26 Feb

Why Tech Companies Like Oracle Are on Acquisition Sprees in 2016

WRITTEN BY Anne Shields FEATURED IN Company News, Insights, & Analysis

Oracle’s acquisition of AddThis in 2016

So far in the series, we discussed how Oracle’s (ORCL) recently announced acquisition—Ravello Systems should provide a much-needed boost to the company in the cloud space. Prior to the Ravello acquisition, Oracle announced the acquisition of AddThis, which provides social sharing, content recommendation, and tailored marketing tools to web publishers.

AddThis will be a part of Oracle’s data cloud, which is said to be Oracle’s fastest-growing DaaS (data-as-a-service), even though in the public cloud space, the company has made a late entry, which suggests that it feels the need to compensate and catch up.

Why Tech Companies Like Oracle Are on Acquisition Sprees in 2016

Tech giants are aggressively hunting growth avenues and niches

Meanwhile, IBM (IBM) and Microsoft (MSFT) are also aggressively hunting down acquisitions, as we can see from their buyouts already in 2016. In 2016 to date (as of February 24), IBM has announced seven acquisitions—namely, Iris Analytics, Ustream, Resource/Ammirati, Aperto AG, Ecx.io AG, and Truven Health Analytics. Microsoft is also looking to snatch up companies in the cloud, mobile app, and unified communications space, where it aims to seek various avenues of revenue growth.

IBM also has video space on its radar. On January 25, 2016, IBM announced the acquisition of Ustream, a live video conferencing platform that has approximately 80 million viewers every month. In late 2015, IBM announced the acquisition of Clearleap, whose video platform provides video services that deliver content to multiscreen devices. After these buyout announcements, IBM went ahead and announced the formation of its new Cloud Video services unit, which will encompass its recent acquisitions.

The above chart shows the cloud revenues of Amazon.com (AMZN), salesforce.com (CRM), Microsoft, Google (GOOG), IBM, and Oracle, among others in 2015. Investors who wish to gain exposure to IBM might consider investing in the SPDR S&P 500 ETF (SPY). SPY has 8.7% exposure to application software and invests ~0.7% of its holdings in Oracle.

Now let’s look a little more closely at IBM’s designs on the video space.

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