Top 12 Strategic Tech Acquisitions In 2016
The year 2016 marked several interesting equations formed in the technology business. While on the one site, major cloud vendors such as Microsoft, Google, Oracle etc. were seen grappling for winning the strategic domain specialist startups to add one more feather in their hats, the industry also saw big wings such as Symantec and Avast absorbing the small players to become more strong. Overall the year 2016 remained the year of disruptive technologies with Cloud, IoT, security, VR, AI were largely influencing the go to market plans of technology majors.
CXO Today offers its readers a quick glance on the major tech deals in 2016. (Also Read: 2016 Flashback: Top 10 Tech Deals Channel Should Know)
Overcoming several legal and procedural hurdles, Microsoft finally closed the acquisition of social networking platform LinkedIn for approximately $26 billion deal. Dismissing the demand of its arch rival Saleforce for ‘antitrust’ regulator European Union gave a green signal to the acquisition on the condition that third-party rivals integrate Office into their services for the next five years.
CRM player Salesforce, who was also in a race to buy the professional networking company, has contended that the deal was anti competitive and the threat to future innovation and demanded ‘antitrust’ regulator to be “vigilant” as they monitor Microsoft’s use of LinkedIn. According to Salesforce, Microsoft will be able to deny competitors access to that data, and in doing so obtain an unfair competitive advantage. However, the EU dismissed the demand paving the way for Microsoft to access the huge data of LinkedIn users and push its CRM solutions.
The LinkedIn acquisition is certainly a mega deal in the history of Microsoft post acquisition of Skype for $8.5 billion back in 2011. Founded in 2002, LinkedIn today claims more than 430 million members around the world. LinkedIn not only opens up new opportunities for Microsoft but to compete strong with CRM players like Salesforce.
There are clouds of uncertainty over the much talked about proposed Verizon Yahoo merger deal after Yahoo revealed two massive data breaches, where more than 1 billion user accounts have been compromised and put on sale in the dark web. As per the latest update, Verizon Communications is now exploring a price cut or possible exit from its $4.83 billion pending acquisition.
In July of this year, Verizon agreed to acquire Yahoo for $4.8 billion. But the deal was hit by the two major data breach incidents in less than two months in the second half of 2016. In September Yahoo confirmed that 500 million accounts had been compromised, leaking names, emails, telephone numbers, and hashed passwords. The company acknowledged a separate hack in December that affected over a billion users, exposing much of the same kind of information.
The acquisition is intended to help the Verizon to build a media company. The transaction is also seen boosting Verizon’s AOL internet business, which the company acquired last year for $4.4 billion. But as the effect of Yahoo’s crisis, Verizon has reportedly formed a legal team to explore a reduction in the purchase price or dumping the deal altogether.
In a largest technology merger in history, Dell (now Dell Technologies) completed acquisition of EMC Corp for its $67 billion to become a one-stop shop for IT solutions. With this mega deal, Dell has become the world’s largest privately controlled technology company which will now play strong in the both servers and storage segment which an added portfolio from EMC.
Dell announced its intent to buy EMC in October in a deal that involved a lot of debt and turning the VMware shares that EMC owns into a tracking stock. Interestingly, VMware will continue to be a separate publicly traded company, whereas, EMC will go private and become part of Dell ending the company’s long history as a publicly traded company.
While the two companies intend to leverage the market position of each other in the server and storage space, there are likely to be a lot of redundancies that might lead to layoffs. EMC has already announced it is laying off people as part of a restructuring plan ahead of the deal. Whereas, Dell has sold off Perot Systems and SecureWorks to compensate the deal investment.
What could be termed as a major consolidation in the security business, Symantec, announced the acquisition of Blue Coat Systems for $4.65 billion. The acquisition complements Symantec’s product portfolio and creates the industry’s largest pure play cyber security company.
With the acquisition Symantec has strengthen its play in the Web security, the portfolio which the company was lacking before bringing Blue Coat under its umbrella. Symantec has typically focused on endpoint security, while Blue Coat has specialized on the networking side, including managing encrypted traffic. Symantec can now offer a whole range of products, promising better threat detection.
The acquisition is expected to inject growth for Symantec at time when its business has been reportedly limping. To drive sales, Symantec hopes to sell its products to Blue Coat customers. Symantec has around 370,000 enterprise clients, while Blue Coat has about 15,000 customers worldwide.
Once arch rivals in the mobile anti-virus space are now partners. Avast Software announced to acquires antivirus maker AVG Technologies for $1.3 billion. The deal is aimed at gaining scale and geographical breadth, along with a plan to expand product offerings including in the IoT space, especially in the APAC region.
Combining Avast’s and AVG’s users, the new organization will have a network of more than 400 million endpoints, of which 160 million are mobile. With the acquisition, Avast has also expanded its SMB business enabling Avast to support more and larger organizations. The new entity will have one of the largest network of sensors for threat detection, positioning it well to be the go-to security solution for the IoT, especially in consumer applications.
Both Avast and AVG have announced several acquisitions in the past three years. Last year Avast acquired Remotium, a provider of business-focused mobility solutions. In June 2013, AVG acquired LPI Level Platforms, a provider of remote monitoring and management software solutions. Its recent acquisitions include PrivacyChoice, DroidSecurity, Bsecure to name a few.
Demonstrating a serious ramping up to win over competitors, Oracle concluded the acquisition of NetSuite for $ 9.3 billion. With the deal, Oracle aims to surge in the cloud race. Similarly, the collaboration with Oracle is expected to benefit NetSuite, to leverage the market opportunities with synergy generated by both cloud vendors.
The deal has been complicated by opposition from NetSuite’s largest institutional shareholder, T. Rowe Price Group, which held 14.4 million NetSuite shares as of Nov. 1. The group cited the conflict of interest created by the substantial NetSuite stock holdings by Oracle Executive Chairman Larry Ellison and his family, saying the $109 a share price was too low. However, Oracle Chief Executive maintained that the company’s $109-a-share bid is its “best and final offer.”
In May, Oracle announced a deal to buy Opower, a cloud-services company that assists utilities, for $532 million. It also acquired Textura Corp. for approximately $663 million in April, which targets the construction industry. The NetSuite acquisition is Oracle’s second largest after its hostile $10.3 billion takeover of PeopleSoft Inc. in 2005.
HP surprised the industry when it announced to capture Samsung’s printing business unit for approximately $1.5 billion. The deal, which paves way for HP to make its strong inroads in the Asia region with Samsung’s laser printing technology and around 6,500 printing technology patents.
By acquiring Samsung, HP also intends to eliminate one of its printer rivals and gains a possible boost in revenue in its shrinking printing business. Samsung’s laser printing technology is also crucial for HP as the company attempts to enter the copier machine market. HP also reportedly plans to debut a new line of copier machines are based on some of Samsung’s underlying printing capabilities, like its laser and toner technologies.
This is the largest print acquisition in HP’s history and accelerates its growth opportunities in the copier segment, strengthens its laser printing portfolio and paves the way for future printing innovation. According to HP’s claim, the acquisition will position the company to ‘disrupt and reinvent’ the $55 billion copier industry.
Microsoft has acquired Solair, an Italy-based IoT service for an undisclosed amount. With this acquisition, Microsoft plans to integrate its technology into the Azure IoT Suite.
Microsoft like other cloud vendors such as Amazon, IBM, Cisco, LogMeIn sees huge opportunity powering billions of connected devices and analyzing the data aggregated in the process.
The acquisition takes place amid a major push by Microsoft to expand its presence in the IoT business. In March, it introduced a series of Azure IoT Starter Kits to help developers test new devices for proof of concept and prototypes. The Solair acquisition is expected to accelerate connected devices push.
In a bid to expand its cloud-based offerings, internet major Google acquired San Jose, California based Apigee for approximately $625 million. Apigee offers software for predictive analytics and management of application programming interfaces (APIs).
Google has been working on expanding its enterprise-focused products to surge the rivals Amazon and Microsoft who are far ahead in the cloud race. With the acquisition of Apigee, Google intends to get its hands on specialized app developer technology.
Analysts say that Apigee, with high-profile clients in a strategically important area, will help Google close in on the competition. Apigee whose customers include AT&T, Burberry Group Plc, Vodafone Group Plc and the World Bank, went public in April last year at $17 per share.
Britain’s Micro Focus International Plc has announced to acquire HPE’s Non-Core Software Assets for $8.8 billion. According to reports, HPE plans to contribute the following software assets to the transaction: Application Delivery Management, Big Data, Enterprise Security, Information Management & Governance and IT Operations Management.
Micro Focus and HPE also announced as part of the transaction the intent to enter into a commercial partnership naming SUSE as HPE’s preferred Linux partner.
HPE said that it would continue to have a sizable software business, both through its interest in Micro Focus and through its focus on software-defined infrastructure.
Apple has acquired Facial-Recognition Startup Emotient for an undisclosed amount. Emotient uses artificial intelligence to scan a person’s face and read their emotions in a fraction of a second - technology that is particularly useful to advertisers and salespeople.
The growing relevance of artificial intelligence in the business has attracted the attention of tech majors towards AI startups. Emotient’s technology has primarily been used by advertisers, doctors, and retailers, though it’s not yet clear what Apple plans to do with it.
This isn’t Apple’s first acquisition in the artificial-intelligence field as applied to humans. In October, Apple confirmed that it had acquired VocalIQ, a company whose technology helps computers understand natural speech.
Blackberry which is heavily focused on building a robust services portfolio, acquired U.K-based cyber security consultancy Encription for an undisclosed amount. The acquisition brings expertise of Encryption into the BlackBerry fold. The deal will also give BlackBerry the opportunity to also cross-sell some of its own security products.
The acquisition of Encription is the latest in a string of software and services focused acquisitions made by BlackBerry in the last year. In September, the company agreed to acquire rival security software maker Good Technology for $425 million. Before that it announced acquisition of privately-held AtHoc, a provider of secure, networked crisis communications.
With these acquisitions, BlackBerry is now attempting to boost revenue from software and services to offset the revenue declines from its legacy business. BlackBerry has also announced to launch professional Cybersecurity services to get more deeper into the booming security business.
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