More M&A is expected among large IT companies as they aim to acquire next-generation data center technologies. Analysts say privately held startups will likely again be targeted. Among last year’s acquisitions, Cisco Systems (NASDAQ:CSCO) bought MetaCloud, and EMC (NYSE:EMC) acquired CloudScaling.
Some hot startups, though, as usual could go public rather than sell out to big IT companies.
Here are five M&A scenarios to watch.
- Data storage system giant EMC is at a crossroads, analysts say. Will it spin off all of VMware (NYSE:VMW), in which it holds an 80% stake? Or will EMC expand into the computer server market, speculates Pacific Crest Securities.
- Cisco jumped into the storage market in 2014. If Cisco or Chinese network gear vendor Huawei expand into storage, it could spark a wave of M&A, analysts say.
- Converged infrastructure combines server, storage and networking technologies with management software. Software-defined networking, or SDN, centralizes control of network security, storage systems and servers connected to networks. Nutanix, SimpliVity and Scale Computing are among startups in the converged, SDN market that could be targeted by big IT companies, says Barclays.
- Hortonwor ks (NASDAQ:HDP) made its IPO in December. It sells open-source Hadoop software used to store and search through huge amounts of data. Cloudera, another Hadoop software startup, says it’s in no rush to file for an initial public offering. Analysts say smaller Hadoop players, though, could be acquired.
- F5 Networks (NASDAQ:FFIV) and Akamai Technologies (NASDAQ:AKAM) are among companies aiming for growth in security products.Israel-based CyberArk Software (NASDAQ:CYBR) went public in September. Privately held security vendors include Bromium and Zscaler. Nomura Securities calls Bromium and Zscalar market share takers and IPO candidates, though they could be acquired before they go public.