Welcome!

@CloudExpo Authors: Liz McMillan, Zakia Bouachraoui, Elizabeth White, Pat Romanski, Carmen Gonzalez

Related Topics: Release Management , Java IoT, IBM Cloud, Recurring Revenue, Log Management, @CloudExpo

Release Management : Article

Examining Cloud Computing Mergers & Acquisitions

There is a sudden interest in cloud centric M&A activities thanks in part to the recent IBM / Sun rumors

One topic that keeps reoccurring in my various conversations is the sudden interest in cloud centric M&A activities thanks in part to the recent IBM / Sun rumors. Being that I continuously find myself in the midst of a lot of the back room, off the record type conversations I thought I'd share some of my recent insights into cloud m&a.

Without going into detail, lately for one reason or another I have become aware that several of the largest names in technology have put together "cloud M&A teams" focused on buying up both established cloud related companies as well as some of the latest crop of cloud startups. What is clear in these acquisition discussions is the traditional models applied to M&A don't work in the current economy and is specially true in cloud computing.

Along with the financial crisis, we are facing what I can only describe as a technological crisis of identity. Suddenly every tech company worth it's salt is claiming to be a cloud company or has a cloud computing strategy of some sort similar to the late nineties where every company suddenly had a web strategy. For most of the established tech companies this means buying your way into this technology revolution. Also interesting is a lot of these companies are sitting on significant cash stockpiles. The problem is there are not nearly enough solid revenue generating cloud computing companies to match the demand and hype surrounding the cloud sector which has caused some very interesting side effects.

One of those is the rise of the mini-acquisition, which I would describe as buying a company consisting of a couple guys with a good idea or a rough "beta". For me this seems like a glorified hire with signing bonus. Another is the R&D acquisition, basically it's easier to buy a venture funded company which is light on customers but strong on technology then build it yourself. In the case of a VC backed company it's certainly easier to value the startup since in a sense the VC's have already set the value. But this leaves the independent boot strappers in a interesting spot. This group are in a great position because they don't have to worry about paying back their venture investors and have been operating successfully for sometime. A 10 or 20 million dollar exit goes a lot further with a bootstrapped startup then a 60 million dollar exit with a VC backed startup.

From what I can see, the current cloud M&A market is focused on the fact the we're in the midst of a seismic shift in the IT world, one that the larger players are having trouble adapting to. No longer do you have to be a Microsoft or Google spending billions on infrastructure to gain significant market share, just look to Twitter or the dozens of successful startups using Amazon Web Services. What's more, the balance of power has shifted, a couple guys with a good idea can now influence the direction of major corporations thanks to the emergence of social web technologies. Ideas have become among the most valuable assets you can have.

In the coming weeks your going to hear about a variety of M&A deals. I think you will be surprised to see that these deals are not based on booked revenue or other "traditional" metrics but rather market influence and speed to market. What is clear is cloud computing has less to do with pay-per-use, on demand, outsourced infrastructure and more to do with a term that has in a very general sense come to define the next generation of computing.

More Stories By Reuven Cohen

An instigator, part time provocateur, bootstrapper, amateur cloud lexicographer, and purveyor of random thoughts, 140 characters at a time.

Reuven is an early innovator in the cloud computing space as the founder of Enomaly in 2004 (Acquired by Virtustream in February 2012). Enomaly was among the first to develop a self service infrastructure as a service (IaaS) platform (ECP) circa 2005. As well as SpotCloud (2011) the first commodity style cloud computing Spot Market.

Reuven is also the co-creator of CloudCamp (100+ Cities around the Globe) CloudCamp is an unconference where early adopters of Cloud Computing technologies exchange ideas and is the largest of the ‘barcamp’ style of events.

CloudEXPO Stories
ScaleMP is presenting at CloudEXPO 2019, held June 24-26 in Santa Clara, and we’d love to see you there. At the conference, we’ll demonstrate how ScaleMP is solving one of the most vexing challenges for cloud — memory cost and limit of scale — and how our innovative vSMP MemoryONE solution provides affordable larger server memory for the private and public cloud. Please visit us at Booth No. 519 to connect with our experts and learn more about vSMP MemoryONE and how it is already serving some of the world’s largest data centers. Click here to schedule a meeting with our experts and executives.
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throughout enterprises of all sizes.
When you're operating multiple services in production, building out forensics tools such as monitoring and observability becomes essential. Unfortunately, it is a real challenge balancing priorities between building new features and tools to help pinpoint root causes. Linkerd provides many of the tools you need to tame the chaos of operating microservices in a cloud native world. Because Linkerd is a transparent proxy that runs alongside your application, there are no code changes required. It even comes with Prometheus to store the metrics for you and pre-built Grafana dashboards to show exactly what is important for your services - success rate, latency, and throughput.
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application performance guarantees & data privacy.
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the benefits of the cloud without losing performance as containers become the new paradigm.