We’ll see more big deals like IBM’s purchase of Red Hat next year. Here’s why: The big enterprise tech companies are losing market share to the cloud, so they are looking to buy back the market share they are losing. In this case, IBM is trying to grow its hybrid cloud business.
Indeed, cloud computing is eroding big enterprise tech providers’ profitability by removing hardware and software from enterprise data centers. Although many promote cloud computing, it’s the traditional stuff where they make their big margins.
So, understanding that you’ll see more of these acquisitions, how should you think about these huge deals in light of your enterprise cloud strategy?
First, is it relevant to you? The fact is that many enterprises do not have any of the technologies involved, so there is no need to think about the effect on the technology unless you plan on using the products.
Second, if it is relevant, what are the dependencies? How will the deal likely change things, and how does that affect enterprise tech strategy?
If you have a great deal of dependencies—meaning you use the technology that’s part of the cloud deal a lot—then you need to start considering the future and asking questions. I would not take the technology provider’s word for it; in most cases, teh salespeople don’t know the answers or were told something that won’t ultimately be true.
You need to focus on what’s likely, and when it is likely. Based on your understanding of the market, will the technology in question likely remain as a supported product? If it won’t, when do you think the new owner will stop supporting that product? Although none of us can know for sure, it’s healthy to state assumptions and put a line in the sand and act on it.
These are big questions that don’t need fast answers. These large deals typically take years to complete, and then more time to integrate and affect the technology involved. So, don’t panic and do something you’ll regret, such as pushing the technology out of the enterprises before you understand what’s going to happen. Indeed, I would use this as an event to drive perhaps a better deal.
