Despite economic uncertainty, mergers and acquisitions (M&A) in the software and technology sectors have continued to boom from the beginning of the COVID-19 pandemic through 2021 and 2022. In the enterprise software sector of the IT market, 2022 M&A levels are expected to match or surpass those in 2021, with DevOps accounting for the largest share.
High-profile deals, such as Broadcom’s $61 billion acquisition of VMware and TIBCO’s leveraged buyout of cloud and SaaS provider Citrix Systems worth nearly $14 billion, have led to nearly $105 billion in 2022 M&A activity.
Blockbuster M&A deals tend to decrease in favor of small- and mid-market transactions during economic downturns, as larger companies often find more value in acquiring smaller specialist enterprises than in building their own solutions.
Databricks, for example, has taken an aggressive stance in M&A, acquiring Datajoy, Cortex Labs, and more in 2022 alone. More than anything, cloud migration and overall digital transformation seem to be driving these deals, and the state of the global economy doesn’t appear to be slowing them anytime soon.