Mergers Expected in B2B Integration, SaaS

Loraine Lawson

One of the major and oft-repeated predictions this year was that there would be a slew of mergers and acquisitions in the tech sector. While I don't have the information to compare this year against other years, I think we can safely say this was one New Year's prediction that's already came true.


Really, Google could have fulfilled this one on its own. Recently, it acquired semantics technology company Metaweb, bringing its 2010 acquisition total to 15. And regular readers already know about this year's M&A trend in master data management and IBM's spending spree.


These deals are fascinating to watch and ponder, but really, when it comes to your job, most stories about mergers and acquisitions aren't particularly relevant-and often when they are, the changes are a long time coming.


But recently, Dennis Gaughan discussed a trend that very likely will affect you. Gaughan, a managing VP within the Enterprise Software research team, says we're on the "cusp of a wave of acquisition activity in the enterprise software space."


This is, after all, his area of expertise. His research is focused on enterprise applications and the support technologies, particularly application integration and B2B infrastructure.


He discusses three trends that are triggering acquisitions in the enterprise app space- my favorite is "unbounded users"-but more significantly, he gives a guess as to which areas might be involved, specifically:

  • Cloud application vendors, which really should surprise no one.
  • Trading exchanges and marketplaces, which he thinks will be targeted because "their industry-specific trading networks can be a valuable asset for companies looking to increase their footprints in a new industry."
  • B2B integration, which obviously caught my eye. Gaughan writes this is already under way with IBM's planned acquisition of Sterling Commerce and the GXS-Inovis merger.


Gaughan sees the IBM-Sterling and GXS-Inovis deals as potential catalysts for further M&A activity:

.. IBM's pending acquisition of Sterling Commerce and the GXS-Inovis merger will force the hand of large enterprise software vendors to have a more credible story about how they can support customers' B2B integration requirements. And I don't think it's just the big remaining vendors in play. There's a lot of interest from our customers in trying to automate the last 20 to 30 percent of their trading-partner relationships to eliminate costly manual processes and there is a cottage industry of small vendors that help provide low cost B2B services. Those vendors have accumulated networks of companies that could be appealing to larger vendors looking to build B2B critical mass.

So, brace yourself for integrations in the business-to-business space, and SaaS-which, really, could relate back to that B2B space.

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