2022 was a busy year for enterprise software M&A, and 2023 is likely to be busier, according to market watchers.
Based on the number of deals through September 2022, deal advisor Hampleton Partners forecast that merger activity for the full year would be 19% higher than in 2021, with deals also growing larger, and valuations as a multiple of earnings also increasing.
A survey published by law firm Morrison Foerster in November 2022 found that 80% of private equity firms and 71% of corporates expect tech M&A deal volumes to increase over the next 12 months. AI will be the hottest market sector for deals, according to 51% of respondents (up from 3% last year), with cloud favored by 31% (down from 54% last year).
There’s also increasing demand for IT security consulting companies, Hampleton Partners said. Our colleagues at CSOonline have the rundown on cybersecurity M&A activity.
The top enterprise technology M&A deals of 2022 included acquisitions of VMware, Citrix, Anaplan and Zendesk. For CIOs, these deals can disrupt strategic rollouts, spell a need to pivot to a new solution, signal sunsetting of essential technology, provide new opportunities to leverage newly synergized systems, and be a bellwether of further shifts to come in the IT landscape. Keeping on top of activity in this area can help your company make the most of emerging opportunities and steer clear of issues that often arise when vendors combine.
Here CIO.com rounds up of some of the most significant tech M&As of the last 12 months that could impact IT.
December
FTC hits pause on Microsoft’s $68.7 billion bid for Activision Blizzard
Almost a year after Microsoft agreed to buy games developer Activision Blizzard, the US Federal Trade Commission has asked a court to block the deal citing a threat to competition. Microsoft’s bid, a whopping $68.7 billion, dwarfs even the $19.7 billion it paid for Nuance Communications in 2021 or the $26.2 billion it paid for LinkedIn in 2018.
Activision Blizzard’s apps are not typically authorized on enterprise networks, but there’s a chance its technology for creating and animating virtual worlds could make it into the workplace. Microsoft said the acquisition will give it the building blocks for the metaverse.
If so, that could make the virtual office a more pleasant sight than the blurred backgrounds and disembodied heads we see in Teams today — and prompt a wave of hardware refreshes to support the additional graphics workload.
Intercontinental Exchange’s bid for Black Knight in doubt
Another of the biggest software deals of 2022 is also in doubt. In May, Intercontinental Exchange, owner of the New York Stock Exchange and a host of mortgage technology companies, bid $13.1 billion for Black Knight, a mortgage software company.
In late December, though, the Financial Services Committee of the US House of Representatives wrote to the US Federal Trade Commission to express its concern that the deal could result in too much concentration in the mortgage origination market.
Big though the deal is, it’ll have few consequences for CIOs outside the mortgage services industry.
Cognizant buys AustinCSI and assets of OneSource Virtual
IT services giant Cognizant has added 175 digital transformation consultants in Texas with the acquisition of AustinCSI, a company specializing in the design of cloud and automation systems. It has also acquired 400 specialists from another Texas company, Workday partner OneSource Virtual, bringing it close to 350,000 employees worldwide.
LumApps buys chatbot maker Vizir to improve employee experience
French employee experience platform LumApps has snapped up Vizir, developer of a no code chatbot creation platform, to help enterprises deliver more interactive services to employees. Companies building their own tools for natural language understanding like this will face strong headwinds from the likes of ChatGPT, an interactive version of the giant AI language model GPT that can be trained for use in multiple domains.
November
After Broadcom made its offer in May, it’s a step closer to closing the $61 billion deal to buy VMware, after that company’s shareholders voted to accept the offer. VMware is looking to expand its virtualization technologies into the 5G edge computing market, where Broadcom’s radio and networking chip business could give it a foothold.
RegScale, GovReady join forces to implement OSCAL governance formats
RegScale, a developer of governance, risk, and compliance software, has acquired compliance-as-code platform GovReady. The two companies are early adopters of NIST’s Open Security Controls Assessment Language (OSCAL), used for representing control catalogs and system security plans in machine-readable format.
SAP service providers join forces
Codestone Group is still expanding. After its May acquisition of Clarivos, the company has added data analytics and BI specialist DSCallards to its collection. The purchase will allow it to expand its services capabilities around SAP and Microsoft ERP tools.
Anonos buys Statice to boost data protection
Anonos, a developer of software for pseudonymizing personal data in use, has acquired Statice, creator of a tool for generating synthetic data. With European regulators cranking up fines for breaches of GDPR, tools that allow enterprises to move data between jurisdictions while maintaining protection will only grow in importance.
October
RealVNC adds remote management to VNC Connect
With its acquisition of remote management software developer RPort, RealVNC is extending the capabilities of its VNC Connect remote access tool. It expects IT teams and managed service providers will be able to perform bulk updates of Windows desktops up to 60 times faster than with its existing interactive screen sharing technology.
NTT Data adds to chain of analytics acquisitions
With the acquisition of Aspirent, an analytics advisory firm based in Atlanta, Georgia, NTT Data has added 230 data advisors to its payroll, taking its total number of employees over 130,000.
SandboxAQ spreads its bets in quantum communications
Google alum SandboxAQ is still spending, this time taking stakes in startups Qunnect and evolutionQ. Qunnect is designing components for quantum telecommunications systems, while evolutionQ is developing ways to perform quantum key distribution (QKD) over conventional networks.
ServiceNow extends observability with Era Software
Cloud native log management developer Era Software is now part of ServiceNow, which is planning to use its purchase to help customers improve the performance of the tools they build on its platform.
September
Citrix goes private, merges with Tibco to form Cloud Software Group
Investment firms Vista Equity Partners and Evergreen Coast Capital completed their $13 billion acquisition of Citrix Systems on September 30, combining it with Tibco Software, to form Cloud Software Group. For now they will operate as separate business units and retain their original branding. CSG’s CEO is Tom Krause, formerly president of Broadcom Software.
NTT Data buys Mulesoft consulting firm
Integration platform MuleSoft still belongs to Salesforce, but NTT Data is buying itself a bigger slice of the MuleSoft consulting market with the acquisition of Apisero. Around 1,500 of Apisero’s staff are certified on MuleSoft, for which it provides system integration and managed services from offices around the world, although the majority of its staff are in India. Also in September, NTT Data snapped up the much smaller Umvel, a Mexican digital engineering company.
Big Blue buys little Texan firm
IBM has continued a run of small acquisitions in niche markets, this time buying Dialexa, a software product engineering firm with offices in Dallas and Chicago. The company develops software for other companies’ products — anything from robot mowers to energy trading — and will become part of IBM Consulting.
Ricoh enlarges office communications division with Cenero
Ricoh has bought audiovisual services specialist Cenero to expand its IT services offering in North America. Ricoh already offers managed services around Microsoft Teams Rooms, and its acquisition of Cenero will help it add other unified communications capabilities. Ricoh is trying to reinvent itself as a digital services provider, with a target of making over 60% of its revenue from such services by 2025. It has a way to go: in the second quarter of 2022, digital services accounted for only 40% of revenue, with office printing still making up almost half.
SandboxAQ buys another slice of the crypto auditing market
SandboxAQ, an enterprise SaaS company that spun out of Google in March, has bought young French SaaS provider Cryptosense. SandboxAQ’s first product was a tool to help enterprises inventory and audit all the cryptographic systems they use. Cryptosense is in the same business. Both companies want to help enterprises secure their systems against the threat posed to traditional cryptography by quantum computing.
August
Stratus Technologies joins Smart Global Holdings
Edge computing vendor Stratus Technologies is now part of Smart Global Holdings, a memory module maker and owner of the Cree lighting brand and an IoT company called Penguin Solutions. The company sees the $225 million deal as a way to expand the range of enterprise IT services it offers.
Zaloni sells its data governance platform to Truist
Zaloni has sold its Arena data governance platform to US bank Truist Financial. Zaloni’s chief product officer and chief technology officer will also join the bank, which hopes the analytics and metadata management platform will help reduce its IT costs.
Sage marches into workflow automation
Accounting software vendor Sage has acquired Lockstep, a small Seattle company that automates inter-company accounting workflows. The move will help Sage customers exchange financial data not only with other Sage customers, but also businesses using the 40 other accounting platforms that Lockstep works with.
Signal AI extends its trend monitoring reach
Signal AI, the developer of a platform for identifying business trends in news coverage, has acquired Kelp, a reputation monitoring firm. Kelp is a Signal AI customer, using its External Intelligence platform to monitor corporate reputations and the factors that influence them to help enterprises develop data-driven ESG strategies.
DocHub joins airSlate to consolidate workflows
With its acquisition of DocHub, workflow automation company airSlate will be able to expand its e-signature offering for enterprises.
MariaDB buys CubeWerx
MariaDB has bought CubeWerx, a developer of geospatial software. It plans to add the capabilities to its managed cloud database service, MariaDB SkySQL. The company is named for the open-source database MariaDB, which forked from MySQL when Oracle acquired it in 2010.
July
Salesforce rallies Troops with Slack
In July, Salesforce completed its acquisition of Troops.ai, which provides tools for delivering up-to-date revenue information to sales teams. Salesforce will fold Troops into its Slack communications platform.
Infosys builds base in life sciences consulting
Consulting giant Infosys has swallowed a small Danish firm, Base Life Science, to help it expand its offering for European enterprises in the life sciences industry, particularly around clinical trials and drug development.
IBM observes gap in its portfolio, buys Databand.ai
IBM has acquired Israeli data observability specialist Databand.ai to beef up its IT operations performance management portfolio alongside Instana APM and IBM Watson Studio. Since CEO Arvind Krishna took over in April 2020, IBM has been pursuing a strategy of making small acquisitions — over 25 of them so far — to fill gaps in its offerings.
Ensono adds AndPlus to portfolio
Managed solutions provider Ensono has bought AndPlus, a data engineering firm, continuing a run of acquisitions of small cloud consulting companies: In January, it snapped up ExperSolve, which specializes in moving and modernizing mainframe applications, and last year bought Amido. Ensono is owned by KKR, the owner of BMC Software.
IFS adds Ultimo to its EAM offering
IFS has expanded the enterprise asset management (EAM) capabilities of its ERP platform with the acquisition of Dutch software vendor Ultimo. IFS will continue to offer Ultimo’s software as a stand-alone solution.
June
Thoma Bravo completes acquisition of Anaplan
Business planning company Anaplan is now part of Thoma Bravo. The investment firm negotiated a last-minute 3.5% discount on the deal, paying $10.7 billion, and immediately installed a new CEO, Charles Goodman, formerly CEO of another of its portfolio companies, Imperva. Thoma Bravo owns around 70 other IT firms, including Alation (data discovery), Nintex (process management) and Solarwinds (infrastructure management).
ParkourSC adds IoT to SCM
ParkourSC, a Silicon Valley supply chain software company backed by Intel Capital, has bought IoT networking company Qopper, which was founded by ParkourSC CTO Alok Bhanot.
Zendesk goes private at knock-down price
CRM vendor Zendesk has agreed to be acquired by investment firms Hellman & Friedman and Permira. The two investors will pay around $10.2 billion to take Zendesk private, they announced on June 24. It’s a bargain for Permira and H&F, which also own stakes in cloud customer contact center vendor Genesys: In February, as part of a consortium of bidders, they offered $17 billion for Zendesk, which turned them down saying the offer undervalued the company. At around that time, Zendesk abandoned plans to buy Momentive Global (formerly Survey Monkey) for around $4 billion.
IBM to buy Randori
IBM has bought Randori, a specialist in attack surface management and offensive cybersecurity. It’s Big Blue’s fourth acquisition this year, after buying cloud consultants Neudesic and Sentaca in February, and environmental performance management company Envizi in January.
ServiceNow to buy Hitch Works
ServiceNow has agreed to buy skills mapping company Hitch Works, with the goal of helping its customers fill talent gaps through staff training.
ICF cements links with government health agencies
Digital transformation consulting company ICF is adding to the services it offers US government clients with the acquisition of SemanticBits, a health services software provider. Late last year it also bought health analytics vendor Enterprise Science and Computing (ESAC) and service provider Creative Systems and Consulting, both of which serve US federal agencies.
Epicor adds EDI to its ERP platform with Data Interchange buy
Epicor continues to expand its ERP platform capabilities through acquisition. On June 7, it bought UK-based Data Interchange, the operator of a global EDI network and developer of software for order processing and EDI mapping.
ScanMarket joins Unit4
SaaS ERP vendor Unit4 has bought source-to-contract cloud software vendor ScanMarket to beef up its source-to-pay offering to midmarket service industry customers.
McKinsey buys data architecture and engineering company
McKinsey doesn’t just advise on mergers and acquisitions; it also makes them. A case in point: Its June 1 purchase of Caserta, the company that built its internal knowledge management platform. McKinsey expects the acquisition to benefit its data transformation work for its clients.
May
Instaclustr continues acquisitive streak for NetApps
NetApps closed its acquisition of Instaclustr on May 24. The service provider supporting open-source database, pipeline, and workflow applications in the cloud will join the Spot by NetApp portfolio, the collection of SaaS tools built around the cloud management and cost optimization company NetApp bought earlier in 2022.
Zoom zooms into AI chatbot market
With the market for user of videoconferencing software becoming saturated, Zoom has turned to a new customer base: bots! It has acquired Solvvy, a customer service automation specialist. Solvvy develops AI-powered chatbots that Zoom plans to deploy as part of its Zoom Contact Center offering for enterprises.
Oracle acquires HR tools to expand NetSuite
Oracle has acquired workforce management software vendor Adi Insights. It plans to roll the company’s overtime management, demand forecasting and shift scheduling into SuitePeople, part of its mid-market SaaS ERP NetSuite.
Panasonic plans IPO of recent acquisition Blue Yonder
Barely a year after buying Blue Yonder, a vendor of supply-chain management software as a service, Panasonic is looking to sell it again as it pursues a new strategic direction. Panasonic said in mid-May that it will combine Blue Yonder with its Gemba Process Innovation activities and seek a stock exchange listing for the new entity. It has not set a timetable for the sale.
Augury adds process intelligence to machine health offering
Augury, an industrial IoT vendor specializing in monitoring machine health, has paid over $100 million for process intelligence vendor Seebo. Augury plans to combine the two companies’ AI-based tools to help manufacturing companies to balance quality and throughput with energy consumption, emissions, and waste.
SAP service providers join forces
Codestone Group has bought Clarivos. The two provide services around SAP’s ERP, analytics, and enterprise performance management (EPM) tools.
Perforce Software buys Puppet
Perforce Software, a privately held provider of software development tools, has agreed to buy the infrastructure automation software platform Puppet. Perforce already owns development tools such as Helix and the testing tools, including Perfecto and BlazeMeter.
April
Infosys buys oddity for digital marketing capabilities
The appetite of Indian IT service companies for European acquisitions is still unsated. Infosys has bought oddity, a German provider of digital marketing services that also has offices in Taipei and Shanghai. Infosys will fold oddity into Wongdoody, the US consumer insights agency it bought in 2018.
Microsoft buys Minit to optimize process automation
Microsoft has bought Minit, a developer of process mining software, to help its customers optimize business processes across the enterprise, on and off Microsoft Power Platform. The acquisition will help it extract process data from enterprise systems such as Oracle, SAP, ServiceNow, and Salesforce to identify process bottlenecks that can be optimized or automated.
NTT Data adds Vectorform to service portfolio
Global IT services giant NTT Data has bought another sliver of market share and added some new capabilities with its acquisition of Vectorform, an 80-person digital transformation consultancy based in Detroit. With Vectorform, NTT Data is looking to grow its customer experience and product development services across industries.
Celonis buys Process Analytics Factory
Process mining giant Celonis has snapped up Process Analytics Factory, a small German company specializing in process optimization on Microsoft’s platforms. Celonis started out helping enterprises optimize SAP workloads, and now its acquisition of the developer of PAFnow will help it broaden its access to the Power BI and Power Platform markets.
Equinix buys West African data center company for $320 million
Global data center operator Equinix expanded its capability and connectivity in West Africa in early April with the $320 million acquisition of MainOne, which offers services in Ghana, Nigeria, and Côte d’Ivoire. MainOne has just opened its fourth data center, in Lagos.
Salesforce absorbs Phennecs data management tool
Phennecs, developer of a privacy, compliance, and data management tool for the Salesforce platform, is now part of Salesforce. The acquisition closed in April.
March
SS&C buys Blue Prism
Robotic process automation vendor Blue Prism is now part of SS&C Technology Holdings, a private equity and hedge fund that also owns a stack of niche finance and healthcare software vendors. For now, SS&C plans no changes in Blue Prism’s business, other than tacking SS&C on the name.
SAP closes deal to buy most of Taulia
Working capital management service provider Taulia is now majority-owned by SAP. Investor JP Morgan will retain a stake in the company, which will operate independently within the SAP group.
Nvidia buys block storage software developer Excelero
With $40 billion in spare cash to spend after its bid for chip designer Arm fell through, Nvidia is turning to smaller acquisitions to build its capabilities. In early March it announced its second of 2022, Excelero, which develops software for securing and accelerating arrays of flash storage for use in enterprise high-performance computing.
February
NetApp buys Fylamynt for cloud ops automation
NetApp added some new functionality to its portfolio of cloud management tools in late February with the acquisition of Fylamynt, a young low-code cloud ops automation company. Its aim is to help customers automate the deployment of Spot by NetApp services.
Vendr buys SaaS platform Blissfully to simplify buying SaaS
SaaS vendor management platform Vendr is buying SaaS management platform vendor Blissfully. Vendr aims to offer finance and procurement teams savings on the purchase of SaaS services, while Blissfully helps enterprises identify what software they own and where they can save money.
Test automation: Tricentis buys Testim
Software test automation vendor Tricentis has bought Testim, the developer of an AI-based SaaS test automation platform, to expand its continuous testing solutions. Tricentis hopes Testim’s platform will make it easier for customers to create tests that scale and change with their software.
Phenom pairs with Tandemploy on talent experience management
HR technology company Phenom has snapped up another talent experience management company. This time it’s the German Tandemploy, which Phenom hopes will help it better recommend pairings among peers, mentors, project leaders, and subject matter experts.
January
Atlassian buys Percept.ai
Atlassian has acquired chatbot developer Percept AI and plans to add its virtual agent technology to its Jira Service Management IT support tool. The idea is that it will automate the gathering of necessary context before passing them to human operators to help resolve cases faster. It’s Atlassian’s sixth ITSM acquisition in four years.
Lansweeper acquires UMAknow
IT asset management platform Lansweeper has acquired UMAknow, the developer of Cloudockit. As Lansweeper scans on-premises computing environments, Cloudockit compiles architecture diagrams and documents users’ assets in the cloud.
Precisely buys PlaceIQ
Data integrity specialist Precisely kicked off 2022 by buying PlaceIQ, a provider of location-based consumer data. It’s Precisely’s fifth acquisition since itself changing ownership last March. Other purchases include weather data provider Anchor Point and MDM software vendor Winshuttle.
Aptean jets into Austrian ERP market
Continuing along its flight path of acquiring small regional or industry-specific ERP vendors, Aptean has bought Austrian software vendor JET ERP, its fourth recent acquisition in the country.
Indian IT services companies acquire near-shoring operations in Europe
Indian IT services provider Tech Mahindra is expanding its offering to insurance, reinsurance, and financial firms with the acquisition of Com Tec Co IT, a custom software developer with 700 staff in Latvia and Belarus skilled in modern technologies, including AI, ML, and devsecops, for €310 million, while another Indian company, HCL Technologies, has acquired Starschema, a Hungarian data- and software-engineering service provider with offices in Budapest and Arlington, Va.
Sage swallows Brightpearl
Midmarket ERP vendor Sage closed its acquisition of Brightpearl on Jan. 18. It plans to integrate Brightpearl’s e-commerce management software with its Intacct cloud-based financial applications.
Nvidia buys Bright Computing
With its giant bid for microprocessor designer ARM now abandoned, Nvidia is turning to smaller deals to bolster its capabilities. In early January, it bought Bright Computing, a developer of software for managing the high-performance computing clusters that Nvidia’s chips are used in when they are not mining cryptocurrencies or rendering games.
Oracle buys part of Verenia’s CPQ business
Oracle has acquired Verenia’s NetSuite-based configure-price-quote business to add native CPQ functionality to NetSuite. Verenia retains its non-NetSuite product lines.
