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When networks collide: how M&A brings infrastructure together
Enterprise IT runs on networking, so fixing up the network should be a priority issue during mergers and acquisitions – but that’s not always the case. Find out how the pros manage it
You’ve done it. Well, the CEO has. The ink is drying on the contract. You’ve bought, or been bought by, your oldest rival. The negotiations are over, and tomorrow the hard work of integration begins.
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Given its criticality to enterprise IT, you might think bringing together two disparate business networks should be an immediate priority after the dust has settled.
Perhaps unsurprisingly – given wires and cables are hardly sexy in IT terms – it is not necessarily so. So what is a CIO to do?
Assuming your team will be working alongside an IT services provider of some form, it’s safe to assume such firms will be well placed to offer advice, so let’s hear from some.
Chris Adams, president and COO at Park Place Technologies, an Ohio-based supplier of IT support services with European offices in London, says that first and foremost on the network manager’s mind should be guaranteeing a stress-free experience for all users in both companies.
“Being part of an acquisition is a stressful situation, with a lot of change. If the acquisition plan makes the users’ experience worse than before, you’ve done both the user and the business a disservice,” he says.
So what happens first? James Karimi, senior vice-president of engineering at comms services provider GTT, says he would work to prioritise each of three areas depending on business need. These are avoiding service disruption, reducing costs and preserving technological advantage. Your network integration strategy can then be planned around these pillars.
Josh Blakey, head of presales at services provider Lan3, says mergers are obviously going to be very disruptive, and a thorough network audit is essential.
“A lot will depend on the size of the business and its existing network estate, so an audit is just the first step. A lot of people we engage want to pay us to do it which mitigates the risk. It’s also just as important to look at overall strategy, what is it they are trying to achieve,” he says.
Above all, says Justin Day, managing director of 6point6 Cloud Gateway, a digital transformation business built around using managed, centralised connectivity to ease cloud migrations, flexibility must be at the top of the agenda.
“Where I’ve been part of M&A [mergers and acquisitions] and responsible for the networking element, 99 times out of 100 there are component parts required on both sides, there’s no concept of flicking a switch, you take from the right and the left,” he says.
“To me it’s about getting stable infrastructure between two companies to give a secure, flexible path from A to B, at scale.”
Points to consider
The need for preparation is paramount, but according to GTT’s Karimi, this needn’t be a scary process. After all, he says, linking networks is familiar practice in the comms industry, so this shouldn’t be rocket science.
“Network managers are accustomed to collaborating across operator environments on networking requirements to meet a client’s geographic specifications. In a typical network integration scenario, the initial step is to interconnect the two networks and rationalise redundant routes, replacing leased with owned infrastructure,” he says.
“Phase two focuses on rationalising the core service networks down to the PoP [point of presence] level. It is a relatively straightforward process to manage. If there are common technology platforms and hardware suppliers underlying the two networks, this eases the integration approach.
Adams at Park Place sets out a whole range of concerns that will need to be considered during a network merger, starting with domains. “All acquisitions come with their own domain so the question is whether to add the legacy domain as a child domain to your corporate domain, or to keep them separate and migrate all legacy applications, services and data to the existing domain,” he says.
Both approaches have their ups and downs. Establishing child domains gives you quicker access to acquisition data, apps and software, makes it quicker to move user hardware, and minimises impact on user routines. But you also stand to inherit any bad choices made by the acquired company, and this approach adds substantial security risk to the corporate domain if not done right.
Keeping them separate means one doesn’t have to compromise on security and eliminates any legacy issues that you may have to unwind in the future, but turns the advantages of the child domain approach to disadvantages, slowing everything down and affecting the user experience.
You will also have to consider telephony. “One of the major early goals of an acquisition effort is to enable communication – [but] depending on your corporate phone solution, speedy is not always easy,” says Adams.
Here the choice is on-premise telephony, which will use your old handsets, typically has a higher quality of service (QoS), and can be more flexible to accommodate complex needs. However, it comes with deployment issues if you need to add phone numbers, session initiation protocol (SIP) trunks or multiprotocol label switching (MPLS) lines, for example, versus cloud telephony.
Cloud telephony obviously uses voice over IP and is often more innovative, although there are trade-offs to consider around flexibility, ease of use and QoS.
Applications and how people use them will also need to be considered. Prior to full integration, acquired staff will likely need access to a number of legacy apps, and should the physical location between systems and users be significant, issues such as latency and packet loss will need to be considered.
This dovetails into guaranteeing network performance for users. The acquiring company must be sure to evaluate standard internet to the acquired offices, which may be under- or oversized depending on how it’s being used.
If the bought offices are to remain open and will have a regular need to access the corporate datacentre, Adams says MPLS is still the best option to connect back to these resources.
A final key point to consider is the state of the physical network infrastructure in the acquired office[s]. “Never assume that the state of an office’s physical network is where it needs to be for an enterprise solution. A physical inspection of this infrastructure is an important step to take, and will mitigate a lot of wasted troubleshooting time in your future,” says Adams.
“There is a surprising amount of pure chaos behind the walls of an office. Taking a look is one great way to invest a small amount of time that can pay big dividends, in time returned downstream.”
Time for SDN?
Over the past three years or so, software-defined networking (SDN) has become the darling of the networking sector. According to Russell Crampin, managing director of network integrator Axians, merging two business networks presents a perfect opportunity to do something a little radical and go fully software defined.
“One very strong use case for SDN is that it allows integration, or separation, to be much more straightforward because you’re not having to physically deal with the network, you can logically separate or join them together,” says Crampin.
“We just implemented SD-WAN [software-defined wide area network] for one enterprise that enabled them to disaggregate from the physical layer and bring the acquired business online in minutes.”
Crampin believes that the more elements of your network you software define, the more you can automate, freeing up more time to attend to user needs.
“If you haven’t already, an acquisition is the time to do it because it’ll make it easier now and in the future. If you don’t invest now, it’s unlikely you’ll do it for a long period of time,” he says.
Karimi at GTT agrees: “A merger is a great opportunity to bring new technologies on board. The useful thing about new software-defined technologies is that they rarely entail a hard switch-over.
“For instance, you can roll out SD-WAN devices site by site and do your testing while still keeping existing networking services in place. You can then simply switch over when you are ready and confident it will provide secure connectivity between the two organisations.”
GTT goes a little further than this when helping customers through the process, and uses its own SD-WAN service to accelerate the final process of collapsing the two networks together. “It helps us achieve in weeks what could take months with traditional network interconnect approaches,” says Karimi.
Blakey at LAN3 agrees that the decision to introduce SDN during a merger or acquisition is not necessarily the right thing to do, and should not be entered into lightly; it can throw up issues of cost control and implementation, along with the cultural change inherent in any enterprise introducing SDN.
“We’ve found it depends on the IT staff. Sometimes they think software-defined is a threat to their job and will make them redundant,” he says.
“But if you are in a position where you have budget and the staff aren’t worried, SDN is a perfect opportunity, particularly if you’re going for a cloud-first business or centralising your datacentres.”
For Day at 6point6, cultural change is a key issue across the networking sector right now, not just during M&A. He compares the traditional network to the mainframe of 10 years ago, run by ageing techies and condemned to the scrapheap by vocal cloud advocates.
“People forget that things are still in in a physical place. The network is physical – sure you can control it with software, but it’s physical, it won’t go away, it’s wires and plugs, and that can’t change,” he says.
“Culturally, networking is incredibly hard. Take an average network manager in his 50s with a 25-year career behind him. Nowadays, the board expects an answer for a strategy that involves digital, agility and cloud, and that doesn’t necessarily sit well with networks. Often, often the poor guy must do either one of two things – get in a fight or get tied into a horrible mess.”
“It is vital that those in charge of the process work hard to build positive relationships with the IT staff they will be collaborating with, and that ample time and effort is invested into doing this,” adds Dave Rock, network team leader at Claranet.
“Mergers and acquisitions often involve working with people who might be reluctant to change, but who need to be convinced to adopt new technologies and new ways of working. This is the one of the bigger hurdles organisations need to overcome, and should be a critical component of any strategy.”
Securing buy-in goes beyond the domain of the network manager and the IT team, however. Regular users will be using the network for all sorts of things – some in the interest of the business, but inevitably some not.
Karimi emphasises the need to take a proactive approach to examining what’s happening on the two networks day to day, so that any changes made aren’t met with resistance.
“SD-WAN allows you to learn the behaviour of the acquired company through analytics. This insight can be useful for planning your integration communications to all staff. If, for instance, you can see there’s heavy traffic to certain sites that will be blocked once established security policies are rolled out, you can manage it proactively,” he says.
“Being proactive may lead to feedback that gives you cause to reconsider certain policies. You might choose to lift a block on particular social media sites if you discover that the acquired business has a salesforce that excels at social selling techniques and depends on their online networks to bring in new business.”
Change your mind
Above all, perhaps the key thing to remember is that even if the latest and greatest software-defined, intent-based, automated network isn’t yet right for you, CIOs and network managers alike should use a merger or acquisition as an excuse to reconsider the importance of whatever network technology you have to the business, and maybe change how you think about networking in the future.
Day at 6point6 has the last word: “Stop looking at networking as a project, a programme that you chuck in the bin when you’re done. Let it be the bit that lets you continue to change.”
Read more about M&A
- Dentsu Aegis’s European CIO, Gideon Kay, talks about how to transform the organisation into a “digital economy business”, dealing with M&A activity and creating a centralised approach.
- IT security assessment services may find a new niche in merger and acquisitions as buyers look into the cybersecurity postures of M&A targets.
- Companies are leaving themselves wide open to cyber crime, especially after M&A, so companies need to start enabling cyber-security professionals before they face serious problems.