Ongoing Consolidation Wave in the Enterprise Applications Market Results in Record Performance for the Fourth Year in a Row, IDC Research Shows

FRAMINGHAM, MA – February 13, 2008 – The ongoing consolidation wave in the worldwide enterprise applications market, which entered its fourth year with a record performance in 2007, could well become a permanent fixture in the high-tech industry, a new report published by IDC predicts. The study also reveals that mergers and acquisitions will continue to represent an indispensable vehicle for vendors and investors to strengthen their businesses and portfolios in the years to come.

"In 2007 there were 230 announced and completed deals in the enterprise applications market and the aggregated valuation reached an unprecedented level of at least $59.4 billion," said Albert Pang, research director of Enterprise Applications for IDC. "The deal makers involved will continue to follow the money because of the need to gain shares in strategic segments ranging from structural design engineering to remittance processing and from mobility to green initiatives."

Key findings from IDC’s report, Buyout Billboard Reaches a New Milestone with $59B of Deals in Enterprise Applications Market Consolidation 2007, include the following:

* While there were only a handful of deals in Latin America and Asia in 2004, the number jumped to 14 in 2007. The outlook is rosy given the underlying strengths of the local economies from Brazil, with its abundant natural resources, to China, with its ambitious infrastructure spending. Both forces are expected to further whet the appetite of enterprise applications vendors and investors from abroad eager to expand into the region.

* In the Europe, Middle East and Africa region, Western vendors are going east in their hunt for quality deals and technology gems as active ingredients to build a genuine pan-European software holding company.

* Investment funds dedicated to a class of vertical or subvertical enterprise applications will proliferate in order to quickly build and capitalize on a critical mass of customers and recurring revenues.

* Vertical vendors will start expanding into adjacent or new industries because of the need to diversify their customer portfolios and mitigate risks in anticipation of a deep and intractable recession.

* Midsized enterprise applications vendors will start positioning themselves more like infrastructure players and vice versa by buying each other out.

The study, Buyout Billboard Reaches a New Milestone with $59B of Deals in Enterprise Applications Market Consolidation 2007, (IDC #210589) examines 230 mergers and acquisitions that have been announced or completed in 2007. It also provides detailed information on the 230 deals, including the 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, and the regional and vertical industry dimensions of the deals. Additionally, this study represents a team-based research effort, with perspectives from IDC analysts in Asia/Pacific, Europe, and North America.

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