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Merger and Acquisition Activity in the CX Market is Unabated through the COVID-19 Pandemic

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Merger and acquisition (M&A) activity in the CX space has continued at a good clip over the past 2+ years and shows no signs of slowing. Consolidation continues in this market as companies seek to both deepen their current offerings and expand horizontally across the customer journey.

In Dash Research’s CX Market Ecosystem report, 150 companies are profiled with 40% demonstrating M&A activity between 2019 and 2021. Particularly active acquirers include Medallia, Twilio, Upland, and Salesforce. Acquisitions span all areas of CX functionality, but the segments that showed strong activity include customer data & analytics, contact center, and customer relationship management (CRM). Both 2019 and 2020 saw a good amount of M&A activity, with 2019 being a bit heavier in the data & analytics segment, while 2020 saw a lot of activity in the contact center and CRM segments. The year 2021 is also shaping up to be an active time for CX acquisitions with several deals in the data & analytics and contact center segments. Medallia’s purchase of Decibel deepens the company’s analytics capabilities, while Khoros acquired Topbox, which is aimed at harvesting contact center data. Another interesting purchase in this space is Tech Mahindra’s acquisition of Eventus Solutions, a company that has an Intelligence Hub that collects information across contact center operations, unifies it, and provides insights. Twilio is having an active year with a series of acquisitions of companies that provide technologies that will support and enhance its contact center solutions.

Selected 2021 M&A transactions in the CX market

(Source: Dash Research)

M&A activity has not just been mid-sized players looking to get a bigger slice of the CX pie. Large players with comprehensive offerings are also heavily represented as evidenced by Mastercard’s acquisition of SessionM (2019), McDonald’s buying Dynamic Yield (2019), Cisco’s purchase of CloudCherry (2019), and Facebook’s purchase of CRM provider Kustomer (2020). SAP has continued to expand and deepen its offerings with its 2021 acquisition of Signavio and the purchase of personalization provider Emarsys in 2020. Dash Research will be following M&A activity in the CX market as more consolidation is expected. The lines between the technology segments in the CX market are becoming blurry, and crossover/overlap is becoming more common, potentially making it more difficult for smaller, niche players to continue implementing their business strategies.

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