M&A pent-up demand ?

I noticed atleast 4 different articles recently (including one each in Barron's and Wall Street Journal) about a future upsurge in M&A, especially tech M&A.

In general, when 2 or more business publications agree on something, i tend to take the opposite view (and that has helped immensely in the past), this time around I take this as a contrarian indicator with a twist. While I too believe that an M&A surge is around the corner, this consensus may indicate that the actual surge may be a bit far away.

Companies have been hoarding cash at rates not seen before and cash levels are at historic highs. Eventually, when the current uncertainty fades, we will see this cash deployed in different ways - share buyback (which to me indicates a lack of imagination on the company's part), dividend hikes, one-time dividend payout and ofcourse, big-time acquisitions.

The tech industry is particularly ripe, since there are literally tens (and in some cases hundreds) of software companies doing the same thing, with little or no worthwhile differentiation. Many of these software vendors did end up getting customers during the 90's boom, but have nothing new to offer and hence are seeing no increase in customers. Bigger players looking to cross-sell will be eyeing these just for their customers (and most likely willl layoff most of the employees of the acquired company).

You only have to hear Larry Ellison's comments on Oracle's plan to acquire Peoplesoft. It is not for the technology or the engineers!

The number of car manufacturers went from hundreds (200 or so during the 20's) to 3 US majors now. It is time the same happened to the software industry - it is good for the customer!