© Getty / Drew Angerer – Microsoft has taken over at least 266 companies since its first acquisition in 1987 (Forethought).
The acquisitions and equity investments of Gafam offer an overview of their development axis. What about MicrosoftÂ? The Redmond firm currently appears to be enjoying a prime position as an acquirer.
Acquisitions are a pillar of the Gafam strategy, even after sometimes more than 45 years of existence. This is all the more true since, according to some observers, weak signals show that these technological giants are approaching a certain innovation ceiling and would be more inclined today to bet on the findings of young companies. . Since their inception, Google, Apple, Facebook, Amazon and Microsoft have acquired at least 839 companies. However, these operations are not always disclosedâ ?? In total, according to cross-data from Pitchbook, CBÂ Insights and Crunchbase, the ranking of the number of acquisitions is as follows:
In 2021 alone, the number of operations remains impressive. Amazon has made a deeper foray into entertainment and advertising by acquiring MGM studio ($ 9 billion) and podcast platform Art19, as well as BtoB e-commerce with Selz. Apple for its part has expanded its Apple Music service with Primephonic.
More discreet in 2021 than the previous year, Facebook still got its hands on the video game studio Unit 2 Games (cloud gaming) and BigBox VR (virtual reality). On the Mountain View side, Google has taken over the start-ups Dysonics (3D audio), Provino Technologies (network-on-a-chip solutions) and Playspace (collaborative tool for virtual meetings).
Microsoft, finally, took out the checkbook at least nine times in 2021 to sign acquisition agreements which, like other big tech players, offer a glimpse of its privileged development strategies. © giÃ © es. The volume of these operations reflects above all a highlight of the activity of Gafam today: while all the actions of Google, Amazon, Facebook and Apple are scrutinized by the authorities. Antitrust companies from different countries, the Redmond firm, free from political and judicial interference, currently appears to enjoy a prime position as an acquirer.
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For Satya Nadella, CEO of Microsoft, the company mostly escapes antitrust surveillance today because it does not seek to amass different platforms to exploit user data for profit advertisers, but rather to provide technological services in an agnostic manner, and above all to companies and public bodies.
It should also be remembered that Microsoft got its hands on GitHub for 7.5 billion dollars in 2018, as well as on LinkedIn for no less than 26.2 billion dollars in 2016. Going back further, we also rediscover acquisitions of video game studio Mojang (Minecraft) for $ 2.5 billion in 2014, of Nokia’s mobile phone business in 2013 ($ 7.2 billion), as well as Skype in 2011 ($ 8.5 billion). The company has thus carried out 13 transactions known to more than one billion dollars, more than any other member of Gafam.
Â © CB Insights
Â © CB Insights
Microsoft’s appetite, which escaped dismantling in the early 2000s following its trial for anti-competitive practices, is therefore not new. That said, the firm has shown that in this field, it still knows how to have a significant strike force, not only in volume, but also in value.
The most iconic of this year remains – for the moment – the April purchase of Nuance Communications, a specialist in artificial intelligence (AI) and speech recognition, for $ 19.7 billion. This is the second largest acquisition in Microsoft history after LinkedIn. With this colossal purchase, Microsoft has indicated that it wants to bring “new cloud and AI offerings to the healthcare industry,” as well as other sectors.
The arrival of Nuance in its fold signals for some observers an improvement in its acquisition strategy in AI. We can also cite two recent takeovers: that of the start-up Suplari, which developed analytical tools to allow companies to scrutinize their expenses â € “and thus boost capacities AI of the Microsoft Dynamics 365 platform – and that of Orion Systems, specialist in motion analysis solutions in images and videos using AI. Solutions that have also been integrated into DynamicsÂ 365 and the Microsoft Power Platform with the aim of strengthening the range of applications for professionals.
Satya Nadella, CEO of Microsoft. Â © Getty â ???? Justin sullivan
Satya Nadella, CEO of Microsoft. Â © Getty â ???? Justin sullivan
â ???? Clearly, Redmond has gone on the M&A offensive, with the company clearly in a strong position to capitalize on its strong cloud positioning going forward. , with Nuance as an additional accomplishment, ”noted analyst Dan Ives at the time. UBS bank also felt that Microsoft is looking to expand its portfolio of cloud offerings even further, especially when AWS, Amazon’s lucrative cloud subsidiary, continues to generate more profits (13 billion dollars in operating income in 2020).
The list of cloud-related solutions captured by Microsoft to strengthen its Azure platform has been growing almost quarterly for nearly two years. One of the most significant, Affirmed Networks, acquired by Microsoft in March 2020 ($ 1.35 billion), has developed 5G network virtualization solutions in the cloud. Microsoft was also taking a further step in the telecommunications industry by providing operators and equipment, through Azure, with ways to simplify their operations at low cost. At the same time, Google was also investing in this field with the launch of a platform called Anthos.
The sums spent by Gafams to capture companies that have the potential to meet their strategic needs are impressive. But it must be said that these behemoths, whose market capitalizations remain the largest in the world, have the means to fulfill their ambitions.
In 2020, the year of the global pandemic that has consecrated the digital industry, the American big tech accumulated $ 929 billion in sales, the equivalent of the domestic product gross from the Netherlands and a figure doubled between 2015 and 2020, according to a study by Fabernovel. And the tide does not seem to be turning in 2021.
These record incomes come to fill the coffers of Gafam to the brim. Microsoft, for example, has about $ 130 billion in cash. Apple even has nearly $ 194 billion in cash and marketable securities, according to Reuters, for whom the next acquisitions of the tech giants could be none other than themselves, via share buybacks. In total, Google, Apple, Facebook, Amazon and Microsoft are said to hold around $ 600 billion in cash.
Microsoft also got its hands in July 2021 on AT&T’s Network Cloud platform which allowed the operator to manage its 5G network and was to be integrated with Azure for Operators. In May 2020, the specialist in virtualized network software and communications solutions for Metaswitch Networks operators came to solidify Microsoft’s positioning at the crossroads of telecommunications and from the cloud.
Recently, CloudKnox and RiskIQ (enterprise cloud security) have been under the Microsoft flag. In the spring of 2021, Kinvolk (a specialist in open source Linux and cloud native technologies) also joined the ranks of the firm, as did The Marsden Group, allowing it to strengthen the industrial component of its cloud offering. We can also mention the buyouts in 2020 of ADRM Software (data modeling solutions) and, in 2019, of Mover and Movere, two companies with almost identical names specializing in migration of data in the cloud.
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Beyond AI and the cloud, other segments are benefiting from significant investments. This is the case with IoT, an activity for which the company announced in 2018 a cost of $ 5 billion over four years. A budget that was used in particular to get hold of two specialists in cybersecurity of connected devices: ReFirm Labs, in June 2021, and CyberX a year earlier.
Microsoft has also made a name for itself in video games with another monumental acquisition: the $ 7.5 billion ZeniMax Media acquisition in March 2021. By casting its net on the parent company of many studios, Microsoft could now count on 23 video game studios to strengthen its Xbox offering and face Sony with exclusivity. This arrival followed that of the e-sport event platform Smash.gg, at the end of 2020, which was to expand the e-sport content offer of MSN, Microsoft’s internet portal, a few months after the closure of Mixer, which failed to compete against Twitch and YouTube.
Finally, we can note Microsoft’s more extensive forays into task automation (Softmotive, May 2020), collaborative work solutions (Peer5, August 2021), productivity and creativity. © (Clipchamp, September 2021), but also edtech (TakeLessons, September 2021).
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If one more sign of Microsoft’s quest for diversification was needed, let us note its attempt to take Discord, a popular messaging system for gamers, for $ 12 billion in 2021. An operation that did not ultimately not successful, Discord preferring, it seems, the option of the IPO. However, Microsoft has shown its willingness to get its hands on a service that could have been fully integrated with Xbox Game Pass and overshadow rival services like Sony’s PlayStation Now.
We must also not forget the 20 to 30 billion dollars that the firm would have been ready to put on the table in 2020 to take over the activities of TikTok in North America, Australia and New Zealand (an offer ultimately rejected by ByteDance, the parent company of the video app). Just like the discussions about an acquisition that Microsoft would have held in late 2020 with Pinterest, whose market capitalization was then € 51 billion. Either way, Microsoft was ready to close at least three deals worth over $ 10 billion in just a few months.
In the past five years, only Amazon has spent more than that to buy a business (Whole Foods in 2017). These signals also showed that Microsoft is not rejecting the idea of investing in a perilous ground on which it is absent today: that of social networks, that other giants technology do not seem to want to share.
I have read that they invest in the research of synthetic meat, and that at the same time, they financially support vegan associations and fight against animal abuse.
With their grip on social networks and the media, they are conditioning us to eat their green sun. (film with Charlton Heston).
“while all the actions of Google, Amazon, Facebook and Apple are scrutinized by the antitrust authorities of different countries, the Redmond firm, free from political interference and judicial, appears to currently enjoy a prime position as an acquirer. “
Indeed, it is even surprising that Microsoft is so housewife, whereas in 45 years of existence, they have hardly changed.
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