10 Most Notable IT Mergers and Acquisitions of 2019
The push for better capabilities and bigger markets drove some pretty significant deals this year.
December 31, 2019
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One of the most notable merger/acquisition announcements was made by ConnectWise at the IT Nation Connect conference back in October. There, the company announced the acquisitions of Continuum and ITBoost, as well as a strategic partnership with Webinfinity. This was one of the biggest deals of the year for several reasons.
ConnectWise CEO Jason Magee called the acquisition of Continuum in particular a game-changer for MSPs and technology service providers, especially considering the growing need around cybersecurity talent and skills these days.
Back in May, Kaseya announced that it had snapped up ID Agent, the threat intelligence and identity monitoring provider.
ID Agent was the latest in a series of Kaseya acquisitions, continuing the company’s 18-month hot streak (at the time). The partnership added end-user protection to Kaseya’s existing infrastructure protection suite.
With the acquisition, ID Agent brought its products into the mix, including Dark Web ID, a channel dark web monitoring platform, and BullPhish ID, a phishing simulator and security awareness training platform. Combined with Kaseya’s existing suite of infrastructure management security solutions, the finished product boasts complete protection.
This was fantastic news for the small-to-midsize business (SMB) sector and the MSPs that service that market. By utilizing Kaseya’s IT Complete Security Suite (which is geared toward SMBs), these companies could completely protect their user networks and sensitive data from cybercriminals, ransomware and other malicious attacks.
Insight Enterprises acquired PCM Inc. in a deal valued at more than $580 million.
The deal brought together two of the largest channel organizations in North America. Both companies are listed on the NASDAQ stock exchange under the symbols NSIT and PCMI, respectively, and PCM was recognized as the No. 3 company on the MSP 501 list.
Outlining the terms and strategy behind the deal, Insight executives said the acquisition will help the Tempe, Arizona-based company increase momentum in four key market segments: supply chain optimization; connected workforce solutions; cloud and data center transformation; and digital innovation.
At the beginning of November, OpenText entered into an agreement to acquire Carbonite, the provider of cloud-based subscription data protection, backup, disaster recovery and endpoint security to SMBs and consumers, for $1.42 billion.
Carbonite has more than 300,000 SMB customers, 14,000 MSPs and 7 million professional users. The acquisition is a continuation of OpenText’s “total growth strategy” both through acquisitions and organic growth, the company said.
The transaction is expected to close sometime in January.
Mark Barrenechea, OpenText‘s CEO and CTO, said this acquisition will further strengthen his company as a “leader in cloud platforms, complete endpoint security and protection,” and will open a new route to connect with customers through Carbonite’s “marquee SMB/(professional user) channel and products.”
IBM‘s acquisition of Red Hat was formally completed back in July, an arrangement that was/is good for technology-hungry enterprises and for the MSPs, VARs, resellers and others that help them build and manage their IT systems.
The companies formally announced the closing of the $34 billion acquisition with reassurances that the deal would allow Red Hat to maintain its independence and long history of a progressive and successful open-source culture.
IBM’s acquisition of Red Hat, announced in October 2018, was designed to increase the stakes and opportunities of both companies in the cloud marketplace — especially in hybrid cloud. The move comes more than 20 years after both companies first began working together, dating back to when Red Hat was just a startup offering its open-source Linux operating system as a free download or on CDs at technology conferences.
Trend Micro stepped up its cloud security arsenal back in October with its $70 million acquisition of Cloud Conformity, the cloud security posture management (CSPM) company.
The acquisition was designed to broaden the cloud services Trend Micro can secure and resolves often overlooked security issues caused by cloud infrastructure misconfiguration. The acquisition also aimed to give Trend Micro a competitive advantage over other cloud security companies.
Kevin Simzer, Trend Micro’s COO, said that his company’s partners, along with its customers, will now have access to complementary Cloud Conformity solutions that will help partner organizations “continuously improve their security and compliance posture through automated configuration checks and remediation steps.”
Trend Micro partners with MSSPs, MSPs, resellers, SIs and cloud service providers.
InterVision announced the acquisition of Fotis Networks, an IT professional services and consulting firm. InterVision joined the flurry of companies rushing to strengthen their existing offerings by snapping up other capabilities, in this case beefing up its engineering talent and expertise providing professional services to clients in the commercial, health care, education and government (federal, state and local) sectors.
According to Aaron Stone, president and CEO of InterVision, the company’s clients are moving into more complex environments that require greater expertise in cloud services, security, enterprise infrastructure and compliance. Bringing Fotis on board was designed to add technical depth to these areas.
“InterVision is a strategic service provider that lets our clients choose the right premise, right technology and the right model to suit their requirements,” said Jamie Lee, chief revenue officer at InterVision. “The Fotis acquisition enhances our technical skill set across networking, cloud, security and key emerging technologies. We are excited to have more resources to grow our professional services organization and expand our MSP offerings.”
HP Inc. bought Bromium, the maker of virtualization-based security, as a complement and enhancement to its existing security platform.
Bromium is a young endpoint security vendor founded in 2010. The company’s microvirtualization-based technology uses a Xen-based security-focused hypervisor called the Bromium Microvisor and takes advantage of hardware features built into Intel and AMD CPUs to run each task in a single-use hardware-isolated container. This isolation protects against browser-based attacks, malicious downloads, email attachments and other applications.
“Security is a key competitive differentiator for HP, providing the most secure PCs and printers on the market,” said Andy Rhodes, general manager and global head of commercial systems at HP. “The acquisition of Bromium extends our investments, leadership and focus in this space and security endpoint devices that are on the front lines of defense against cyber security attacks.”
VMware rocked the channel back in August with news that it was buying both Carbon Black and Pivotal Software for a combined value of $4.8 billion. The news came ahead of its annual VMworld event.
The acquisitions were designed to further enhance VMware’s partner ecosystem and make it more comprehensive.
Carbon Black was already a VMware partner and brought with it new security partners. Also, Pivotal has partnered with VMware for many years and brought developer-related partners.
Charlotte Dunlap, GlobalData’s principal analyst, application platforms, said that VMware is getting serious about the cloud and its DevOps strategy, and these acquisitions were a reflection of that, as well as its Heptio acquisition last year.
Riding the tidal wave of M&A activity in the IT services market in the second half 2019 was NexusTek, which in August announced another acquisition — its sixth in 18 months.
The private equity-backed, national provider of cloud, cybersecurity and managed IT services acquired Notonsite, a cloud and IT services company based in Houston.
Notonsite specializes in providing IT outsourcing, IT consulting and cloud services to small businesses. The match was a fluid one, with NexusTek and Notonsite having many operational similarities. With this transaction, NexusTek inherited a strong presence in the southwestern United States, as well as a wide range of customer solutions.
Like NexusTek, Notonsite works side by side with customers to design innovative, cost-effective IT solutions that bring together storage, virtualization, data protection and networking technologies from global leaders such as Cisco, Datto, Dell, Microsoft, Veeam and VMware.
Riding the tidal wave of M&A activity in the IT services market in the second half 2019 was NexusTek, which in August announced another acquisition — its sixth in 18 months.
The private equity-backed, national provider of cloud, cybersecurity and managed IT services acquired Notonsite, a cloud and IT services company based in Houston.
Notonsite specializes in providing IT outsourcing, IT consulting and cloud services to small businesses. The match was a fluid one, with NexusTek and Notonsite having many operational similarities. With this transaction, NexusTek inherited a strong presence in the southwestern United States, as well as a wide range of customer solutions.
Like NexusTek, Notonsite works side by side with customers to design innovative, cost-effective IT solutions that bring together storage, virtualization, data protection and networking technologies from global leaders such as Cisco, Datto, Dell, Microsoft, Veeam and VMware.
2019 showed a massive upswing in mergers and acquisitions in the IT sector, and it looks set to continue into 2020. The flurry of companies rushing to strengthen their existing offerings and expand their geographic reach by snapping up other capabilities is at an all-time high.
451 Research’s Scott Denne
According to 451 Research’s M&A KnowledgeBase, 2018 technology M&A activity totaled $584 billion; in 2019, that number decreased to $392 billion — about 25% less spent globally on M&A. But that’s still “abnormally high,” said Scott Denne, a research analyst at 451 Research.
Deloitte’s annual study of M&A activity claimed that 73% of tech sector executives expect big deals to continue in the coming year — the highest percentage of any industry. But, their acquisition strategies might be set to change.
“Based on the latest survey results, there may be a pivot away from purchasing a company simply for its technology … Instead, in the next 12 months, corporate respondents note an increased focus on buying a company in order to expand,” the report states.
As we prepare to dive headfirst into 2020, here’s a look back at some of the notable IT mergers and acquisitions we saw in 2019 (in no particular order). Scroll through our slideshow above.
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