October 17, 2012 SOFTWARE INDUSTRY GROWTH AREAS INCLUDE DEVELOPMENT TOOLS AND VIRTUALIZATION

Berkery Noyes has released its Software Industry merger and acquisition (M&A) report for third quarter 2012. 

Total transaction volume decreased 11 percent over the prior quarter, from 411 to 364. Aggregate transaction value declined 35 percent, totaling $13.9 billion. It should be noted that there was a similar drop in transaction volume and value for the corresponding timeframe in 2011.

Regarding subsector areas of growth within the Infrastructure Software segment, M&A pertaining to development application software tools increased 36 percent relative to the last quarter. There were also several notable virtualization acquisitions in third quarter 2012, a subsector that nearly doubled since first quarter 2012. For instance, EMC Corporation, through its subsidiary VMware, announced its acquisition of Nicira for $1.1 billion. Cisco Systems also announced its acquisition of security startup Virtuata in the quarter.

“Cloud computing as an interruptive technology has been developing these past five years due to the increase of bandwidth, virtualization technology, and other scaling technologies,” stated James Berkery, Chief Information Officer at Berkery Noyes.

One particular trend right now is that cloud providers are looking to operate across public, private, and hybrid service platforms. VMware’s announced acquisition of DynamicOps in the third quarter was just one example reinforcing this notion.