Cloud Computing Industry Sees Massive Surge in Mergers and Acquisitions

cloud-computing-2153286_960_720It’s no secret that digital cloud solutions are becoming an increasingly popular option for all kinds of businesses. In fact, 80% of cloud adopters see improvements within six months of moving to the cloud. Now, cloud-hosting firm Contegix is reaping the benefits of cloud success and has purchased BlackMesh Inc., which is its third deal this year alone, according to the St. Louis Dispatch.

BlackMesh is based in Ashburn, Virginia and works with web content management platforms. The full terms of the deal have not been disclosed.

“Together, Contegix and BlackMesh will enhance both companies’ ability to serve clients in a secure, efficient, and scalable fashion,” BlackMesh co-founder Jason Ford, who will now serve as Contegix’s chief technology officer and chief information security officer. “We are very excited to join the Contegix team and to continue to provide high-touch service and support to our customers while expanding the services we offer.”

At the end of last year, Contegix purchased Web Services, LLC, which is a managed services and cloud provider based in Kansas City, Missouri. The IRS automatically classifies an LLC as a partnership or “disregarded entity,” depending on if there is one or more than one owner, and before the acquisition, the company had just one owner — Adam Ward.

“We believe that this is a real win for Admo’s customers,” said Ward at the time of the acquisition. “With very little lead time, our clients will gain access to a much broader array of solutions with top-notch support.”

And if Contegix’s track record is any guide, this won’t be the last acquisition for the cloud-hosting firm.

However, these deals are just a few small data points in a much larger trend. For the last several years, tech companies of all sizes have been engaging in mergers and acquisitions. In fact, the pace of these major acquisitions has increased so quickly that last year CNN Tech described it as a “feeding frenzy.”

Last year investors were surprised at the unusually low number of tech IPOs; however, in that same time, mergers and acquisitions took off.

Per CNN Tech: “Mergers and acquisitions, on the other hand, are soaring. Deals to buy private tech companies have totaled $318 billion for the year so far, significantly outpacing the $250 billion spent on tech MandA through the first three full quarters of 2015, according to data from PitchBook.”

Major companies like Salesforce, Walmart, Apple, and Intel have all been aggressively snatching up smaller technology companies to expand their capabilities. In the cloud market, Google has also been working through a list of acquisition targets.

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