It’s really great to listen to folks talk about the economy getting better and all the positive activity going on in the technology industry, but I guess the more things change, the more they stay the same.  We seem to be climbing out of an economic slump that resemble the mudslides of Southern California but the technology landscape seems to be shifting at the same pace as the tectonic plates of the same location.

There are a number of startup companies that made it through the down turn with some great, next generation intellectual property that could really propel some of these monolithic vendors and help each one become more competitive in their own right.

It is important to note that the ‘infrastructure’ of today is changing.  What were once servers, storage and networking is becoming more efficient, integrated, private, secure, and cloud.  Next generation technologies that enable the infrastructure of tomorrow should be prime for acquisition.

IBM announced it would be spending upwards of $20B between 2011 and 2015 on acquisitions.  Additionally they claim that they spend approximately $3B per year on acquisitions.  Sam has come out and said that they will buy software companies because software has more margin.  Maybe so but if all these large suppliers of IT are going to focus on high margin software, are they going to leave it to the user to integrate?  There is a balance of what customers want to purchase and what they want to integrate, and integrated solutions are more of what customers want these days.  I think IBM needs to start getting a little more aggressive on the acquisition road if they want to spend their $3B this year.

Let’s also take a look at who else should be on the acquisition bandwagon…

Dell. 

Dell hires the supposed best M&A guy out of IBM to go do something ‘big’ (and no doubt, Dell needs to do something big).  What have we seen?  The acquisition of Perot.  Okay, but I would hardly classify services, a 30% gross margin business as ‘big’.  Exanet?  I can’t call a $12M acquisition of a non-working technology with no customers ‘big’.  And what will they do with this technology anyway?  Does Dell integrate?  They are a ‘just in time’ manufacture of commodity components.  Let’s compare Dell’s IP portfolio to that of say IBM or HP.

HP. 

Everyone has been predicting that when Dave Donatelli took over at HP and could finally manage the all pieces of the puzzle (including storage), we would see some big changes.  What have we seen?  Palm?  Not sure if that was his idea or not but this seems to be directed toward Google and Apple in order to compete at that level (and they are WAY behind here) and this deal was too strategic (5+ years) for Donatelli, Dave is more tactical.  3Com?  Okay, so now he has some plumbing for his infrastructure and businesses.  Here is HP’s problem.  Where is their data deduplication story?  Where is their primary storage optimization story?  What is their cloud play?  HP believes, because they spend so much money in their labs that they own all of this technology so why buy it and integrate it?  The issue is that it never makes it out into the real world in any time that keeps them competitive with the rest of the real IT world, and now they are losing – at least the storage battle.  (Where are they now – EVA?)

NTAP. 

If NTAP could just learn how to integrate technology and not be afraid of messing it up, they too need to be in the acquisition business.  Why?  They have no technology that allows them to drive data from one of their platforms to another or features besides traditional storage features (like snapshots).  I could easily see NTAP acquiring someone like CommVault.  This would give NTAP a few things.  First, a reason to go visit their existing customers, with a good product, that could give them much more revenue than their ‘Snap’ products.  Second, a way to drive more data from heterogeneous storage to their backend and grow their storage foot print.  (Dell has the same issue by the way – no real technology to drive more data to more of their stuff.)  EMC realized this early on when they acquired Legato.  It gave them solution to drive data that lived on many different storage platforms to their platform (Clarrion DL, and VTL).

I could go on but I think you get the point.  There are a myriad of companies that are ripe for the picking.  Great technology, public and private, good revenues, and good business models such that they don’t fall apart when acquired.  It’s time to pick up some of these companies, make them synergistic to existing business, and execute.