I am just back from a long period of travel and catching up on last weeks developments - need to fiish a lot before I set out to travel again.
John Battelle writes, the fact that DoubleClick went to Google strikes me as a seminal moment in the history of this industry. Microsoft could not win it, despite the cash it was willing to spend. He reports that he learns that Microsoft did offer to match it, and was willing to pay even more to insure that Google did not corner the online ad market. But for whatever reason, the private equity firm that owned the majority of DoubleClick’s shares decided to go with Google.
John Batelle builds his thinking on the basis of what he could gather from his sources and need to be seen as such.I wouldn’t just like that take it as fact that DoubleClick was offered more by Microsoft and that they turned it down. If what John says is true( I would imagine that this should be true given his connections), I do think that it is indeed a significant win for Google. I have dealt with DoubleClick in the past and know its vast potential. For Google, this is indeed significant – they outdistanced a potential big time threat – Microsoft but at the same time have expanded their core service offerings. The deal is not just that – it has helped Google to increase its customer base as well. Google paid 100% more than what it paid to acquire YouTube. Its no wonder why competitors like Microsoft, Yahoo, AT&T are crying foul. I think more than anything else the allure of cash must have helped Hellman-Friedman decide in favor of Google considering their acquisition cost was a mere one billion and odd dollars. My good friend and fellow enterprise irregular points out that Hellman-Friedman is not just a doubleclick pony. I think, at the least, this would help Google keep its focus on what it wants to do for securing its future, not worrying about competition for some time. Moves like this put pressure on players like Yahoo – particularly in its ability to get more value out the current set of raw materials. Google’s aggression is not only going to help its cause but very likely to drive Yahoo and Microsoft to come together. Its interesting to see what all a shrewd marketleader can do – expand the market, consolidate its position and define what competition needs to do!!
Labels: Emerging Trends, Google, Mergers And Acquisitions, Private Equity
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Software AG has agreed to buy SOA vendor webMethods Inc. for US$546 million in cash. This is 2.6x sales value. I was thinking that it could be HP. May be its systinet acquisition gave it enough. It may also be noted that Sun’s acquisition of SeeBeyond has not been any noteworthy success. For Software AG, long considered an XML specialist and the seen as strong in the integration of legacy systems, it desperately needed a makeover as a leading SOA (Services Oriented Architecture) company. WebMethods seemed to fit in well from that perspective. It shows three things:
A. European company paying cash to acquire a predominantly US strong company
B. In SOA space, you have to have scale to see success
C. The much awaited SOA uptick may indeed be happening in the near future.
A recent survey showed that SOA adoption is experiencing slow, but steady, adoption among large and mid-sized enterprises, it finds that SOA is still in very early deployment cycles. The report based on extensive structured survey finds that the early implementers of SOA are primarily taking a technology-led approach to SOA deployment as against the widely held belief that many early adopters were viewing SOA as needing to be a business-led initiative and many initiatives are at early planning stage or at trial deployment around legacy application integration.
How can these companies come together: On paper, it appears that should be able to leverage SOA capabilities to fuse together their offerings in such a way that the features & functionalities may be combined in intelligent ways. WebMethods BAM/BPM solutions could give a legup to Software AG in the fast growing BPM space. It would be very interesting to watch SOA players coming together and creating greater value. Watch out for more action in this space. Some may be centered around well known name like BEA, Tibco etc. They may choose to acquire smaller companies or they may run the risk of getting acquired.
The consolidation shall be accelerated due to the active interest shown by private equity players in the enterprise software. With hundreds of billions of dollars under management, private equity firms need toinvest and chalk up predictable returns, enterprise applications vendors have become an investment class as dependable as batteries and diapers for their steady revenue streams.
Labels: Consolidation, Enterprise Software, Private Equity
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