When considering an acquisition, merger, or investment in a technology company, it is essential to conduct due diligence to understand the company's technology assets, capabilities, and risks. Technology due diligence and software due diligence are two critical components of this process, as they help to ensure that you have a clear understanding of the technology and software that are central to the company's operations and value.
Technology due diligence involves evaluating the company's technology infrastructure, architecture, and systems to understand their capabilities, limitations, and potential risks. This may include reviewing the company's hardware and software assets, as well as the systems and processes that are in place to manage and maintain them.
Software due diligence, on the other hand, is focused specifically on the company's software assets and intellectual property. This may include reviewing the source code for the company's software products, as well as any licenses or contracts that are in place related to the use of that software. Which means that the Software Due Diligence can be part of a Technology Due Diligence. For example, in 2022, UNITED Marketing Technologies GmbH & Co KG, a subsidiary of German media and tech group DuMont Mediengruppe conducted a due diligence with the support as part of its acquisition of Marmind GmbH. The Due Diligence also includes the analysis and reviewing of Marmind's Software as a Service Solution.
Due Diligences unveil capabilities, potential and vulnerabilities
Both technologies, due diligence and software due diligence, are critical to understanding the potential risks and opportunities of a technology investment. By thoroughly evaluating the company's technology and software assets, you can gain a better understanding of the company's capabilities and potential vulnerabilities, and make more informed decisions about the investment.
Opportunities with Due Diligences - it is done quicker then you think!
Conducting Technology or Software due diligence can be a complex and time-consuming process, but it is essential to ensure that you have a complete and accurate understanding of the technology and software assets of the company you are considering investing in. But since the technology on the advisors also evolves, System Verification developed a service connected to an ecosystem company's tool which analyses the code within hours and provides hotspots, where should have a look first. Furthermore, the tool gives unbiased data about the interactions of participated developers which also provides very insightful data for the transaction. With the support of different tools, the time for the delivery of the report can be reduced to approximately one week.
Over 8,000 software company acquisitions worldwide between 2014 and 2020
It is difficult to determine the exact number of transactions involving software companies, as this information is not consistently tracked or reported. However, it is clear that software companies are a significant part of the technology industry and are involved in a significant number of transactions. In recent years, there has been an increase in the number of software companies being acquired, especially by larger tech companies looking to expand their offerings or enter new markets. According to data from Crunchbase, there were over 8,000 software company acquisitions worldwide between 2014 and 2020. These acquisitions ranged in size and scope, with some involving large, well-established software companies and others involving smaller, emerging startups.
Due Diligence creates a clear understanding of the assets
In addition to acquisitions, software companies are also commonly involved in other types of transactions, such as investments, mergers, and partnerships. These transactions can take many forms, from strategic partnerships between software companies to joint ventures between software and non-software companies. Regardless of the specific type of transaction, it is important for all parties involved to conduct thorough technology and software due diligence to ensure that they have a clear understanding of the technology and software assets being acquired or invested in.
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