"First quarter M&A volume suggests a robust overall year in terms of activity. Expectations are that premia and valuations may increase as more transactions involve multiple strategic bidders."Jeff Liu, Group Head, US Technology Lead Advisory, M&A

Smart mobility and cloud computing, two technology deal drivers that we often see together, dominated the top 10 deals of 1Q 2011. Technologies relating to social networking also topped the list of deal-driving trends — and deals involving internet and mobile video technologies spiked — but these drove much smaller deals in terms of dollar size.

Cloud computing

Despite being considered too risky to bet mission-critical applications, cloud computing is becoming increasingly accepted by businesses for its ability to decrease costs and increase agility. There were many cloud-related deals in Q1 2011, including two in which telephone and cable network operators acquired services companies with large data centers in order to enhance cloud service offerings.

Social networking

Businesses and consumers are rushing to social networking platforms as they rushed to the Web a decade ago. Social technology transactions in Q1 2011 included a multitude of smaller-value deals, especially by software and SaaS companies looking to add social functions to their consumer or business applications. Integration of social networking functions into advertising/marketing systems also drove deals.

Smart mobility

Increasing amounts of work (and play) are being done on smartphones, tablets and other mobile devices. First quarter transactions reflected this trend. The quarter’s top 10 deals included three semiconductor transactions that brought together makers of multiple communications microchip technologies.

Several smaller transactions involved mobile device manufacturers acquiring providers of content, applications or services to help develop "ecosystems" around their mobile operating system platforms.

Other significant transaction drivers

Other significant deal drivers include storage, security, e-commerce, health care information technology (HIT), online and mobile games, solar energy and advertising and marketing. Of note, non-technology companies purchased 15% of 1Q11 total value — the same percentage as in all of 2010, but a big jump from 8% in 2009.

Strategic focus on growth

Strategic focus is on both organic and inorganic growth in the near-term, versus preservation of capital. Thus, barring the unforeseen, continued robust activity is anticipated throughout 2011 for global technology M&A.

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