Three Cloud offerings

I had the pleasure of chairing a World Financial Symposiums event in Europe on M&A, spotlighting the Cloud. We particularly discussed the three groups of offerings Software as a Service, Infrastructure as a Service, and Platform as a Service. We identified Amazon and IBM as the dominant players when it comes to the provisioning of Infrastructure Services, and Google, Microsoft and Salesforce as leaders in the Platform as a Service segment. Of course, Salesforce.com is a pioneer and clearly a leader in the SaaS space, with Oracle pushing them all hard, spending billions in a matter of months and making a big entry into the SaaS market. IBM is also keeping everyone on their toes. And of course, SAP, not wanting to miss out, shelled out nearly 12 times revenues for SuccessFactors. That one topped the scales, but the other valuations were not shabby either at the roughly 6x range.

By the way, many of these major firms were our live guests on our annual industry leaders panel. If you didnt get a copy of that report, please let us know at info@corumgroup.com and well mail you one.

Whats driving the activity and the valuations? Well, its the growth, in a market forecasted to expand 130% during the next three years. And the PaaS segment is forecast to grow a whopping 200% over the same period. Im sure well be seeing plenty of deal activity in both the Platform and Infrastructure as a Service segments the rest of this year, so stay tuned.

This phenomenal growth is not only driving the headline grabbing mega-deals, but also in the mid-market space. For instance, in the collaboration market weve seen VMware stepping into the applications space and expanding their portfolio beyond infrastructure for the cloud. Others such as Jive, GlamMedia, and Citrix also are vying to either define or expand their position in the market.

The point is, everyone is jockeying for strategic position, which is going to make for great Tech M&A theater in the next couple of years. Of course, Corum is right in the thick of it with some recent transactions.

We will be working with World Financial Symposiums again to do an American version of Market Spotlight, taking a detailed look at M&A and its implications for the cloud industry. Watch for that in the coming quarter.

 

Posted by , Managing Director on 27 June 2012
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