Posts Tagged google

Fueled by SMAC Tech M&A Activity to Heat Up

Corporate professional services firm BDO USA  polled approximately 100 executives of U.S. tech outfits for its 2014 Technology Outlook Survey and found them firm in the belief that mergers and acquisitions in tech would either stay at the same rate (40%) or increase over last year (43%). And this isn’t a recent phenomenon.

M&A has been widely adopted across a range of technology segments as not only the vehicle to drive growth but, more importantly, to remain at the leading edge in a rapidly changing business and technology environment that is being spurred by cloud and mobile computing. And fueling this M&A wave is SMAC (Social, Mobile, Analytics, Cloud).

SMAC appears to be triggering a scramble among large, established blue chip companies like IBM, EMC, HP, Oracle, and more to acquire almost any promising upstart out there. Their fear: becoming irrelevant, especially among the young, most highly sought demographics.  SMAC has become the code word (code acronym, anyway) for the future.

EMC, for example, has evolved from a leading storage infrastructure player to a broad-based technology giant driven by 70 acquisitions over the past 10 years. Since this past August IBM has been involved in a variety of acquisitions amounting to billions of dollars. These acquisitions touch on everything from mobile networks for big data analytics and mobile device management to cloud services integration.

Google, however, probably should be considered the poster child for technology M&A. According to published reports, Google has been acquiring, on average, more than one company per week since 2010. The giant search engine and services company’s biggest acquisition to date has been the purchase of Motorola Mobility, a mobile device (hardware) manufacturing company, for $12.5 billion. The company also purchased an Israeli startup Waze  in June 2013 for almost $1 billion.  Waze is a GPS-based application for mobile phones and has brought Google a strong position in the mobile phone navigation business, even besting Apple’s iPhone for navigation.

Top management has embraced SMAC-driven M&A as the fastest, easiest, and cheapest way to achieve strategic advantage through new capabilities and the talent that developed those capabilities. Sure, the companies could recruit and build those capabilities on their own but it could take years to bring a given feature to market that way and by then, in today’s fast moving competitive markets, the company would be doomed to forever playing catch up.

Even with the billion-dollar and multi-billion dollar price tags some of these upstarts are commanding strategic acquisitions like Waze, IBM’s SoftLayer, or EMC’s XtremeIO have the potential to be game changers. That’s the hope, of course. But it can be risky, although risk can be managed.

And the best way to manage SMAC merger risk is to have a flexible IT platform that can quickly absorb those acquisitions and integrate and share the information and, of course, a coherent strategy for leveraging the new acquisitions. What you need to avoid is ending up with a bunch of SMAC piece parts that don’t fit together.

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Big Data and Analytics as Game Changing Technology

If you ever doubted that big data was going to become important, there should be no doubt anymore. Recent headlines from the past couple of weeks of the government capturing and analyzing massive amounts of daily phone call data should convince you.

That this report was shortly followed by more reports of the government tapping the big online data websites like Google, Yahoo, and such for even more data should alert you to three things:

1—There is a massive amount of data out there that can be collected and analyzed.

2—Companies are amassing incredible volumes of data in the normal course of serving people who readily and knowingly give their data to these organizations. (This blogger is one of those tens of million .)

3—The tools and capabilities are mature enough for someone to sort through that data and connect the dots to deliver meaningful insights.

Particularly with regard to the last point this blogger thought the industry was still five years away from generating meaningful results from that amount of data coming in at that velocity. Sure, marketers have been sorting and correlating large amounts of data for years, but it was mostly structured data and not at nearly this much. BTW, your blogger has been writing about big data for some time.

If the news reports weren’t enough it became clear at IBM Edge 2013, wrapping up is Las Vegas this week, that big data analytics is happening and companies and familiar companies are succeeding at it now. It also is clear that there is sufficient commercial off-the-shelf computing power from companies like IBM and others and analytics tools from a growing number of vendors to sort through massive amounts of data and make sense of it fast.

An interesting point came up in one of the many discussions at Edge 2013 touching on big data. Every person’s data footprint is as unique as a fingerprint or other bio-metrics. We all visit different websites and interact with social media and use our credit and debit cards in highly individual ways. Again, marketers have sensed this at some level for years, but they haven’t yet really honed it down to the actual individual on a mass scale, although there is no technical reason one couldn’t. You now can, in effect, market to a demographic of one.

A related conference is coming up Oct. 21-25 in Orlando, Fl., called Enterprise Systems 2013.  It will combine the System z and the Power System Technical University along with a new executive-focused Enterprise Systems event. It will include new announcements, peeks into trends and directions, over 500 expert technical sessions across 10 tracks, and a comprehensive solution center. This blogger has already put it on his calendar.

There was much more interesting information at Edge 2013, such as using data analytics and cognitive computing to protect IT systems.  Perimeter defense, anti-virus, and ID management are no longer sufficient. Stay tuned.

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