Michael Maoz

Is it just me, or do the piles of cash clogging the bank vaults of some of the world’s largest and/or most influential software companies make others think: acquisitions! We spent the past ten years watching companies like Oracle (over 60 acquisitions in the past ten years), IBM and Infor buy the content and maintenance streams to smooth access to markets and future revenue. Even much smaller companies such as Salesforce.com have quietly acquired complementary products (examples for Salesforce.com are Informavores, Instranet, Koral Technologies, CrispyNews, Kieden and Sendia).

It is not a stretch to conjecture that Social Media companies will be a ripe next target. With over 50 vendors in the space, and most with revenues between $3 million and $60 million, they can arguably be viewed as outsourced Research and Development for the larger vendors. Why? Because they are not the core operating system or database or infrastructure or system of record. Because the Enterprise Application vendors and the Unified Communications vendors both need what they have.  Because IT governance prefers reduced application sets.

Should you worry? Maybe along the lines of Alfred E. Neuman, you can say, “Me Worry?” These applications and services are mostly delivered in the Cloud, are easy to set up, and give you a great opportunity to learn a lot about an important direction that your business needs to engage in: understanding your consumers / customers / citizens / students.  So go ahead and get started.

It does mean, however, that you need to think carefully about contingencies, as 85 percent of these vendors likely will be under different ownership within five years.

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