Firmex Blog How to Successfully Acquire a Tech Firm Technology is one of the traditionally hot sectors for M&A, driven primarily by the rapid nature of change in the industry. In a rapidly changing industry it is impossible for any company to invest in all the newly developing market areas. Even market leaders start falling behind in key product/service areas and need to find ways to put themselves back at the forefront of customer needs. To stay ahead, companies need to constantly make choices on whether to "build" vs. "buy". More often than not, the path to close the gap internally is either too expensive or too time consuming. A merger or acquisition becomes the only realistic path to meet customer requirements and strategic goals. The higher the rate of change in a given market segment, the higher the need for M&A. By definition, "younger" industry segments have higher rates of change than "mature" market segments. It is therefore logical that most of the M&A activity, especially high profile M&A activity, tends to be within budding industry segments. Trends in Tech M&A In the 80's most of the activity was in the PC hardware business. In the 90's it was in the PC applications and networking businesses. The late 90's and early 2000's were defined by activity in the internet space. In the last few years, most of the activity has been in the internet, ERP, CRM, BPO, SaaS and cloud computing markets. The advantages of acquisitions in technology companies