Mobile App Developers Are the New M&A Target

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 you’re 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 corporations are buying up leaders in the mobile app industry. In December Deloitte purchased Seattle-based Ubermind, followed quickly by Walmarts announcement of a deal with the Portland, Ore., firm Small Society to go with their expanding Walmart Labs portfolio of app developers, such as Grabble and OneRiot. With these acquisitions Walmart and Deloitte get firms with proven track-records to add to their respective stables: Ubermind has developed apps for REI, Target and Alaska Airlines, among others; while 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, rather than as keeping them independent entities as CNN professes to be doing with their recent acquisition, Zite. In August CNN purchased Zite, the creators of a mobile magazine app of the same name, with an eye towards gaining purchase in the app marketplace. Though CNN admits to using Zites talent-pool to upgrade their digital content, as of now it will remain an independent entity. Whatever the case may be, mobile app developers look to be the hot new commodity for larger firms lacking a tech-savvy pedigree that are looking to keep up with the mobile app boom.