Subscribe To Our Daily Enewsletter:

5 Big Technology, Cloud Businesses Likely Up for Sale

Amid the rapid shift from CapEx IT spending toward OpEX cloud services, at least five major technology companies and/or cloud businesses are up for sale. Who are they? In some cases, you likely already know the names. But it’s easy to forget just how much M&A money could be changing hands over the next few months.

Here’s a look at four businesses that are up for sale — if they right buyer comes along — and one business that’s rumored to be up for sale…

1. Verizon Cloud Data Centers

  • Why potentially sell: Failure to keep pace with Amazon Web Services, Microsoft Azure.
  • Why buyers might be interested: Big footprint of data centers known for mission-critical services.

Details: Rumors about Verizon’s attempt to sell its cloud data center businesses have circulated since around November 2015. At the time, Reuters suggested the businesses could be worth as much as $10 billion. Frankly, I doubt the figure is that high — especially since Verizon’s cloud revenues aren’t all that strong. Instead, the company has increased its focus on network-centric services.

More recent reports suggest that Verizon is looking to sell only a portion of the cloud data center business, perhaps for about $2.5 billion. During an earnings call in July 2016, the telecom giant said it expects to decide whether to sell or retain the cloud data centers sometime in Q3 of this year. We’ll be watching.

2. CenturyLink Cloud Data Centers

Glen Post

Glen Post

  • Why potentially sell: Failure to keep pace with Amazon Web Services, Microsoft Azure.
  • Why buyers might be interested: Big footprint of data centers known for mission-critical services.

Details: This situation is somewhat similar to the Verizon situation. CenturyLink since 2015 has been looking to sell some or all of its physical cloud data centers. But the company wants to continue offering cloud services in some capacity. During a recent earnings call, CenturyLink CEO Glen F. Post said the company hopes to finalize its decision on a potential sale in Q3 or the early Q4 2016 timeframe. In the meantime, the company’s cloud business has experienced revenue declines in Q1 and Q2. Nobody said competing with Amazon Web Services and Microsoft Azure was going to be easy.

3. Avaya’s Business

  • Why potentially sell: Heavy debt load, shrinking revenues and a failure to keep pace with Cisco Systems.
  • Why buyers might be interested: Backed by sophisticated channel partners; offers well-respected unified communications and collaboration systems.

Details: Avaya since May 2016 has been considering financial options that could include selling some or all of its business. As part of a Q2 earnings announcement, Avaya CEO Kevin Kennedy said the company has retained Goldman Sachs and Centerview Partners as financial advisors “to assist in comprehensively assessing alternatives and evaluating expressions of interest which address the company’s capital structure.” In other words: Avaya is for sale if a bidder can come up with the right financial package. ChannelE2E mentioned these potential buyers for Avaya back in May… but we haven’t heard much since that time.

4. ShoreTel’s Business

  • Why Potentially Sell: Lacks the scale to compete with enterprise-size cloud PBX and telecom providers. Potential rise of Microsoft Cloud PBX tied to Office 365.
  • Why buyers might be interested: Transitioning quickly toward recurring revenues. Large network of channel partners that understand SMB voice solutions.

DetailsShoreTel essentially put itself up for sale in August 2016, forming a Strategic Advisory Committee to explore that path forward along with potential alternative paths. But which companies could potentially bid for ShoreTel’s unified communications, IP telephony and cloud businesses? We offered this list of potential ShoreTel buyers but haven’t heard much since that time.

5. HP Enterprise Software Business

Meg Whitman HPE CEO

Meg Whitman

  • Why Potentially Sell: Weak SaaS revenues within an industry that’s growing rapidly.
  • Why buyers might be interested: Portfolio includes a range of IT management, analytics and optimization tools.

Details: Chalk this one up as just a rumor. HP Enterprise has performed pretty well since the HPE-HP Inc. company breakup last year. But rumors about HP Enterprise wanting to sell some of its software assets surfaced in July 2016. Of course, we weighed in with a list of potential buyers for those HPE software businesses. But again, this nugget belongs purely in the rumor bin.

Tell Us More…

So which “for sale” technology businesses did we miss? Please feel free to leak your company secrets, rumors and potential exit information directly to my email inbox: Joe@AfterNines.com.

Return Home

No Comments

Leave a Reply

Your email address will not be published. Required fields are marked *