More Small Technology Acquisitions as Economy Stumbles?

Perhaps the slowing economy is encouraging small technology acquisitions.

The Wall Street Journal recently ran an interesting article on Oracle and the small acquisitions it has made in the past year. Oracle is well known for its large acquisitions (e.g., PeopleSoft, Siebel, Hyperion, and BEA), but it has also been busy scooping up small companies, some for as little as $5M. Oracle is not alone in its thirst for acquisition. Other cash-rich companies such as Cisco are also mentioned in this article.

New emerging technology companies normally have a battle for customer credibility. The challenges of the current economic climate exacerbate the problem, because funding sources are less available. So the arguments for going with large and financially stable vendors (e.g., Oracle, HP, Cisco, Microsoft) that offer similar technology are stronger than ever.

Being acquired by a larger vendor can have a positive outcome for small technology companies. The market for initial public stock offerings has for all purposes disappeared, so being acquired is the most likely financial exit scenario for stockholders.

... Bob Spurzem

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