Plenty throughout the industry have talked about how cloud computing is blurring the lines between hardware and software. Traditional providers such as Cisco are in a perfect position to begin offering cloud computing services if and when they choose.
But you’re starting to see M&A activity reflect the blurring boundaries between hardware and software as hardware makers and software providers look for closer cohesion. Intel’s purchase of Wind River Systems is one example within the consumer electronics market.
Cloud computing is proving another big driver. Oracle’s purchase of Sun Microsystems gives the company access to Sun’s high-end servers, which it can bundle with database and business software products. I’ve also read that EMC has made moves to acquire Data Domain, which I imagine is partly driven by the attraction of Data Domain’s data duplication filtering; useful for data centers powering cloud computing.
I think the industry-wide push towards cloud computing will continue to prompt bigger companies to look for smaller acquisitions to fill in niche gaps within their product portfolio’s or to help lay the foundation for future cloud offerings. In addition, the economy and indexes such as the S&P 500 help, as growing belief that valuations are as low as they’re likely to get will help fuel further acquisitions.