Large vendors identified as likely consolidators in 2011


Large vendors identified as likely consolidators in 2011

Simon Quicke

Cloud and digital security are two of the areas that will be targets for M&A activity next year with most of the large vendors sitting on war chests that could fund a spending spree.

With a consensus emerging from market watchers that next year could see a buoyant period for buying and selling in the tech sector as valuations rise there is set to be more consolidation in the channel in 2011.

Jonathan Coker, investment director at MMC Ventures, has looked at the market and concluded that next year will be a fairly busy one for trading.

"Hot sectors will continue to be well funded even in the equity gap. We are seeing strong demand for deals in digital media, e-commerce, mobile software, cloud, cleantech and digital security and this will continue for some time," he said.

"Large corporates with accumulated cash reserves are currently the most active players in the M&A market and this will continue to drive venture capital decision making processes," he added.

Apple, Microsoft, Cisco and Google are among those that Coker said had large cash reserves to fund acquisitions.

But next year might not be so good for those channel players that have not embraced some of the latest technology.

"Companies that are reliant on old revenue models and that are not flexible with new routes to market will struggle to raise capital," said Coker.

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