IBM advance hybrid cloud & AI strategy with Instana
Following a definitive agreement between IBM and Instana, IBM is set to acquire the application performance monitoring and observability company. In acquiring Instana, IBM reports that it will help the organisation manage the complexity of modern applications in the hybrid cloud landscape, as well as strengthen its AI strategy and AI automation capabilities.
As part of the acquisition, iBM will help companies to overcome challenges that come with managing application performance across multiple teams, across 2 to 15 clouds.
"Our clients today are faced with managing a complex technology landscape filled with mission-critical applications and data that are running across a variety of hybrid cloud environments – from public clouds, private clouds and on-premises. IBM's acquisition of Instana is yet another important step that we are taking to provide companies with the most complete portfolio of AI-automated solutions to tackle this enormous challenge and help prevent unforeseen IT incidents that can cost a business in lost revenue and reputation,” commented Rob Thomas, Senior Vice President, Cloud and Data Platform, IBM.
Once Instana’s capabilities have been integrated with IBM, the company reports that it will be able to feed the insights provided into Watson AIOps, which can be compared to a baseline of normal operating applications.
The integration will also have alerts triggered by AI to notify that an issue needs to be resolved to avoid a negative impact. IBM’s ambition is to help eliminate the need for IT staff to manually monitor and manage applications, freeing employees to focus on innovation and higher value tasks.
"With the added responsibility of ensuring the build and run quality of the software they develop, DevOps teams need a new generation of application performance monitoring and observability capabilities to succeed. Instana's observability capabilities combined with IBM's AI-powered automation capabilities across hybrid cloud environments will give clients a full view of their application performance to best optimize operations,” commented Mirko Novakovic, co-founder and CEO, Instana.
M&A activity key lever for future tech sector growth
Despite the continuing uncertainty of the pandemic, the tech sector has witnessed soaring dealmaking activity over the past year, rocketing in the second half of 2020, with the last quarter of 2020 a record one for M&A activity, and momentum continuing into 2021.
Dealmaking in tech sector soars in past year
And the latest figures bear this out with the number of technology M&A deals totalling US$208.44bn globally in Q1 2021, according to GlobalData. While the US holds top spot both in volume of deals (1034) and total value (US$140.61bn), Europe ranked next with 649 deals (US$44.49bn) with the UK continuing its reign as Europe’s biggest M&A market with 204 deals.
In particular, megadeals – those valued at US$5bn or more – soared in 2020 representing 59% of all global technology sector deal value in 2020, up from 47% in 2019, according to the latest edition of the EY Technology Global Capital Confidence Barometer.
This tech sector trend towards megadeals is backed up by EY’s CCB data, with 16% of tech sector respondents planning to pursue transformative deals valued at US$5bn or more in the near-term.
While technology deal activity “all but stopped at the beginning of 2020 after fluctuating between historic highs and lows, companies pivoted quickly and tech M&A exploded in the second half of the year”, says Barak Ravid, EY Global TMT Leader for Strategy and Transactions.
M&A activity level for tech sector growth
Looking ahead to the future, technology executives are optimistic, with nearly half (47%) expecting profitability to fully rebound this year, according to CCB data, compared to 23% across all sectors, and with more than half (51%) planning to pursue M&A in the next year in order to sustain growth.
According to Ravid, M&A activity is increasingly becoming a key lever for growth as businesses look to recover.
“To position themselves for future revenue growth, tech companies are now adjusting their M&A strategy to focus more on a target’s business resilience, digital technology alignment and to gain market share through consolidation,” says Ravid.
However, with an increasingly competitive deal market and ongoing geopolitical tensions, the majority of tech execs expect to see more competition in the bidding process for assets over the next year, primarily from private capital.