TeamViewer And 1E: The First Major DEX Acquisition But Not The Last
When I published my blog post on the great DEX-pansion in October, I foretold a future when the digital employee experience (DEX) market would consolidate … but I didn’t think it would happen so quickly.
While I predicted that consolidation would happen in 2025, this morning, we received news of the first major acquisition in the DEX space.
German remote connectivity vendor TeamViewer announced its intent to acquire end-user experience management vendor 1E for $720 million.
TeamViewer And 1E: Good For Vendors, Customers, And The Market
Whenever M&A hits a market I cover, I ask myself four questions to evaluate whether it makes sense:
- How does it benefit the companies involved?
- Does the acquisition benefit customers?
- What are the risks?
- How will it change the market going forward?
Let’s cover each now.
TeamViewer Gets Access To The DEX Space, While 1E Benefits From Scalability
TeamViewer is a perennial leader in remote support and control and continues to remain popular with Forrester clients, even as a plethora of third-party endpoint management tools have released their own native remote support tools. After a massive surge in its stock price during the pandemic due to the rise in remote working, however, the company has been trying to reinvent itself in a sluggish remote support market. 1E offers that opportunity with:
- A proactive and autonomous approach to IT support, rounding out TeamViewer’s more reactive approach with real-time end user experience telemetry.
- A strong market presence in the rapidly growing DEX space.
- Improved visibility beyond devices with 1E’s web, SaaS, and client application monitoring capabilities in addition to employee sentiment.
1E has been challenging the end-user experience management (EUEM) market for the past few years but is increasingly facing pressure from larger software vendors that are entering the space. Despite strong growth and its recent acquisition of Exoprise, the company will need more resources to compete in an increasingly crowded market. TeamViewer gives 1E the resources that it needs, such as:
- Access to TeamViewer’s 4,500 enterprise customers worldwide, especially in OT environments.
- Increased go-to-market resources from a vendor that’s significantly larger with exceptional brand awareness.
- Products that fill gaps in the 1E portfolio, such as mobile device management.
Customers Get An End-To-End IT Support Capability Spanning Reactive To Proactive
Proactive IT is a frequent subject of client inquiry. Most customers today, however, have different tools for managing different phases of the IT support lifecycle. The acquisition combines 1E’s proactive approach to IT support with TeamViewer’s leadership in reactive remote control. Theoretically, this will enable customers to source best-of-breed capabilities from a single vendor. Typically, this is not possible today without sacrificing the quality of either the EUEM or remote control product, but customers will still need to supplement these capabilities with third-party service management and conversational AI tools to bring proactive IT to life.
Product Overlap And Integration Are The Biggest Risks
M&A always poses some risks for vendors and customers alike: Culture harmonization, product line rationalization, talent retention, and pricing increases are some common challenges. While Forrester’s view of this acquisition is positive, there are a few notable risks:
- TeamViewer and 1E products are mostly complementary, but overlaps exist. 1E has a significant endpoint management business that may clash with the client management side of TeamViewer’s remote monitoring and management business. 1E’s unique architecture and proprietary remediation language will also need to go through a harmonization and rationalization process. This will take time and could impact feature sets for customers in the long term. 1E’s legacy business (e.g., Nomad) and on-premises presence will likely require attention.
- 1E joins a much bigger company with its own culture, ways of working, and priorities. So far, 1E has operated as a small, nimble SaaS company focused primarily on DEX. It will be up to TeamViewer to ensure that 1E can continue to capitalize on the DEX opportunity and up to 1E to level up its staff to understand opportunities in the OT world, an area that 1E has little experience serving. Success in DEX requires a very specific sell, so a joint go-to-market motion that dilutes DEX in some way could pose a risk.
This Is Just The Beginning Of DEX Consolidation
All of the Leaders and Strong Performers in the recent evaluation The Forrester Wave™: End-User Experience Management Solutions, Q3 2024, are pure-play experience monitoring tools. While some vendors have enough momentum to continue operating independently, it will become increasingly difficult for some to maintain market leadership without significant investment in partnerships and M&A. With the rise of larger software vendors such as Ivanti, Omnissa, and Tanium, smaller vendors will move fast to provide a bulwark against encroaching DEX competitors.
My Prediction: We Will See Another Major Acquisition Or Merger In 2025
What do you think? Is the TeamViewer/1E partnership a good thing? Will there be more acquisitions in 2025?
Forrester clients can set up an inquiry with me to learn more, and non-Forrester clients can always find me on LinkedIn or set up a briefing by emailing briefings@forrester.com.
