17 thoughts on “As the Economy Turns, Tech M&A Is Back — and That's Good News for Startups”

    1. The reason I say this — after talking to folks in the know – Paul Martiz is supremely motivated and wants to make this deal work. You want to share why this would be hard. I sincerely would love to learn from you about this.

      1. You are absolutely right that Paul is very committed to both their vCloud project as well as the Spring acquisitions. The difficulty for me is one of market and selling segments. Spring’s software will be sold to a different buyer within customers (applications group) than vSphere (server/networking group).

        If you followed #VMworld on Twitter this year you saw the thread of all of the sys-admins walking out of the keynotes when they got into the Spring deal at the end–this is again the segment issue. These guys are server jockeys and not passionate about Java frameworks. So its a new segment for both sales and marketing.

        Finally, and perhaps most importantly though is the tricky end game vision of a PaaS that goes all the way down the stack to their base tools. There just aren’t many vertically integrated stacks from server tools to application delivery– because its just such a competitive market its hard to keep control of every step. You can see this evidenced by Spring’s numerous EC2 announcements. None of this makes success impossible–but I do believe it will be tricky.

        Paul is smart and knows VMware must become a platform company, but I’m staying tuned to see how that really plays out–they are solidly a tools company today. All of this you are well aware of…just sharing my perspective on the facts. Thanks.

  1. Hi Om,

    I agree with you that the trend of tech M&As starting to happen again is a good thing, and that a new set of acquirers are emerging is also great.

    You may also want to look at Intuit’s PayCycle acquisition: $170m: http://www.sramanamitra.com/2009/08/26/adp-draft/

    I have discussed eBay or Amazon buying both MELI and NILE: http://www.sramanamitra.com/2009/04/27/amazon-ebay-netflix/

    Now who is likely to acquire Informatica? http://www.sramanamitra.com/2009/09/16/who-will-acquire-informatica/

    I also think Salesforce.com needs to start a roll-up binge: http://www.sramanamitra.com/2009/03/10/salesforcecom-3/

    Hope you are well, Sramana

  2. Great post on the M&A trends, Om. Here are a few others that make sense to me. The first two are small but with the right products and growing.

    – Yammer (Microsoft/Google)
    – Expensify (Intuit/Salesforce)
    – Citrix (IBM)
    – SixApart and Automattic (Adobe)
    – Rally Software (IBM/Microsoft)

    1. Rob,

      that was mostly because Oracle has been buying all through the downturn, regardless of the economy. I think they are not coming back to the market, as others have. Sorry if that wasn’t clear.

  3. Doesn’t seem as if Facebook Connect comment from before stuck. Redux in the event it didn’t.

    Great post on M&A activity. Here are a few deals that I think are possible.

    – Yammer/SocialCast (Microsoft/Google)
    – Expensify (Intuit/Salesforce)
    – Citrix (IBM)
    – Rally Software (IBM/Microsoft)
    – PBWiki (Citrix or others upstream)
    – Brightroll

  4. Lots of nimble startups like us are moving faster than Google and other giants. The Peter Principle is partly to blame as deadwood clogs up management ranks at some companies (not necessarily Google where the upcoming Google Wave is going to give even our technology a run for the money).

    There is another factor that can be seen in the arrogance when so-called big-wigs and experts follow 40 people on Twitter and preen themselves like peacocks about having 20,000 followers themselves…what is happening is that they are not *listening*, even to small competitors who are following them (and listening themselves very carefully).

    This allows small companies to be like velociraptors…the non-follow behavior of the big company on a platform like Twitter is like a dinosaur not seeing the velociraptors watching and circling them.

  5. funny, i had the passing thought early tonight as i sat outside (wondering if sonos controlled outdoor speakers would be good option for friend’s yard speaker needs) that bose might buy sonos. seems like a better fit than cisco from a margin/customer/brand/product approach. plus if bose is to stay relevant, they’ll have to move past the cd/mp3/alarm radio product portfolio. i don’t buy bose stuff, so just my impression.

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