VERY Interesting article........ please read
Gartner Says Acquisitions Are in the Future for Microsoft
LOS ANGELES--(BUSINESS WIRE)--April 10, 2002--
Analysts Discuss the Outlook for Microsoft at Gartner
Conference "Windows: Nothing But .NET," April 10-12
As the Microsoft antitrust case nears an end, the company has built up a cash reserve of $38 billion, which makes the possibility of large acquisitions by Microsoft almost inevitable, according to Gartner, Inc. (NYSE:IT and ITB).
Gartner analysts gave their outlooks for Microsoft today on the opening day of the Gartner conference "Windows: Nothing But .NET," which is taking place April 10-12 at the Westin Century Plaza in Los Angeles.
During the past 10 years, Microsoft has acquired more than 60 companies, but its acquisition activity has slowed during antitrust proceedings. The largest recent acquisition was in December 2000.
"Holding off on acquisitions was cautious and sensible, and maintaining significant cash on hand was a wise insurance policy in the unlikely event Microsoft had been forced to split into two or more companies," said Tom Bittman, vice president and research director for Gartner. "Now that it appears Microsoft will come through the case somewhat unscathed, it will find a way to invest this cash through key acquisitions."
Gartner anticipates Microsoft making major acquisitions in professional services, workload management and media, among other areas.
By year-end 2005, Microsoft will likely spend at least $15 billion to acquire up to five IT professional services vendors, including a large IT professional services vendor with a globally recognized brand, according to Gartner.
"Microsoft has learned that enterprise consulting and on-site services are critical to maintain account control and influence," said David Smith, vice president and research director for Gartner. "Although it is likely that growing enterprise consulting as a business is not a Microsoft goal today, it will likely be forced to grow its consulting business to satisfy its growing number of enterprise clients, to directly influence the industry toward .NET and to increase its direct enterprise influence."
By year-end 2004, Gartner predicts Microsoft will spend $500 million to $1 billion to own or acquire workload management tools.
"From a technology standpoint, the most glaring issue in Windows as an enterprise server is its inability to efficiently and manageably run multiple workloads," said Bittman. "To maintain control of its own destiny, Microsoft will likely either develop its own workload management tools or acquire them, as well as a partition manager and possibly even distributed resource management tools."
Gartner forecasts that by year-end 2005, Microsoft will spend as much as $1 billion to further its media goals but will not attempt major acquisitions with the goal of becoming a media company.
"Rather than becoming a traditional media company, Microsoft is much more interested in becoming a strategic technology provider to traditional media companies," said Smith. "We expect more investments in broadband that will drive demand and ensure Microsoft technologies are considered by companies, rather than Microsoft acquiring Yahoo! for example."
Aside from making investments in professional services, workload management, media and broadband, Gartner expects Microsoft to make acquisitions in storage management and security management.
For more information about Gartner's "Windows: Nothing But .NET" conference, go to www.gartner.com/events or call Ashley Pearce at 1-800-778-1997.
Additional information on Microsoft's future is available in the Gartner special report released today at Gartner's "Windows: Nothing But .NET" conference. The special report, "Microsoft: Back and Stronger Than Ever," provides detailed analysis on Microsoft's outlook in various business segments. The special report is on the Gartner Web site at www.gartner.com.
About Gartner, Inc.
Gartner, Inc. is a research and advisory firm that helps more than 11,000 clients understand technology and drive business growth. Gartner's divisions are Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Conn., and has of 4,300 associates, including 1,200 research analysts and consultants, in more than 90 locations worldwide. The company achieved fiscal 2001 revenue of $952 million. For more information, visit www.gartner.com.
CONTACT:
Gartner, Stamford
Danielle Westling, 203/316-6754
danielle.westling@gartner.com
