by Romy Kaura, Director, IT Mergers & Acquisitions and Services, VMware
Mergers & acquisitions (M&A) can be disruptive and—if not done properly—might not yield desired synergies for the companies involved, especially when it comes to IT integration. In last two years alone, VMware IT has successfully executed more than ten deals, and that has allowed us to turn IT M&A execution into “a well-oiled-machine”.
Each deal is unique, and that must be taken into account for integration planning and execution. A detailed approach should be adapted according to the type of deal and its complexity. The different deal types include technology tuck-ins, full integration, a hybrid (best of both companies), or a standalone M&A.
A technology tuck-in requires an ‘adopt-and-go’ approach where desired assets and employees are incorporated as needed. Full integration is just as the name says, all aspects of the business are integrated. A hybrid integration involves choosing the best elements from both the new company and yours. Finally, a standalone M&A involves minimal integration into the host company’s landscape.
What are M&A best practices? First, IT should always be brought into the process early on to start strategizing and aligning to the company’s strategic objective. Otherwise a ‘killer deal’ could prove a technological nightmare after the fact.
Assuming IT is on board from the start, the next step is to look at the integration from a deal perspective, rather than a project perspective. That means you must understand the deal drivers, your target’s end-to-end technology landscape, the interdependencies between different functions, and the overall alignment with the business.
At VMware, integration planning and execution involves a core IT M&A team (integration and solution managers) along with a focused Center of Excellence (CoE) execution team that comprises network, security, cloud, collaboration, business apps, and other relevant resources with historical M&A integration experience.
Successful IT M&A integration takes a village!
During the deal journey, significant emphasis is also paid to the acquired company’s employee experience and productivity. A positive employee experience is mandatory for success each and every time, and it starts from Day1. In addition to a customized New Hire Orientation (NHO) on their first day, all acquired employees at VMware get immediate access to VMware network/ systems and resources. Plus, IT support is sustained and focused throughout the deal lifecycle. This ensures a smooth transition and brings a sense of inclusion/belonging to employees often concerned about what their new work environment will be like.
We at VMware also drink our own champagne! We employ VMware products such as VMware Hybrid Cloud, Workspace ONE, vRealize Orchestrator and others—combined with our IT system/infrastructure maturity—to dramatically expedite interim and end-state execution during any and all M&A activity.
Profit from VMware’s lessons learned
Our experience has taught us a lot about what makes a successful M&A deal from an IT perspective, whether the target company is long established or a start-up. Here’s a brief summary of those lessons learned:
- Establish integration principles.
- Assess the company’s culture and appetite for change—it is human nature to resent change.
- Understand the big picture.
- Make sure you understand the target company’s IT gap early on. Examine their IT infrastructure, resources, skillsets, and overall process maturity levels.
- Adopt a structured approach (toolkit, playbooks, operating model/governance).
- Get a comprehensive understanding of their go-to-market and product strategies during the integration planning phase.
- Ensure all legal and regulatory compliance issues are taken into account, especially if the target company’s operations extend to non-American markets.
- Employ continuous innovation and improvement.
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