2018 was the year of cloud-based companies incorporating and joining forces to smoothen all kind of cloud services to be even more innovative and get a bigger cap in the cloud technology industry. About 170 companies, including worldwide giants, such as Microsoft, Salesforce, SAP, Adobe made investments worth $13M to $8B in software services and acquired cloud-based enterprises. The average amount of money spent on these purchases was about $1.3 billion dollars. Every acquisition gave a different kind of impact on each company, though every deal looked like a huge success, according to companies’ representatives. Let’s take a look at the 10 biggest SaaS companies acquisitions of 2018.
SAP acquired Qualtrics
The Experience Management platform provider Qualtrics was acquired for $8 billion right before its planned IPO. Qualtrics is a subscription software for collecting and analyzing data for market research, customer satisfaction and loyalty, product and concept testing, employee evaluations and website feedback.
As SAP CEO Bill McDermott said in a statement, the deal will allow SAP to combine its operational data with Qualtrics’ experience data and insights, enabling it to better manage supply chains, networks, employees and core processes.
This is the second-largest ever acquisition of a SaaS company, after Oracle’s purchase of Netsuite for $9.3 billion in 2016. Read more here.
Microsoft acquired GitHub
GitHub is a large software development platform that is a popular resource for developers and companies for hosting projects, documentation, and code. GitHub was last valued at $2 billion in 2015 and was sold for significantly increased $7.5B in Microsoft stock. Nevertheless, GitHub will continue to run it as an independent platform and business.
“Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness, and innovation,” said Satya Nadella, the CEO of Microsoft.
Salesforce acquired MuleSoft
The deal was closed on May pricing $6.5 billion. An interesting thing to note, Mulesoft 2017 revenue was $296.5 million, that makes company’s trailing revenue multiple 21.9x! However, MuleSoft grew more rapidly than its rivals. Also, MuleSoft gives the company an integration cloud, a new market, and an entry into hybrid deployments and on-premises software, which lets Salesforce look a bit more like legacy software vendors, too.
After the acquisition, MuleSoft shares popped to about $44/share, comparing to 2017, it was worth $32 per share. That means investors respond very favorably to this acquisition and see great potential between this merge.
Adobe acquired Marketo
Adobe Systems has acquired San Francisco-based marketing automation software firm Marketo for $4.75 billion. The service helps marketers manage digital marketing to engage customers and prospects. Marketo features include lead management, email marketing, consumer marketing, customer base marketing, and mobile marketing.
It seems, that Adobe is trying to get a piece of the enterprise marketing pie. “The acquisition of Marketo widens Adobe’s lead in customer experience across B2C and B2B and puts Adobe Experience Cloud at the heart of all marketing,” Brad Rencher, general manager, Digital Experience at Adobe said in a statement.
After the acquisition, Adobe will be able to compete in B2B marketing cloud business against Salesforce, Oracle, SAP, Microsoft.
SAP acquired CallidusCloud
SAP and CallidusCloud have been sales partners for several years, and after years of successful partnership, both companies agreed to form a strategic OEM agreement combining SAP and CallidusCloud solutions. From now on CallidusCloud will be working under SAP Sales Cloud name.
This was the biggest acquisition for SAP in more than 3 years, costing 2.4 billion USA dollars. “We did it because it’s the most innovative company in its space,” McDermott, SAP CEO said on a call with reporters. The company has been expanding cloud-based services to challenge rivals such as Salesforce and Oracle and serve clients using the software to run sales, manufacturing, and human resources
Cisco acquired Duo Security
Cisco bought the cybersecurity firm Duo Security for $2.35 billion. Duo Security is a zero-trust security platform for all users, devices, and applications. It reduces security and compliance risk, improves end-user productivity, lower investment and management overhead.
Cisco said it would integrate Duo’s technology across its network, device and cloud platforms. According to Duo, this partnership will secure customers’ remote access, secure its’ DNS, as well as cloud apps. Duo Security will also expand Cisco’s line of subscription-based services and boost the company’s recurring revenue from software and subscriptions, based on per-user pricing. Full article.
Twilio acquired SendGrid
Leading email API platform SendGrid and leading cloud communications platform Twilio are now working hand-in-hand. After acquisition SendGrid survived as a subsidiary of Twilio. Both companies agree, that the resulting company would offer developers a single, best-in-class platform to manage all of their important communication channels — voice, messaging, video, and now email as well. Together, the companies currently have more than 100’000 customers, serve millions of developers and their annualized revenue run rate of 2018 was over $700 million.
Twilio paid $2 billion to acquire SendGrid, which was 19% premium per share. SendGrid made its stocks public in 2017, starting at $16 per share and after rising for a year hit $38.66 in October 2018.
Adobe acquired Magento
Another deal Adobe made last year to strengthen its competition within cloud-based commerce services – acquired Magento Commerce for 1.68 billion dollars. Magento is an e-commerce platform for both B2B and B2C businesses, providing everything needed for customer experience management.
Consumers and businesses now expect every interaction to be shoppable – whether on the web, mobile, social, in-product or in-store and now Magento brings enablement to manage and distribute all inventory and sales through a single platform. It also allows to personalize every merchandising by location, offers any kind of extensions that go from sales tax calculations to new payment methods. Read more.
Workday acquired Adaptive Insights
Workday, the cloud-based platform that offers enterprise applications for finance and human resources, has acquired Adaptive Insights for $1.55 billion to bolster its business planning efforts. Adaptive
“With this strategy in place, we will fast-track our planning roadmap by 2+ years in order to deliver an even more robust solution that meets the needs of customers as they face increasingly complex planning use cases in today’s dynamic business environment”.
More at techcrunch.com
Recruit Group acquired Glassdoor
A leading Japanese human-resources company Recruit Holdings acquired Glassdoor for $1.2 billion. Glassdoor is a second-largest job website in the USA, known for providing better workplace transparency by hosting anonymous employee reviews about the culture and management of their companies. Glassdoor totally transformed the way people search for jobs and the way companies recruit.
Through the incorporation, Recruit will gain access to the USA website’s extensive stash of content such as employee reviews, while Glassdoor will try to expand into non-U.S. markets. Read more.
Every M&A seems to be a big push for making greater and more innovative products in the cloud-tech industry. The top 17 high-growth SaaS enterprises are counting more than 65% revenue growth in 2017-2019 years and this is one of the reasons why big global companies are implementing cloud service features into their organizational systems. The future of cloud computing is bright and promising, so becoming a part of this field is almost inevitable. If you are interested to sell your SaaS business, find out how much money it is worth, fill up the business valuation form.