Stealthy Money Affects Technology–StorageSoup blog by Randy Kerns

By Randy Kerns, Wednesday, January 28th 2015

Analyst Blogs

Stealthy Money Affects Technology

By my count, around 70 storage start-up companies were acquired in the past year. That is quite a few acquisitions, although not as many as in some past years. A surge in acquisitions always leads to contemplation about upcoming opportunities for other companies to reach their exit goals. There are different types of acquisitions, which usually depend on the stage that the acquired company is in. While thinking about who could be next, there are basically three types of acquisitions to consider:

1. Technology acquisitions. Some startups begin with new technology and get to a point to prove the technology either by demonstrating it to customers or acquiring paying customers. If the technology shows value, an established company may want to acquire it to fully develop and market the product rather than invest to develop the technology from scratch.

2. Business acquisitions. If a company has reached a maturity level with the product and shown it can grow a business around it, an established company may see an opportunity to fill a hole or add a complementary product to its portfolio. These are usually the larger value (billion-dollar plus) acquisitions that are talked about for years after they have been completed.

3. Competitive acquisitions. These are deals where a vendor eliminates a competitor by absorbing it. The acquiring company will usually deny that is its motive, but these transactions often end with the acquired technology discarded within a few years.

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