Cloud Platforms and M&A Work

So I’ve been wondering if having a system in a cloud platform makes it easier to do M&A work, i.e. integrate an acquisition into your company’s environment. Is it easier to merge them into a cloud platform than to an on premise platform?

I know of what case where an acquired company and the acquiring company were both using the same cloud service. One might think it would be easy to merge them together, i.e. the provide could flip a switch or run a script or press a button and the domains would be merged. Not so fast, doesn’t work that way, actually very hard to do. In fact, a 3rd party is needed to merge the domains. Weird, strange and dumb.

In another case, three different companies that were merging used the same cloud service. In this case, it was easier, not because they could easily merge domains, but because all three companies had the same skills and knew how to use the systems and thus merge the systems. In this case, the new combined organization had lots of expertise that could be applied to consolidate the systems. However, one might argue that this would be true even if they were not a cloud platform, i.e. a on premise platform.

It seems to me that the advantage of having a cloud platform like Salesforce.com is that all the companies are on the exact same version. The cloud integration completely avoids the problem of being on the same software but different versions. That would seem to be the key advantage. Less variables to control.

What other advantages can you see? Is it an advantage at all? What do you think?

3 thoughts on “Cloud Platforms and M&A Work”

  1. My two cents on the the outcome of the M&A integration is the process. Regardless if you are in the cloud or on-premise, you will have challenges integrating these organizations if their processes do not align specially at the technology level. The example of companies using the same cloud platform makes you think of the elements that made the integration easy. Having the same version of an application for example, whether in the cloud or on-premise, will give the same ease of integration; at the application layer the processes are the same. I think the advantage of the cloud solution is the agility it provides an organization particularly in the procurement cycle part.

    1. Good thought on the procurement side. One could just license more seats which might make scaling up easier. Agreed that the PM either way is key. Thanks for stopping by!

  2. The key aspect of M&A is leveraging the synergies of the M&A as soon as possible for the acquiring company. Depending on the type of acquisition the synergies could come from cost optimization, from up-selling to customers of the acquired firm.. from leveraging the product features and so on.. This means that the context of the integration is more important than the content(data). I can integrate 2 applications but if i don’t understand the business value of the integrations then my integrations are just dumb message exchanges over some protocol (SOAP, HTTP or whatever..) However if i do understand the context of the message that is flowing .. then i can tap into that context and leverage it as per the best ROI for the business usecase..
    As an example if leveraging joint customer synergies is the most important M&A objective.. then i can tap into the context from the integration between sales leads from 2 systems and write a little “app” to alert based on context that signifies an opportunity to tap into the synergies.. This means faster ROI..
    Contextual integration can be over cloud or on-premise or both.. The physical location of the systems should not have any relevance on the speed of integration.. However lack of contextual awareness will mean that even if the systems run on exactly the same version.. they integrate but dont “understand” each other.. You wont get the ROI without understanding the context..

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