It was all excitement as the this Cheval Capital celebrated 400th transaction! Since the company entered the business in the late 1990’s Hillary and Frank have assisted companies in cloud hosting, and even IAAS businesses navigate the tricky waters of both mergers and acquisitions, corporate finance and financings.
The benchmark which is the 400-transaction also marks the 25th transactions that were successfully closed in the last year! Within the last few months, many operations were completed with companies from various countries including in Ireland, Australia, China, New Zealand, Israel, Canada and the United States.
The wide network and e industry expertise has helped in enabling clients to get maximum value in business regardless of their location.
According to their leaders, The company has achieved growth even as providers struggled with organic growth and turned to acquisitions instead. This acquisition demand has supported prices and resulted in an active industry.
There are several highlights regarding observations about the hosting, cloud and related business markets.
SMB hosting/cloud business is a market of siloed mass-market-products: Though this isn’t new, it’s intriguing to people that such a massive proportion of the SMB providers in the hosting/ cloud space are businesses offering a restricted set of products/services to a mass-market, frequently commoditized basis. This focus on a restricted product/service set is terrific for several reasons, but it can also create issues, especially when market expansion slows because of either maturation or competition from substitutes.
What happens when growth rate reduces? As market expansion slow down in many industry segments, the limited product/service set providers in those segments have witnessed their growth slow together with it. Providers who were growing more slowly than the market have had trouble replacing normal attrition, and some have started to shrink.
Options: Service suppliers in such slow expansion segments are pursuing one or more of several paths;.
o Utilizing sales and marketing to take customers from competitors.
o Expanding into new products/services that are either related or share customer bases.
o Abandoning customer development as a target and running the company to maximize the money flow from these clients (possibly for distribution to owners or for growth into unrelated companies).
o Employing M&A to obtain clients or exit the business enterprise.
It appears that larger providers pursue several of these options simultaneously. The smaller providers typically tend to concentrate on one or two.
Even though a couple of suppliers that may take away customers from the others and go on growing in these mature sections, it can be hard for many suppliers unless they offer new, high expansion products or solutions. So, such kind of suppliers may opt to diversify into a wider package of Products/services or use M&A to acquire clients or exit.