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Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
Merger & Acquisition by top Technology companies
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Merger & Acquisition by top Technology companies

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The study looks into the merger and acquisition by the top 10 Enterprise Technology companies in between 2000 to 2011 and attempts to identify the trend and strategic direction for these companies.

The study looks into the merger and acquisition by the top 10 Enterprise Technology companies in between 2000 to 2011 and attempts to identify the trend and strategic direction for these companies.

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  • An overview of the project - 1 slideAn overview of Technology Business - Taxonomy - 1 slideBusiness Size - Data from Gartner - 1 slideCriteria used to select the companies - List of companies - 1 slideCurrent Competitive positioning of companies - 1 slideAcquisition Slides of IBM, Oracle, SAP, HP, Dell, EMC - 6/7 slidesRevenue breakup and growth - Software business players, Server & PC Business guys and Niche players -  2/3 slidesAcquisitions by Segments - 3 slidesConclusion - 3 slides---------------------------------------------Total - 22 slides
  • We removed few companies like Google, Apple & Amazon from the list.
  • http://www.gartner.com/it/page.jsp?id=1339013
  • http://www.morganstanley.com/institutional/techresearch/pdfs/tenquestions_web2.pdfThis slide give a very critical perspective into how computing has been changing over a period of time.With explosive growth in Mobile Internet users, whole new horizon of opportunities are opening up.Consumer specific computing would move to Smartphones and Tablets while a large part Business Computing would move to cloud based computing – SaaS, PaaS, HaaS
  • In this slide, we would cover different segments in the Tech Business that are in use with various companies like Oracle or practiced by various analysts like Gartner.Some of the high growth sectors are shown in different color.
  • Based of their current product offerings.
  • Primarily a database provider. Oracle has transitioned completely into a mega vendor over 5 years due to acquisitions.ERP, CRM, BI, eCommerce, Middleware (all market leaders)With the acquisition of BEA, Oracle sought to accelerate the adoption of Java middleware technologies and Service Oriented Architecture (SOA) to enhance and extend its Fusion Middleware software.The acquisition of Sun was influential in many waysOwn Java technologies – on which a lot of technologies run.Have its own operating system Solaris – and integrate DB and SolarisCapture the server, storage business of Sun.
  • Ascential Software, Cast Iron and Sterling Commerce – all data integration companies. Using the combined technologies of IBM and Sterling Commerce, clients have the flexibility to manage these processes – and their networks of business partners – through public or private cloud computing environments.Lot of acquisitions in AnalyticsCognos – BI reportsCoremetrics, Unica – Web analytics – customer pref analysis, provide more relevant and targeted marketing communication on internet. Along with SI, demand generation, sales process automation, order processing and fulfillment.IBM has also strengthened its offering in networking mgmt and unified communication systems (video technology) with acquisitions of Micromuse and MRO Software.
  • EDS – Major services acquisition3PAR – Network storage leader – primarily viewed as HP’s urgency to strengthen its offerings in fast growing virtual data center and cloud computing markets.3Com – Purchase of network infra company – routers, switches, Palm – move to get into mobility devices and create mobile OS, appsArcSight – security solutions. For enterprise risk and compliance management.Mercury – Big acquisition in software space. But revenue figures indicated that HP didn’t take full value of acquisition.
  • SAP – a leader in enterprise apps segment with strong CRM, Supply chain solutions.Business Objects – Analytics tool to integrate with its software applications to analyze large amount of data to improve business performance with its reports.Follows Oracles acquisition of HyperionSybase – two purposeProvide its enterprise apps in mobileAcquire Sybase DB, removes dependence with Oracle DB
  • Lot of acquisitions and investments to enhance their wireless networking offeringsThe acquisition of Infineon enhanced its offerings in mobile wireless solutions and along with embedded devices acquisition of Silicon Hive, Wind River, Intel now goes head to head with ARM to create chips for smart phones. Big acquisition of McAfee – to provide security in hardware mobile.Recently came up with tablet “meebo” in collaboration with Nokia and in 2011, plans to come up with chips for smartphones. Clear strategic direction.
  • Major acquisitions in various segmentsPerot systems – to improve their service offeringsEqual Logic, Compellent – leader in network storage provider. With a view to provide virtualization solutions.Move into SaaS integration with acquisition of Boomi and SecureWorks
  • Cisco has given a lot of emphasis on is in Virtualization. Cisco has rolled out a product called Unified Computing System, which is a combination of (network + storage + server + virtualization).Tandberg, Starent Corp., WebEx, Navini Networks etc. which are very strong in video conferencing solutions, mobile based IP, internet communications, mobile WiMAX respectively.
  • IBM, SAP & Oracle are the top three players. Ref - http://www.gartner.com/it/page.jsp?id=1357514OutlookSoft Corporation was a Stamford, Connecticut based software company with products for business performance management including planning, consolidation, forecasting, budgeting, dashboards, predictive analytics and reporting. Along with OutlookSoft, other vendors in the performance management space include SAS, Cognos and Business Objects.SAF Simulation, Analysis and Forecasting AG, one of the global forecasting and replenishment software leaders in the retail and wholesale industries. Through the intended acquisition, SAP plans to further extend and complement its current planning, forecasting and replenishment solution portfolio for retail and wholesale companies.Netezza – Dataware house Appliance, BIOpenPages, a leading provider of software that helps companies more easily identify and manage risk and compliance activities across the enterprise through a single management system.ClaritySystems – Corporate Performance Magmt, Financial Governance.
  • Oracle -With Sun acquisition, Oracle is a new entrant in this space.IBM –Diligent – Data deduplicationStorwize – Data compression
  • Oracle -With Sun acquisition, Oracle is a new entrant in this space.IBM –
  • IBM -Traditionally IBM is strong player in Network Management and they have Tivoli in their portfolio.In Collaboration (or Unified Communication System), IBM has IBM Live & Lotus (notes, sametime etc)IBM’s recent acquisitions in this space are aimed at strengthening it’s position in Network Managment space further. However, with Blade acquisition, IBM will build its expertise in high-performance, low-latency Ethernet switches. HP –HP is present in Network Equipment manufacturing (Switched & Routers etc) through Procurve.HP’s offering in Netowork Management is OpenviewHP’s acquisitions are aimed at strengthening their presence Network Equipment further.Cisco –Cisco is traditionally strong player in Network Equipment Manufacturing i.e. Switches & Routers. But in recent past its under price pressure from very aggressive offerings from HP & Juniper.Recently acquisitions from Cisco are aimed at strengthening their presence in Collaboaration (Unified Collaboration System) further.
  • IBM traditionally has been Server, PC business, with good Db2 offering.Over years, good divestitures, good acquisitions in BI, Storage.Good partnerships with Juniper for networking and Vmware for virtualization.
  • Unique End-to-End Solutions EnablementAcadia—a joint venture of Cisco and EMC, along with VMware and Intel—focuses on speeding adoption of private cloud infrastructures through end-to-end enablement of service providers and large enterprise customers. they seek to virtualize their IT infrastructures and evolve to the private cloud.The Virtual Computing Environment coalition offers organizations of all sizes an accelerated approach to data center transformation with dramatic efficiencies that promise significant reductions in both capital and operating expenses.
  • IBM, Oracle, SAP and Microsoft are clearly heading towards mega vendors who can provide one-stop-shop.EMC, Cisco & Intel are focused players in Virtual Computing.HP and Dell seems to pursuing similar strategy. However both on services and in mobility they would be pitching against well-established players.
  • Every new IT trend goes through a cycle. At the end of a cycle, the industry faces an inflection point. We noticed Oracle, IBM and other focused vendors have a very clear cut strategy.However, we do notice that HP and Dell are not.
  • One interesting observation here – HP & Dell are the only two comapnies where the Market Capitalization is less than the revenue.
  • This slide is an extra slide and not for presentation.
  • Transcript

    • 1. Merger & Acquisitions by Big IT CompaniesA study to identify the trend and strategyProf. R. Srinivasan (CSP)Naveen Kumar K E (2008040)Satyajit Paul (2008046)Date – 19-Mar-2011PGSEM Final Year Project
    • 2. Project OverviewUnderstanding the strategies of the large Tech Companies byanalyzing their acquisitions. Our study should help us develop an indepth understanding about the emerging technology trends &innovation and how those technology trends & innovationinfluenced the strategies of large technology companies.Methodologies Selection of companies based on predefined criterion. Data Collection Sources include company websites, Press Releases, SDC,Gartner Press Releases, Data Monitor. Study the individual companies. Develop the Taxonomy of Software Companies and find the market size. Fit them into the Taxonomy of Software Companies. Study the acquisitions of the companies over last 5 to 7 years Study some of the high growth segments. Observations & Insights. Predictions.
    • 3. Selected CompaniesHewlett-PackardIBMMicrosoftOracleDellCisco SystemsIntelSAPEMCCriterion Used for filtration•Fortune Top 100 companies by Revenue.•Fortune Top 50 companies by Market Value.•Fortune Top Computer Software Companies.•Fortune Top IT Services Companies.•Companies having operations in India.
    • 4. Worldwide IT SpendingLonger-term, server spending will be curtailed by virtualization, consolidation and, potentially, cloud computing.The infrastructure market (all the software to build, run and manage an enterprise) is the largest segment in terms ofrevenue and the fastest-growing through the 2014.The hottest software segments through 2014 include virtualization, security, data integration/data quality andbusiness intelligence.Web conferencing, team collaboration and enterprise content management are forecast to have double-digitcompound annual growth rates (CAGR), in the face of growing competition surrounding social networking and content.
    • 5. Computing CyclesSource – Morgan Stanley (Nov, 2010)
    • 6. Taxonomy of Technology CosSemi conductorStorageServersVirtualizationOperating SystemDatabaseMiddleware & IntegrationApplicationCloudSoftware ServicesERPCRMSupply ChainBI&AnalyticsServers, Tools & PlatformsSecurity&ComplianceNetworkingApplication Dev SoftwareNetwork & Nt Srvc MgmtNetwork InfrastructureContent ManagmentSoftware as ServicePlatform/HW as ServiceProj. & Portfolio MgmtIT Infra MgmtUnified Communication
    • 7. Competitive Positioning - PresentSemi conductorStorageServersVirtualizationOperating SystemDatabaseMiddleware & IntegrationApplicationSoftware ServicesServers, Tools & PlatformsNetworking
    • 8. 0500010000150002000025000300002005 2006 2007 2008 2009 2010ServicesHardwareSoftwareMajor Acquisitions -PeopleSoftSiebelHyperionBEA SystemsSun MicrosystemsRevenue in Software businessgrowing substantially.With acquisition ofSun, Oracle has enteredHardware segment.Company Analysis - ORACLE
    • 9. Company Analysis - IBMMajor acquisitions:Sterling CommerceCognosNetezzaDivestitures:Personal ComputingPLM SoftwareMost recent focusCloud IntegrationBusiness AnalyticsIncremental Growth inSoftware, Middleware andServices01000020000300004000050000600007000080000900001000002005 2006 2007 2008 2009ServicesServersStorageSoftware
    • 10. 0200004000060000800001000001200001400002005 2006 2007 2008 2009 2010Imaging and PrintingGroupPersonal Systems GroupServicesStorage & ServersSoftwareCompany Analysis - HPMajor Acquisitions –EDS3PAR3Com, Palm Inc.Mercury•Strong growth in Services Revenue•Consumer segment revenuestagnant•Drastic reduction in revenue fromHP Software•Lack in Enterprise SoftwareOfferings.
    • 11. Company Analysis – SAPTwo major acquisitions1) Business Objects (Analytics)2) Sybase (Mobile Solutions)
    • 12. Company Analysis - Intel1. Strong focus on Mobile & Security2. Plan to compete with ARM technology for smart phone chips.
    • 13. 010,00020,00030,00040,00050,00060,00070,0002005 2006 2007 2008 2009 2010Desktop PCMobilitySoftware &PeripheralsServicesStorageCompany Analysis - DellMajor acquisitions:Perot SystemsEqual LogicCompellentSome recent –OcarinaBoomiSecureWorks•Major decline in Desktop PC segment•Slight increase in Laptop segment•Average performance in othersegments
    • 14. Company Analysis - EMCMajor acquisitionsVMWare (2003)RSA SecurityData DomainIsilon SystemsVery strong onstorage segment.% Share of Storagecompanies adoptingVMWare for virtualization.
    • 15. 010000200003000040000500002005 2006 2007 2008 2009 2010ServiceOtherAdvanced TechnologiesSwitchesRoutersCompany Analysis - CiscoMajor acquisitionsScientific AtlantaWebexNavini NetworksStarentTandbergMajor growth noticed in UnifiedCommunications (Video, Internettechnology) – reaching the enduser segment.
    • 16. Company Analysis - Microsoft• No big ticket acquisition but lot of small acquisitions, attempted Yahoo! buy.• Strong Presence in all the segments of Enterprise Software & Development Tools.• Enjoys the competitive advantage due to the use of in-house closed technology.• It has created a niche and enjoys monopoly in that space leading to extra-normalprofit on all it’s softwareofferings.• High focus on Mobility and Entertainment Business.• One stop shop.010,00020,00030,00040,00050,00060,00070,0002005 2006 2007 2008 2009 2010Entertainment andDevices DivisionMicrosoft BusinessDivisionOnline Services DivisionServer and ToolsWindows & Windows LiveDivision 02,0004,0006,0008,00010,00012,00014,00016,00018,00020,0002005 2006 2007 2008 2009 2010Windows & WindowsLive DivisionServer and ToolsOnline ServicesDivisionMicrosoft BusinessDivisionEntertainment andDevices Division
    • 17. Acquisitions by Segments
    • 18. BI & Analytics – Major Acquistions2006 2007 2008 2009 2010 2011
    • 19. Storage– Major Acquistions2007 2008 2009 2010 20112007 2008 2009 2010 2011
    • 20. Virtualization– Major Acquistions2007 2008 2009 2010 20112007 2008 2009 2010 2011Rembo Technology
    • 21. Networking– Major Acquistions2007 2008 2009 2010 20112007 2008 2009 2010 2011(ProCurve )
    • 22. Middleware – Major Acquistions2007 2008 2009 2010 20112007 2008 2009 2010 2011
    • 23. Trends – Mega VendorsERPCRMBI &AnalyticsMiddlewareServer/StorageDatabaseVendorMegaVendorBI &AnalyticsCloudSmarterPlanet*Server &PC CoMegaVendor
    • 24. Trend - MicrosoftPureplaySoftwareMobilityCloudComputing
    • 25. Trends – Niche PlayersWirelessMobilitySecurityVirtualizationSecurityPrivate CloudWebCollaborationVideoCollaborationUnifiedComputingSemiconductorStorageNetworkInfra
    • 26. The Infrastructure BattleVirtualComputingEnvironment(VCE)CiscoVMWareIntelEMC
    • 27. Strategic Focus AreaBI & Analytics, IntegrationStorage, Mobility, ServicesStorage, Virtualization, SecurityBI, MiddlewareMobile Apps, DatabaseStorage, Mobility, ServicesWireless, SecurityCollaboration/Video, Unified Computing SystemMobility, Cloud Computing
    • 28. Strategic DirectionMega Vendors Focused Vendors
    • 29. Insights IBM & Oracle stands out in managing acquisitions well including divestitures. IBM is best positioned for one-stop-shop offerings to large enterprise customers. Oracle is one-stop-shop in making. It lacks Services offering in order to grab bigscale enterprise deals. Cisco, EMC and Intel – a significant strategic alliance in making, will give IBMs andHPs run in Storage and Cloud space. HP & Dell lacks strategic direction in the acquisitions. Microsoft has most coherent cloud strategy for the end users – both SMEs andlarge enterprises.
    • 30. Money MattersCompany name P/E ratio Mkt Cap ($ b) Revenue ($ b) Net profit margin (%)Microsoft Corporation 11.47 227.37 62.48 30.02Intl. Business Machine... 14.24 204.79 99.87 14.85Oracle Corporation 25.32 170.17 65.22 22.87Intel Corporation 10.8 123.5 43.62 26.76Cisco Systems, Inc. 14.28 104.48 40.04 19.40SAP AG (ADR) 29.08 71.69 16.9 14.57EMC Corporation 30.9 56.24 17.01 11.58Dell Inc. 11.42 29.78 61.49 4.28Hewlett-Packard Company 13.18 105.84 126.03 6.95050100150200250P/E ratioMkt Cap ($ b)Revenue ($ b)Net profit margin (%)
    • 31. Predictions Oracle going for acquisition of a Services company that canprovide scale – CSC is a good choice. HP & SAP forming strategic alliance – while HP lacksmiddleware and Software, SAP can not really pitch againstOracle and IBM due to lack of depth in it’s offerings. So, ithas choice to remain a focused player or need to forgealliance with a large Server/Storage vendor. Dell acquiring Citrix. With EqualLogic and Compellent buysDell is well placed in Server and storage. However Dell &Citrix would be strong alternative toEMC+Vmware, particularly in wake of it’s straining relationwith EMC after Compellent buy.
    • 32. Emerging Trends• Consumer Computing moving to mobile and tablets. Its isexperiencing explosive growth as never before.• Enterprise Computing moving to Cloud – Public Cloud as well asPrivate Cloud.• SMEs are ahead in adopting Cloud based Software Service, whileLarge Corporates prefer to have Private Cloud.• Private Cloud will experience higher growth over the Public Cloud.• Virtualization seems to be the hottest of all segments.• Storage is experiencing explosive growth driven by growth in socialnetworking, videos and other user driven data (10x by 2011, 44x by2020).• Security remains elusive for most of the vendors, remains thebiggest concern for the corporates and potentially may slow downthe growth of Cloud based computing.
    • 33. Send an email to satyajit.paul@gmail.com forfull report.

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