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Technology: Strong-Hand Buyouts
With tough economic times, enterprise software companies, like companies from many other industries, are doing their best to weather the difficulty. And big companies with cash on hand are capitalizing on the general weakness and snatching up bargains. John Chambers of Cisco said that right now “Cash is king, queen, and the royal family”.
Top tier buyers include Oracle, Cisco, and Microsoft. Oracle, for example has $7.4 billion in cash available. Cisco has issued $4 billion in debt with an intent to use a good portion of that on acquisitions. Rumors of possible targets of Microsoft include Adobe, Netflix, Yahoo, and RIM.
Many software companies are down in value 30 to 40 percent over the last year. And as companies are getting short on cash, their leverage in negotiation is low.
Oracle has bought 10 companies over the last year. Oracle’s most recent acquisition was mValent, a software tool maker that assists with configurations. mValent top customers included Lehman Brothers and Circuit City.