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Flurry of technology M&A foreshadows 2017 trends

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As the market continues to undergo a series of major mergers and acquisitions, some observers say to expect more technology M&A in 2017.

In the fall of 2015, with Dell's purchase of EMC, the technology industry witnessed the biggest technology buyout in history.

The hardware vendor bought the storage and security provider for $67 billion. Observers wondered whether the combination made sense, whether the buyout was overvalued and what the purchase foretold for the future.

It seemed surprising at the time, but was, in fact, just a foreshadowing of more technology mergers and acquisitions (M&A) to come. In 2016, the flurry of acquisitions continued, with an equity firm buying Marketo (the marketing automation vendor), Microsoft purchasing LinkedIn (the enterprise social networking site) and Oracle going after its traditional ERP competitor, NetSuite. Many smaller buyouts took place, as well, with Salesforce snapping up vendors like MetaMind, Demandware and Quip to fill out capabilities in its customer engagement platform.

Scott Robinson, a SharePoint and BI expert, weighed in on some of the 2017 technology trends that marked last year, like M&A, and which will continue to build in 2017.

Technology platform wars. Robinson said that fleshing out elements of their platforms makes sense for big vendors, as they want to broaden their functionality in customer engagement, BI and analytics, and internet of things.

"We have learned since [ERP implementations of the 1990s] that this monolithic deployment will eat you alive," Robinson said. "The platform wars are a 21st-century answer to that problem. They are well integrated and can solve a host of enterprise challenges all in one pass, which is a great thing."

However, according to Robinson, "It becomes unhealthy where big giants are so powerful that Microsoft can gobble up LinkedIn for pocket change. Then [the] tech universe is funneling in directions that are not as diverse, as rich as what we've had for the past decade."

Technology M&A impact. Robinson also noted that the flurry of technology M&A activity could squelch innovation and diversity in the marketplace.

"The big concern," he said, "is that this is becoming the new way tech giants do warfare against one another. Rather than trying to compete on products, services and good ideas, they're trying to compete through sheer financial power. That has never worked out well in any industry from the consumer's point of view. It's a way to dominate in a market; it's a way to win. But if you are winning by scooping up smaller competitors, you're not really out there in the marketplace competing.

"We need to be building bridges, not walls," Robinson concluded.

For more, check out the podcast above. For part one, click here.

Next Steps

NetSuite acquisition signals more consolidation

Dell-EMC buyout has major impact on technology M&A landscape

Microsoft purchase of LinkedIn could benefit Dynamics CRM

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