Last year marked a slight decrease in global technology M&A activity from the blockbuster year that was 2018 – when SAP bought Qualtrics for $8 billion, IBM acquired Red Hat for a staggering $33 billion and Broadcom picked up CA Technologies for $18.9 billion in cash.
As of the end of Q3 2019, technology M&A deals worth $245 billion had been announced globally, marking a decrease of 25% year-on-year according to GlobalData.
Which mergers and acquisitions does 2020 have in store? If January alone is anything to go by then there will be no slowing of major deals across the industry, with security already proving to be a hot area.
Here are the biggest technology acqusitions of 2020 so far, in reverse chronological order:
March 26: Microsoft to acquire Affirmed Networks
Microsoft announced that it is acquiring the Boston-based Affirmed Networks for an undisclosed amount in March. The 2010-founded company specialises in virtualisation and cloud-based mobile network technology, which makes it an attractive acquisition target for any company investing in next-generation 5G connectivity.
“This acquisition will allow us to evolve our work with the telecommunications industry, building on our secure and trusted cloud platform for operators. With Affirmed Networks, we will be able to offer new and innovative solutions tailored to the unique needs of operators, including managing their network workloads in the cloud,” Yousef Khalidi, corporate vice president of Azure Networking wrote in a blog post.
The terms of this deal were not announced but Affirmed was most recently valued at north of $1.3 billion following a $38 million funding round in 2019.
March 2: BMC Software to acquire Compuware
Enterprise software stalwart BMC agreed to buy Compuware in March for an undisclosed amount, marking its third purchase of a mainframe specialist in just over a year.
The deal signals further consolidation of the mainframe support and services vendor landscape, as BMC has bought up RSM Partners and CorreLog in the past year or so, following an injection of cash when it was acquired itself by private equity firm KKR in 2018.
“The combined company will help customers better manage their mainframe operations, cybersecurity, application development, data, and storage as part of their enterprise devops strategies,” BMC said in a statement.
March 1: DocusSign acquires Seal Software for $188 million
E-signature specialist DocuSign has announced it is acquiring Seal Software for $188 million in cash. Seal, which is based in northern California, has built machine learning-enabled analytics software specifically for contracts, allowing organisations to search through large volumes of agreements by legal concepts, instead of keywords.
DocuSign made a $15 million strategic investment in the firm last year and has signalled its intention to tightly integrate its machine learning-powered application into its Agreement Cloud software.
“DocuSign is about digitally transforming the very foundation of doing business: agreements and agreement processes,” said Scott Olrich, DocuSign’s chief operating officer in a statement. “We believe that AI will play a vital role in this transformation. And by integrating Seal into DocuSign, we can benefit from its deep technology expertise and its broad experience applying AI to agreements.”
Feb. 28: Intuit to acquire Credit Karma
US software maker Intuit – best known for its QuickBooks, Mint and TurboTax products – announced its intention to acquire fellow Silicon Valley-native company and rival Credit Karma in a $7.1 billion deal in February.
Through the acquisition, Intuit is looking to build an all-in-one financial assistant for customers, combining income, spending and credit histories, complete with financial product offers and personalised advice.
“By joining forces with Credit Karma, we can create a personalised financial assistant that will help consumers find the right financial products, put more money in their pockets and provide insights and advice, enabling them to buy the home they’ve always dreamed about, pay for education and take the vacation they’ve always wanted,” said Sasan Goodarzi, CEO of Intuit, in a press release.
The deal could get the attention of regulators however, with Credit Karma offering one of the few alternative free, digital tax-filing solutions on the market.
Feb. 25: Salesforce acquires Vlocity for $1.33 billion
CRM giant Salesforce made its first acquisition of 2020 in February, picking up the San Francisco-based company for $1.33 billion. It’s a straightforward fit for the SaaS company, as Vlocity is a key partner and specialises in building industry-specific CRMs on top of Salesforce for companies in the media, financial services, health, energy and utilities sectors, as well as public sector and nonprofits. Salesforce had already invested in the company through its ventures arm in 2019.
Salesforce has long been interested in vertical specificity as it looks to embed its software deeper with large enterprise clients and has launched several of its own targeted solutions for industries with Financial Services Cloud and Manufacturing Cloud.
“Upon the close of the transaction, Vlocity – this wonderful company that we, as a team, have created, built, and grown into a transformational solution for six of the most important industries in the enterprise – will become part of Salesforce,” Vlocity CEO David Schmaier wrote in a blog post.
Feb. 21: Morgan Stanley to acquire ETrade for $13 billion
American investment bank Morgan Stanley made a splashy acquisition in February, picking up online brokerage ETrade for $13 billion.
Morgan Stanley is hoping that the acquisition can help boost its wealth management division by attracting younger, less affluent customers thanks to the lower margins associated with digital wealth management solutions, including robo advice and commission-free trading like that popularised by startups Robinhood in the US and Nutmeg in the UK.
Founded in 1982 and based in Silicon Valley, ETrade specialises in electronic trading of financial instruments, from common stocks to exchange-traded funds (ETFs).
“E-Trade represents an extraordinary growth opportunity for our wealth management business and a leap forward in our wealth management strategy,” said Morgan Stanley chairman and CEO James Gorman in a statement.
Feb. 20: Dialog Semiconductor acquires Adesto Technologies
UK-based Dialog Semiconductor acquired Adesto Technologies for $500 million in February. The California-based chip maker specialises in System-on-Chips (SoCs), edge router, network interfaces and resistive RAM technologies, with a specific focus on industrial IoT.
Just four months earlier Dialog also acquired German fabless chip firm Creative Chips GmbH for $80 million.
“This acquisition substantially enhances our position in the Industrial IoT market,” said Jalal Bagherli, CEO of Dialog in a statement. “Adesto’s established strength in connectivity solutions and highly optimized products for building and industrial automation perfectly complements and adds scale to our Industrial IoT portfolio from the recently acquired Creative Chips. Adesto’s deep customer relationships, comprehensive system expertise, and proprietary technology will deliver enhanced value for Dialog customers.”
Feb. 19: Facebook takes majority control of Scape Technologies
Facebook surpassed a 75 percent majority share in London-based computer vision startup Scape Technologies in February. TechCrunch pegs the value of the deal at around $40 million. Scape’s existing backers included Entrepreneur First (EF), where the company was formed, along with VC firms LocalGlobe, Mosaic Ventures, and Fly Ventures.
Scape has built a developer kit that can combine imagery, latitude and longitude data to determine the location of a device to a higher degree of accuracy than GPS.
Feb. 4: Koch Industries acquires remaining stake in Infor
It was announced in February that the massive multinational Koch Industries had acquired the remaining equity stake in the software vendor Infor. The deal values Infor at $11 billion, or nearly $13 billion including preferred shares, according to Bloomberg. Koch has been an investor in the vendor since 2017 and reportedly held as much as a 70 percent stake before this deal. This will halt any rumours of an IPO for Infor.
Infor specialises in enterprise resource planning (ERP) software, particularly focused on industry verticals and increasingly, shifting to the cloud with its CloudSuites product. It competes with the likes of Oracle, Microsoft and SAP and has a solid, loyal customer base, many of which, however, are still on-premise.
“Koch’s decision to acquire Infor is a strong endorsement of our product strategy and focus on creating innovative solutions for our customers,” said Kevin Samuelson, CEO of Infor in a statement. “As a subsidiary of a $110 billion+ revenue company that re-invests 90 percent of earnings back into its businesses, we will be in the unique position to drive digital transformation in the markets we serve. We are rapidly expanding our industry-specific CloudSuites and offering customer experiences and outcomes that are well beyond what is standard in enterprise software.”
Feb. 3: Accenture acquires UK data consultancy Mudano
Accenture announced in February that it is acquiring UK-based data consultancy Mudano for an undisclosed amount. The firm will join Accenture’s Applied Intelligence unit, which has been on an acquisition binge as of late, acquiring the likes of Clarity Insights, Pragsis Bidoop in Spain and Analytics8 in Australia in the past
Founded in 2014, Mudano has offices across the UK and its clients tend to be in the financial services sector.
“Our research shows that UK businesses are struggling with how to scale technologies like artificial intelligence to deliver business value – and financial services is no exception,” said George Marcotte, head of Accenture’s Applied Intelligence group for UK & Ireland, in a statement.
“Mudano’s focus on helping clients build a ‘data culture’ aligns perfectly to Accenture’s Applied Intelligence strategy. By creating a strong data foundation — supported by the right skills, stakeholders and technologies — our clients can transform at speed and scale and fuel real change for their business.”
Jan. 22: ServiceNow acquires Loom Systems
ServiceNow is looking to accelerate its ability to deliver AIOps with the acquisition of Israeli startup Loom Systems for an undisclosed amount.
The SaaS giant is looking to deliver on the promise of AIOps, a model of IT where artificial intelligence techniques are leveraged to help predict and prevent issues from occurring, instead of reacting to service desk requests.
“Today, IT departments struggle to meet performance expectations and keep pace with the growth in demand for new, great digital services,” said Jeff Hausman, vice president and general manager of IT operations management at ServiceNow. “By bringing together Loom Systems’ ability to analyse log and metrics data with ServiceNow’s AIOps and workflow automation capabilities, IT departments will be able to proactively pin-point and resolve operational issues, enabling seamless experiences for their customers and employees.”
Later that month ServiceNow also acquired Passage AI, a Mountain View-based conversational AI specialist.
Jan. 15: Apple acquires Xnor.ai for $200 million
Apple acquired Seattle-based Xnor.ai for a reported $200 million in January, according to TechCrunch.
The startup was spun out of the nonprofit Allen Institute for AI (AI2) in 2017 and specialises in machine learning and image recognition algorithms and techniques which work locally on the device.
As our Apple columnist Jonny Evans wrote at the time: “There is an obvious symmetry between the two company’s visions: Xnor.ai’s AI models that can be installed on edge devices and Apple’s strategy to invest its devices with on-board intelligence that don’t need cloud servers.”
Jan. 14: Google Cloud acquires AppSheet
Google Cloud announced the acquisition of AppSheet in January for an undisclosed amount. The Seattle-based startup specialises in no code software development, allowing customers to build simple business applications without having to know how to write code.
AppSheet was founded by Praveen Seshadri and his old Cornell student Brian Sabino in 2014 and had secured a modest $18.5 million in funding to date, so it is safe to assume this wasn’t a blockbuster acquisition by the cloud vendor but it does fit with the company’s broader desire to democratise application development.