76% of SaaS technology acquisitions fail to achieve their financial objectives.
Why Technology Acquisitions Fail To Deliver On Their Promises
We're all familiar with the time pressures while a deal is in its exclusivity period, and the tendency to focus on operational and financial aspects of the pending transaction during that period. That focus comes at the expense of time that ought to be devoted to proofing our understanding of the capabilities, limitations and flaws of the core SaaS asset we're acquiring.
Post-transaction strategy for the acquired asset is the single most under-developed aspect of the entire diligence process… and that lack of visibility is the root cause of high failure rates.
In one case out of two, the root causes for those failures lie in cursory or flawed technical due diligence on the core asset: the SaaS software.
Questions Technical Due Diligence Should Answer
Ideally, technical due diligence should reliably answer key questions that determine, in significant measure, the success of the acquisition thesis:
- Is the SaaS asset architected, and implemented, in a modern, scalable, integrate-able manner?
- Is the development process that maintains and enhances that asset similarly modern, appropriately automated, and well-instrumented?
- At the code level, and the deployment level, is the asset defensibly secure, compliant with relevant requirements (SOC 2, HIPAA, PCI, GDPR) and auditable?
- Can the asset perform at scale, and under operational pressure? Where are the performance bottlenecks, and what are the strategies for avoiding or evading those limitations?
- How well does the asset recover from a failure, in its own stack, or in its underlying cloud service provider infrastructure?
- Is the asset’s future roadmap sound, well-articulated and consistent with the market the asset serves?
- Does the asset have a modern API model? Is it susceptible to integration, and if so, how?
- What kinds of technical debt are we acquiring, and what is the strategy for remediating that debt?
- What kinds of exposure do we have to free and open source software (FOSS) components, both in the asset’s stack and from a FOSS licensing perspective?
- Are the teams responsible for the design, implementation and operation of the assets competent, well-trained, adequately compensated and effectively developed and retained?
In many, if not most, cases, one or more of these key questions remain, at best, poorly understood at the time the SaaS asset changes hands. And that lack of visibility, and the related failure to plan effectively for post-transaction integration, is the root cause of high failure rates, post-transaction.
Close The Gaps In Understanding and Tighten Strategy
Olio Apps's AcquireReady™ offering allows your core due diligence team to focus on financial and operational details of the transaction, with technical due diligence performed by Olio Apps's seasoned enterprise architects and SaaS software professionals.
AcquireReady™'s methodology is driven by our client's hypothesis: no extraneous technical details and a relentless focus on the acquisition hypothesis and desired outcome. If our client's acquisition hypothesis can be realized, we'll tell you how and at what cost. And if it can't, we'll tell you so, and tell you why.
Post-transaction strategy for the acquired asset is the single most under-developed aspect of the entire diligence process.
What AcquireReady™ Covers
During the exclusivity period, a dedicated Olio Apps senior software professional operates as a member of our client's acquisition team, focused on employing our proprietary AcquireReady™ methodology.
Within days, identify any core technology issues that might be considered show-stoppers or red flags, escalating those to the attention of the acquisition team
Conduct interviews with key personnel within both the acquisition target and the acquirer
Review all available product and process documentation associated with the asset being acquired, and all relevant materials on the acquirer’s offerings
Sample, analyze, score and evaluate source code, development and deployment practices and operational runbooks
Evaluate the target’s operational metrics, monitoring statistics and ticket queues for indications of brittleness, scalability issues and unpredictable performance excursions
Scan and evaluate the attack surfaces of the SaaS asset for vulnerabilities, known and unknown
Analyze the acquisition target’s roadmap, in-field failure data and customer and market-driven requests for change (RFC) information
What You Receive in 30 Days
Within 30 days from project start, Olio Apps delivers to the acquirer's team a comprehensive documented evaluation of the SaaS asset, processes, tooling and personnel being acquired.
Flaws & Risk Identification
Identification of flaws, defects and issues with the organization’s technology, products, processes and tooling that must be remedied in order to validate the acquirer’s investment hypothesis
Remediation Strategies
Specific remediation and adaptation strategies and tactics for each significant flaw, defect or issue, with timing, costing and criticality assessments
Post-Transaction Guidance
Guidance on renovation of the post-transaction SaaS infrastructural, product management and development processes, as well as required skills improvements for the organization’s technology and product teams
Independent, Unbiased Assessment
The Olio Apps principal who conducts the AcquireReady™ assessment delivers a concise, rich long-form report to the asset purchaser, and also delivers up to three oral reviews of Olio Apps's findings and recommendations with board, management and operational teams.
With a view into both the asset's product and personnel, and the product and personnel of the acquiring company, Olio Apps's principals can provide the acquirer with a dispassionate and unbiased view of both the asset being acquired, and the issues that are likely to arise, within the acquirer, post-transaction.
That independent view often makes the difference between success and failure, once post-transaction integration begins.
Why Olio Apps
- 14+ years helping SaaS companies scale
- 50+ SaaS products built, integrated, or remediated
- Experience fixing post-acquisition failures — we know what acquirers look for
- Trusted by Fortune 100 and global software leaders
- Work led directly by Olio Apps principals, not junior consultants
Get AcquireReady™
Today's technology markets are fickle and unforgiving — a single failed post-transaction integration can cost you the installed base of the asset you've acquired, and damage your own market position. If you're leading a due diligence team, and need to ensure that your technical due diligence is thorough, accurate, focused, productive and unbiased — you won't find a better technical due diligence service partner than Olio Apps.
- Fast, complete, pragmatic and unbiased
- Fixed price — we deliver value before asking for compensation
- We stay on the job until our clients are satisfied