17 thoughts on “The new guard: Look at who is buying technology companies now”

  1. Om–Nice piece. Not a coincidence I am sure that your post comes the same day Dave Johnson left Dell for private equity….

  2. Om, you should come to see Shopperception Demo at the PrimeSense booth in CES to experiment what you write about retailers data needs :).

    We use 3D sensors to generate analytics and real time events of shoppers interaction in front of the shelf. (www.shopperception.com)

    Our technology level the battlefield between off line retailers and ecommerce.

  3. I don’t see why ZipCar is any more of a tech company than Avis. Both rent cars, and both have websites that let you reserve the cars. Both are dependent on computers and the cloud. Both employ armies of programmers and engineers. So why is ZipCar a tech company and not Avis?

    1. Good point, although I wouldn’t consider any one of the two as tech companies. They both fundamentally offer an analog service. One of the reasons for the acquisition was indeed to get a talented network of programmers on-board, but more importantly to cover another promising part of the car rental business.

  4. The AthenaHealth purchase of Epocrates made sense and glad someone picked them up before they went away as finding all those formularies and what tier the drugs are is a huge asset and I have been using it since the Palm days. Mergers and acquisitions in healthcare are brutal and I see people relating that that doesn’t relate to sell “stuffed analytics”..scary and FICO is a big one that uses your credit score and queries it with data mine and won’t review the sources to create this magical report that scores you from 0 to 500 on whether or not you will be a patient who will take their prescriptions. I know it sounds nuts but it’s out there and they are selling this. I don’t care if someone wants to crunch numbers but when you combine credible heatlhcare information with non credible nonsense mined from the web with sources not given, I call it Algo Duping.

    Even Google as this is funnier than all get out suspended my Google Plus account until they fixed it saying my name did not meet their policies.

  5. There are more worthwhile conversations to be had here, IMHO. By extension one could call Google a media company, and not tech. All these companies straddle multiple worlds, some just get “social tech”, the 3.0 of Tech.

  6. I dunno. A great many enterprise software deals are still done for user base/licence revenue and for economies of scale. Gettign smart people or tech is secondary in that world of glorified financial arbitrage.

  7. This trend makes sense from both a talent perspective and a complementary channel approach where bricks and mortar approach can be integrated with a more comprehensive online presence. We are providing a new channel for sellers to sell goods with our user driven platform at our newly launched beta site Flash Purchase.

  8. Good article Om. Athena Health is a tech company though. It is a major EMR (electronic medical records) company.

  9. Question with respect to Amazon, however: does Amazon actually have a sustainable business model, at least with their current pricing?

    I say this as someone who personally likes Amazon as a consumer. Look at any financial metric, however – margins, net income, return on assets, and return on equity are all anemic. I can’t see why the company should have a market cap of anything like $120 billion. The counterargument from Amazon bulls is that the company is investing for growth. My issue with that line of reasoning is that a company with over $50 billion of annual revenue should have sufficient scale that profits from the core business easily fund growth initiatives – particularly when annual revenue growth is in the mid-20% range.

  10. Great article and of course many offline publishers will be buying these new digital media orgs…My top 10 list for acquisition targets in 2013 are (alpha order):

    Twitter (or IPO)

  11. “Tech Company” is a redundancy for any large enterprise market. Avis didn’t buy a “Tech Company” by buying Zip Cars, they just bought a company that did a better job of reaching a specific demographic by harnessing a newer utility.

  12. Om excellent article and great example “A physical retailer of tomorrow … that is highly customized to an individual”.
    Intuition Intelligence, Inc’s iCube Super Relevancy engine can already do it for retailers in their Smartphones and other digital channels.
    Wipro Technologies recently launched “SmartOffers” in partnership with us for Financial Services.
    – Yusuf Ansari
    Founder, Intuition Intelligence, Inc.

  13. Really great insight. This is happening quietly, that’s why most ‘old’ companies (and majority of public) don’t realise this fundamental change.

    At today accelerated pace of change of everything around us, who knows who will own whom, how soon and how will old industry or niche look after change. Exciting times definitely.

  14. Excellent post, Om.

    I’m also seeing a rapid evolution in the range of buyers for technology companies.

    This video is from a talk I gave at the National Angel Capital Association summit, where I describe the new types of M&A buyers active today:


    All these new buyers sure make being an entrepreneur today a lot more exciting.

    Thanks for your outstanding blog.

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