Tag Archives: acquisition

Microsoft desires Mellanox

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My lazy Thursday morning was spurred by a posting by Stephen Foskett, Chief Organizer of Tech Field Days. “Microsoft mulls the acquisition of Mellanox”

The AWS factor

A quick reaction leans towards a strange one. Microsoft of all people, buying a chip company? Does it make sense? However, leaning deeper, it starts to make some sense. And I believe the desire is spurred by Amazon Web Services announcement of their Graviton processor at AWS re:Invent last month.

AWS acquired Annapurna Labs in early 2015. From the sources, Annapurna was working on low powered, high performance networking chips for the mid-range market. The key words – lower powered, high performance, mid-range – are certainly the musical notes to the AWS opus. And that would mean the ability for AWS to control their destiny, even at the edge. Continue reading →

Pondering Redhat’s future with IBM

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I woke up yesterday morning with a shocker of a news. IBM announced that they were buying Redhat for USD34 billion. Never in my mind that Redhat would sell but I guess that USD190.00 per share was too tempting. Redhat (RHT) was trading at USD116.68 on the previous Friday’s close.

Redhat is one of my favourite technology companies. I love their Linux development and progress, and I use a lot of Fedora and CentOS in my hobbies. I started with Redhat back in 2000, when I became obsessed to get my RHCE (Redhat Certified Engineer). I recalled on almost every weekend (Saturday and Sunday) back in 2002 when I was in the office, learning Redhat, and hacking scripts to be really good at it. I got certified with RHCE 4 with a 96% passing mark, and I was very proud of my certification.

One of my regrets was not joining Redhat in 2006. I was offered the job as an SE by Josep Garcia, and the very first position in Malaysia. Instead, I took up the Hitachi Data Systems job to helm the project implementation and delivery for the Shell GUSto project. It might have turned out differently if I did.

The IBM acquisition of Redhat left a poignant feeling in me. In many ways, Redhat has been the shining star of Linux. They are the only significant one left leading the charge of open source. They are the largest contributors to the Openstack projects and continue to support the project strongly whilst early protagonists like HPE, Cisco and Intel have reduced their support. They are of course, the perennial top 3 contributors to the Linux kernel since the very early days. And Redhat continues to contribute to projects such as containers and Kubernetes and made that commitment deeper with their recent acquisition of CoreOS a few months back.

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Did Dell buy a dud?

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In the past few weeks, I certainly have an axe to grind with Dell, notably their acquisition of Quest Software. I have been full of praise of how Dell was purchasing the right companies in the past and how the companies Dell acquired were important chess pieces that will propel Dell into the enterprise space. Until now …

Since its first significant acquisition into the enterprise with EqualLogic in 2008, there were PerotSystems, Kace, Scalent, Boomi, Compellent, Exanet, Ocarina Networks, Force10, SonicWall, Wyse Technologies, AppAssure, and RNA Networks. (I might have missed one or two). To me, all these were good buys, and these were solid companies with a strong future in their technology and offerings. Until Dell decides to acquire Quest Software.

At the back of my mind, why the heck is Dell buying Quest Software for? And for a ballistic USD2.4 billion! That’s hell of a lot of money to spend on a company which does not have a strong portfolio of solutions and are not exactly leaders in their respective disciplines, barring Quest’s Foglight and TOAD. A quick check into Quest’s website revealed that they are in the following disciplines:

 

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Quest Software going private

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Just a couple of days ago, Quest Software Inc, got an offer from Insight Venture partners. The offer of USD$23 per share will bring the offer close to USD$2 billion, and the company will be taken private.

This is the second big-name taken off and going private. The first one being BlueCoat after it has agreed to be take private for a price of USD$1.3 billion by Thoma Bravo, a private equity firm.

Quest Software is the maker of the famous Oracle performance analyzer, Toad and also has acquired smaller companies like Bakbone and Vizioncore in the past, but this around it has become the acquisition target.

This brings a very interesting fact, that, more and more public companies are going private. Here in home ground, the largest mobile carrier, Maxis, went private a few years ago.

Why? Typically most companies go private when the shareholders think that the stock market does not give the company share the right value. The market perhaps has stagnated and not growing. However, BlueCoat and Quest Software are not in a stagnant market. Security, application acceleration, data protection and data analytics are big market in the cusp of exploding growth. Then why are these companies going private?

Here are a few possible reasons (my take):

  1. With the buy-out, these companies can be free from the encumbrances that come with being a public company. Some of them include lengthy approvals from shareholders, board of directors and regulators, which could slow the decision-making process
  2. These new owners are looking at plans to expand into markets that they can’t get to globally without being scrutinized by the regulators and certain shareholders. Going private mean that they could offer their services across the globe in the cloud space, with lesser restrictions and prohibitions.
  3. They want to be really aggressive and being public just bogs them down.
  4. The new owners plan to “shoeshine” these lackluster companies and hoping to sell them out again to get a huge profit.

Thoma Bravo, for example, already has several companies in its security portfolio – Entrust, Hyland Software, SonicWall and TripWire and the BlueCoat acquisition just adds more to its “great view of security“. Thoma Bravo, as described, is a technology investment firm specializing in revamping and growing established companies.

Insight Venture Partners (IVP), too, is in the business of private equity and venture capital, and has invested in companies such as Solarwinds, Acronis and DataCore.

This Quest Software acquisition could IVP’s biggest yet, but the question remains. Why?