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Biggest Tech Day Ever for M&A… And Separations

It was an unprecedented day for technology mergers, acquisitions — and separations. Four technology giants — Dell, EMCHewlett Packard Enterprise and Intel — each made major moves that will reshape their businesses. Some of the moves were expected. Others were rumored and finally confirmed. The big two-part question: Will the moves actually improve their businesses — and the partners they serve?

Among the massive moves worth noting:

M&A Hits and Misses

Each move highlights just how difficult it is for “established” IT giants to navigate today’s cloud, mobile, big data and social landscapes.

Dell Technologies claims it can be nimble and a market leader for software-defined data centers. But that won’t be easy. Dell’s earlier acquisitions included some hits (Compellent, EqualLogic) and some misses (MSP software platforms like PacketTrap and SilverBack got killed in the crossfire). The company also had to reverse course on some deals, essentially selling off SonicWall (partners sound thrilled) and Quest Software) to raise money for the EMC buyout.

Intel, meanwhile, never did find its stride with McAfee. That business unit was an early leader in MSP-focused security solutions. But under Intel’s ownership, those strategies stumbled badly and partners alleged some McAfee assets (ie, MX Logic) were killed off prematurely.

HPE, similarly, had egg on its face after the massive Autonomy acquisition and future write-down of the deal’s value. HPE’s own SaaS business has been flat or shrinking in recent quarters — evidence that the company has struggled to compete in fast-growth recurring revenue markets.

How About Organic Business Development?

Amid the respective M&A missteps at HPE and Intel, some partners are surely hoping big IT vendors will increasingly focus on organic business development and/or strategic tuck-in deals.

No doubt, most big M&A deals have upside promise. Dell and EMC, for instance, truly have a massive portfolio of compute, storage, network and software technologies to run tomorrow’s data centers.

But the pain of poorly executed M&A — examples like Intel-McAfee and HPE-Autonomy — certainly has left its mark in many ways. Lost jobs. Lost valuation. And lost time in the highly competitive IT market…

Long live M&A (done right). And long-live spin-offs that give a new owner a fresh chance to do things right.

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