Tech Private M&A Activity Report for 2012

CB Insights just released its M&A activity Report for 2012

The report breaks down the 2,277 private tech companies that were acquired globally in 2012, and examining corresponding trends.

Followings are some of the interesting facts to note:

 

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As expected California saw the most private tech companies acquisitions.

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Position on the top 3 markets globally suggests that India’s entrepreneurial tech community is becoming more established.

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Google and Facebook have been the most aggressive acquirers last year, doing 12 acquisitions each. Five of Facebook’s acquisitions were for talents.

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From the companies what were acquired,  eight have been valued on more than $1 billion. Otherwise more than 50% of deals are less than $50M and more than 80% of the acquisitions are less than $200M.

R&D Spending versus Rate of Innovation

According to Booz & Company’s annual Innovation report there are three approaches to innovation:

Need seekers (think Apple): These are companies that actively and directly engage current and potential customers to shape new products and services based on superior end-user understanding, and strive to be the first to market with those new offerings.

Market readers (think Samsung): These companies watch their customers and competitors carefully, focusing largely on creating value through incremental change and by capitalizing on proven market trends.

Tech drivers (think Google): This category includes companies that follow the direction suggested by their technological capabilities, leveraging their investment in research and development to drive both breakthrough innovation and incremental change, often seeking to solve the unarticulated needs of their customers via new technology.

As with companies mentioned above, each of these three strategies can produce superior financial results and there are always individual companies outperform others within each strategic group. The success in each category depends closely to company’s culture and mindset.

One highlight of the report is that R&D spending and rate of innovation do not necessarily correlate which is illustrated in the chart below:

 

 

 

Impact of Patents on Innovation

Today New York Times published an interesting article about impact of Patents on Innovation.
According to the article today, almost every major technology company is involved in ongoing patent battles. Of course, the most significant player is Apple, industry executives say, because of its influence and the size of its claims: in August in California, the company won a $1 billion patent infringement judgment against Samsung. Former Apple employees say senior executives made a deliberate decision over the last decade, after Apple was a victim of patent attacks, to use patents as leverage against competitors to the iPhone, the company’s biggest source of profits.
At a technology conference this year, Apple’s chief executive, Timothy D. Cook, said patent battles had not slowed innovation at the company, but acknowledged that some aspects of the battles had ‘kind of gotten crazy.’
It is a complaint heard throughout the industry. The increasing push to assert ownership of broad technologies has led to a destructive arms race, engineers say. Some point to so-called patent trolls, companies that exist solely to sue over patent violations. Others say big technology companies have also exploited the system’s weaknesses. ‘There are hundreds of ways to write the same computer program,’ said James Bessen, a legal expert at Harvard. And so patent applications often try to encompass every potential aspect of a new technology. When such applications are approved, Mr. Bessen said, ‘the borders are fuzzy, so it’s really easy to accuse others of trespassing on your ideas.’

“Shared Nothing Architecture” for large scale analytics

“Shared Nothing (SN) Architecture” is an old technology that is increasingly gaining popularity.

SN Architecture (or SNA) is a distributed architecture where each node is independent and self-sufficient, which eliminates single points of failure/bottleneck in large scale systems.

Today TIBCO announce the release of new ActiveSpaces 2.0
To improve scalability and facilitate more in-depth analysis of “data in motion” TIBCO is relying on SVA for storage. (in Google world it would be called “DB Sharding”).

(As a side note Teradata uses SNA as well)

With this release TIBCO is pushing further into the big-data market which according to Wikibon is predicated to be a $53.4 billion hardware, software and services market by 2017.

Intelligent Computers .. of the other kind

Computer Intelligence is getting another boost through an innovative new design for artificial neural networks.

Known from her work on Artificial Recurrent Neural Network (ARNN) Hava Siegelmann of the University of Massachusetts Amherst is responsible for the breakthrough.

She is taken Alan Turing’s work to its next logical step. Her neural network models are capable of morphing and completely rearranging their design every time a new fact is learned. It means that her neural network learns an order of magnitude more effectively and faster than more traditional neural networks. Siegelmann claims that her model is superior not just in ability but also it requires significantly less computational power.

She received funding to develop the first ever “Super-Turing” computer based on ARNN.

At the same time scientists from the University of Gothenburg just demonstrated growing nerve cells (biological neural network) on nanocellulose that can be used to construct 3D brain models.

One way or the other we will get to true AI … the question is which approach will prevail; reverse engineering or evolutionary process!