In the enterprise software sector, ServiceNow and Snowflake have emerged as the standout acquirers in 2023–2025, leveraging high-stakes M&A to accelerate their push into AI, analytics, and vertical-market solutions. This piece examines their strategic rationale, valuation metrics, competitive positioning, and risks, backed by hard data and historical context.
SaaS M&A: A Record-Breaking Wave
SaaS deal volume has surpassed even optimistic forecasts. In Q3 2024 alone, 594 M&A transactions of SaaS companies were reported, an increase of 20.5% QoQ, bringing the year-to-date total of such deals to 65% of all software M&A, and marking it among the top three annual totals ever.
Valuations remain elevated: median EV/revenue multiples hovered around 4.9×, with upper quartile deals reaching 9.3×, a 75% premium to index averages. Against this backdrop, ServiceNow and Snowflake, both premium-tier SaaS platforms, are making bold and timely acquisitions.
ServiceNow: From Tuck-Ins to Megadeals
M&A Evolution
From modest M&A in 2020–22 (Element AI, Hitch Works, G2K) totaling a few hundred million dollars, ServiceNow’s deal size has rocketed. According to Mergr, it executed 32 acquisitions since inception, with four alone in 2025, totaling roughly $3 billion.
The crown jewel is the $2.85 billion acquisition of Moveworks, announced in March 2025, ServiceNow’s largest-ever deal, primed to close later this year.
Meanwhile, smaller yet strategic purchases in 2024 include 4Industry (industrial workflows) and Cuein (conversational analytics).
Strategic Rationale
ServiceNow positions itself as the emerging control tower for AI-powered automation, where a unified “agentic AI” layer orchestrates workflows across IT, HR, finance, customer service, and OT environments.
- Moveworks brings a conversational AI layer and enterprise search logic, integrated into 250 common customers and supporting over 5 million employee users in just 18 months.
- 4Industry and Cuein add specialized AI/OT capabilities for manufacturing and front-line worker applications.
Management believes that combining conversational AI with backend orchestration will multiply impact—”1 + 1 = 4,” as ServiceNow CFO Gina Mastantuono noted.
Market Response & Risks
Despite the strategic logic, the Moveworks deal triggered pessimism among investors: ServiceNow stock fell ~7.8% immediately after the March 10 announcement and is down nearly 28% YTD.
Critics cite three major risks:
- High valuation: $2.85 billion for a $100 million ARR startup implies a steep price, Moveworks achieved 77% CAGR 2021–24, but the multiple remains rich.
- Integration complexity: As Everest Group cautioned, merging AI agents seamlessly without compromising security or governance is a “real test”.
- Execution risk: ServiceNow’s consistent messaging around M&A discipline reinforces that “if executed poorly, this could be another unrealized AI purchase”.
Snowflake: From Analytics Powerhouse to AI Data Cloud
Build-Up to Crunchy Data
Snowflake, heralded for its cloud-data-warehouse innovation, had remained relatively M&A-light until June 2025. Then it announced the $250 million purchase of Crunchy Data, a PostgreSQL cloud services provider.
Crunchy Data strengthens Snowflake’s multi-model support capability—allowing users to seamlessly run AI/ML apps with reliable transactional data support through PostgreSQL compatibility.
Strategic Upside
Snowflake’s platform now supports 4.2 billion daily queries across 10,618 customers, including 800+ Forbes Global 2000 firms. Its push into generative AI, via Cortex (launched November 2023), makes it increasingly AI-centric .
Crunchy Data complements this strategy by enabling:
- Hybrid workloads: Streaming, ML, and analytical workloads across relational pipelines.
- AI Data Cloud expansion: Better serve AI workloads with structured and semi-structured data support.
- Competitive differentiation: Undercuts competitors (notably Databricks) with integrated transactional data support.
Risks on the Radar
Even at $250 million, Crunchy Data’s carveout brings:
- Strategic fit risk: PostgreSQL services must integrate smoothly into Snowflake’s architecture.
- Executionamp integration: Scaling the hybrid-transactional/analytical workloads without performance compromise is critical.
Nevertheless, compared to ServiceNow’s mega-bet, Snowflake’s move is measured, valued at just ~2–3% of its enterprise value.
Broader SaaS M&A Landscape & Competitive Context
A. Notable Deals in 2023/2024
To understand context:
- Snowflake acquired Neeva for $150 million in January 2023.
- ServiceNow bought G2K in May 2023 (~$500 million).
- Other giants like Broadcom (VMware at $61 billion), Silver Lake (Qualtrics at $12.5 b), Thoma Bravo (Coupa at $8 b), and IBM (Apptio at $4.6 b) dominated headlines.
B. Competitor Moves
- Salesforce acquired Slack (2019) and Tableau (2019) historically, and has recently continued AI-enhanced deals.
- Microsoft and Oracle are building AI capabilities with smaller AI acquisitions and deep platform partnerships.
- Databricks, Snowflake’s core rival, continues to grow via M&A—like MosaicML in 2023 ($1.3 b).
Against this backdrop, ServiceNow’s bold AI acquisitions and Snowflake’s platform-focus deal mark unique strategies among SaaS mega-cap leaders.
Are They Right—or Overpaying?
ServiceNow
- Support for thesis: Agentic AI is exploding, ServiceNow reports over 500,000 agentic workflows internally, delivering 20% productivity gains and 84% case deflection across service desks.
- Valuation concern: Paying 28× ARR for a $100 million company signals high expectations, any hiccup in integration or slower deployment among its 8,500 customers could dampen returns .
Overall, it’s a calculated high-wire act: high reward if executed; high risk if they misstep.
Snowflake
- Measured expansion: The Crunchy Data deal is modest and aligns tightly with its strategy to unify data workloads under one platform.
- Valuation discipline: At 250 million against Snowflake’s multi-billion-dollar EV, this seems low-risk and conservative.
Historical Echoes and Cautionary Tales
Past examples serve as guideposts:
- Salesforce’s success with Slack/Tableau was driven by rapid integration and platform cross-sell.
- Microsoft’s acquisition of LinkedIn (2016) succeeded because of clear data/AI synergy (later).
- On the flip side, HP’s acquisition of Autonomy (2011) turned into a mess due to cultural mismatch and governance failures.
- Cisco’s SAP Concur buy (2016) underperformed relative to expectations due to slow marketing and tech integration.
These memories underscore that execution and cultural fit ultimately define success—not just price tags.
Conclusion: Watchful Optimism in SaaS M&A
ServiceNow and Snowflake are deploying sharply different M&A strategies—one aggressive and transformative, the other focused and integrative.
- ServiceNow’s path: A transformational bet that marries agentic AI front-ends with enterprise workflow orchestration.
- Snowflake’s track: Steadfast platform-enrichment, adding incremental yet meaningful capabilities aligned to analytics and AI.
In the broader SaaS landscape, multiples remain high, deal volume is surging, and M&A is increasingly mission-critical for differentiation. History rewards those who can integrate with discipline, price accurately, and deliver measurable ROI.
If ServiceNow nails integration and accelerates revenue from Moveworks, it could redefine workplace automation. If Snowflake leverages Crunchy Data into better hybrid analytics, it may cement its AI Data Cloud advantage.
But both face execution, valuation, and market adoption risks. The next 12–18 months and early financials, will determine whether they truly earn the “new kings” crown in SaaS M&A, or pay the price for ambition.