Consolidation rules enterprise application market

Consolidation in the worldwide enterprise applications market could become a "permanent fixture" in the high-tech industry, a new IDC report predicts.

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 $59.4bn," said Albert Pang, research director for enterprise applications at 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."

IDC's report also suggests that western vendors are going east in their hunt for quality deals and "technology gems".

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

In addition IDC expects midsized enterprise application vendors to start positioning themselves more like infrastructure players and vice versa by buying each other out.