Java Industry M&A Predictions

by Steve Anglin

The following is just an editorial opinion of what could likely happen in the industry. This opinion is not to be taken at all as buy/sell recommendations, investment advice and analyst speculation. Please research and conclude on your own findings with/without the help of an experienced and certified investment advisor/analyst.

The following are various Java industry M&A (Mergers and Acquisitions) given current investment and market environments.

  • IBM has invested much in Novell, and is using them as a very important distribution channel for its WebSphere Application Server product. IBM has invested much in Novell and occupies seats on the executive board as well as a major shareholder. With its cash flow and stability, IBM seems to be just waiting for the right time to acquire Novell. All the pieces seem to be in place. It's not if but when...

  • Prediction: IBM acquires Novell, when Novell's stock price falls/settles at US $3.5 per share (on negative earnings report over 3-6 months).

  • HP's software strategy includes the ChaiVM and MicroChaiVM, Java clone development platforms. It recenty scored big with a partnership with Qualcomm and its BREW OS. Additionally, HP acquired Bluestone to enhance its enterprise Java strategy. Look for HP to try and tie these into a comprehensive strategy that developers can use and develop. Perhaps, an IDE such as Borland's JBuilder (and JBuilder Handheld Express). Borland could make sense for HP. Other possibilities exist as well.

  • Prediction: HP will continue to augment its software strategy through an additional acquisition sometime this year or early next year at the latest.

  • If HP does not acquire Borland first, look for IBM to acquire Borland if Visual Age continues with its lackluster sales. Borland's JBuilder would be a great bundle with IBM WebSphere. Philosophically, both companies are similar with their Linux OS focus.

  • Prediction: If not HP, IBM acquires Borland.

  • Furthermore, look for the general trend of consolidation to continue, especially with Web Application Server vendors acquiring IDE and UML Modelling/Design tools to enhance their offerings.