The Cloud M&A Scene Too Hot to Handle?

The cloud industry represents a constantly maturing and expanding trend, and it seems that every spark of innovation can trigger quite a bit of interest from some of the biggest players in IT. This phenomenon is the main driver behind the exceptional amount of activity we’ve seen in the cloud mergers and acquisition scene lately.

Wikibon analyst Doug Chandler provided some insight into this field, and highlighted that telecom companies have been historically eager to monetize new technologies. However, companies don’t tend to favor major telecom providers’ services because of the bad experience they had in the IT-as-service market. This is why the latter have been particularly busy in the cloud acquisition scene says Chandler, who continues to elaborate that credibility is a key factor for these companies:

“…in a market where telcos need to build credibility, early entry could be an advantage. Last week’s $3.2B acquisition of Savvis by CenturyLink gave more proof that the telecom players, past be damned, are serious about cloud computing.”

Telecom companies acquire cloud companies to gain competitive edge over others, and they’re certainly not the only ones to do so. VMware for example has chosen a similar strategy to boost its developing cloud portfolio, and recently acquired cloud-based online presentation application SlideRocket for an undisclosed amount. The company’s technology will be used to power a VMware presentation-as-pa-service offering. The virtualization giant also acquired online data backup provider Mozy, and thus quite effectively boosted its competition with Amazon.

When looking at other companies, Cisco also made a recent push with the acquisition of newScale. The developer of self-service cloud offerings portal targeting IT organizations will merge with the networking giant will be used to enrich Cisco’s cloud portfolio.

Closer to the consumer end, Groupon recently acquired the operator of service Whrrl, Pelago. Location-based services and mobile are a part of the wider cloud movement, which is beginning to span across every imaginable aspect of technology.