If you follow the technology industry at all, you’ll understand one basic principle: everything changes. From top to bottom, left to right, the technology industry is constantly refining, rethinking, and replacing old tech with new solutions. At a higher level, companies undergo the same kinds of radical changes. We’ve seen Dell purchase EMC, Carbonite purchase Evault, and NetApp acquire SolidFire in the past year alone. That’s only to name a few.
Recently there’s been a few more acquisitions, one of which drastically changes the technology landscape and the other is in response to the changes we’re already seeing. However, as the industry consolidates in one area, it is also expanding faster than ever in other areas.
Tech Data Purchases Avnet
The impact of the cloud is wide reaching and can shift the technology market in ways we all may not have expected. With more companies migrating their environments to the cloud, the need for on-prem data center hardware across the entire industry is declining. This has prompted consolidation in the technology distributor industry. These distributors purchase data center equipment from the manufacturers and sell it to resellers who then pass it along to the end user. In large part due to the cloud, that market is not as large as it once was.
Tech Data has just recently signed a deal to acquire the Technology Solutions portion of Avnet for $2.6 billion. This deal makes sense in a lot of ways. Though Tech Data has a data center division of their company, their strongest markets are in end user devices, such as iphones and PCs. Avnet instead focuses on high-end data center equipment. Combined, Tech Data will have a stake in both areas of the technology distribution business.
With this consolidation, that leaves few competitors left in the industry. Aside from Tech Data, the remaining distributors are Arrow, Synnex, D&H, Ingram Micro, and only a few more.
Genesys Purchases Interactive Intelligence
In the contact/call center space, there are hundreds of companies offering stand-alone tools for your contact/call center, but there are only a handful of leading companies developing and supporting full contact/call center platforms. That field just got a little smaller as Genesys entered into a definitive agreement to purchase Interactive Intelligence for approximately $1.4 billion.
Genesys is a customer experience development company based out of Daly City, California. They offer a contact/call center platform called “The Genesys CX Platform” that focuses on enabling omnichannel communication between a company and their customers. This product will align well with Interactive Intelligence’s PureCloud offering which provides a full-feature software as a service. With this new expanded product portfolio, Genesys will be able to offer a wider range of solutions to a wider range of companies.
Furthermore, Genesys invests approximately $200 million a year in research and development. Given how new Interactive Intelligence’s PureCloud solution is, these resources will be a major boon in completing the PureCloud vision.
Dr. Don Brown, President and CEO of Interactive Intelligence, commented on the acquisition:
“We have been working for the past 22 years to build an outstanding company with innovative, disruptive technology solutions that transform businesses. I am confident that our agreement with Genesys, which follows a careful evaluation of strategic alternatives, provides Interactive Intelligence shareholders with immediate and significant value, and will deliver meaningful benefits to our customers, partners, and employees. The combination of Genesys and Interactive Intelligence provides a complete portfolio to address all market segments by combining Interactive Intelligence’s PureCloud, Cloud Communications-as-a-Service (CaaS), and Customer Interaction Center (CIC) with Genesys’ offerings. I am excited for the combined company to continue to grow and meet the needs of organizations around the world.”
The Tech Industry Isn’t Shrinking
With articles like this, it’s easy to get the wrong impression. While companies may be merging and consolidating, that doesn’t mean that the industry is shrinking or has fewer overall players—not by a long-shot. There are over 11,000 tech startups formed every hour. That’s three businesses a second. The truth is that the technology industry is growing at a rate we’ve never seen before.