Technology
Mobile-app developers are the hot, new M&A target.
By Finnian Durkan February 21, 2012
This article originally appeared in the March 2012 issue of Seattle magazine.
Mobile applications are emerging as a critical component in the strategies of corporate giants, from retailers to accounting companies. Are golf course operators among your clients? Better make sure they have a good caddy app that takes advantage of the latest in GPS technology. If youre a retailer, you want to make sure your point-of-sale software is well integrated with the latest barcode-reading app.
To develop that capability to quickly take advantage of the latest in mobile-app technology, large companies are buying up leaders in the mobile-app industry. In December, Deloitte purchased Seattle-based Ubermind, which was followed quickly by Walmarts announcement of a deal with the Portland, Oregon, firm Small Society to complement its expanding Walmart Labs portfolio of app developers such as Grabble and OneRiot. With these acquisitions, Walmart and Deloitte add to their stables two businesses with proven track records: Ubermind has developed apps for REI, Target and Alaska Airlines, among others; Small Society has worked with industry giants Amazon.com and Starbucks, as well as Zipcar and the Democratic National Convention.
Both Deloitte and Walmart seem to be using these purchases as strategic assets to upgrade their digital services across the board. By contrast, CNN, which acquired Zite, the creator of a mobile magazine iPad app, hopes to build a presence in the e-app development business. Though CNN is using Zites talent pool to upgrade its digital content, San Francisco-based Zite will remain an independent entity for now. (It also has offices in Vancouver, B.C.)
In any case, mobile-app developers look to be the hot new commodity for larger firms that lack a tech-savvy pedigree but are looking to keep up with the app boom.