cloud computing firms in M&A spotlight

June 4, 2010

cloud computing firms in M&A spotlight

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Cloud computing, or software as a service, allows businesses to cut back on hardware and space by having their software hosted in remote datacenters they access over the Web.

Deep-pocketed technology firms like IBM (IBM.N) or Oracle Corp (ORCL.O) might be looking to snag deals in this area to complement their own traditional, mostly on-premise services.

Human resource management software makers SuccessFactors Inc (SFSF.O) and Taleo Corp (TLEO.O) and retail-focused software firm DemandTec Inc (DMAN.O) could be the early targets, according to analysts.

“The themes of cloud computing and software as service (SaaS) are so real, and it’s still so early, that I think there should be lot of activity,” said Raymond James analyst Terry Tillman.

Janney Montgomery Scott analyst Sasa Zorovic believes companies like NetSuite Inc (N.N), Rightnow Inc (RNOW.O), Kenexa Corp (KNXA.O) and Constant Contact (CTCT.O) could all be attractive takeover targets.

Most big players delayed entering the cloud space and now want the scalable platforms provided by these SaaS companies to build efficient applications.

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Written by: Ammalgam

Filed Under: Acquisition, New Products, Resources, Startups, Strategy, Tools