Today I came across an interesting posting from Chris Schneider, CEO of MomentumSI, about Consolidations in the Software Industry. He makes some interesting observations about recent consolidations in the technology industry amongst the “next 40” (the largest 40 software/services companies after Microsoft). He also points out the next set of acquisition targets from that same set.
Predictions are always hard to make (and harder to look at years later). But out of Schneider’s next acquisitions, I have my own set of thoughts I wanted to share.
- Sybase, Tibco, BMC and CA – I actually don’t see these companies being acquired. While there are some interesting technologies that they all own (BMC and CA have a diverse collection of tools…both old and new), at a cursory glance there is nothing immediately compelling within them to make them acquisition targets.
- Cognos and Citrix – These could be acquisition targets from someone.
- Citrix has application virtualization and acceleration technology that might be interesting to someone; as long as their other applications are of interest or could be easily disposed of.
- Cognos is interesting to those who are looking to acquire customers in the BI space (maybe combining with Sybase?)
- Red Hat and Adobe – I don’t see these two being acquired (or wanting to be)
- Red Hat – If Red Hat were to be acquired, I fear that the open source world might start to swing in a completely different direction. I don’t see Red Hat letting that happen.
- Adobe – They have an interesting mix of products that makes them much more unique than these other companies. Their combination of enterprise and end use solutions make them an interesting company to watch in the next few years.
Even more interesting than focusing on these acquisitions, is focusing on the companies that aren’t getting acquired. These are the companies that we don’t hear about that exist below the radar threshold. Small companies that are profitable, doing interesting if not exciting stuff in very focused or niche markets. I know of a number of companies like this that were boot strapped by their founders, grown to impressive revenue numbers, and still kept private and focused on providing value to their customers and their employees.
Some of these companies get acquired every now and then and pop up above the radar level. But the more interesting thing is how many stay down where they are. Perhaps this is part of the maturing of the High Tech industry that has been in process for a while. The development of High Tech business leaders that are in the business for something more than the quick buck or the big bang.