The biggest enterprise technology M&A deals of the year

Software mergers and acquisitions are bouncing back in 2023 after hitting a low in the last quarter of 2022, according to risk and financial advisor Kroll. In the first quarter, deal value was down 52% on a year earlier, but the number of deals bounced back, rising 23% compared to the previous quarter, to over 600.

With a few notable exceptions, those deals were mostly small ones with unreported values, Kroll said.

One reason deals are getting smaller is that buyers are less willing to bet on future growth, and so ratios of enterprise value to revenue are getting smaller. Kroll noted that the ratio for ERP and supply chain management software vendors dropped from 11 in December 2021 to 7.2 in March 2023. Over the same period, the EV-to-revenue ratio for HCM software vendors dropped from 12.4 to 6.6, and for financial and accounting software vendors from 11.7 to 6.0. Vertical software vendors, already valued less highly, saw their EV-to-revenue ratio halved from 5.6 to 2.8 over the same period.

Software-as-a-service (SaaS) vendors have also seen their valuations crash. After a euphoric period early in the COVID-19 pandemic, when the median EV-to-revenue ratio for SaaS companies topped 15, it had dropped below 10 by December 2021 and was as low as 6.3 in March 2023.

Despite the broader slump in valuations, there were still a handful of billion-dollar-plus enterprise technology M&A deals in early 2023, including the acquisitions of Qualtrics, Apptio, MosaicML and Software AG.

For CIOs, these deals can disrupt strategic rollouts, spell a need to pivot to a new solution, signal sunsetting of essential technology, provide new opportunities to leverage newly synergized systems, and be a bellwether of further shifts to come in the IT landscape. Keeping on top of activity in this area can help your company make the most of emerging opportunities and steer clear of issues that often arise when vendors combine.

Here, CIO.com rounds up some of the most significant tech M&As of the last 12 months that could impact IT.

July 2023

ServiceNow agrees to buy retail data platform G2K

ServiceNow is getting ready to sprinkle some more AI magic on its automation of workflows in the retail industry. It has agreed to buy G2K, the developer of the Parsifal data platform, which the company says can analyze the movement of customers and products around stores.

Silver Lake buys majority stake in Software AG

Software AG, the German maker of tools for managing IoT data, APIs, and legacy mainframe apps, looks set to become part of Silver Lake, which also owns stakes in Airtable, Celonis, Qualtrics, and Splunk. The investment fund secured a 63% stake in the company, valuing it at $2.4 billion, after a bidding war that pitted it against mainframe modernization firm Rocket Software. Prior to the deal, Software AG’s largest shareholder was a foundation, SAGST, created by one of its founders: SAGST’s 30% holding had for years protected the company from takeovers, but in April the foundation agreed to sell most of its stake to Silver Lake. Sanjay Brahmawar, CEO of Software AG since August 2018, said the company will benefit from the stability and certainty provided by a single major shareholder.

Adobe-Figma deal runs into regulatory trouble

Adobe’s plan to buy one of the largest rivals to its online design tool, Creative Cloud, is unsurprisingly facing stiff opposition from competition regulators. Its September 2022 agreement to buy Figma for $20 billion is now being reviewed by the European Commission’s antitrust team, while the UK Competition and Markets Authority said in late June it would oppose the deal unless Adobe made undertakings to avoid the deal resulting in a substantial lessening of competition. The US Department of Justice is also said to be considering an antitrust lawsuit to block the deal. Figma is more often seen in the art department than the IT department, but with Adobe also a big player in customer data platforms, CIOs will be wary of the company getting an even bigger hold on their cloud software spend.

June 2023

IBM offers $4.6 billion for Apptio

IBM has agreed to buy cloud cost control specialist Apptio from private equity firm Vista, which has owned it since 2018. IBM plans to roll Apptio’s offering into its IT automation portfolio—AIOps, Instana, and Turbonomics—to help enterprises optimize both application cost and application performance from a single control center. The acquisition will also give IBM access to anonymized data on $450 billion of IT spending that it can use to train AI tools for further optimization.

FTC case against Microsoft’s $68.7 billion bid for Activision Blizzard reaches court

The US Federal Trade Commission has aired its concerns about Microsoft’s plans to acquire games developer Activision Blizzard in a US federal court, six months after it sought an injunction to stop the deal and 18 months after the companies announced it. Microsoft’s bid, a whopping $68.7 billion, dwarfs even the $19.7 billion it paid for Nuance Communications in 2021 or the $26.2 billion it paid for LinkedIn in 2018.

Activision Blizzard’s apps are not typically authorized on enterprise networks, but when the deal was first announced, it seemed there was a chance its technology for creating and animating virtual worlds could make it into the workplace. Back then, Microsoft said the acquisition would give it the building blocks for the metaverse. However, since then Microsoft has laid off 100 staff in its industrial metaverse unit, essentially closing it down.

While regulators in the European Union and South Africa have now approved the deal, the FTC and the UK’s Competition and Markets Authority are still against it.

Databricks buys MosaicML for $1.3 billion

Generative AI is a hot commodity these days, and Databricks, for one, can’t get enough of it. In addition to developing its own large language model (LLM) based on open data, Dolly, it has now acquired MosaicML, the creator of two open source models, MPT-7B and MPT-30B. With the acquisition, Databricks hopes to make it easier for enterprises to build LLMs based on their own data.

Silver Lake buys Qualtrics for $12.5 billion

Qualtrics has changed hands again. SAP acquired it for $8 billion in 2018, but the graft didn’t take, and SAP soon sold a minority stake. Now Silver Lake and the Canada Pension Plan Investment Board have snapped up the whole company. The deal closed June 28. SAP will remain a go-to-market partner of Qualtrics and service their joint customers.

Data center operator buys its way to a greener carbon footprint

Data center operator nLighten has bought Euclyde, owner of six data centers in neighboring France. One of nLighten’s goals with the acquisition is to reduce its carbon footprint: in France 70% of electricity comes from nuclear power stations, while in nLighten’s home country, Germany, around one-third of it comes from coal, which has the highest carbon intensity of all electricity sources.

HCM vendor UKG buys payroll provider Immedis

UKG’s cloud-based HCM software already delivers a wide range of functions to some enterprise HR departments. Now it’s adding to those capabilities with the acquisition of Immedis, which helps enterprises and mid-size companies operating in more than one country to manage payroll across borders. UKG plans to integrate the new functionality into its software suite as UKG One View later this year.

IBM buys French cloud services firm Agyla

Looking to improve its offering for French clients, IBM has agreed to buy Agyla, a provider cloud platform engineering services. It plans to incorporate Agyla into its IBM Consulting division.

May 2023

Survey company Momentive says yes to STG deal

Symphony Technology Group has closed its acquisition of Momentive (formerly SurveyMonkey) for $1.5 billion. STG’s portfolio also includes ERP vendor CAI Software and a stake in cybersecurity firm RSA.

Snowflake adds Neeva’s generative AI to its data warehouse platform

Snowflake has acquired Neeva, a small startup that used generative AI to improve the search experience. The deal came just days after Neeva closed its subscription-based, ad-free search engine. Building a search experience people were willing to pay for, while hard, turned out to be the easy part, according to a farewell blog post from Neeva’s founders: “Convincing users to pay for a better experience was actually a less difficult problem compared to getting them to try a new search engine in the first place.” Now it’s up to Snowflake to convince its customers to change.

IBM to automate cloud data protection with Polar Security acquisition

Data security posture management specialist Polar Security will soon be part of IBM, which plans to integrate the Israeli company into its Guardium range of data security products. There, it’ll help IBM customers pinpoint security risks and compliance violations. IBM didn’t say how much it had paid for the company, but Israeli news site Tech12 put the price at $60 million.

Databricks buys Okera to keep tabs on LLMs

Databricks has been encouraging enterprises to experiment with LLMs, offering Dolly as open source. Now it’s offering its customers a way to keep such models under control with the acquisition of LLM governance specialist Okera.

April 2023

Ciphr adds diversity with Marshall acquisition

Marshall E-learning, a provider of diversity and inclusion training, is now part of Ciphr, a UK-based HR SaaS platform. Ciphr expects the deal will enable it to expand its existing online learning offering.

March 2023

Vista buys insurance software firm Duck Creek

Vista’s latest acquisition is a $2.6 billion niche play: Duck Creek, a developer of specialist software for the insurance industry. The companies say the deal will accelerate Duck Creek’s move to the cloud, allowing it to scale up its business.

Quantive buys OKR consulting firm

Following its acquisition of consulting firm AuxinOKR, strategy execution platform Quantive is rolling out a new consulting division to support enterprises adopting its tools for measuring business results.

Quantexa is loving the Aylien

Quantexa has acquired Aylien, a Dublin-based natural language processing firm specializing in risk management and market insight. It will use Aylien’s NLP skills to enhance its AI-based decision intelligence tools for the finance industry.

Capita lays off employment screening business

Matrix SCM, a British IT staffing agency, has acquired Security Watchdog, a provider of employment screening services, from Capita, the giant IT services business. It’s part of a broader sell-off for Capita, which also let go of three other HR companies in March: Capita Resourcing, HR Solutions, and ThirtyThree. Capita is selling non-core businesses to reduce its debts, and refocusing on public sector and customer experience work.

Key secures Rocket

Mainframe software developer Rocket Software has bought mainframe security specialist Key Resources. The deal will enable it to offer additional security-related services to the mainframe users it works with.

February 2023

Thomas Bravo manages $8B spend on Coupa Software

Coupa Software, a provider of business spend management tools, has been acquired by investment firm Thomas Bravo in an $8 billion deal. Abu Dhabi Investment Authority has taken a minority stake. Thomas Bravo also owns business payments company BottomLine, open finance platform Solifi, data management tool Talend and a raft of security and identity management software companies.

Arm sells software arm

Processor designer Arm has sold Forge, its suite of software development tools for high-performance computing, to Linaro, which develops and supports a range of other Arm-specific software for enterprises. Arm originally acquired Forge in 2016 to support its entry into the HPC market.

Accenture buys Morphus, adds new South-American cybersecurity center

With its acquisition of Brazilian cybersecurity and threat intelligence provider Morphus, Accenture has added a new site from which to supervise its offering of managed security services and advanced analytics. The cyber fusion center in Fortaleza, Brazil, was previously Morphus Labs.

Broadcom and VMware kick their merger can further down road

Broadcom first offered to buy VMware in May 2022, and VMware’s shareholders agreed to the deal in November, but still the deal isn’t done. Now the two companies have formally given themselves another three months—until May 2023—to close the acquisition, and Broadcom representatives say the deal will close by the end of the company’s fiscal year on October 30, 2023.

January 2023

OpenText buys Micro Focus for $5.8 billion

OpenText has closed its acquisition of Micro Focus, a vendor of mainframe modernization and application portfolio management tools. OpenText’s first move on completing the deal was to begin laying off staff. It announced an 8% reduction in workforce to realize $400 million in annual cost savings to help finance the $5.8 million purchase, which it first announced in August 2022.

Dell buys Cloudify

After selling off its stake in VMware, Dell is moving back into the cloud software business with the acquisition of Cloudify. The Israeli startup has developed a cloud orchestration platform to help devops teams automate provisioning.

McKinsey buys machine MLops platform Iguazio

McKinsey is adding to its stable of machine learning experts with the acquisition of software developer Iguazio. In time, it plans to integrate it into QuantumBlack, a McKinsey business unit that has specialized in AI for the last decade. Iguazio is the developer of a commercial MLops platform and two open-source tools: MLRun, for ML pipeline orchestration, and Nuclio, which offers real-time serverless functions for automating application deployment.

HPE buys Pachyderm to automate ML development

Pachyderm, a developer of data pipeline automation tools used in training machine learning models, is now part of Hewlett-Packard Enterprise. The company’s software will become part of the HPE Machine Learning Development Environment.

Quantum fusion: IonQ ties up with Entangled Networks

With each of the handful of companies developing quantum computers betting on a different architecture, a cross-platform quantum computing operating system is still a way off. That’s why quantum hardware companies like IonQ are developing their own software tools too. To speed up the process, IonQ has acquired Entangled Networks, a developer of software optimization tools for quantum computers, and is building a new Canadian subsidiary around the software team.

Two ServiceNow partners tie the knot

ServiceNow solutions provider Thirdera has acquired another ServiceNow partner, SilverStorm Solutions, to expand its reach in Europe. Thirdera also operates in South America. Combined, the two ServiceNow Elite-level partners have over 900 employees.

December 2022

IBM buys Octo Consulting Group

Appropriately enough for its eighth deal of 2022, IBM’s latest acquisition is called Octo Consulting Group. Not to be confused with Octo Technology, a French consulting company bought by Accenture in 2017, IBM’s Octo is a US company specializing in government IT modernization projects that was until recently owned by Arlington Capital Partners. Its 1,500 staff will join IBM Consulting.

Intercontinental Exchange’s bid for Black Knight in doubt

Another of the biggest software deals of 2022 is also in doubt. In May, Intercontinental Exchange, owner of the New York Stock Exchange and a host of mortgage technology companies, bid $13.1 billion for Black Knight, a mortgage software company.

In late December, though, the Financial Services Committee of the US House of Representatives wrote to the US Federal Trade Commission to express its concern that the deal could result in too much concentration in the mortgage origination market.

Big though the deal is, it’ll have few consequences for CIOs outside the mortgage services industry.

Cognizant buys AustinCSI and assets of OneSource Virtual

IT services giant Cognizant has added 175 digital transformation consultants in Texas with the acquisition of AustinCSI, a company specializing in the design of cloud and automation systems. It has also acquired 400 specialists from another Texas company, Workday partner OneSource Virtual, and bought Houston-based SAP services company Utegration, bringing it close to 350,000 employees worldwide.

LumApps buys chatbot maker Vizir to improve employee experience

French employee experience platform LumApps has snapped up Vizir, developer of a no code chatbot creation platform, to help enterprises deliver more interactive services to employees. Companies building their own tools for natural language understanding like this will face strong headwinds from the likes of ChatGPT, an interactive version of the giant AI language model GPT that can be trained for use in multiple domains.

November 2022

VMware shareholders approve acquisition by Broadcom

After Broadcom made its offer in May, it’s a step closer to closing the $61 billion deal to buy VMware, after that company’s shareholders voted to accept the offer. VMware is looking to expand its virtualization technologies into the 5G edge computing market, where Broadcom’s radio and networking chip business could give it a foothold.

RegScale, GovReady join forces to implement OSCAL governance formats

RegScale, a developer of governance, risk, and compliance software, has acquired compliance-as-code platform GovReady. The two companies are early adopters of NIST’s Open Security Controls Assessment Language (OSCAL), used for representing control catalogs and system security plans in machine-readable format.

SAP service providers join forces

Codestone Group is still expanding. After its May acquisition of Clarivos, the company has added data analytics and BI specialist DSCallards to its collection. The purchase will allow it to expand its services capabilities around SAP and Microsoft ERP tools.

Anonos buys Statice to boost data protection

Anonos, a developer of software for pseudonymizing personal data in use, has acquired Statice, creator of a tool for generating synthetic data. With European regulators cranking up fines for breaches of GDPR, tools that allow enterprises to move data between jurisdictions while maintaining protection will only grow in importance.

October 2022

Sage warms to Spherics’ carbon accounting tool

Financial accounting software vendor Sage has acquired carbon accounting software vendor Spherics. Sage will integrate Spherics’ tool with its own software, but also offer it as a standalone solution. Spherics sucks in accounting system data and uses standard emission factors for various activities to estimate a company’s carbon footprint.

RealVNC adds remote management to VNC Connect

With its acquisition of remote management software developer RPort, RealVNC is extending the capabilities of its VNC Connect remote access tool. It expects IT teams and managed service providers will be able to perform bulk updates of Windows desktops up to 60 times faster than with its existing interactive screen sharing technology.

NTT Data adds to chain of analytics acquisitions

With the acquisition of Aspirent, an analytics advisory firm based in Atlanta, Georgia, NTT Data has added 230 data advisors to its payroll, taking its total number of employees over 130,000.

SandboxAQ spreads its bets in quantum communications

Google alum SandboxAQ is still spending, this time taking stakes in startups Qunnect and evolutionQ. Qunnect is designing components for quantum telecommunications systems, while evolutionQ is developing ways to perform quantum key distribution (QKD) over conventional networks.

ServiceNow extends observability with Era Software

Cloud native log management developer Era Software is now part of ServiceNow, which is planning to use its purchase to help customers improve the performance of the tools they build on its platform.

September 2022

Citrix goes private, merges with Tibco to form Cloud Software Group

Investment firms Vista Equity Partners and Evergreen Coast Capital completed their $13 billion acquisition of Citrix Systems on September 30, combining it with Tibco Software, to form Cloud Software Group. For now they will operate as separate business units and retain their original branding. CSG’s CEO is Tom Krause, formerly president of Broadcom Software.

NTT Data buys Mulesoft consulting firm

Integration platform MuleSoft still belongs to Salesforce, but NTT Data is buying itself a bigger slice of the MuleSoft consulting market with the acquisition of Apisero. Around 1,500 of Apisero’s staff are certified on MuleSoft, for which it provides system integration and managed services from offices around the world, although the majority of its staff are in India. Also in September, NTT Data snapped up the much smaller Umvel, a Mexican digital engineering company.

Big Blue buys little Texan firm

IBM has continued a run of small acquisitions in niche markets, this time buying Dialexa, a software product engineering firm with offices in Dallas and Chicago. The company develops software for other companies’ products — anything from robot mowers to energy trading — and will become part of IBM Consulting.

Ricoh enlarges office communications division with Cenero

Ricoh has bought audiovisual services specialist Cenero to expand its IT services offering in North America. Ricoh already offers managed services around Microsoft Teams Rooms, and its acquisition of Cenero will help it add other unified communications capabilities. Ricoh is trying to reinvent itself as a digital services provider, with a target of making over 60% of its revenue from such services by 2025. It has a way to go: in the second quarter of 2022, digital services accounted for only 40% of revenue, with office printing still making up almost half.

SandboxAQ buys another slice of the crypto auditing market

SandboxAQ, an enterprise SaaS company that spun out of Google in March, has bought young French SaaS provider Cryptosense. SandboxAQ’s first product was a tool to help enterprises inventory and audit all the cryptographic systems they use. Cryptosense is in the same business. Both companies want to help enterprises secure their systems against the threat posed to traditional cryptography by quantum computing.

August 2022

Stratus Technologies joins Smart Global Holdings

Edge computing vendor Stratus Technologies is now part of Smart Global Holdings, a memory module maker and owner of the Cree lighting brand and an IoT company called Penguin Solutions. The company sees the $225 million deal as a way to expand the range of enterprise IT services it offers.

Zaloni sells its data governance platform to Truist

Zaloni has sold its Arena data governance platform to US bank Truist Financial. Zaloni’s chief product officer and chief technology officer will also join the bank, which hopes the analytics and metadata management platform will help reduce its IT costs.

Sage marches into workflow automation

Accounting software vendor Sage has acquired Lockstep, a small Seattle company that automates inter-company accounting workflows. The move will help Sage customers exchange financial data not only with other Sage customers, but also businesses using the 40 other accounting platforms that Lockstep works with.

Signal AI extends its trend monitoring reach

Signal AI, the developer of a platform for identifying business trends in news coverage, has acquired Kelp, a reputation monitoring firm. Kelp is a Signal AI customer, using its External Intelligence platform to monitor corporate reputations and the factors that influence them to help enterprises develop data-driven ESG strategies.

DocHub joins airSlate to consolidate workflows

With its acquisition of DocHub, workflow automation company airSlate will be able to expand its e-signature offering for enterprises.

MariaDB buys CubeWerx

MariaDB has bought CubeWerx, a developer of geospatial software. It plans to add the capabilities to its managed cloud database service, MariaDB SkySQL. The company is named for the open-source database MariaDB, which forked from MySQL when Oracle acquired it in 2010.

July 2022

Salesforce rallies Troops with Slack

In July, Salesforce completed its acquisition of Troops.ai, which provides tools for delivering up-to-date revenue information to sales teams. Salesforce will fold Troops into its Slack communications platform.

Infosys builds base in life sciences consulting

Consulting giant Infosys has swallowed a small Danish firm, Base Life Science, to help it expand its offering for European enterprises in the life sciences industry, particularly around clinical trials and drug development.

IBM observes gap in its portfolio, buys Databand.ai

IBM has acquired Israeli data observability specialist Databand.ai to beef up its IT operations performance management portfolio alongside Instana APM and IBM Watson Studio. Since CEO Arvind Krishna took over in April 2020, IBM has been pursuing a strategy of making small acquisitions — over 25 of them so far — to fill gaps in its offerings.

Ensono adds AndPlus to portfolio

Managed solutions provider Ensono has bought AndPlus, a data engineering firm, continuing a run of acquisitions of small cloud consulting companies: In January, it snapped up ExperSolve, which specializes in moving and modernizing mainframe applications, and last year bought Amido. Ensono is owned by KKR, the owner of BMC Software.

IFS adds Ultimo to its EAM offering

IFS has expanded the enterprise asset management (EAM) capabilities of its ERP platform with the acquisition of Dutch software vendor Ultimo. IFS will continue to offer Ultimo’s software as a stand-alone solution.

For last year’s mergers and buyouts, see The biggest enterprise technology M&A deals of 2022.