013 will continue to see M&A activity focused on the new core of mobile, social, analytics and security.