Tech M&A Rebounded in 2010, Poised for More Activity in 2011

A new analyst report shows a rebound in merger and acquisition activity among tech vendors in 2010, providing a fuller picture of the backdrop to much of the dealmaking among solution providers last year.

In its "2010 Tech M&A Analysis Report" released this week, IDC analysts identified 1,900 M&A deals worth over $200 billion in the information and communications technology sector.

According to IDC, application-related areas accounted for the majority of last year's deals. IDC identified 586 deals in enterprise applications and 421 deals in Internet applications. Another big area was the infrastructure segment with 219 deals. High-profile deals included Intel's $7.7 billion acquisition of McAfee and SAP's $5.8 billion acquisition of Sybase.

"The renewed confidence accompanying the recovery in IT spending helped to make 2010 a turnaround year for technology M&A activity," said IDC analyst Dan Yachin in a statement. "Looking ahead, IDC expects 2011 to be another active year as companies make strategic investments in a variety of critical areas, such as converged infrastructure, mobile content, service creation and enablement, data analytics (and the supporting infrastructure), and pervasive computing."

IDC's assessment of the overall market fits with the recent activity among Microsoft partner companies. In an in-depth article "Consolidation in the Microsoft Channel," RCP identified some of the biggest deals among Microsoft partners in 2010. Those included Aspect Software-Quilogy, Avtex-Inetium-Convergent, Avanade-Ascentium, ClearPointe-Do IT Smarter, Heartland Technology Solutions-CNS, Tallan-twentysix New York, Avnet-Bell Micro, Open Text-Burntsand, Perficient-speakTECH and Atos Origin-Siemens.

While Microsoft partners have been active, Microsoft itself hasn't ramped up acquisition activity to pre-recession levels.

In its news release about the study, IDC wrote, "The most active companies on the M&A landscape were Google, which made 27 deals in 2010, followed by AOL and Facebook with 9 deals each. Among the major IT vendors, Cisco, Dell, HP, IBM, Intel, Oracle, and VMware all displayed a renewed appetite for acquisitions."

Microsoft is notably absent from that list. According to the Acquisition History section of Microsoft's Investor Relations Web site, the company made only three acquisitions last year: Sentillion in February, AVIcode in October and Canesta in November. The company's page for 2011 acquisitions is blank.

By comparison, Microsoft acquired six companies in 2009, and 16 in 2008 up through late August when the financial meltdown brought dealmaking to a screeching halt.

Posted by Scott Bekker on March 29, 2011 at 11:58 AM