Take overs take over

Increasing mergers and aqcuisitions among enterprise applications vendors spells out the need for Chief Information Officers to chose their vendor carefully when implementing a long term enterprise solution.

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By  Colin Edwards Published  February 7, 2006

According to an IDC study, the worldwide enterprise applications market saw a spectacular amount of merger and acquisition activities in 2005, spelling out the need for Chief Information Officers to select their vendor carefully when implementing a long term enterprise solution. The study finds the number of deals in 2005 climbed to 199, compared with 144 in 2004, and the value of these deals more than doubled to over $36 billion. In addition, there were seven deals worth more than $1 billion in 2005, compared with only one in 2004. "By almost every measure, the pace and value of enterprise application mergers and acquisitions went through the roof in 2005," said Albert Pang, research director of Enterprise Applications at IDC. "However, that doesn't mean the market is likely to go the way of traditional industries, with only a handful of players left competing for the shrinking pie. Instead, the future is likely to be marked by continuous product and customer innovation from best-of-breed vendors as well as visionary players who know what it takes to stay financially viable as well as technologically advanced. These vendors will emerge as category champions and ultimately industry leaders for many years to come.'' IDC expects the numbers of mergers and acquisitions involving Europe and Asia/Pacific to rise dramatically throughout 2006, as hungry investors and vendors seek to replicate their expansion strategies in new locations. In terms of vertical industry breakdowns, the horizontal enterprise market accounted for the biggest percentages of deals in 2004 and 2005, followed by financial services, and engineering. Additional vertical industry vendors that were highly sought after in 2005 include: retail, healthcare, banking, and manufacturing.

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