How to successfully navigate tech consolidation

Everyone says the tech industry is in a constant state of reinvention. While that’s true, it’s also in a constant state of consolidation. For example, backend technologies, mobile development and integration are all becoming one. The needs of organizations within the industry are being redefined with all of the new technologies offered today. This is why M&A activity is constantly on the rise and business transfer agents are becoming more than just dealmakers.

Companies want the ability to sell more offerings because they’re constantly being threatened—and sometimes outmaneuvered—by smaller, newer and nimbler players in their space. In order to compete, the big brands have to make adjustments; move to the cloud, engage their users on a mobile channel, modernize their legacy IT, connect all their different systems across their extended ecosystems (including their partners’), participate in the API economy, create amazing new experiences to attract Millennials—and the list goes on. The tech industry is more cutthroat than ever before and doing less than the competition is never an option.

Traditionally, companies like IBM would have been a one-stop-shop for all the technology an end user company would need. But the big tech conglomerates are generally too expensive, slow and behind the times to truly “get it.” So, the best of breed technologies and vendors in markets focused on mobile, integration, IoT and APIs are strategically aligning themselves to provide customers with the ability to do more—more quickly and more competitively. In addition to adding new functionalities, this results in companies forming partnerships, joint ventures and a little bit of M&A.

Given this current landscape, what does it mean for companies that are exploring different technology solutions? It can be easy to get confused when so much vendor consolidation is taking place, so here are some recommendations:

  • Search for a healthy ecosystem: It’s important to take advantage of products and technologies that provide more than just one benefit. Slack, for example, offers not only a chat platform, but provides hundreds of integrations, bots and other third party services. For developers, JavaScript and Node.js is where it’s at. When IBM bought StrongLoop it added strength to its community rather than damaged it.
  • Look for versatility: Instead of using a mobile backend, just choose a backend—technology requirements across mobile, web and IoT are more similar that people think. Similarly, you don’t need three content management systems—pick one that is “headless” and can be a central hub for content management across all channels.
  • Use microservices and APIs for your offense and defense: With microservices you can assemble best of breed services and differentiate solutions and experiences. And with APIs you can switch services and vendors if you need to—no vendor lock-in. For example, you don’t need to stick around if your existing vendor shuts down a service or gets acquired and changes the terms and conditions to something you don’t like.
  • Avoid the Unicorns: Look for companies that are beholden to customers, not VCs. VCs love when companies have a singular focus in the market. But when it comes to the customers, they prefer holistic solutions over one-trick ponies. Look for vendors that have services to complement their products and have experience deploying them in the real world.

A conversation is never wasted. We’re confident that we can give you all the help you need, but we’ll tell you if we think there’s a better option for you.

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