Enterprise Applications Market Reaches New Consolidation Milestone with a Record 550 Mergers and Acquisitions Announced Between 2004 and 2006, IDC Finds

FRAMINGHAM, MA – APRIL 2, 2007 – The enterprise applications market experienced continuous consolidation as merger and acquisition activities reached a new milestone of 550 deals with an aggregated value of at least $74 billion between 2004 and 2006, according to a new study published by IDC. The consolidation ushered in a new set of mega-ERP vendors as well as vertical-industry powerhouses, redrawing the competitive landscape by transforming relatively unknown entities into permanent fixtures with billions of dollars in recurring revenues as well as hundreds of thousands of customers.

"Like a wild fire, the consolidation engulfed the core of the U.S. market with deals like Oracle's purchases of PeopleSoft and Siebel and quickly spread worldwide by redistributing vendor shares, forcing customers to remap their software strategies, and finally throwing investor expectations into a feeding frenzy," said Albert Pang, research director of Enterprise Applications at IDC. "And the best is yet to come as the deal value could soar over the next three years because of favorable economic conditions and increased optimism of professional investors, as well as the underlying strengths of vendor fundamentals from rising recurring revenue streams to irreplaceable vertical-industry expertise and dominance.''

Key results presented in IDC's study include:

— Deal volumes and valuations are likely to increase over the next three years as enterprise applications vendors and investors are waiting to capture the perfect window of opportunity to either dominate a particular market segment or cash out to yield outsized returns.

— The number of merger and acquisition transactions in North America has been holding steady since 2004, suggesting that there will still be plenty of deal opportunities in the world's largest applications market given its fragmented nature, abundance of private equity capital as well as a growing desire among the established players to leapfrog competition through strategic acquisitions.

— As deal activities continue unabated in Asia/Pacific, Europe, and Latin America, the future makeup of the enterprise applications vendors will be dominated by truly global players capable of addressing the needs of their customers in multiple geographies and the consequences for the procrastinators – or those that choose to sit on the sidelines – could render many of them without any chance to recover lost ground.

This study, Acquisitive Vendors, Investors Profit from the Latest 36-Month Period of Enterprise Applications Market Consolidation (IDC #206021) offers an in-depth analysis of 550 mergers and acquisitions that have shaken the core of the enterprise applications market between 2004 and 2006 resulting in an aggregated deal value that exceeded $74 billion and affected every corner of the world. This study provides detailed information on the 550 deals including strategies of the acquirers, the vendors acquired, and the types of applications and technology assets purchased. Other data points include announced dollar amounts of the transactions, characteristics of top deals and the most acquisitive players, number of customers being affected, and regional and vertical industry dimensions of the deals. In addition this study represents a team-based research effort with perspectives from IDC analysts in Asia Pacific, Europe and North America.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com .

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