Q1 2017 Software Industry Trends Report

Software transaction volume increased 16 percent over the past three months, from 456 to 528. Deal value gained 75 percent, from $29.4 billion to $51.4 billion. Volume throughout the past five quarters reached its peak in Q2 2016, whereas value reached its zenith in Q3 2016.

Strategic acquirers completed seven of the top ten highest value software deals in Q1 2017. The industry’s largest transaction year-to-date was Intel’s announced acquisition of Mobileye, which develops self-driving technologies, for $14.7 billion. The Mobileye acquisition follows several related transactions in 2016 by high profile acquirers such as Uber’s acquisition of Otto for $680 million and General Motors’ acquisition of Cruise Automation for $581 million.

The Business Software segment, which consists of software designed for general business practices and not specific industry markets, saw a 29 percent increase in volume on a quarterly basis. The Business segment’s highest value deal in Q1 2017 was Blackstone Group’s announced acquisition of Aon’s technology-enabled and human resources platform for $4.3 billion.

The Infrastructure Software segment experienced a 27 percent volume increase in Q1 2017. Four of the overall industry’s top ten highest value deals year-to-date occurred in the Infrastructure segment. The largest of these was Cisco System’s acquisition of AppDynamics, an application performance management and IT analytics company, for $3.6 billion.

As for other industry sectors, volume in the Niche Software segment, which is targeted to specific vertical markets, improved 14 percent in Q1 2017. Four of the industry’s top ten largest acquisitions thus far in 2017 occurred in the Niche segment. Meanwhile, deal activity in the Consumer Software segment declined 11 percent.