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Tech sector in acquisition mode

Business | Sponsorship | Technology

Growth through acquisition has always been a popular strategy in the technology industry but its recent developments have really put it back in the spotlight. Companies like Cisco and Oracle have been in the acquisition game for years and have bags of experience in integrating workforces and technologies into the business. Whether the objective is to expand into new markets or develop existing offerings these two, and others, have become well versed. But now the whole market seems to be buying someone. In the last couple of weeks alone headlines have been full of HP buying 3Par then ArcSight, IBM buying BigFix, Intel with two big purchases and rumours of Juniper buying Trapeze.

Intel is perhaps more well known in the industry for Intel Capital, the company’s own investment and venture capital arm with a large portfolio of companies that has included Broadcom, Citrix, Inktomi, MYSQL, Red Hat and Research in Motion. So while small acquisitions might be expected from this portfolio, its recent assimilation of McAfee and Infineon are much more significant. These will take some digesting and integrating from all angles, particularly as it is not yet fully clear how McAfee products and technologies will fit into the Intel business. Interesting that AVG is also one of the portfolio businesses at Intel Capital. 

While already the largest IT and technology business in the world as a result of 10 years or so merging with and acquiring the likes of Compaq, EDS, 3Com, Tower Software and host of others, HP has also been busy lately. Despite the departure of Mark Hurd, 3Par and ArcSight have been announced as the latest targets as recently as yesterday.

These businesses typically focus on the integration of people, finance and technologies. While marketing is not overlooked in the process, it is not always recognised as a critical element in the equation. But brand equity is generally an expensive piece of the deal and acquirers cannot afford to write this off. AMD is currently deciding whether to drop the ATI brands in its portfolio. At the other extreme HP quickly migrated the Compaq branding on the BMW Williams F1 cars as part of their sponsorship in 2001/2002. This latest round of acquisitions is sure to create some challenges for marketers in all disciplines including sponsorship, PR and product marketing, so it will be interesting to see how they pan out.

Chris Ritchie

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