There's more evidence that every organization -- whether they are in services, manufacturing or healthcare -- is becoming a technology company as well, and this trend is accelerating. With the rise of cloud, Software as a Service, and now, the Internet of Things (IoT), more organizations -- in all types of businesses -- recognize they are evolving into technology and data companies. So they are creating both strategic and tactical partnerships to try to make the most of this evolution.
That's one of the takeaways from EY's (formerly Ernst & Young) glimpse at first-quarter technology mergers and acquisitions M&A data. EY documented what it calls "record-setting technology M&A and new post-dotcom-bubble records in 1Q 2015 for both quarterly value and volume."
In total, aggregate value of disclosed-value for global technology deals hit $77.1 billion in the first quarter of this year, higher than any quarter since 2000 and up 16% year-over-year and 72% sequentially, EY says. A total of 981 deals were logged.
Specific details about the M&A deals have not been released by EY yet. But the consultancy does observe that "technology deal-making was fueled by technology-enabled digital transformations from corporate technology and non-technology buyers alike, which continue to disrupt multiple industries." Interest in IoT was a major factor, with deals focusing on IoT capabilities tripling in aggregate value over the fourth quarter of 2014. In addition, values for security, big data, payment and financial technologies, smart mobility and cloud/SaaS also rose over the previous quarter, EY reports.
“Non-technology buyers were the wild card” over the past quarter, according to EY's Jeff Liu, who observed that the line between technology vendors and consumers is increasingly blurring: “The ‘blur’ between tech and non-tech that we see in 1Q15’s record-setting technology M&A will accelerate,” he predicts. “The Internet of Things shows why: it drives the integration of digital sensors, processing, connectivity and security into virtually every industry’s products. And that pushes tech companies to deliver more comprehensive solutions — increasing blur and spurring more M&A."
(Disclosure: the author has conducted project work for EY over the past 12 months.)
