So far this year, mergers and acquisitions among enterprise applications vendors have reshaped the software market in a discernible way amid cross currents in the tech industry.
Fifteen deals worth more than $1 billion each have been announced. Of these 15 deals, seven were private equity transactions suggesting that asset flipping remains prevalent. We expect more of the same will run through 2023. Question is whether any of these deals portends worsening market conditions among tech buyers leading some PE firms to accelerate the pruning of their holdings.
Silver Lake Management and the Canada Pension Plan Investment Board (CPPIB) jointly made a significant impact on the software industry with their acquisition of Qualtrics for $12.5 billion. Other big deals included Thoma Bravo’s acquisition of Coupa Software in the spend management space for $8 billion and Vista Equity Partners’ purchase of Duck Creek Technologies in the insurance vertical for $2.6 billion. The biggest deal in 2023 remains Broadcom’s purchase of VMWare for $61 billion, expanding the chip maker’s reach in different software segments than ever as it continues its diversification beyond semiconductors.
Table 1: Top Software M&A Deals in 2023 by Deal Size
| Date | Company | Acquired | Deal Size $M |
|---|---|---|---|
| 26-May-23 | Broadcom | VMware | 61000 |
| 28-Jun-23 | Silver Lake, CPPIB | Qualtrics | 12500 |
| 23-Feb-23 | Thoma Bravo | Coupa | 8000 |
| 31-Jan-23 | OpenText | Micro Focus | 5800 |
| 26-Jun-23 | IBM | Apptio | 4600 |
| 25-Jul-23 | Thales | Imperva | 3600 |
| 12-Aug-23 | Bain Capital | Chindata | 3160 |
| 3-Aug-23 | RingCentral | Hopin | 3000 |
| 30-Mar-23 | Vista Equity Partners | Duck Creek | 2600 |
| 29-Jun-23 | Silver Lake | Software AG | 2400 |
| 26-Jun-23 | Ramp | Cohere.io | 2000 |
| 12-May-23 | Francisco Partners | Sumo Logic | 1700 |
| 13-Mar-23 | Symphony Technology Group | Momentive | 1500 |
| 20-Jan-23 | Thoma Bravo | Magnet Forensics | 1340 |
| 19-Jul-23 | Databricks | MosaicML | 1300 |
| 10-Jan-23 | BioNTech | InstaDeep | 680 |
| 24-Jan-23 | Voya Financial | Benefitfocus | 570 |
| 6-Jun-23 | UKG | Immedis | 550 |
| 29-Apr-23 | Xilinx | Solarflare | 500 |
| 12-May-23 | ServiceNow | G2K | 500 |
| 30-Jan-23 | Marqeta | Power Finance | 275 |
| 29-Jun-23 | Meituan | Light Years Beyond | 234 |
| 14-Apr-23 | Zoom | Workvivo | 215 |
| 3-Apr-23 | Acorns | GoHenry | 200 |
| 20-Jun-23 | IFS | Poka | 200 |
| 26-Jun-23 | ThoughtSpot | Mode Analytics | 200 |
| 9-Jan-23 | Microsoft | Fungible | 190 |
| 24-May-23 | Snowflake | Neeva | 150 |
| 3-Aug-23 | Sprout Social | Tagger Media | 140 |
| 16-Aug-23 | Aptean | Best Practice IT Solutions GmbH | 120 |
| 6-Jul-23 | DigitalOcean | Paperspace | 111 |
| 25-Jan-23 | Dell Technologies | Cloudify | 100 |
| 3-May-23 | Databricks | Okera | 100 |
| 11-Aug-23 | PDI Technologies | Skupos | 100 |
| 16-Aug-23 | OpenAI | Global Illumination | 80 |
| 3-Mar-23 | Geniee | Zelto | 70 |
| 3-Aug-23 | Acturis Group | Broker Buddha | 65 |
| 16-May-23 | IBM | Polar Security | 60 |
| 31-May-23 | Stripe | Okay | 60 |
| 31-Jul-23 | Dynatrace | Rookout | 60 |
| 3-Aug-23 | ADP | Sora | 55 |
| 27-Jun-23 | HashiCorp | BluBracket | 30 |
| 3-Aug-23 | Enghouse Interactive | Lifesize | 20.7 |
Source: Apps Run The World, August 2023
A close examination of the top M&A deals reveals a strategic focus on key technological trends, including cloud computing, artificial intelligence (AI), and hybrid cloud services. These trends are driving major players to acquire companies with expertise in these areas, enabling them to offer cutting-edge solutions that cater to the evolving needs of businesses and consumers.
AMD’s acquisition of Pensando, valued at $1.9 billion, illustrates the semiconductor giant’s foray into data center solutions, aligning with the growing demand for high-performance computing in the cloud era. Looking ahead, several emerging trends are likely to shape the software industry’s M&A landscape in the coming years.
The integration of AI and machine learning into various software applications will continue to drive acquisitions aimed at enhancing data analysis, automation, and predictive capabilities. Similarly, the demand for cloud-based services and infrastructure will foster deals that strengthen companies’ cloud offerings and enable seamless digital transformation.
IBM’s acquisition of Apptio and Microsoft’s purchase of Nuance showcase the emphasis on AI and cloud services. These acquisitions are poised to amplify the capabilities of the acquiring companies, allowing them to deliver advanced and innovative solutions to a global customer base.
As technology continues to evolve and new opportunities emerge, the software industry’s M&A landscape is likely to remain a focal point for innovation, growth, and transformation. With each strategic acquisition, companies are poised to deliver enhanced value to customers, while also setting the stage for the next wave of technological advancements.
As we peer into the future of the software industry’s M&A landscape, it becomes evident that emerging technologies will be a driving force behind transformative deals. These technologies hold the potential to disrupt existing markets, create new business models, and reshape industries.
The responsible development and deployment of artificial intelligence (AI) has become a pressing concern as AI technologies become more pervasive. Software companies are taking strides to address biases, enhance transparency, and ensure that AI systems are used ethically and responsibly. M&A deals may revolve around acquiring startups that specialize in AI ethics, fairness audits, and bias detection to ensure that AI-driven technologies benefit society as a whole.
Table 2: Software M&A Deal Size in 2023 Chronologically, by Month
Table 3: Top Software M&A Deals in 2023 Chronologically
| Date | Company | Acquired | Deal Size $M |
|---|---|---|---|
| 9-Jan-23 | Microsoft | Fungible | 190 |
| 10-Jan-23 | BioNTech | InstaDeep | 680 |
| 20-Jan-23 | Thoma Bravo | Magnet Forensics | 1340 |
| 24-Jan-23 | Voya Financial | Benefitfocus | 570 |
| 25-Jan-23 | Dell Technologies | Cloudify | 100 |
| 30-Jan-23 | Marqeta | Power Finance | 275 |
| 31-Jan-23 | OpenText | Micro Focus | 5800 |
| 23-Feb-23 | Thoma Bravo | Coupa | 8000 |
| 3-Mar-23 | Geniee | Zelto | 70 |
| 13-Mar-23 | Symphony Technology Group | Momentive | 1500 |
| 30-Mar-23 | Vista Equity Partners | Duck Creek | 2600 |
| 3-Apr-23 | Acorns | GoHenry | 200 |
| 14-Apr-23 | Zoom | Workvivo | 215 |
| 29-Apr-23 | Xilinx | Solarflare | 500 |
| 3-May-23 | Databricks | Okera | 100 |
| 12-May-23 | Francisco Partners | Sumo Logic | 1700 |
| 12-May-23 | ServiceNow | G2K | 500 |
| 16-May-23 | IBM | Polar Security | 60 |
| 24-May-23 | Snowflake | Neeva | 150 |
| 26-May-23 | Broadcom | VMware | 61000 |
| 31-May-23 | Stripe | Okay | 60 |
| 6-Jun-23 | UKG | Immedis | 550 |
| 20-Jun-23 | IFS | Poka | 200 |
| 26-Jun-23 | IBM | Apptio | 4600 |
| 26-Jun-23 | Ramp | Cohere.io | 2000 |
| 26-Jun-23 | ThoughtSpot | Mode Analytics | 200 |
| 27-Jun-23 | HashiCorp | BluBracket | 30 |
| 28-Jun-23 | Silver Lake, CPPIB | Qualtrics | 12500 |
| 29-Jun-23 | Silver Lake | Software AG | 2400 |
| 29-Jun-23 | Meituan | Light Years Beyond | 234 |
| 6-Jul-23 | DigitalOcean | Paperspace | 111 |
| 19-Jul-23 | Databricks | MosaicML | 1300 |
| 25-Jul-23 | Thales | Imperva | 3600 |
| 31-Jul-23 | Dynatrace | Rookout | 60 |
| 3-Aug-23 | RingCentral | Hopin | 3000 |
| 3-Aug-23 | Sprout Social | Tagger Media | 140 |
| 3-Aug-23 | Acturis Group | Broker Buddha | 65 |
| 3-Aug-23 | ADP | Sora | 55 |
| 3-Aug-23 | Enghouse Interactive | Lifesize | 20.7 |
| 11-Aug-23 | PDI Technologies | Skupos | 100 |
| 12-Aug-23 | Bain Capital | Chindata | 3160 |
| 16-Aug-23 | Aptean | Best Practice IT Solutions GmbH | 120 |
| 16-Aug-23 | OpenAI | Global Illumination | 80 |
Source: Apps Run The World, August 2023
In a world defined by rapid technological change, the software industry’s M&A deals are a testament to the sector’s resilience, adaptability, and unwavering commitment to pushing the boundaries of innovation. As we look ahead, it is certain that the software industry will continue to be a hotbed of M&A activity, with deals that will shape the digital future of our world. The software industry’s M&A deals are a testament to its dynamism, resilience, and insatiable drive for innovation.
