The role and impact of M&A on innovation IBT@DMSEXPO Geert Kruiter VP Continental Europe The role and impact of M&A on innovation

Perceived as controversial Significant impact on operations M&A Perceived as controversial Significant impact on operations

Access to new customers Traditional M&A Growth Improved efficiencies Creating synergies Risk reduction Increasing market share Regional expansion Access to new customers War game

Undervalued motive for M&A Driver for increased innovation Greater value creation Patents Faster introduction of Innov. post-merger Registration of patents Positive announcements Long term stock performance

IT SW industry Database industry - 3 major vendors dominating market ERP industry - Major consolidation during last 10 yrs stabilized, top20 active globally remaining; niche vendors ECM/BPM - Highly fragmented No clear leadership role Many local hero/vendors Only few globally active

Dynamics Move to Cloud based solutions Mobile Multi – Everything (channel-Integr.-Functions) Lower cost of ownership Faster implementation and operational Fast ROI

User requirements Risk free purchase Future proof Easy integration One party to deal with Speed, price, Flexibility INNOVATION COMES FROM SMALL TECH COMPANIES

Small and innovative tech firms Inadequate to articulate the benefits of their innovations Only of interest for “Innovators” Unable to “cross the chasm” Targeting the wrong buyers

Be aware of the background and type of project you undertake Users/buyers of technology Be aware of the background and type of project you undertake Q – Can we gain competitive advantage by deploying latest and new innovations? - High risk, Green field, use tech innovators Q - Business critical infrastructure Can’t afford risk, continuity – Est. vendors

Buyers behaviour can stimulate innovation Be aware of the impact you as buyer has on the impact of the ECM/BPM sector where the pace of innovation will only increase