Mergers and acquisitions: how cloud helps the process

Advice Lesley Meall Jan 10, 2013

Mergers are tricky things to get right - and a big headache for IT departments, but cloud could help soothe the process

The impact of cloud on mergers and acquisitions seems likely to increase during 2013 and in a number of ways.

The research and analysis firm IDC is predicting M&A activity amounting to billions, as cloud offerings become central to the products and services provided by more vendors of packaged applications and they battle it out with cloud pure plays for dominance in some of the major business software markets. In addition to this, and both inside and outside the technology industry, the significance of cloud software and services will also increase in the management and the minutiae of post-M&A IT integrations.

IT infrastructure can be complex, covering hardware, networks, software and even collaboration between people, and some of these components (and the organisations utilising them) can benefit more, and more easily, from cloud technologies and techniques than others. “Some of the benefits are straightforward and self-evident,” says Neil Cross, managing director of Advanced 365 a UK outsourcing and managed services provider (and no stranger to M&As). Adding another organisation or doubling the size of an implementation, for example, can be complex and time-consuming with traditional corporate information systems; less so with pure cloud.

Ramping up server numbers and storage capacity or increasing mailbox numbers and adding seats for the finance department are all relatively straightforward when these resources are located in the cloud. “The very fact that cloud is built with integration in mind allows newly acquired businesses to either join their existing estate considerably more quickly or to take advantage of applications as a service from the cloud to replace their own services,” says Matthew Smith, UK director of business architecture at Software AG, an enterprise software company with M&A expertise that’s based on its own acquisitions experiences and those of its clients.

Adding another organisation can be complex and time-consuming with traditional corporate information systems; less so with pure cloud

The cloud focus on connectivity may be making a virtue of a necessity, but integrating disconnected systems and the associated data is getting easier. Both cloud vendors and traditional software vendors are individually and collectively doing their bit to ease communications between applications inside and outside the cloud and across the great divide with a mixture of APIs, product-specific connectors, and a growing range of generic SaaS-based integration tools, which is making it progressively less complex and time consuming to integrate applications, data, and even business processes.

Software AG, for example, offers its webMethods Cloudstream technologies to enable organisations to integrate applications and manage the data flows between cloud infrastructures, whether they are private, hybrid or public ones. SaaS-based tools such as Boomi AtomSphere from Dell allow customers to connect any combination of cloud, SaaS or on-premise apps with no appliances, no software, and no coding. While the SaaS integration solution from Adeptia uses a services-based (SOA) approach that allows organisations to automate business processes that interface with on-demand apps, rather than simply moving data.

Some advantages are less self-evident. ‘Supporting M&A activity with cloud techniques can add some significant improvements when it comes to IT integration between both hardware and software, but also, more importantly, staff collaboration,’ says Smith. Organisations that have moved to a model where cloud includes collaboration capabilities – such as social business process management – can have significant advantages as newly merged entities, he suggests, because new co-workers can visually see and work together on joining up their processes.

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