Cloud technology driving latest spate of mergers and acquisitions

Cloud technology driving latest spate of mergers and acquisitions

The use of the cloud has become all the more extensive over the course of recent years, offering businesses a number of great advantages.

However, it seems that such platforms are now being seen as an integral part of mergers and acquisitions (M&A) for a number of technology firms.  

That is the latest verdict from EY, which in its latest review of M&A activity in the second quarter of this year found that cloud was behind a number of transactions between companies.

In fact, the firm found that a total of $52.4 billion (£31.60 billion) in deals were conducted across the globe between April and June, representing a 57 per cent year-over-year increase.

EY estimates that cloud and smart mobility was directly responsible for influencing around 42 per cent of deal-making decisions in the technology sector.

Not only was there a greater amount of deals motivated by cloud terchnolgy, but the deals made were also far more lucrative too, with three quarters of the second quarter transactions greater than $1 billion targeting internet or cloud/SaaS companies or firms linked to the ongoing Internet of Things trend.

The study also outlined a number of key examples, including SanDisk Corporation's acquisition of Fusion-io, Inc., a deal that was mainly influenced by the cloud-driven growth of high-performance data centre storage solutions.

Elsewhere, Zebra Technologies announced a $3.5 billion deal to acquire the scanner business of Motorola Solutions, while Cloudera acquired Gazzang, a provider of cloud-based encryption software.

Fair Isaac Corporation (FICO) also acquired Karmasphere, Inc., a Hadoop query construction and collaboration software vendor, in a deal that has allowed it to provide an interface for its FICO Analytic Cloud.

EY’s Jeff Liu said: “Nothing less than a technology-induced reinvention of all industries has begun, moving toward ‘sense and respond’ relationships between businesses and their customers and driven by the five transformational technology megatrends: smart mobility, cloud computing, social networking, big data analytics and accelerated technology adaptation."