Private Equity Takes To The Cloud

0
Private Equity Takes To The Cloud

In 2015, Mergers & Acquisitions magazine published an article on Thoma Bravo Advantage (NYSE:TBA)’s commitment to investing in companies that leveraged the cloud. At the time, it was backing 25 such companies.

Get The Full Walter Schloss Series in PDF

Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q1 2021 hedge fund letters, conferences and more

Thoma Bravo’s Commitment To The Cloud

“With most companies now looking to transition at least some of their service to the web, strategic acquirers and private equity firms want in on the action,” the article states. “As strategic acquirers look to migrate to the cloud, they are gobbling up companies that can help them make the transition.”

Southpoint Capital likes these stocks [Q1 Letter]

Clint Carlson Far ViewSouthpoint Qualified Fund and Southpoint Qualified Offshore Fund returned 2.5% net for the first quarter, compared to the S&P 500's 6.2% return and the Russell 2000's 12.7% gain. During the first quarter, Southpoint's funds averaged 133% long and 70% short. Q1 2021 hedge fund letters, conferences and more The fund's long positions added 13% gross Read More


Fast forward to 2021, Thoma Bravo’s commitment to the cloud has only intensified. One recent example: in March, the venerable private equity investor acquired data integration specialist Talend for $2.4 billion.

Thoma Bravo isn’t alone in its love of all things cloud.

When the pandemic hastened the need for digital transformation, private equity firms realized the value in acquiring solutions to assist with end-to-end cloud automation. With oodles of money in their coffers, they have gone on a tear.

According to Bessemer Venture Partners analysis, cloud companies are thriving, with a record-breaking market capitalization of more than $2 trillion. Cloud growth rates and access to capital are at all-time highs, with the average Cloud 100 company growing 80% year-over-year and $186 billion going into private cloud companies in 2020.

PE's Interest In The Cloud

Snowflake Inc (NYSE:SNOW)’s 2020 IPO offering could be what sparked private equity’s recent interest in the cloud. Raising over $3 billion in its initial public offering, Snowflake became the largest software IPO in history and the fifth-largest tech IPO ever after Facebook, Uber and Snap.

In the past, private equity firms focused on cutting costs of the companies they acquired, rather than profits. They are now focusing on growth. Thoma Bravo’s approach is to take in-house private companies that do one thing well – such as data integration – and aggregate that space with other companies that do one thing well.

Toward what end?

In 2016 Thoma Bravo acquired Qlik Technologies, an industry leader in reporting, analytics and business intelligence. To that capability the private equity firm added Talend’s capabilities – its tools are used to move data between IT systems.

Thoma Bravo is weaving together end-to-end cloud capabilities. It understands the value of end-to-end automation and the various capabilities required for the migration process.

Cloud Migration

From an investment perspective, what makes the cloud even more worthwhile is that more than a third of companies are still in the very beginning stages of their cloud migration process, which means there is more growth on the horizon. Our recent study, conducted by Propeller Insights, confirms that an overwhelming majority of companies – 87% – have yet to migrate workloads or applications to the cloud, even as 65% of companies see cloud migration as a top-three technology priority in 2021.

Enterprises are struggling with the complex processes within that cloud migration continuum – specifically, workload migration.

According to our survey, 40% of IT decision makers are unsure how to best modernize legacy applications for the cloud.

These are complex tasks that companies are struggling with. Next Pathway tools automate the end-to-end migration journey  – from planning out the migration and executing the most complex portions of migration to cutting over and de-risking the migration. Ours is a streamlined approach to automatically translating legacy code to enable and accelerate cloud migration. And not just legacy workloads but ETL (extract, transform and load) pipelines and BI (business intelligence) reports as well.

We are solving an essential piece of the cloud migration process that's just pumping up as companies are moving more of their workloads to the cloud.

This is why Next Pathway is getting a lot of attention and growing exponentially.

Article by NextPathway

No posts to display