Plugging the gaps

2006 was another year of corporate marriages--from hardware to security and telecommunications--some interesting, others surprising.
Written by Vivian Yeo, Contributor

Coming off a year of furious tie-ups, witnessed in 2005, the tech industry continued to be characterized by mergers and acquisitions in 2006.

The most notable corporate marriages took place in the hardware, security, software and telecommunications sectors, but there were some buying sprees in the Internet space as well, thanks mainly to Google.

ZDNet Asia sizes up some of the industry's megadeals as well as the more interesting buyouts over the past 12 months.

Alcatel and Lucent
In a nutshell: Merger talks between the two go back as early as 2001. Five years later, it's a done deal.
The $ factor: US$11 billion
Wow factor: With the merger, the world's largest telecommunications and networking player has emerged--the combined market capitalization of both companies is worth over US$33.8 billion. The new entity also swings more European power to the contest, in which the balance has largely tilted the American way. Watch out, Cisco Systems and Nortel Networks.

In a nutshell: The up-and-coming processor company, Advanced Micro Devices (AMD), incorporates PC graphics card maker ATI into its fold, aiming to become a processor powerhouse. The deal was completed in October.
The $ factor: US$5.4 billion
Wow factor: ATI allows AMD to offer a more complete product to PC manufacturers, making it a more formidable opponent against terse rival Intel. Apart from that, AMD is also predicting that graphics processors will score with PCs going forward, with an increase in more sophisticated games and multimedia applications. For a young company, AMD has done relatively well over the last few years in gaining market share and winning new PC manufacturer partners. The acquisition is tipped to not only boost its breadth and depth, but also deliver a sting to rival Intel, which had been a partner of ATI.

HP and Mercury
In a nutshell: Determined to become a software powerhouse, Hewlett-Packard picked up Mercury in July to boost its line of IT management software. This brings the computing giant's total number of software-related acquisitions to nine in the last three years.
The $ factor: US$4.5 billion, HP's biggest acquisition to date
Wow factor: These are still early days. The acquisition was closed in November; right up till mid-December, HP had not made any announcements on how it would integrate Mercury into its strategy, save for making it known that the Mercury line of products would be known as HP Software. According to Gartner, although there are minimal technology overlaps between Mercury and HP's product lines, questions remain over the future of the CMDB (configuration management database) products from both companies. The controversy that erupted in the last calendar quarter over the company's handling of an investigation into a media leak would have have kept top executives busier than usual.

Motorola-Symbol Technologies
In a nutshell: The mobile phone giant expanded its portfolio of enterprise offerings in a strategic purchase of Symbol, which specializes in barcode, wireless and RFID (radio frequency identification) equipment.
The $ factor: US$3.9 billion
Wow factor: Enterprise mobility is hot, and analysts have pointed to the pairing as a good fit. Motorola's move, even if its own enterprise business is smaller than Symbol's, augurs well to compete more effectively with competitors such as Nokia. What could be better than having your own company manufacture RFID phones? Other than Symbol, Motorola's shopping spree has also included companies such as Good Technology and Broadbus. Now it's just a matter of working out the merger integration.

In a nutshell: Looking to more effectively gel security and data storage, EMC found a mate in RSA Security, shelling out what some financial analysts believe to be a relatively high price.
The $ factor: US$2.1 billion
Wow factor: You could swear you saw this tie-up coming. After all, Symantec had only acquired Veritas Software just 19 months before, although the reverse was true--it was a security company buying a storage specialist. Rather than keep RSA as a standalone entity, akin to VMware, EMC has said that this buy would be incorporated under its Information Security Division, This would seem an odd move since RSA has an enviable brand in the security arena. The acquisition is still yet to be finalized, and just how things may turn out remains debatable. One point that's undeniable: EMC has emerged a stronger brand with strategic acquisitions such as VMware and RSA.

In a nutshell: Placing its bet on online video, Google added another piece of its business jigsaw puzzle by acquiring online video phenomenon YouTube.
The $ factor: US$1.65 billion
Wow factor: Google's Internet empire is growing and so is the gap between some of its biggest competitors, despite talk that the deal has resulted in Google being saddled with copyright issues. With other acquisitions such as JotSpot and Writely in the bag, Google is growing its influence in the hosted productivity applications space, too.

Other deals this year...
Ericsson shells out greenbacks for Redback
With US$2.1 billion, company beefs up IP-routing expertise as it tries to help phone companies offer services like IPTV.
Thursday, December 21, 2006

BT snaps up Counterpane Internet Security
Counterpane security guru Bruce Schneier joins BT Group as it tries to increase network security for business customers.
Thursday, October 26, 2006

IBM to buy ISS for US$1.3 billion
Latest buy in rapid-fire spending spree, to bolster security services, is set to close in fourth quarter.
Thursday, August 24, 2006

IBM to pay US$1.6B for FileNet
The US$35-per-share deal marks IBM's third software-related purchase announcement since last week.
Friday, August 11, 2006

Brocade to buy McData
Deal valued at US$713 million furthers consolidation in storage area networking industry.
Thursday, August 10, 2006

Nokia and Siemens merge units to fight Ericsson
Between 6,000 and 9,000 staff expected to lose their jobs, as the two companies aim for US$1.8 billion in cost reductions.
Tuesday, June 20, 2006

Infor to acquire SSA Global
The acquisition effectively makes Infor the third largest in the business applications market, behind SAP and Oracle.
Tuesday, May 16, 2006

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