In the highly complex world of Mergers and Acquisitions (M&A), the focus is often on financial due diligence, market share, and cultural alignment. However, a critical yet frequently overlooked factor in the success of any M&A is IT Asset Management (ITAM). When two organisations merge, they don’t just combine workforces; they collide complex software estates, conflicting licensing agreements, and disparate IT governance frameworks.
In the second half of 2025, global M&A dealmaking soared. Deal value finished the year up 43%, to $4.7 trillion, up from $3.3 Trillion the year before. For companies in highly regulated industries, addressing ITAM during M&A is particularly crucial. Failure to do so can lead to a variety of issues, including compliance risks, unnecessary costs, disputes with vendors, and operational delays, ultimately resulting in significant fines or audits.
This blog explores the primary ITAM and software challenges organisations face during M&A and outlines how expert guidance can help navigate them.
1. The “Day One” Visibility Gap
The most immediate challenge in any M&A transaction is the lack of a unified view of the combined IT estate. In the UK, nearly one in every five pounds spent on SaaS is lost to unused or duplicate licenses, money that organisations under post-deal pressure cannot afford to waste. Thus, showing that lack of visibility of ITAM during mergers and acquisitions has a direct financial impact. Acquired companies often have Shadow IT which is software purchased by individual departments without central IT oversight.
- The challenge: Acquirers often inherit a myriad of software assets. Without a clear inventory, it is impossible to assess the true value of the acquisition or identify immediate security risks.
- Addressing the challenge: Specialised IT asset visibility services, including comprehensive discovery and assessment, can help organisations gain a clear, data-driven baseline of their entire IT spend and asset landscape from “day one.”
2. Contractual Landmines and “Change of Control” Clauses
Something often overlooked during mergers and acqusitions is that software licenses are not always transferrable. Many enterprise agreements contain “Change of Control” clauses that require vendor consent and often a fee, to transfer licenses to a new entity.
- The challenge: Failure to identify these clauses during due diligence can lead to massive, unbudgeted “transfer fees” or the immediate termination of critical software access.
- Addressing the challenge: Independent commercial advisory and contract negotiation expertise can be invaluable. Specialists can review existing agreements to identify such clauses and lead negotiations with vendors to ensure a smooth, cost-effective transition of licensing rights.
3. The Hidden Cost of Software Redundancy
When two companies merge, they inevitably end up with overlapping software portfolios. Two different CRM systems, multiple project management tools, and redundant SaaS subscriptions with various renewal dates become a significant drain on capital.
- The challenge: Maintaining redundant systems is not just a waste of money; it creates “technical debt” and complicates data integration efforts.
- Addressing the challenge: Cost optimisation services are designed to identify and remove functional duplication. By rationalising the combined estate, organisations can achieve significant reductions in software renewal costs, ensuring they only pay for what is truly needed.
4. Heightened Audit Exposure
Merger and acquisition activity often signals to software vendors that it’s an opportune time for audits. Public announcements of a merger can trigger immediate audit notifications from major vendors like Oracle, IBM, or Microsoft, who may seek to capitalise on the complexities of integration.
- The challenge: A poorly managed audit during a merger can result in multi-million-pound compliance fines and distract leadership from the core integration goals.
- Addressing the challenge: Tactical audit defence services provide expert support through vendor audits, helping organisations defend their usage and avoid unnecessary penalties.
5. Cloud and Hybrid Licensing Complexities
The shift to cloud and hybrid environments has added a new layer of complexity to mergers and acquisitions. Unlike traditional on-premises software, cloud consumption is dynamic, and licensing rules for hybrid environments are often restrictive.
- The challenge: Merging organisations often face “License Mobility” restrictions, where on-premises licenses cannot be easily moved to a different cloud provider. Additionally, the “Double-Bubble” effect, where an organisation must pay for both the legacy on-premises environment and the new cloud environment during the migration phase—can lead to significant, unbudgeted costs. Fragmented governance across multiple cloud providers (AWS, Azure, GCP) also creates visibility gaps and “orphaned” resources that continue to incur costs.
- Addressing the challenge: Specialist FinOps and hybrid ITAM expertise can help manage these complexities. By implementing unified cloud governance and leveraging tools like license managers, organisations can optimise their cloud spend, ensure license portability, and eliminate the financial waste associated with overlapping hybrid environments.
Real-World Volatility: The “Broadcom-VMware” Effect
When M&A occur, they can impact organisations from different angles, the main one being that you are the one merging or acquiring and therefore need to ensure your ITAM is managed effectively. One angle of mergers and acquisitions that many organisations often overlook is the effect it can have when suppliers are being acquired or are merging. Both angles highlight the same risks. Without a mature ITAM practice and supporting roles such as Vendor Manager – You’ll be receiving an audit letter!
Heard about the recent acquisition of VMware by Broadcom? It’s been big news in recent times and serves as a cautionary tale for the entire industry. Following the acquisition, Broadcom shifted licensing models and significantly increased audit activity, leaving many organisations in a precarious position. If interested, you can read our blog on the situation here.
Market consolidation among software vendors can lead to sudden changes in pricing, licensing models, and support levels that impact the merged entity’s bottom line. Expertise in navigating specific vendor shifts, such as the Broadcom-VMware transition, can provide strategic guidance and insights to help organisations future-proof their infrastructure against vendor-driven volatility.
Our VMware specialist and Principal Consultant, Barry, has recently featured on The Tech Leaders Podcast, a special podcast episode discussing the Tesco V Broadcom Case and why Enterprise IT Leaders should pay attention, you can listen to it here.
Conclusion: Turning ITAM into a Strategic Advantage
M&As are inherently risky, but ITAM doesn’t have to be one of those risks. By proactively addressing software challenges early in the deal lifecycle, organisations can protect their investment and accelerate the integration process.
Leveraging independent expertise in ITAM can transform it from a back-office function into a powerful tool for M&A success. Whether it’s through comprehensive transformation programmes, robust governance design, or direct cost savings, effective ITAM ensures that a software estate is an asset, not a liability.
The maturity of an organisation’s ITAM program plays a pivotal role in mitigating these risks and unlocking strategic value during M&A. A mature ITAM framework, characterized by well-defined processes, robust tools, and skilled personnel, enables accurate visibility into software assets, streamlines license optimisation, and ensures compliance across merged entities. Organisations with higher ITAM maturity are better equipped to identify redundant software, consolidate licenses, and negotiate favourable terms with vendors, thereby transforming potential liabilities into significant cost savings and operational efficiencies. This proactive approach not only safeguards the investment but also positions ITAM as a critical enabler for successful post-merger integration and long-term strategic growth.
At bedigital, we help organisations understand where they stand today and identify practical steps toward a more mature and resilient ITAM practice. If you would like to learn more about what we can offer you, book a call with our experts today.
