Guest Blog: Multi-Cloud M&A: Formation Flying for Business

Author: Kevin L. Jackson, CISSP®,CCSP®
_{CEO, GC GlobalNet / Consultant / Educator / 2X USA Today and WSJ Best-Selling Author / Inventor}

{If you missed episode 5 of the The Multi-Cloud Expedition on “Challenges of Mergers and Acquisitions”, please visit that blog page for details and links to the recordings.}

My most enjoyable times as a pilot were associated with formation flying. While flying near other airplanes has risks, the benefits outweigh the hazards.

To those unfamiliar with formation flying, flight within a wingspan’s distance of another airplane looks eerily like an imminent collision. And collisions in planes generally don’t end well. But, in some cases, formation flying presents a lower risk than flying alone. Advantages from a piloting point of view include:

• Acquiring new advanced skills;
• Mitigating risks associated with degradation or loss of navigation or communications systems;
• Assisting fellow pilots when diagnosing dangerous or unsafe conditions (i.e., external inspection of an aircraft in flight);
• Enhancing trust, camaraderie, or community;
• Leveraging the capabilities of one aircraft to mediate a weakness in another; and
• Building motivation, enjoyment, precision, teamwork, confidence, or skills to ensure continuous improvement.

Under the Federal Aviation Administration (FAA) Flight Regulation that discusses flights near other airplanes, the FAA requires prior arrangements by the command pilots for any formation flight. This rule means that the pilots must discuss a plan before they climb into their cockpits — a process called a briefing — where aspects of the flight, such as the mission, area, weather, altitude, maneuvers, and more, should be discussed. There is one inviolate rule: Don’t hit the other airplane or airplanes in the formation! Additional risks to address before conducting a formation flight include:

• The number of airplanes flying in the formation (Crucial In large formation groups);
• Performance differences when the pilots are flying dissimilar aircraft;
• Aircraft power, pitch, configuration, or switching errors (The pilot must keep a close eye on the other plane while doing any configuration changes);
• Expected weather conditions;
• Use of visual or instrument flight rules;
• Expected aircraft traffic conditions;
• Controlled or uncontrolled airspace rules;
• Variances in pilot experience, ability to maintain situational awareness, currency, or familiarity with procedures.
• Required maneuvers, which could include:
  • Lead vs. wingman procedures;
  • Station-keeping visuals (following the lead’s moves);
  • Hand signs;
  • Cross-under (moving from one side of the lead aircraft to the other);
  • Pitch-outs and Rejoins (breaking up the formation and forming back up); and
  • In-trail work (following behind the lead with timed spacing).

Surprisingly, a pilot’s formation flying steps parallel the corporate merger or acquisition process.

The reasons for considering a merger or acquisition are also similar to a pilot’s initial decision to learn formation flying in that both organizations are:

• Acquiring new capabilities;
• Attempting to reduce business risk (acquisition of capabilities or mitigate shortcomings);
• Avoiding dangerous conditions (i.e., competition or business failure);
• Enhancing customer or business partner trust, camaraderie, or community;
• Leveraging the capabilities of one business to mediate a weakness in another; and
• Building motivation, enjoyment, precision, teamwork, confidence, or skills to ensure continuous improvement.

M&A IT Challenges

During the due diligence phase, the acquiring organization must understand the risk associated with the acquisition and merger process. With information technology, the first concern typically revolves around any cyber dangers related to the targeted company. This analysis helps to visualize the IT integration path. Key challenges revolve around scalability and operational compatibility. Typically a triage process is used to evaluate the acquired company’s IT infrastructure. The evaluation puts relevant IT infrastructure components into three buckets:

• Trash it!
• Keep the current infrastructure and continue running the resident applications; or
• Identify costs, timeline, and run rate for integrating resident applications to a different infrastructure.

Need for speed

A recently emerging M&A characteristic is that the process is no longer sequential. All steps are tackled in parallel to accelerate the change to the overall business model. Companies that are successful in quickly completing a deal outpace their competition. Companies that don’t miss out on any emerging market opportunities. Acquisitions fail because the team loses focus on the investment thesis or takes too long to accomplish the desired business transformation.

A Deloitte survey showed that 90% of corporate M&A teams and 94% of financial buyers see transformation as the key to realizing the value of a deal. These numbers are up from 63% just one year before. This change means focusing on completing step 7, “Day 3”, of the M&A acquisition steps outlined above is paramount. Digitalization and cloudification are both key accelerators to the speed of transformation.

Cloudification and Divestitures

In divestitures, cloudification is also a crucial aspect. When a company thinks about selling a capability, both tend to be painful because of the multiple and challenging tasks of separating or standing-up new business processes. These tasks must accurately identify:

• What data is associated with updated business processes, and where does it live;
• How are business transactions executed, and how are the results posted; and
• What are the required software applications and the stand-up or modification processes for each?

If these functions operate across a multi-cloud environment, these steps can proceed much faster because cloud-deployed assets are better documented, segregated, and metered. An M&A that includes a traditional data center environment without software-defined components can increase costs, implementation timelines, and risks.

Call to Action

Every merger or acquisition needs to maintain focus on the investment thesis and reach the desired transformative state as fast as possible. VMware has solutions specifically designed to help your enterprise accomplish these goals.

When the organization starts contemplating a merger or acquisition, VMware Aria Migration can help discover and classify applications, plan and assess migration strategies, and confidently migrate to the cloud. VMware Aria Operations for Networks flow-based technologies can quickly find workloads and organize them into applications to support the operational due diligence process. Using a data-driven migration assessment process, the organization can gain a macro-level view of its readiness, use innovative default groups to scope migration candidates, and understand your target cloud’s requirements.

Get your team ready for “Day 0” by using Workspace ONE Intelligent Hub to improve employee engagement and productivity through a single app. This solution streamlines onboarding by delivering a consistent experience across all use cases, such as BYO/corporate devices, and across platforms (mobile, desktop, and web).

Enable smooth workforce transitions from Day 1 through Day 2 and Day 3 with VMware Workspace One. This solution delivers IT simplicity into every aspect of the IT admin and end-user experience by using AI/ML-powered automation. The Self-Service Workspace uses a centralized enterprise catalog to provide users or devices with the right apps, notifications, and self-service resources. VMware tools leverage an AI/ML-powered data science engine to aggregate, correlate, and visualize data across your company’s digital workspace.