Acquisitions & Alliances Drive Latest Tech Roundup
New software development, AI, and security and payment systems potentially on the horizon for many credit unions.
Recent technology acquisitions and alliances in the areas of cloud computing, third-party processing and payment security could have far-reaching implications for credit unions down the line.
Armonk, N.Y.-based IBM agreed to buy open-source software developer Raleigh, N.C.-based Red Hat in a $34 billion deal, according to a statement from the companies, believe aimed at helping Big Blue compete in the cloud computing network battle against Amazon, Microsoft, and Google.
Businesses use Red Hat, recognized for its enterprise tools for Linux systems, to shape and manage infrastructure and applications for IT operations in the cloud. Red Hat cashes in mainly on its sale of subscriptions to software and provides training services that support its users. Red Hat brought in $2.9 billion in revenue last year and generated a $258.8 million profit.
According to Mergermarket, Red Hat/IBM is the second-largest computer software deal ever recorded globally, according to Mergermarket data (which dates back to 1998).
Elizabeth Lim, senior analyst at Mergermarket, said “IBM has been in need for some time of catching up with other tech giants such as Amazon and Microsoft in making a sizeable investment like this in the cloud, and it makes sense that IBM would pay such a large amount for a company like Red Hat, to try to outbid any potential competition.”
Lim added, “The deal with Red Hat marks a transformation for the company more toward hybrid cloud computing after years of seeking growth with mixed results, such as when it made big bets on its AI system Watson while its traditional IT business has shrunk. It’s clear that CEO Ginni Rometty intends, with this deal, to try to propel IBM back into the ranks of the industry’s top players after falling behind in recent years, and that the company also felt the need to acquire outside tech instead of spending years trying to develop it in-house. The question now is how IBM will successfully integrate Red Hat.”
Brookfield, Wis.-based financial services powerhouse Fiserv, Inc. announced it has agreed to acquire the debit card processing, ATM Managed Services and MoneyPass surcharge free network of Elan Financial Services, a unit of U.S. Bancorp. The acquisition is expected to enhance the value proposition of Fiserv, deepens its presence in debit card processing, and expand its mobile and digital payments offerings for consumers and businesses.
Through this transaction, Fiserv will build on the growth of its Card Services business by expanding its suite of solutions in key areas such as ATM Managed Services. The company will also add MoneyPass, described as the second largest surcharge-free network in the United States with access to more than 33,000 ATMs nationwide, to further enhance its market position.
“We continue to see opportunities for financial institutions to enhance the card-based payments they provide to their customers in an always-on, anytime access world,” Jeffery Yabuki, president/CEO Fiserv, said.
Fiserv, also announced they will collaborate with Miami-based DadeSystems to provide financial institutions the capabilities to automate accounts receivables processing for businesses, with Fiserv serving as a connection point through which institutions can access DadePay AR Automation as a software-as-a-service solution. Financial institutions can offer the solution as a standalone service or as a complement to the commercial banking suite from Fiserv.
In October, Austin, Texas-based digital banking platform developer Kony acquired Pivotus, the innovation subsidiary of Portland, Ore.-based Umpqua Bank. In acquiring Pivotus, Kony said it adds expertise and capabilities to enhance Kony its DBX portfolio of digital banking applications and platform. Kony will continue developing the Engage platform, which Pivotus introduced to deliver a more human digital customer experience.
Payment security firms Atlanta-based Bluefin, which develops PCI-validated point-to-point encryption solutions, has partnered with Edmond, Okla.-based TokenEx, which provides tokenization for data security. Each firm will provide their platform security technologies to each company’s respective client bases – including Bluefin’s PCI-validated P2PE solution for TokenEx clients, and TokenEx’s Cloud Tokenization solution for Bluefin clients.