“So far, since there is no major negative impact in terms of how the companies are doing after these mergers, I personally see this activity going for the next couple of years,” said Krishnendu Datta, managing director for SAP Philippines, issuing his forecasts in an interview with INQUIRER.net.
In particular, he foresees more software companies, which are smaller and targeting niche markets, to get acquired by larger companies with big cash reserves.
In the long-run, however, he noted that too much consolidation would be detrimental to the end-user because it would result in less room for innovation.
“The biggest of companies are normally not the biggest innovators,” he said. “So I would say the trend would continue for the next couple of years but at some point in time, the trend would reverse, in maybe between two to four years.”
SAP itself has acquired several companies, most recently Business Objects, which makes business intelligence software, in a deal valued at around $6.8 billion. The move is seen as the German software maker’s reply to rival Oracle’s earlier acquisition of Hyperion, a competitor of Business Objects.
Datta, though, stressed that SAP remains focused on organic growth while acquiring several smaller companies to cope with changing trends in enterprise software. He noted smaller acquisitions like Triversity, which makes point-of-sale software and was acquired by SAP several years back.
“SAP realizes that there are packets of solution gaps that would be difficult for us to fill in such a short time. Even though Business Objects is a big acquisition for us, it still falls under that direction,” he said.
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