Enterprise-class cloud computing has made many facets of doing business on a larger scale easier for many adopters. Cloud integration makes businesses more agile and better prepared to make bold new strategic moves, a trend which includes improvement in mergers and acquisitions approaches, according to business consultants Ernst & Young. Although recent global economic hardships have slowed many business' willingness to pull the trigger on M&A decisions, Ernst & Young's report indicated that this trend should reverse in the rest of 2013 and into 2014, with cloud computing at the heart of the new shift. In their report, the analysts commented that both technology providers and companies across industries will focus on adaptability and mutually beneficial innovation.
The report also highlighted five sweeping trends that will impact M&A in the near future, of which cloud computing is the focal point for growth: besides cloud computing, smart mobility, big data analytics, social networking and accelerated adaptation will be crucial to M&A developments. Cloud computing and/or software-as-a-service played a central role in 18 percent of all M&A deals in the first quarter of 2013, a fact indicative of their growing presence in the market.
"[V]irtually all of these technologies were delivered from the cloud or via SaaS, or had a cloud component alongside a more traditional model," reported Ernst & Young.
Growing opportunities for cloud partner programs
According to Ernst & Young, businesses will continue to pursue focused, strategic deals in the M&A arena, instead of opportunistic mergers, as a buyer's market continues. The buyer's market also reflects the abundance of technological offerings and solutions providers in all industries, which means that businesses that want to move to and stay at the top need to perform at a high level. It also creates more opportunities for enterprises to leverage partnerships with cloud service providers into reselling cloud solutions. Businesses that have their own cloud infrastructure in place will be more attractive to other organizations and can create M&A opportunities where they can draft the terms. Cloud computing expert Thomas Erl recently spoke to Forbes contributor Joe McKendrick about the the sophisticated capabilities of the cloud, which he called "IT outsourcing on steroids." It's particularly instrumental in fostering swift growth for SMBs and start-ups, which can quickly grow into powerful M&A players.
For smaller businesses, said Erl, cloud services "improve the chances of immediate success because they can divert finds [sic] they would have normally had to put into a proper IT enterprise."