As part of our software M&A engagements, we dedicate significant effort to gathering information on various market sectors, emerging technologies, and valuation trends as well as buyer activity and profiles. Central to our business is being able to understand which sectors are consolidating, which are expanding, where the venture funds and private equity interests are placing their money, and where the next deals will be. Part of that is understanding the geography of the deals. Is money flowing into North American software companies, or are European deals increasing? How about Asia, and if Asia, are deals getting done within Asia, or are companies being acquired in Asia by foreign parties, or are the Asian companies acquiring outside of their home markets? Such are the dynamics of a very complex and evolving market.
As a speaker at a recent SaaS University conference, I had the pleasure of meeting Jay Greenwald, author of International Markets for Enterprise Software Vendors. Jays book divides the world into 6 logical groups, and then analyzes each in terms of wealth and spending, levels of technology adoption, acceptance of English as language of commerce, and the technology sales and buying culture. In reviewing this, it struck me that the same things that drive or hinder the growth of ERP sales in these regions may also impact the level of software M&A, and the same barriers (language, culture, IP protection, legal systems, etc.) are also factors in where M&A deals get done. More on this to follow.