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10 biggest tech mergers and acquisitions of 2009
December, 10th 2009

The top 10 mergers and acquisitions in the network industry in 2009 all cracked the billion-dollar barrier, and involved vendors in hardware, IT services, collaboration, storage, wireless infrastructure and other segments. IT behemoths such as Oracle, Cisco, Dell, HP, EMC and IBM were among the biggest spenders.

Here are the top 10 acquisitions from 2009 based on publicly disclosed transaction values, including some deals that are still pending and may not be completed until 2010.

1. Oracle-Sun: $7.4 billion
It seems a long time ago that Oracle announced its blockbuster deal to purchase the struggling Sun Microsystems, giving the industry's largest database software vendor entry into the server and storage markets. The acquisition, still pending, was announced in April, and may even be blocked because European regulators are contending that combining Oracle's technology with Sun's open source MySQL database would violate competition laws. Oracle-Sun is by no means a done deal, but if it goes through it would give Larry Ellison new ammunition against Microsoft (in the database market) and against big hardware vendors such as IBM, HP and Dell.

2. Xerox-Affiliated Computer Services: $6.4 billion
In one fell swoop Xerox was able to triple its services revenue from $3.5 billion to $10 billion a year with the purchase of business process outsourcer Affiliated Computer Services. The agreement, announced in September, combines 74,000 ACS employees with Xerox's staff of 54,000, which runs the company's longtime photocopier business and various document management technologies and services. Xerox believes ACS will help it penetrate new markets without huge amounts of overlap, saying that only about 20% of the companies' customers are common to both businesses.

3. Dell-Perot Systems: $3.9 billion
Just days before Xerox's big move, Dell announced an agreement to buy Perot Systems, another major IT services firm founded by Ross Perot. Dell is betting that Perot will help it become a leading services company, and allow it to sell more hardware to existing Perot customers, many of whom are in the healthcare and government industries. Dell's purchase can also be seen as a response to rival HP's $13.9 billion acquisition the previous year of EDS -- another services company founded by Perot.

4. Cisco-Tandberg: $3.4 billion
Cisco, already a major player in collaboration products with WebEx and TelePresence, signed an agreement in October to purchase videoconferencing vendor Tandberg, which makes both video devices and network infrastructure products. The acquisition, if completed, could have both a direct and indirect impact on Cisco's bottom line, because expanded use of videoconferencing may increase network traffic, letting Cisco sell more switches and routers.

The deal, announced in October, is still pending. Shareholders initially objected to the acquisition but Cisco now appears to have won enough support to complete the merger.

5. Cisco-Starent Networks: $2.9 billion
Cisco's multibillion dollar purchase of Starent, announced in October, boosts the vendor's IP-based mobile infrastructure for several types of wireless networks, including LTE and WiMAX. Cisco had already made an investment in WiMAX with the $330 million purchase of Navini Networks in 2007, and a supply contract with Clearwire in 2009. But LTE is gaining steam as well, with both Verizon and AT&T saying they will use LTE for their 4G networks. Starent's technology has been deployed by more than 100 mobile operators in 45 countries.

6. HP-3Com: $2.7 billion
HP is launching an assault on Cisco in the data center networking and convergence markets with its purchase of 3Com, a maker of switches, routers and security products. The deal, announced in November, gives HP a core switch, the H3C 12500, to compete against Cisco's Nexus 7000, as well as significant market presence in China. But the acquisition, which is facing a shareholder lawsuit, also suffers from overlap at the low end of the companies' switching lines and in wireless networking.

7. EMC-Data Domain: $2.1 billion
EMC had to outfox rival NetApp to make this top 10 list, as the storage vendor won a six-week bidding war to purchase Data Domain and gain new technology in the data de-duplication market. De-duplication helps companies save money by reducing data storage needs, which is why both EMC and NetApp believe it will play a major role in the storage market in the coming years. NetApp originally had a $1.5 billion signed agreement to purchase Data Domain, but EMC swooped in and kept raising the price until the smaller NetApp could no longer afford to stay in the bidding.

8. Emerson-Avocent: $1.2 billion
Emerson is expanding its IT operations management portfolio with the addition of Avocent, which makes software, hardware and embedded technologies designed to simplify management of complex data centers. Emerson said Avocent's configuration and monitoring technologies are complementary to its own power, energy management and cooling systems, and will thus help customers tackle the growing problem of energy inefficiency. The acquisition, which will also expand Emerson's capabilities in the KVM switching market, is expected to close around Jan. 1, 2010.

9. IBM-SPSS: $1.2 billion
IBM is spending more than $1 billion to expand its analytics software capabilities, with SPSS and its predictive analytics tools that help companies mine historical business data to identify future trends. "IBM sees potential applications for SPSS tools in helping financial services companies retain customers, preventing crime and picking the optimal site for a new store or factory," the IDG News Service reported in July when the acquisition was announced. The purchase is just the latest step in IBM's strategy of bolstering its line of business analytics tools. Previously, Big Blue acquired data discovery technology from Exeros and paid $5 billion for business intelligence vendor Cognos.

10. Ericsson-Nortel Networks' wireless assets: $1.13 billion
Ericsson won a bidding war over the wireless assets of bankrupt Nortel Networks, beating out offers from Nokia Siemens Networks, the private equity firm MatlinPatterson and Research in Motion. Specifically, Ericsson won Nortel's CDMA and LTE wireless networking business, allowing the Swedish company to strengthen its presence in North America. "Nortel customers in North America that will now be supplied by Ericsson include Verizon Wireless, Sprint, U.S. Cellular, Bell Canada, Leap and Telus," Network World reported when the deal was announced in July. Because of the Nortel purchase and other strategic deals, Ericsson will have 14,000 employees and $5 billion in revenue from North America.

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