10 Most Significant Tech Acquisitions Of 2010

Big Buys In 2010

M&A activity was alive and well throughout 2010. Whether marquee vendors were bulking up their cloud computing presence, chip makers were taking over security superstars or high-tech Hercules were taking over suffering smartphone makers, 2010 was a big year for buyouts. And those acquisitions could have a very strong influence on how the IT market proceeds in 2011.

Here, we take a look at the 10 most significant IT acquisitions of 2010 and what they mean (in order by dollar amount from lowest to highest).

HP Bails Out Palm

Palm had been a lame duck; struggling to stay afloat amidst the fervor generated by the Apple iPhone and the Google Android. Once a PDA and mobile phone pioneer, plenty predicted Palm would be put out to pasture 2010.

Enter HP, which acquired Palm in April 2010, paying $1.2 billion for the Sunnyvale, Calif.-based smartphone maker.

HP has expressed excitement over being able to put its own spin on Palm's webOS, which the device maker had hoped would break new ground but fell flat with the release of the Palm Pre. The move also gives HP an established smartphone division, which, while it could use some tweaking, gives it a competitive edge over other high-tech behemoths like Cisco and HP.

The Palm buy also gives HP the chance to entice developers and dive headfirst into the mobile application ring, while also providing a way for it to ease itself into the cloud computing pool.

Symantec Checks Out VeriSign

Symantec took itself on a security shopping spree in 2010, scooping up a host of companies, but none as striking as its acquisition of VeriSign. In May, Symentec said it would take over VeriSign's Identity and Authentication Business, including its Secure Socket Layer Certificate Services, for a bulky $1.28 billion in cash. The deal also gives Symantec VeriSign's SSL Certificate Service, Public Key Infrastructure, VeriSign Trust Services and VeriSign Identity Protection Authentication Service.

The goal of the deal is to give Symantec users simple and secure access to information from any devices in any location and gives Symantec a competitive advantage by adding identity and authentication into its IT stable. And, with cloud computing coming of age in 2011, the ability to identity and authenticate users becomes exponentially important, and Symantec, through the VeriSign buy, is on the front lines of the cloud, mobile and social revolution.

IBM Sets Sights On Sterling

As IBM set to build out its position in the marketing application space, it put a big chunk of change on the table to acquire Sterling Commerce, which makes supply chain and business-to-business collaboration software. More specifically, the $1.4 billion buyout gives IBM ownership of Sterling Commerce's software, which helps businesses develop networks of business partners, suppliers and customers and manage electronic transactions between them. The Sterling Commerce acquisition was announced in May and closed in August. The acquisition, through which IBM bought Ohio-based Sterling from AT&T, saw IBM merge Sterling and its 2,500 employees into its WebSphere organization with IBM's Software Group.

At the time of the acquisition, IBM said adding Sterling Commerce to its arsenal lets the company offer a full platform for multi-enterprise business transactions while complementing IBM's existing industry-focused software frameworks.

IBM Nets Netezza

IBM continued its acquisition-filled 2010 with the addition of Netezza, a Marlborough, Mass.-based data warehousing player, in a $1.7 billion purchase. The Netezza acquisition closed in November and IBM plans to integrate it into its IBM Information Management software portfolio. The Netezza acquisition helps IBM bulk up its business analytics plays, which IBM has said will be one of its core growth areas going forward.

Attachmate Acquires Novell

In November, Attachmate said it planned to acquire Novell to the tune of $2.2 billion while Novell will also sell "certain intellectual property assets" for $450 million to CPTN Holdings LLC, a technology consortium organized by Novell rival Microsoft.

The sale is expected to be completed in the first quarter of 2011. Once the deal is closed, Attachmate has said it plans to operate Novell as two business units, Novell and SUSE, and join them with its other business holdings. Attachmate makes software for terminal emulation, legacy software modernization, systems and security management and application integration.

Attachmate's acquisition of Novell is significant, as it puts an end to Novell, which has long struggled to keep up with competitors Oracle and SAP. Attachmate has said it will keep the Novell name going, but by the time of the acquisition the company was a shell of what it once was.

HP Victorious In 3Par Bidding War

Probably the front runner for most dramatic acquisition of 2010 was HP's purchase of storage player 3Par after an intense tit-for-tat bidding war against Dell.

In the case of the 3Par acquisition, which closed in September to the tune of $2.35 billion, Dell opened the door with an out-of-the-blue $1.15 billion acquisition offer in mid-August. HP got wind and fought back, making a bid of its own. The two companies battled back and forth with competing offers and on September 2 HP made it official, announcing that it will acquire the Fremont, Calif.-based maker of storage arrays that offer clustering, tiered storage and thin provisioning to allow applications to be configured with more storage capacity than is physically available.

The acquisition of 3Par gives HP an edge in the converged infrastructure and cloud computing game, and gives it an advantage against Dell, which lost out on its coveted 3Par after bowing out of the bidding battle.

NTT Nabs Dimension Data

Nippon Telegraph and Telephone (NTT) acquired global solution provider Dimension Data in a $3.3 billion deal that opens the door for NTT to create a massive global IT services and solutions provider. The combination of Tokyo-based NTT and London-based Dimension Data creates a powerhouse player in the solution provider space by weaving together NTT's managed network services, data centers, system integration and mobile services and Dimension Data's development, operation and maintenance of IT infrastructure like network devices and servers at the client sites.

The acquisition is yet to close, but in October the two companies agreed on the terms and all regulatory requirements were cleared.

SAP Bets Big On Sybase

In May, SAP revealed plans to acquire Sybase for a whopping $5.8 billion, which gives SAP a new competitive weapon against chief rival Oracle. The Sybase buy, which closed in July, brings new technologies to SAP to let it tackle mobile applications, in memory computing software and other areas it previously lacked. At the same time, SAP will also be better armed to attack the SMB market, where it struggled to gain traction.

SAP's Sybase acquisition also gives SAP a database it could tie more tightly into its CRM and ERP applications to gain an edge on Oracle. Meanwhile, it also gives SAP more ammo in its battle with Microsoft Dynamics.

Oracle Scoops Up Setting Sun

Oracle and Sun announced the $7.4 billion acquisition on April 20, 2009. But clearing regulatory hurdles from the European Union took time and the companies didn't wrap up the deal (for $7.3 billion, a bit less than originally negotiated) until Jan. 27. And the industry hasn't been the same since. Oracle's new ability to sell complete hardware-software "stacks," from server, to operating system and middleware, to database and applications, brought a level of IT integration not seen since the days of the IBM mainframe. It's also accelerated the industry consolidation toward a handful of "one-stop shop" IT vendors, including IBM, Cisco and HP, offering extended lines of servers, software, communications and storage products. And Sun channel partners have been dealing with the repercussions all year. Oracle said from the start it would sell Sun products directly to big-account customers, reversing Sun's trend of selling more products through the channel. And in October Oracle cut Sun resellers out of the maintenance renewals business. The message from Oracle: Sun resellers must add value to their service offerings, not just fulfill sales.

Intel's Blockbuster McAfee Purchase

Though it is yet to close, the one of the biggest and likely the most significant acquisition of 2010 was Intel's blockbuster proposed buy of security player McAfee for a massive $7.68 billion. The deal has been approved by the Federal Trade Commission (FTC) and is expected to close sometime in early 2011.

The two companies have said that once the deal is complete, McAfee will operate as a wholly owned Intel subsidiary and report into Intel's Software and Services Group. The pending acquisition has the potential to radically alter the security paradigm and give Intel the ability to better secure billions of new Internet-ready devices, such as mobile and wireless devices, from myriad sophisticated and evolving malware threats. Looking ahead, Intel could infuse security into its chipset that powers TVs, cars, medical devices and ATM machines, essentially baking security into all Internet devices.