After the M&A Frenzy: What’s Next?

Leveraged buyouts and strategic acquisitions have set new records. What will happen to these assets – and to software M&A - when the economy slows?

By Ken Bender, Software Equity Group, LLC

We have no crystal ball, but Software Equity Group has a decent track record forecasting the software industry’s economic expansion, consolidation and contraction over the past fifteen years.

We believe the U.S. economy, despite the Fed’s best efforts, will finally fall victim to the housing bust, tight credit and skyrocketing oil prices. Economists expect the GDP will slow to 1.6% in Q4 and may well contract further in 2008 until there is a modest negative decline for two consecutive quarters, the economic definition of a recession. The current expectation is any recession will be moderate and will last some 12 to 24 months.

Nevertheless, such a contraction will likely create a new M&A environment for software industry entrepreneurs and investors.

Find Your Vendor on SandHill.com

Don’t forget to check the SandHill.com Services Directory when you are looking for a new vendor. The page includes a variety of listings for businesses which specialize in serving the software industry. Vendors include developers, public relations experts, marketing firms, financial consultancies and more. Just click on a firm’s name to find out more information.

To list your services firm on SandHill.com, simply scroll to the bottom of the Services Directory page and and click on “Want to post a service? Login/register here.

Make Time for “White Space” Thinking

Many execs are so focused on what is going on inside their companies that they are not assessing the changes going on in the market and what impact those changes might have on the future of their companies. Nilofer Merchant of Rubicon Consulting stresses the importance of setting aside time for long-term thinking in this week’s post to the SandHill.com Blog, “New Era, New Thinking.”

A Roadmap to Services Excellence

As the technology services industry matures, it is critical to identify predictive and diagnostic measures to gauge the health of the businesses. Jeanne Urich of Adexta Consulting shares the results of a new study which identify five pillars of services excellence and a roadmap for achieving each. Read more in this week’s post to the SandHill.com Blog on services best practices.

Publish Your Perspective!

The SandHill.com Blog wants your opinions. Send your thoughts on the enterprise software industry to editor@sandhill.com and we’ll publish them in our blog.

Cracking the Complexity Code

There are two types of complexity. Understanding where to intervene is the key to managing them to create value. Find out the three things that companies must get right in order to realize how to make the most of this Web 2.0 content in this article from The McKinsey Quarterly.

News Update: On the Battlefield

Icahn steps in as the war for BEA continues; plus, Ellison “lockboxes” his NetSuite shares, Google steps up its mobile efforts and Mandriva’s CEO calls out Steve Ballmer. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.

Poll: A Recession in 2008?

Will the U.S. economy and technology spending slip into a recession next year?
Take our Pulse Poll >>

Last week, readers gave their opinions as to whether Oracle would end up buying BEA.
Give us your opinion and see the results >>

More at SandHill.com:

Oracle’s Fusion is getting a new boss.
Read the most important enterprise software industry news of the week >>

Socialtext received $9.5 million in new funding.
Monitor the latest software venture capital deals >>

Iron Mountain to buy Stratify for $158 million.
Size up last week's software M&A deals >>

Ray Homan named CEO and director of BDNA.
See who's made it to the top in our list of recent software executive appointments.

Send us your feedback on this newsletter and the SandHill.com site.

Parting Thought

“The measure of success is not whether you have a tough problem to deal with, but whether it's the same problem you had last year.”
– John Foster Dulles

Courtesy of Malcolm Kusher, The Kushner Group