2011 Silicon Valley Tech Acquisition Strategies

As we head into the new year some firms have already started the buying frenzy. Amongst the major players, Intel has already made a few big moves with it's acquisitions of McAfee and Infineon. The play positions Intel nicely to make a move into the wireless sector where they can expand on their partnership with Nokia and hedge against suppressed demand for PC's. Expect AMD to make similar but scaled moves in the coming months if they're not bought by Oracle first.

Google had an enormous year with 40+ acquisitions as they are frantically trying to roll out their social media platform. I'd expect them to continue to buy in this space until they can launch their platform. After their launch, I'd also look for them to buy infrastructure/ services support as their application matures.

Apple's $100B war chest has remain closed, don't forget about them as we move into 2011. Steve Jobs has expressed his intent to make some big purchases in the near future. I'd like to see Apple supplement their Ping launch and make a run at YouTube for market share in the multimedia space.

H-P has been all over the headlines lately with it's bidding war to acquire 3Par, Mark Hurd debacle, and acquisition of Arcsight a few weeks later. It's clear that the world's largest tech company by annual revenue is strategically positioning itself as an end to end solutions provider. As an end to end provider with a broad portfolio of Enterprise products and services, they can make a run in the corporate data center market, a direct play at tech giants Cisco systems, Oracle, and Dell.

Based on the acquisitions we saw in 2010, I think we can forecast 3 distinct trends for 2011 acquisitions:

• Chip Maker/Semi Conductor plays into the wireless market: Tablet devices have suppressed PC demand and chip makers will need to diversify their portfolios to hedge their losses while this market is hot.
• B2C based companies will continue to play the web 2.0 market with acquisitions in multimedia sharing, location based services, blogging platforms, and the emergence of group procurement services.
• B2B enterprise networking and data center companies will continue to broaden their portfolios with cloud, virtualization, and adjacency plays intended to supplement their core business models.

As usual, thank you all for following.

SVTB